The Dark Clouds Roll In

Well, the Coach talks a good talk, but he seems to have difficulty on the walk. I listened to a conference call a few weeks ago and he was whooping it up about the 2nd Quarter Results. He was so excited because they were "so good" that he was going to release them early and just before the convention. Well, Jerry Brown stole his thunder there I suppose.

Well, they are out and it appears, either he can't walk the walk, or does not realize that parentheses on a balance sheet are not good. Dashes mean negative, and red is not a good color!  Here are some initial highlights and key figures:

• The bottom line is YTB lost $199,577 in the 2nd quarter which increased its year to date loss to just shy of $4 million. It is interesting to note that this time last year, the report showed an income of $1.6 million for the quarter and only a $505K loss for the year to date.  Seems like YTB is sliding to me.
• Travel sales are WAY off.  Year to date they have paid out $14.1M in commissions. That will put them near $28.2M for the year.   At an overall 10% commission that places sales in the neighborhood of $282M.  Seems a long shot from the $411M they claimed to Travel Weekly. ANd certainly not on the way to a BILLION dollars for 2006 2007 2008.  $282M puts them in the mid 30s spot on Travel Weekly, but my guess is that they slide much further (while others grow) if they make it at all.
  
• This year they have cash on hand of $632K and last year there was over $1 million.
• They disclosed that an acquisition did not go through. This is apparently the highly touted American Destinations Inc. acquisition--could I have been correct? (Caution, this is THE post, hide your children and protect their eyes the photo is still there!)
  
• Also as expected, the RTAs are leaving at a record pace. This quarter, they sold 23,296 sites (last year they sold 34, 309 so recruiting is off 32%). But 30,638 quit. So for every new site sold, 3/4 of a site left.  And on a six month basis, they are still losing more than they are selling. But, this was already predicted and expected back in May.
  
• Canada appears to be a complete bust and represents only 3% of their income and interestingly enough, Bermuda and the Bahamas are not reported at all. I wonder if they produced ANY revenue?
• The number of RTAs has only increased 30% year over year, yet the administrative expenses (salaries, etc.) have increased  100% from $13M to $26M. Seems the overhead may end up killing them.
• And of course, there is absolutely no surprise where YTB makes their money. For the quarter, in first place is website rental and sign up fees at 74.5%, in a very distant second place is income from travel at 19.7%, and bringing up the rear is training materials at 5.1%. I will say that it is slightly better than last quarter as their 6 month picture is 76.9%, 16.2%, and 6.9% respectively. Not sure those numbers will be enough to convince Jerry Brown et al, but it may be worth a try.
  

And let's keep in mind that these reflect only through June 30, 2008. They do not take into account any of the issues surrounding the recent events from California, Illinois and the Class Action suit. Nor does it include the expense of the foam prop. Speaking of which, it is strange how it has all of a sudden been devalued from $8M to $1.8M. Some things make you go "Hmmmm."

I did notice that YTB included some deferred revenue in the filing to indicate sales made that have not been paid commission. If they are accurate in this number and it is only for unpaid commissions, the sales are even further off the mark. On Page 6 it shows the "Deferred Revenue" as defined on Page 9 to be $2.6 Million. This does not seem to be a large number. That shows that each RTA has commissions owed (at some point) of about $12.

I imagine that the steady decline of RTAs in the last three quarters will only increase exponentially in the 3rd quarter. I cannot imagine how people can sell the program with the black cloud of $125M in lawsuits hanging overhead and the probability of several more.

All in all, seems like the ship is sinking and I wonder what this dismal report will do the the stock that has already taken a HUGE hit over the last week.

Well The Locals Love Like REALLY Don't Like YTB Either

This article is from a local paper called The Telegraph in Alton, Illinois. The article essentially rehashes the BBB complaints that are mounting against YTB.  But that is not the real story here.

What I found to be very interesting was the tone of the comments from the locals. Apparently, YTB is as well liked in their hometown as they are elsewhere.

Lloyd Tomer has stole money off of hard working metro east residents for years. 1st, Primerica, then something else, now this, all in the name of god. He's unbelievable. It's about time this piece of trash was held accountable by SOMEBODY! How do you sleep at night Lloyd, Scott and KIM? I'ts even more unbelievable the number of people who fall for it. It's sad. Better put those building complex plans on hold, Lloyd. Judgement day might be coming. ALthough I'm sure you'll hop in your Lexus and move on to other innocent people in other states.

I worked for YTB a couple years ago in Edwardsville.
I worked there for a couple weeks but after being assigned to "collections" for one day, I had to quit.
I went home that day, and wrote my letter of resignation. I told them I did not want to be associated with a company and would rather be broke than paid by them.
SAD SAD STORY

I went to a YTB meeting and the 1st thing out of the man's mouth was "this is a get rich quick company" There is no such thing is get rich quick. I hope they shut YTB DOWN......We don't need a travel company in Wood River. We need something for the children...

OK all you Pro YTB freaks, get a CLUE. I was on the "inside" of that company for a long long time. I left because. I got sick of all the lies and deceit from the upper "Team Members". Those who you who think you know the company so well, look at all the Tomers and Sorensens on the payroll. The company reeks of nepotism. The company has lost their IATAN status. If you are a real "Travel Pro" you will know what that means. To those who don't, it means that YTB is not a real travel agency. They lost it because of their deceitful ways. Also, I worked several conventions where it was "required" that we be there and work long hours. We were never given gas money. Oh and I was there when those firings happened, and it did happen like it was told. That company deserved to be shut down and soon!!!

