If you’re not part of our newsletter, you need to stick close this week. I know it’s been kind of slow – but things are starting to heat up a bit up in the Home Office and you need to be aware of the upgrades, advancements, and promotions that are going on – particularly this week. Those that plug in will be able to take advantage of the opportunities that present themselves. (Take a look at Friday’s post and the new Group Cruise Page to get a taste of what I’m talking about.)

Also released late Friday was YTB’s 10Q for the 3rd Quarter. What most investors want to see is how a company responds to it’s current conditions. I’m happy to report that YTB has responded with a small but important profit for the 3rd Quarter and an increase in net income by 26%. I want to advise you that what we saw from Friday’s upgrade and the Group Cruise page, and the the announcements coming up later this week are a direct result of available cash on hand that YTB invested back into the company in previous quarters. While critics were predicting bankruptcy, the Founders and Executives of YTB have been laying the foundation of what we will be seeing in the weeks and months to come.

What most people don’t realize (or refuse to acknowledge) is that YTB operates off of working capital. With the one exception of the Home Office building, YTB is completely debt free. What I’m also seeing more and more of in the Quarterly reports is more self reliance – meaning that what the company use to sub-contract out for is now being brought in house. This self reliance in turn controls expenses.

As a result the pieces are starting to come together. The years of making hard choices and investing millions back into the company is paying off. YTB posted a 3rd Quarter profit of $362K which is coming out of a very turbulent point in it’s history and very difficult economic times.

If you recall the previous quarter, YTB reported a $1.2 Million profit before they bit off $2.6 million in contract termination costs for the disposal of REZconnect, which resulted in one time loss for “discontinued operations”. Also gone is $1 million in legal expenses for California’s attempt to shut the company down with claims of being a gigantic pyramid scheme. $250K still remain of the $1 million settlement made in May which squashed the Attorney General’s attempt to end YTB’s existence.

While some have speculated that items such as these were insurmountable, the company continues to show that it’s able to answer the speculation in the black.

I can’t knock those that have left. It appeared that everyone and their mother was telling us that YTB’s days were numbered. It’s human nature to buy into the doom and gloom – especially when you’re bombarded with bias media and overly obsessed and obnoxious critics. Even “experts” like our auditors, didn’t have confidence that YTB could pull this out.

Yet, here we are three quarters through 2009. Yes there’s been a decrease in Travel and Travel Stores out there due to the harsh external conditions over the last two years. What has also decreased general and administrative expenses of $9.5 million to answer that and keep the the company solvent. That’s called corporate responsibility and when you show profits of any kind, it provides a very resounding answer to all the negative speculation.

If there’s one thing I’ve learned after all this time it’s this. You can’t talk your way in or out of anything – you have to do it. Talk is cheap, and while walking the walk may take longer to show results, it produces a much better result.

What we saw on Friday and will continue to see throughout this week are some very solid tools and answers on what the company intends to do to keep the company solvent and viable. YTB didn’t react – it responded. (And there’s a huge difference in that.) There have been some very significant and important changes at the top of the company that puts key people in roles in which they excel. Scott and Coach are recruiters – and are now out in the field doing more with the field. Bob Van Patten has taken over the day to day operations, and manages the income and expenses. (He also appears to be in complete control of that aspect based on YTB’s bottom line.)

Like last weeks Group Cruise page – now comes the value these changes produce for those of us in the field. We’ve seen plenty of it with RPM Trainings, the Sail-a-Thons, shopYTB, and site upgrades like YTB Golf.

Like I told you at the top of this post – stick close this week – there is more to come!

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I always knew this day would come. I had no idea when or how it would evolve, but I knew it was coming. J. Lloyd Tomer, or “Coach” has handed over his Chairman of the Board title to his son, Scott Tomer so he can take some time to enjoy his “4th Quarter”. Coach will do what is true to his heart and what he does best: Mentoring the sales force through Coach’s Corner while increasing his efforts to the Company’s philanthropic division, Passport to Giving.

That’s who Coach is. Those of use who know him, know how much he’s given back to the community. He’s been a teacher and mentor most of his life and it’s fitting that he moves into this phase of his life during his 4th Quarter. News of Coach handing over the reigns to his son Scott Tomer as Chairman of the Board and Robert Van Patten being names as CEO of YTB International came out today in an 8K filing.

