USANA Watchdog just posted an article this morning which questions the active associate count of USANA Health Sciences (NASDAQ:USNA) and whether there is illegal recruiting of associates in China. Watchdog’s analysis of the numbers found some very curious things:
- Associates in Hong Kong have increased by 300% in the last three years, when the rest of the territories have seen decreases.
- Hong Kong has 1 associate for every 135 citizens. The market is either completely saturated or completely fabricated. Watchdog draws the conclusion that the associate count for Hong Kong more likely includes recruits from mainland China (where recruiting for MLMs is illegal).
- Associate counts in almost every territory have gone down over the last three years, but because of the way USANA presents the numbers in its SEC filings, it’s nearly impossible to see this.
- Something funny is going on the Philippines. During 2009, USANA was stating in its quarterly filings that they added 5,000, 5,000, 6,000, and 4,000 new associates there, for a total of 20,000 new associates in that territory in 2009. Yet the current associate count in the Philippines is 7,000.