USANA Should Disclose What The Actual United States of America Net Sales, Active Associates, and Active Preferred Customers Are For The Last 5 Years.

Many may not know, but when USANA Health Sciences (USNA) reports their United States figures in their quarterly and annual financial statements they also include the United Kingdom and the Netherlands. These foreign markets are about 4200 miles apart from the United States, but that hasn't stopped USANA from considering them all part of their domestic market. So when USANA reports net sales for the United States after the closing bell on Tuesday, February 9, 2016 would it mean anything different to investors if the United States of America figures were actually only half of what they are reporting for the United States? I believe I have evidence to suggest this may be the case.

USANA reports in their North American Average Total Earnings for 2011 that the total number of US associates that purchased at least one product (active associate) was 135,590. The next available figure, which was finally disclosed just last November after Fox13 news in Salt Lake City asked USANA if they can provide updated information since 2011 was a bit outdated, shows in their North American Average Total Earnings for 2014 that only 61,400 US associates purchased at least one product. That is a 54.7% decline in the United States of America according to those reports. However, USANA has not made any such disclosure in SEC filings regarding this massive decline of US active associates. In fact, SEC filings only show a slight decline for the United States from 2011 to 2014.

Regarding their SEC filings (10-Q and 10-K), USANA reports only 3 months worth of associate activity for each quarter. In 2011, USANA had on average 47,500 active associates each quarter for their US market. In 2014, USANA had about 40,000 active associates on average each quarter. So according to SEC filings, USANA only declined 15.8%. So why is there a massive discrepancy between a 54.7% decline (undisclosed to investors) versus a 15.8% decline (disclosed to investors)? I believe the answer is the United Kingdom and the Netherlands, which may account for half of the active associates USANA reports for the United States in their SEC Filings.

This begs the question - what are the actual net sales, active associate numbers and active preferred customer numbers for the United States of America? I thought USANA was required by law to disclose their domestic sales figures separately and not sure how they can still be including sales to associates and preferred customers from the United Kingdom or Netherlands as domestic sales. If I am right and a substantial part of USANA's United States sales figures are non-domestic, does this spell trouble for USANA? Are they trying to conceal their massive decline in the US from investors? Does this warrant a SEC investigation? Will class action lawsuits be filed as a result? If I am wrong, then someone please explain what happened to all the active associates they reported in the average total earnings reports.

Below is a table showing each year's total number of US associates and the number of distributors reported in SEC filings for the 4th quarters (except 2014, which was not disclosed in SEC filings, but deduced from statements made regarding % increases or decreases).

YEAR	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
# of US Associates in 4th Quarter Per SEC Filings	51,000	59,000	61,000	63,000	57,000	51,000	45,000	Not Disclosed	Not Disclosed	40,000 (Deduced)
Total # US Associates in Year per Average Total Earnings Disclosures	101,361	142,841	126,146	158,934	165,710	146,714	135,590	Not Disclosed	Not Disclosed	61,400
Total US sales (in millions) per 10K SEC Filing	$134.2	$159.4	$169.6	$161.2	$151.7	$150.9	$148.1	$152.5	$157.5	$143.7
10K SEC Filing	10K-2005	10K-2006	10K-2007	10K-2008	10K-2009	10K-2010	10K-2011	10K-2012	10K-2013	10K-2014
North American Average Total Earnings Disclosure	Disclosure 2005	Disclosure 2006	Disclosure 2007	Disclosure 2008	Disclosure 2009	Disclosure 2010	Disclosure 2011	Not Disclosed	Not Disclosed	Disclosure 2014

To find out when USANA began including the UK and the Netherlands with US domestic data, we must rewind over a decade in time.

USANA states the following in their second quarter 10-Q for 2000:
"Since the beginning of the second quarter of 2000, the Company's United Kingdom market has been serviced from the United States and is now considered a part of the domestic operating segment of the Company." - Q2-2000

In the third quarter 10-Q for 1999, USANA states the following:
"The Company began selling products into the Netherlands in the third quarter of 1999. The Netherlands will be serviced by the Company's United Kingdom administrative facility." - Q3-1999

USANA's First Quarter Results for 2011 Reveal Falling Interest For USANA's Business Opportunity.

USANA released their First Quarter Earnings Statement and it shows that all over the world USANA's active associate numbers fell except China, which I believe cannot be trusted.

Year over year, USANA's active associate figures yield:
United States: from 56,000 to 49,000
Canada: from 25,000 to 24,000
Mexico: from 13,000 to 10,000
Southeast Asia/Pacific: from 44,000 to 40,000
North Asia: from 9000 to 8000
Greater China: from 57,000 to 82,000

USANA uses the excuse that the bad United States economy is responsible for the declining figures, but this decline is world wide. However, China is an exception. Hong Kong and mainland China numbers are sky rocketing, but as I have mentioned many times now, I belive this is because USANA is allowing illegal recruiting of mainland China persons into USANA's Hong Kong territory, which violates foreign laws. Not to mention mainland China is not a "USANA" territory. It is a Babycare territory. There is a difference.

I believe USANA stated last quarter that they expect the Hong Kong distributor numbers to start falling because a handful of USANA products are now sold through Babycare Ltd. This was due to the expectation that mainland Chinese distributors signed up as USANA associates in Hong Kong would leave USANA and sign up as a Babycare associate. Not only does this validate my claims that USANA has been recruiting mainland Chinese nationals as USANA associates in Hong Kong, but also raises a serious question: Those associates who left USANA's Hong Kong distributorship and signed up as Babycare associates, are they counted twice? The answer should be "NO", but it would not surprise me. Perhaps there are those that hold both a USANA distributorship as well as a Babycare distributorship; count them twice!

Of course this begs the question, where are the millions of retail customers that should come from having hundreds of thousands of USANA sales reps? Unfortunately, after distributors pay a premium price for the USANA inventory, why would anyone pay even more? Distributors pay $110 for a USANA Healthpak100 which only lasts 28 days which makes it a $3.93 per day multivitamin supplement. View the USANA Price List for yourself. Who in their right mind would fork out $1430 per year for vitamins, and that's the distributor's cost! And don't expect any ethical doctor or nutritionist to recommend such a product either. Since only USANA distributors can sell the product, the doctor or nutritionist would have to be a USANA distributor. In other words, some doctors peddle USANA product to the patient they would have to peddle the product to their patient, which violates their code of ethics.

Yet, USANA's Healthpak100 is one of their most commonly sold product. Why is that? Simple. USANA attaches sales points to each of their product. Most distributors have 1 business center and are required to personally purchase 100 sales volume points every 28 days. The Healthpak100 is 100 sales points, so only 1 product would have to be purchased. Plus, it is the best value for the number of sales points awarded. Purchasing other products and meeting the minimum 100 point requirement would usually put the order over 100 points, which further wastes the distributors money. So a 100 point product easy much easier to deal with. Sadly, USANA distributors also have to pay a pricey shipping and handling fee on top of it.

Knowing all this, it is obvious why there is a serious lack of retail customers. One can go down USANA's entire product line and see how over priced it is. More and more people in the United States are becoming aware of MultiLevel Marketing schemes like USANA and are distancing themselves from the cultish behavior. USANA has reached saturation in the United States and other areas, and without the shenanigans in the China region, USANA would have a single digit stock price.

These are my opinions and I welcome harsh criticism.