After looking over some of the articles and news documented here, this move has been in the works for some time. We’ll review the changes and moves the last six months for you below to help you understand how well planned and thought out the new changes are. However, this has been something that was understood by Coach, Scott and Kim from the very beginning when YTB was founded back in February of 2001.

With Coach at the age of 75 and new book finally out, a Co-CEO who’s had 6 months to evaluate the company and it’s assets, the new Board not only in place, but with time under their belt so everyone could become acclimated, the timing was right to pull the trigger on this. The new changes also move key personnel into positions and talents they are best suited for.

From what I know of all the executives involved in the new changes announced today, virtually nothing about YTB as we know as TSO’s or Reps here in the field will change. Scott, Coach and Kim will still be around doing what they do best as Reps. (In fact, Coach will still be here in Atlanta in early November.) However, with YTB being publicly traded, YTB International now has a Chief Executive Officer and President in Robert Van Patten, who not only understands Wall Street, but from what I know, thrives in this atmosphere.

Back in April I wrote about Robert Van Patten, and actually had a chance to briefly thank him for all he’s done for the company while at this years Convention. Mr. Van Patten brings over 25 years of senior management experience to YTBI and was previously President of IMC Agribusiness, an $800 million dollar division of IMC Global. IMC was also listed on the New York Stock Exchange. The company now has someone with the experience and temperament to deal the day to day issues of running a publicly traded company. While few have laid claims to the demise of YTB, with predictions of bankruptcy, we owe a tremendous amount of thanks and gratitude to Scott and Coach for stepping aside to allow Mr. Van Patten to make the hard choices and decisions he has over the last 6 months, but also owe the same to Mr. Van Patten for insight to make these difficult choices.

New Board Members Thomas Baker, Jack Humes, and Patricia Williams who were appointed the YTB’s Board of Directors in June also have vast experience in finance, accounting, entrepreneurial business development, and legal services to corporations and governmental bodies. Their new insight and experience brought to our Board also played a key role in the changes made to YTB.

To Coach, Scott and Kim’s credit – They not only understood that Mr. Van Patten was best suited for this new role – they allowed him to execute the changes necessary.

Make no mistake however. The move announced today by YTB and it’s Board we’re carefully thought out and planned by Coach, Scott, and Kim. If they didn’t believe this was the right move for the field and the company as whole, none of this would have happened. They’re Reps at heart. After a fight and successful settlement in place in California which not enabled YTB to continue doing business in the state, but kept our compensation plan in tact, there’s sufficient prove the Founders have held true to their heart.

By handing over the reigns to Mr. Van Patten to deal with the day to day operations of the company as CEO and President of YTB International, Scott moves over as CEO of YTB Marketing, and Coach is completely freed up to do what he loves – and that’s being with the field.

Key people in key positions – doing what they do best. What a concept!

It will be nice to have both Coach and Scott back here in the field. Coach will not only be doing a book tour with his new book “The Fourth Quarter”, but also has plans for 12 Day Tour to Israel and Jordan in April of 2010. (Check your Travel Portal for more details.)

All in all, it’s a great move for YTB, especially with the way this all this developed. This isn’t some band aid or hasty move that didn’t have input or thought from everyone involved. Not with the Board of Directors YTB now has. Gone are the “good ol’ boys” and “buddy system” and in with some very promising and talented executives. 

Congratulations to Scott, Kim and especially Coach for making this choice, and thank you for your ability to let go. It shows this Rep and TSO you really do care and have my best interest at heart.

And Coach – enjoy your 4th Quarter. ;-P

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The week before the Convention Scott Tomer joined our team on a conference call. I remember Scott telling the group that he couldn’t put his finger on the exact moment or particular event that shifted the momentum back to YTB. He (like me) could sense a change, a shift in direction after all the baseless attacks and bantering going on concerning our company. Back in April, YTB announced Robert Van Patten as their new Co-CEO. Mr. Van Patten brought 25 years of senior management experience to the company and had been charged to oversee many of the administrative, accounting and corporate governance issues of the company.

Few people realize that YTB and Mr. Van Patten agreed to terms the very day word came of the tentative settlement of the civil lawsuit filed in California. As I thought about today’s topic I remembered both the e-mail that came in about the tentative settlement, and the conference call that followed with news of both the pending settlement and Mr. Van Patten’s appointment as Co-CEO.