Yes Amac it's a great company until you get laid off/fired like so many others these past few months. They have fired people on the spot w/ no reasons given. You wont even see it coming. Unless you are high on the totem poll I'd watch my back if I were you. I would almost put money on the fact that as soon as they find out who these employees are posting on this site they get terminated too. But like the chick who got tanked and quit this weekend said you can get a min wage job anywhere lol.

I thought it was insightful and you can read it here--please read the comments and let's discuss here!

False Claims Abound

Please pay attention around minute mark 2:00. You can earn 60% of of everything that is booked on your website!  Not misleading at all huh?

And I also believe this is the same guy that was talking about his boogers before! What was his name...Rufus!

Well The Truth Comes Out

Looks like old Coach is trying to pull a fast one on the troops. The Saturday Evening Post hoax was nothing more than pumping his own ego. Here is the cover of the real edition. Don't believe me? Go to your local bookstore!

The depths of this guy's ego knows no bounds!

And here is his version:

Blockbuster Convention Announcements

We heard the hype and now here is the reality. Here are four of the blockbuster announcements from the convention:

1. There is an enhanced Rep site. For a monthly fee of only $14.95, you'll gain access to one of the most powerful recruiting tools in YTB. Not only will prospects be impressed by the innovative design, they'll be able to see what YTB is all about through the Media Center!
2. You can buy a DVD. In a slowing economy where the price of gas is nearly $4 a gallon, many Americans are hurting financially. Give them an answer to their needs with this informative DVD, which explains why they should look into owning their own business with YTB and "Recession-Proof" their income! Available soon from your Back Office!
3. The bonuses are being tweaked. Here at YTB, we want to give you every opportunity to succeed! That's why during this year's convention, we've enacted this one-time only Reset Bonus! Basically, everyone will be working on their first set of six towards a $1,000 Leadership Bonus. Don't worry, you won't lose anyone, you just won't have to worry about fall-off on the ones you've already earned a bonus for.
4. Coach was in a magazine. One of the most prestigious magazines in the country has chosen Coach to be on the cover! The Saturday Evening Post, the longest running continually published magazine in the history of the United States, has selected Coach to be on their 2008 Special August edition. The magazine features a four-page article on Coach's life and gives you an inside look behind his vision to create 10,000 millionaires. Available soon in your Back Office. Price: $4 each.

Whole lot of travel info out there. But let me comment on a few items.

I thought the current websites were the best in the industry. Now they want to take a "free" opportunity and charge $14.95 per month. And this one is good for your "prospects" to see about YTB. I think prospects can see enough about YTB by googling them to be honest.And this seems like it might more clearly define YTB as a pyramid....taking money for recruiting only.

Buy a DVD and recruit more people. Instill the fear of the recession in them and learn how to bilk them for $449 and $49.95 a month. And if you are good, you can sell them the upgraded website.

The bonuses are being reset. This is a key point. In the old system if you had a power team of 6 people and two dropped out, you needed to recruit 2 to reclaim that status and then recruit 6 more to get your next bonus. They are resetting this so that if 2 drop out, you do not need to replace them with 8 you can just get 6. This is damage control. With the news this past week, there will be plenty of people dropping out. And when they drop, the income of the upline is affected and then they will drop. That's the way the pyramid crumbles. But by not requiring a replacement of the drop outs, they are hopefully holding onto some of the upline. Very shrewd on the part of YTB. I wonder how many of the Reps will get it?

And Coach was on a magazine. While I have not seen the magazine yet in the stores, I am not wondering if it was not a paid cover. YTB refers to it as a "Special" edition. Perhaps they did a special cover and inserted the story in the magazine for the convention. Anyhow, you can buy it for $4. If anyone has seen the August issue in a market other than St. Louis, let me know who is on the cover. My suspicions are now leaning toward a paid cover and story. But I guess if you can't get good press you might as well buy it!

So, where was all the wonderful travel training and the travel announcements? If you want to see a video of the convention, it is accessible in the new Rep site link above. Or click here.

Update On Federal Suit

According to Travel Weekly, this suit was filed for $100 million dollars.  Wow, that is $125 million in less than 5 days.

Two former referring travel agents for YTB Travel Network launched a class-action lawsuit in U.S. District Court in East St. Louis, Ill., seeking more than $100 million in actual damages for themselves and others who invested in the YTB programs.

They claim they and the members of their class suffered financial losses because YTB International and its divisions operated an illegal pyramid scheme.

The lead plaintiffs are Faye Morrison of St. Louis and Kwame Thompson of Atlanta. One of their attorneys, Christian Montroy, said that because the lawsuit is so new, it is uncertain how many plaintiffs are in the class but “certainly more than 1,000.” He said two more plaintiffs will be added to the suit in the next week.

YTB Withdraws Application For AMEX Listing

In light of the recent lawsuits and investigations, YTB has withdrawn its application to the AMEX.  I imagine it was more in lines of a request that they withdraw.