USANA CFO: Our distributors are volunteers!

Usana Health Sciences (NASDAQ: USNA) CFO Gil Fuller is one of the great wordsmiths of our time. When asked about whether he is a CPA during the company's analyst presentation on Thursday, Fuller joked that he needed to ask Bill Clinton's attorney about the definition of is. But the highlight of the presentation came earlier when Fuller explained the company's "business opportunity" by saying that "direct selling implies a volunteer army..."

Well, Gil Fuller's absolutely right. Usana's army of associates are volunteers, in the sense that they don't make any money. According to Barry Minkow's initial report on USANA, 85% of distributors lose money, with no less than 74% failing within a 12-month time period.

In addition, the average payment to the bottom 99% of Usana salespeople is about $5.66 a week, before product purchases, taxes and all other business expenses. Given that Usana products appear to be hopelessly overpriced compared to the competition, being a Usana distributor is a losing venture for all but a tiny percentage of those who give it a try. 3% of the company's distributors earn 70% of the commissions.

So congratulations to Gil Fuller. Even if he can't seem to figure out the definition of is, he has made George Orwell proud with his characterization of Usana associates as volunteers. Next time you hear a complaint, just remember: They're not losing money! They're volunteers!