One of Van Pattens first orders of business was an internal audit and review of YTB International. We’ve seen many changes in the company since Van Pattens arrival. If you looked at the Q2 financials that were released a week ago, you’ll see Roberts fingerprints all through that document with cutbacks, cost cutting, even the disposal of nonperforming subsidiaries. (A traditional Brick and Mortar model.)

I can also assure you that Van Patten had a hand in the newly appointed Board Members who add a tremendous amount of business savvy to our Board of Directors. Our new Board was introduced to everyone at the Convention and I had an opportunity to catch up with Robert and our CFO John Clagg after Friday afternoons general session to thank him for all the hard work and difficult choices he’s made to ensure that YTB comes out the other side of the economic slump. When you combine the economy with the bizarre accusations and constant obsession of our critics on the internet, that’s not an easy task.

Day before yesterday, I got word from Mr. Van Patten regarding the company appointment of Damian Jones as Director of Corporate Affairs. Damian starts his new roll today at the home office, however, he’s no stranger to the company. I met Damian back in February and learned that he was instrumental in the development of YTB Golf and the creation of this viable niche site for our Travel Store Owners who love the game. Damian spent several years with Perry Golf, a premier golf destination travel company we offer on the site. Damian was also instrumental in the introduction of Proam Golf for golf equipment, and Worldwide Golf Vacations for golf resorts and spas now offered on our site. His background also includes management of construction projects as well as business development and legal affairs. (He’s a graduate of Louisiana State University with a degree in architecture and he received his law degree from Tulane University.)

According to Robert Van Patten:

In the role of Director of Corporate Affairs, Damian will first develop a new Company Business Plan, incorporating the franchise concept the Company is moving towards.  Also, he will work with staff to develop a communication protocol so that all home office personnel are aware of new and changing programs that take place in the field.

Both of these issues were the top two concerns of key management personnel during the internal audit review that took place earlier this year. After these assignments are well underway and/or completed, Damian will assist me in managing the legal issues of the Company, including the registration of the franchise model that will be rolled out in all states at the start of 2010.

I wrote back in April about the Master Mind Group that was highlighted in the classic book “Think and Grow Rich”. The idea of the Master Mind is to tap into the expertise of others in order to help the overall good of the group. (Or in this case company.)

Since the implementation of the 2020 Vision Group that was formed from the idea in the book, the Master Mind concept been one of the most significant changes in the history of YTB. Damian’s appointment as Director of Corporate Affairs is yet another example of YTB’s commitment to put the ball in the hands of play makers who can effect change and make things happen. He not only brings experience and knowledge to the role, but a passion I’ve witnessed personally. In my opinion, (among others I’ve talked to over the last few days) this is a perfect fit.

Please welcome Damian to our staff and wish him much success in this new opportunity with YTB International.

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YTB’s Quarterly financial report came out on Friday. During this years Convention, Scott Tomer announced a Q2 profit on earnings before income taxes. He was correct, as YTB did post a $1.2 million net income from continuing operations. What he may or may not have known until after the Convention however was a $2.6 million in contract termination costs for the disposal of REZconnect, which resulted in a “discontinued operations” line item resulting in a loss of $2.8 million total dropping the $1.2 million profit into a $1.5 million loss overall for the quarter. The current portion of the $2.6 million liability balance is $608,000 and is required to be shown in our SEC filing based on future commitments.

REZconnect has been somewhat of a sore spot in years past. Micheal Brent had been selling off shares like it was candy. Rumors surrounding the subsidiary also pointed to a net loss in revenue for the entire company for years. This was the first time the subsidiary had been broken out to show it’s contribution. REZconnect operations reported net revenues of $869,000 and a loss from operations of $463,000. The Board of Directors made a strategic decision about the REZconnect business model, which they stated was serving primarily brick and mortar travel agencies, and felt it was not compatible with YTB’s current and future plans.

“As a result, the Company expects to realize cash savings of $2.4 million over the next 5.5 years based upon the cash payments to be made under the employment severance agreement versus the cash payments that would have been required under the original employment contracts.  Thus, while the Company has recognized significant expenses in the current period, the cash savings in the coming 5.5 years will serve to contribute a significant savings in terms of liquidity, helping to strengthen the Company’s position.”

In this current economic climate companies need to cut dead wood. While I have not seen, nor do I really care to see what others will be saying about YTB’s financial condition, I’m willing to bet you that they’ll be pointing to the huge loss in revenue over the last year do to the pyramid crumbling. While they will most certainly be pointing YTB’s “business model” as the cause of the loss in revenue, you should take a look at other company revenues to compare what they’re doing in this current economic climate. Royal Caribbean’s revenue (and profit margins) have declined significantly, resulting from large profits plummeting to significant losses over the last four quarters.

People are not spending in this current economic climate. Period.

It should be noted that the hemorrhaging of our RTA’s has slowed significantly in part due to the California settlement. While there was an enormous amount of speculation over California winning it’s argument of a gigantic pyramid scheme and successfully shutting the company down, the truth (as always) finally came to light. In addition, the “ungainly monster of 39 pages and 133 paragraphs” that was submitted as a class action law suit was also thrown out by the courts. Current RTA’s are just now starting to realize what I’ve known all along.

If you’d like to read my analysis of what our critics actually know about MLM and YTB in general, I invite you to read my e-book entitled “What the Critics Know About YTB“.

To further illustrate my point, I did take note of a couple of things in the notes section that critics were speculating (as they always do) about YTB’s financial condition and what the company would and would not be able to do.

Once Scott mentioned “profits from continued operations” our second payment for the California settlement was brought up. Some wondered if we happened to skip that payment in order to show profits. It should be pointed out that it was in fact paid and half of the settlement money is behind the company. Payment of $250,000 was paid as scheduled before the June 30 quarter ending.

In March, YTB’s credit card processor increased it’s reserve requirements, resulting in a $2.7 million balance to be held in reserve. While it was speculated that YTB would not be able to acquire the funds necessary to obtain the balance, that request was also achieved during this quarter. This too is now behind the company.

One of the funniest twists found in the financial statement that I doubt you will find anywhere but here is the saga of the proposed Conference Center that was envisioned by YTB to be built on land the company currently owns. Back in November, YTB sold a 9.9 acre out parcel of the 59 acres it owns to an undisclosed buyer. In late July, we found out through the media and the blogs that the buyer plans to build a Holiday Inn Express and a Country Kitchen gas station on the land that has been purchased. When news came out that the Wood River City Council voted to approve a funding agreement with Aventurs Development LLC. nobody bothered to check if the land in question had in fact been paid for.

“In addition to other consideration, the Company received a $500,000 promissory note dated November 24, 2008 as proceeds for the sale of land situated in Madison County, Illinois, which was non-interest bearing so long as there was no event of default thereunder.  Principal and other amounts under the note, collateralized by the related land sold, was due and payable on March 24, 2009.  On April 22, 2009, the Company sent a notice of default under the promissory note and mortgage to the purchaser because the purchaser failed to satisfy all obligations under the note within 120 days.  The notice required the purchaser to cure such non-payment within five business days of receipt of the notice, as required by the mortgage.  On May 6, 2009, the Company filed a complaint for foreclosure in Madison County, Illinois Circuit Court under the terms of the promissory note and mortgage because the purchaser failed to cure the non-payment within the required five business days.  On June 2, 2009, a notice of foreclosure was recorded against the land.”

Of course, like everything else that backfires on our critics for drawing conclusions based on what he reads and hears on the internet without checking actual facts, mums going to be the word on this. Instead, they’ll continue to focus on yours truly and the gross error I made when I didn’t check my source. As I’ve learned over the weekend, thanks to many comments, e-mails, and phone calls, it’s much better to surrender defeat in cases such as this in order to move on and get back on track.

Lastly, it should be noted that the company has made significant advances in curbing it’s spending and keeping an eye on the bottom line. Those of us who were at this years Convention saw evidence of that. With the current details listed in the notes section of the quarterly report just filed, we see more documentation of YTB doing what it needs to do in order to survive. Many of the hard choices made in prior months have proven to be significant, and while time will tell if the elimination of REZconnect will help YTB’s bottom line, the future looks to be significantly better than a single number found at the bottom our financial report.

A major key in YTB’s survival and prominence in the industry is educating those who may be looking for opportunities as the country starts to come out of the current economic condition. With YTB’s new tools and upgrades just announced at Convention, it may prove to be significant in showing the company’s strength instead of weakness.

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When YTB first started back in February of 2001 all the Founders had was a goal of being the largest seller of travel in the industry. They didn’t have their first RTA, they didn’t have a travel partner, they didn’t even have a booking engine, nor did they have their first travel sale. A bold statement from three guys who had no experience in the travel industry.

What YTB found was a company called REZConnect who came into the picture in 2002. Michael Brent, the President of REZconnect made an agreement to provide travel web site hosting for YourTravelBiz.com. By 2004 the partnership looked to be successful and the two companies merged and changed its name to YTB International, Inc.

All systems were a go and beginning in 2005 YTB started it enormous growth from 8000 RTA’s to 138,000 in 2007.

Once control was placed in the hands of YTB, a series of events happened that started the exit of both Michael and Derek Brent. On November 22, 2006, each of the members of the Brent Group resigned from their position as a member of the Board of Directors with the Company. Michael Brent also resigned from his position as President, and Derek Brent as Secretary of the Company. Along with the resignation both agreed to grant an irrevocable proxy to Lloyd Tomer (Coach) , Scott Tomer and Kim Sorensen with respect to all shares of the Company’s Common Stock or other capital stock of the Company now owned by the Brent Group.

The Founders of YTB were now in control.

Soon thereafter, Michael Brent started to sell his shares of stock. While this has been a bone that critics like to gnaw on with questions about why “executives” are selling, none of them ever considered that the direction of the company was no longer in Michael Brent’s control, and never would be. He built REZConnect and it was more than likely time to cash in on what he built. To this day, Michael Brent remains the largest single share holder in the company, yet has no voice in the day to day operations of YTB, or it’s direction.

For the last two and a half years, REZConnect has been sitting in New Jersey doing their own thing, and minding their own Vacation Central business without input or direction concerning YTB. They have however, remained the YTB payroll, and they have appeared on all press releases as a “wholly-owned subsidiary” of YTB International, Inc.

The last part of the REZConnect relationship, partnership if you will, with YTB was announced Tuesday in an 8K which stated an Employment Severance Agreement by and between REZConnect Technologies, Inc., formerly a wholly-owned subsidiary of YTB, and Michael and Derek Brent, former Chief Executive Officer and President of REZConnect.

I’ve seen a statement or two about this being another “fire sale” of sorts to generate revenue because YTB is in financial trouble. I’m not sure how returning a $275,000 certificate of deposit can be deemed a “sale”, but as we’ve seen so many times before, critics will grasp at any mud they think of that might stick.

Based on what I know about this relationship and have verified with other sources close to either YTB and the Brents, this is an end to a five year plan. REZConnect has not had an active role in the operation of the YTB booking engine for some time. Furthermore, YTB is looking to curb its expenses and there is solid speculation that the severance was initiated by our Board of Directors, 3 of which are brand new members, with an eye on YTB’s bottom line. We also can’t discount the possible role of Co-CEO Robert Van Patten who now oversees administrative, accounting and corporate governance issues for YTB.

It was time to make this break. Personally, (and this is only my opinion) this break was long overdue.

Don’t get me wrong, REZConnect served a very powerful role for YTB at a time when we didn’t have the foundation or the relationships that we do now. (That comes with proving yourself as a top travel seller.) Because YTB reinvested into itself (which showed up as losses in “income”) the company acquired assets such as land, technology, and office space to house the entire company. Today, YTB is standing very much on its own.

The issue I have are the morons who keep pointing to Michael Brent’s stock sales with questions about “What does he know that you don’t?” None of the idiots who ask that question have taken the time to read the notes found on every one of those forms. If they did, they would realize how dumb they sound to someone who takes the time to read the form in full to realize that the stock represents a monetary value only, and not a sign of anything to come. Of course we can’t discount the fact that some of these dolts do in fact know about the irrevocable proxy, but are betting that those who find their questions on forums and blogs won’t take the time to investigate on their own, which could result in more mud drying and sticking for them.

Even with their employment being terminated, the terms of the severance package are very favorable for the Brent’s, as it should be. Ownership of the stock remains with them, and their #2 Rep position with the company also remains. (Because of the Bill of Rights in place to protect all Reps.) What this does for YTB is eliminate administrative costs in regards to salary, insurance, health and medical benefits as well as participation in the Company’s profit-sharing, incentive bonus and pension plans.

There have been a number of positive changes in the last few months. A Co-CEO, new Board Members, industry awards, recognition as a top seller of travel, moving forward with our franchise model, and a settlement over some very ugly accusations. This is another positive change, if for nothing else than to put an end to those silly questions about what Michael Brent knows that we don’t.

All the best to the Brent Group, and REZConnect. And thank you for seeing what many would not or could not when YTB was young and unproven.

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We’ve been getting a bunch of financial data over the last few weeks. When you look at the first quarter results you find alarming losses from many companies. Just in the travel industry alone, you find a loss of $9 million in Q1 for Dollar Thrifty, Wynn Resorts reports a Q1 loss of $33.8 million, Marriott loses $23 million in Q1, Royal Caribbean loses $36 million in Q1, Delta loses $794 million in Q1 along with United losing $382 million, and Orbitz realizes a $336 million loss.

Revenue has also dropped significantly in the industry. Hawaii’s Q1 hotel occupancy sinks to 69%, Starwood’s Q1 profit plummets 81%, and Disney’s Q1 operating income down 24% for parks and resorts. Let’s not forget about Mexico and what it’s gone through the last few weeks. Anyone want to take a stab at what the swine flu has done to the economy there thus far?

And what do you imagine critics will be talking about? YTB of course!

YTB’s Q1 Financials (YTBLA.OB) were posted last evening with a sharp decline in revenue, along with a $1.9 million loss. Not great by any means. When you look at the majority of companies in our market posting huge losses, it doesn’t come as a big surprise. Couple that with Q1 losses each of the last 3 years and you’re looking at a quarter that is certainly difficult for YTB in regards to it’s bottom line.

With revenue down considerably due to a number of factors, the filing focuses on the economy for this reason. It doesn’t accurately credit the less than favorable suits that have been levied against the company. While the California AG nor any of YTB’s critics will look at the legal letter of the law concerning pyramid schemes, the tentative settlement being finalized at this time will shed plenty of light on that subject. (More on that a little later in this article, and considerably more when the settlement is made public.) Combine that with very heavy recruiting and pillaging of our sales force from other companies feeding on the fears of the litigation the company is defending, and former members of our company who have changed companies. As a result, YTB’s active members have been cut just short of half of what it was a year ago.

Yeah…yeah…”What do they know that I don’t”.

If you want to look at the numbers and let that be the be all and end all for you, you are welcome to it. It makes little difference to me these days what a few obsessed zealots want to pitch to the public right now. While they choose to ignore how far out of bounds they are, the truth will surface in due time. The rumors, lies, and myths about this pyramid idea will be brought to light for everyone else to see. Talk is cheap, and I like to look at how the company is walking in response the the challenges it’s facing.

What many of you are here for are the facts and findings that you won’t find anywhere else. The statements in the filing that everyone wants to hide because if found, could change the momentum of the mud slide the company is currently experiencing. These are very difficult times for any company in business right now. Only those who respond correctly to the current financial climate are going to make it through these difficult economic times. We’ve already seen a number of agencies such as Joystar and Cruise Value Center bite the dust. Suppliers like Happy Vacations have closed their doors as well.

Clearly, the problem here is a flawed business model right?

I think not.

YTB is a vastly different company than it was a year ago. If it refused to respond to the challenges brought up against them (as some would have you believe) we might be looking at a deficit twice as large instead cutting our quarterly loss in half over what it was a year ago. ($3.5 million Q1 2008) Combine the deficit with considerably less revenue and the company has cut it’s spending considerably in a number of areas. The company clearly gets the fact that it can’t spend the way it has in the past. A huge expense that has been a part of Q1 for years was Coach’s Birthday Bash. Typically this Leadership Event is announced during the National Convention each year, costing the company millions for these trips. For the 18,000 plus who made it to Convention in 2008, the absence of any January trip hosted by the company was certainly missed. Red Carpet Days at the companies expense have slowed to once per month. We have also not seen any news about a grand presentation like we did last year at this time for Convention.

Because YTB is watching it’s spending, cash reserves have tripled over the last 3 quarters from $600K ending Q3 to $1.8 million Q1. Part of this was pinned to the sale of the Corporate Jet and some land that was sold. We’ve come to find that the the 9.9 acres that was sold is now being foreclosed on due to payment not being received by the buyer. Since the land (an out parcel of the 56 total acres YTB currently owns) never produced any revenue for the company, the additional funds realized between December 31 and March 31 came from controlling expenses not selling of assets.

In another myth gone south, how does a company spend $8 million on a foam statue when the financial data provided documents less than half that paid to Beryl Martin for all of 2008? Remember they did most of the printing for YTB as well. I guess we need to put the word ‘estimated’ back into the news report that made the quote over a year ago.

Critics like to call the company “Coach and Scotties personal piggy bank”. Based on what “Coach and Scottie” have done in recent months, I wonder why that myth persists. A number of measures have been put in place to look at cost structure to improve the overall profitability of the Company. Bob Van Patten was brought in early April to do just that. Bob’s job is to cut spending, while Coach and Scott’s job is to produce revenue. YTB also put in place an Audit Committee as a measure of checks and balances for any expense in excess of $50K to require Board approval. Critics will probably point out that the Board is considerably smaller with the departure of both Clay Winfield and Tim Kaiser, but will likely ignore Bob Van Pattens role in leveling the playing field when it comes to any piggy bank that Coach and Scott may be dipping into.

We’ve also gained little better picture of the pending litigation that has been brought against the company.

On August 4, 2008, a day before YTB’s National Convention, a civil action was filed against against YTB and it’s Executives by the California Attorney General. Among the 17 complaints it claims that YTB is a gigantic pyramid scheme. The complaint was filed after 18 months of dialogue, initiated by the Company with the Attorney General to discuss the implementation of a new California travel laws that went into effect in January of 2007. (Anybody remember why YTB now has minimum booking requirements to apply for CLIA?) The penalties consist of at least $15.0 million, and restitution of at least $10.0 million totaling $25 million dollars. The largest claim filed in California history. On April 6, 2009, the Company reached a tentative settlement agreement with the State of California and papers stating this were filed by James Toma with the courts on April 8th in Los Angeles. The tentative settlement agreement is currently awaiting execution by both parties in addition to final court approval.

There have been rumors that a deal is final, but we will await final word from either YTB, the California AG, or both before any further word is mentioned here.

I’m simply glad that someone was finally able to educate the California AG that no one pays a single dime to YTB for the opportunity to recruit others into the business. Nor does anyone earn a single dime without a product being attached to it. (AKA: a booking engine.) I know all about the myths and the perceptions surrounding YTB and pyramid schemes. Here, we deal in facts. I’ve been with YTB for 4 years, and it’s never cost me a red cent for the opportunity to recruit others. Hard for anyone to lose money when no money is required. Thus we have a tentative settlement instead of dragging this into the courts in September to find out what I already know to be true.

In addition, on February 9, 2009, the Company filed motions to dismiss the consolidated complaint (formerly two that were filed) and these motions are now pending before the Court. The motions to dismiss were fully briefed and the Court has set a hearing for June 1, 2009.  YTB believes the Company has meritorious defenses and intends to vigorously defend these cases. With the settlement pending in California, and from what I know to be true about pyramid laws and the proper structure of YTB, I like the odds of this being dismissed.

That’s not to say that it will be dismissed…I just like the odds.

I realize it’s difficult to read the crap out there on the internet with all the doom and gloom. The predictions of YTB filing for bankruptcy, or even better, Coach, Scott and Kim preparing to fly off with all your hard earned money. I’ve been reading it for years, and still holding my breath for that shoe to drop. Because none of it has ever come to fruition I take it with a grain of salt and chalk it up to wishful thinking.

Once the California situation is behind us, and YTB pays the fine due the state, the legal costs due them for filing the complaint, and what ever restitution they come up with for the “victims” they claim their trying to protect, we can get back to building our business. At this point it’s clear that the California Attorney Generals plan of shutting YTB down completely isn’t going to happen. If you never figured it out on your own, or if nobody told you, California never had that type of authority to begin with. (Small detail or fact that critics never considered.) While Illinois is still a little more uncertain in which way that will go, we will have some finalization to that ordeal in less than a month.

For those that have hung around to see what will actually come of this fiasco, we are about to find out.

Challenges like we’ve seen can either make or break a company. YTB’s been skating along for a number of years without facing much adversity. If you actually look at what it’s been able to do, instead of ignoring it, it looks to me like YTB is planning on sticking around for some time to come.

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I was reading Think and Grow Rich (again) and in one of the chapters it talks about a Chicago newspaper that printed in their paper that the brilliant Henry Ford was an “ignorant pacifist.” Ford brought a suit against the paper for libeling him. While in court they put Ford on the stand an proceeded to ask some really ridiculous questions. Ford who finally grew tired of the questioning said, “Why would I clutter my mind with such nonsense when all I have to do is push a button and I can summon to my aid men who can answer any question?” Every person in the courtroom realized what Ford had done with that response. It didn’t come from an ignorant man, but of a man of education. Through the assistance of his Master Mind Group Henry Ford had at his command all the specialized knowledge he needed to enable him to become one of the wealthiest men in America.

Scott Tomer has been the keystone of YTB for quite some time. I’ve watched in amazement as he’s grown, especially in the last several months. The type of pressure and obstacles that have been laid down before him would break many. The strength and calmness I’ve seen and heard in him has been a real lesson in leadership.

I’ve seen people ridicule and scorn Scott for his comments of having only 2 hours of college education. (It was a Monday from what I’ve been told, and the Steelers were playing so it could have been three or for hours if it weren’t for Monday Night Football.) People often question what type of qualifications Scott has to be CEO of his own company, and point to his lack of education to dismiss his title. By Scott’s own admission, being a CEO of a public company has it’s challenges. Many “T’s” need to be crossed, and “I’s” need to be to dotted during daily operations, and being in the public eye, many sit on the sidelines to criticize any decision that’s made. (Easy being a “Monday Morning Quarterback” isn’t it?)

As I’ve watched this company grow I’ve seen many specialists who’ve been hired by the company to help Scott, his father Coach (J. Lloyd Tomer) and Kim Sorensen. Andy Cauthen was one of the first I can remember, and has made a tremendous impact to our company as COO and President. His attention to detail and energy keeps everyone on their toes. Both Gregg Fritsch and David Lash came on board 18 months ago with an expansive background in travel and have been key in the Convergentware upgrade the company is currently experiencing. James Tackett came to YTB with over 20 years of experience producing quality marketing materials for Direct Sales companies that list from A to Z.

If the company isn’t hiring outright, they are outsourcing with industry leaders like Marc Manicini with YTB’s E-Campus training, or bring in supplier specialists with companies like Carnival and Princess to conduct sales events, or form partnerships with MailPound to help promote our product offering.

YTB International’s (YTBLA) most recent addition was publicly announced last evening with a new Co-CEO, Robert Van Patten who came to YTB with 25 years of senior management experience. Robert will oversee many of the administrative, accounting and corporate governance of the company to free Scott up to do what he does best, build. Another piece of the Master Mind Group has been put in place to take YTB to the next level.

There shouldn’t be any mistake that Coach and Scott are Reps at heart. While I realize this makes some cringe, and others even angry because they fear the word “recruiter”, I have my doubts if either Scott or Coach have any concerns on how others perceive the word or the profession. The appointment of Robert Van Patten will not only free Scott up to do what he does best, but put the reigns in the hands of someone who has the experience and temperament to deal the day to day issues of running a publicly traded company.

That’s what good leaders and companies do. They find key poeple and put them in roles that enhance the entire organization. Nobody can be an expert in everything, and those that recognize and accept that someone else could be better suited for certain roles is a great sign of leadership. By bringing in and allowing others to capitalize on their strengths and expertise benefits everyone involved.

There are those who believe that if you want something done right, do it yourself, which is nothing more than ego getting in the way. If you can let go enough to allow others to work in their element, you end up working more in yours, and ultimately end up getting more done. If a company truly wants to grow and expand, core people are needed in the right place to handle the details that suit them best.

Robert Van Patten has been put in place for his specalized knowledge to aid in his area of experitice and contribute to the building and growth of YTB.

PS - If you're involved with YTB, sign up for our FREE Newsletter. As a Website Owner or Website Seller, we'll keep you up to date with all the latest news, acquisitions, and developments with YTB.

PPS - Subscribe to the Just Picture It Now RSS feed, (including e-mail) for all the latest posts and updates found right here!

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