OpTree

In the wake of the announcement that third quarter profits have plummeted for online travel site, YTB, comes the announcement that the company has decided to mix some things up in their management team.

The company announced this week that they have promoted J. Kim Sorensen to Vice Chairman and Andrew Cauthen to President. 

Sorenson, who was previously president of YTB International, will remain President and Chief Executive of the company’s subsidiary, YTB Travel Network. 

Cauthen joined YTB since 2004 as the company’s Chief Operating Officer and then moved up to serve as President of YourTravelBiz in 2006. Cauthen was then named COO of YTB International in January 2008.

YTB has been hit pretty hard these last few months, not only have their profits plummetted almost 90% percent, but they’re being investigated for illegal practices in two different states, they’ve had to lay people off and just yesterday came word that they had to sell an office building and their learjet.  Hopefully these reassignments will shake things up a bit and get the company going in the right direction. 

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YTB International Inc., has just released their financial results for the third quarter, and not surprisingly, the company did not do well.

Currently, the online travel agency which uses independent sales reps to sell travel packages, is under investigation by two different state attorney generals, in Illinois and California, for allegedly operating a pyramid scheme.

Corporate filings (YTBLA: OTC) show pretty meager earnings for the third quarter, showing a profit of only $288,000 in the three months ending September 30th. That is a huge decline from the same quarter last year when the company raked in over $2 million dollars in profit.

Filing with the SEC show that while revenue grew, so did its operating expenses which climbed 13 percent this year. All total, net loss for the nine months ending September 30th was $3.4 million dollars.

“While we are disappointed by the reduction in our net income, we are also aware that much of the softness we are seeing is reflective of both an industry-wide trend and a difficult comparison to last year’s explosive growth,” company CEO Scott Tomer said Monday. “In the face of a looming recession, growing companies face the difficult choice of either cutting back on marketing efforts to save on expenses, or increasing these efforts in order to capture the increasingly selective customer,” he added

The company said that it plans to help raise cash by selling some of their assets, including an office building in Edwardsville as well as the company’s Learjet.

The YTB stock has gotten hammered this year.  From a high of over $4 to where it sits today at around $0.33, the company’s issues continue to mount as concerns about the ongoing lawsuits and financial situation continue to plague them.

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YTB has named James M. Tackett as the newest member of their executive team. The company, which has been involved in its fair share of scandal over the last few months, appointed Mr. Tackett as the company’s new Chief Marketing Officer, a role which will no doubt be both important in the near future and difficult, as the company struggles to regain its good name.   With a lot of concern surrounding Florida politician and YTB Board member Burt Saunders, this announcement comes at a good time.

Tackett has an impressive resume within the industry as a talented writer, producer and director with over two decades of experience in TV and video production. Tackett has consulted for some big name direct sales company’s such as Avon, Shaklee, Nikken and Herbalife to name a few. Tackett has also produced in flight programming for United Airlines.

Prior to joining YTB, Tackett worked as a producer with Video Plus, a supplier to the direct sales industry.

“We are excited and honored to include James in our fine executive team,” said J. Scott Tomer, Chief Executive Officer of YTB. “With his broad experience and talent, we have positioned ourselves to take our marketing initiatives to the next level.”

YTB is still dealing with the two class action lawsuits as well as the lawsuit by the California Attorney General.

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More questions keep coming up about DSA Member company YTB and whether or not the company is completely legit. Lawsuits have been filed, board members have resigned, and allegations have been flying for months now that the company, an online travel site, is running an illegal pyramid scheme. There has also been some talk about insider deals within the company.

Now comes word that amongst the members of the Board of Directors is Florida State Senator Burt Saunders, (R-Naples). Saunders serves on the Board of YTB International which operates YourTravelBiz.com.

Saunders, who is currently running for U.S. Congress has been paid in the past by the company to be its director and has received money as a consultant for the company. Financial documents show that he had received $16,000 dollars in 2007 from the company, no word yet on whether or not he has been paid for any services this year.

Currently YTB is facing two class action suits each asking for over $100 million dollars, with California asking for restitution for victims in that state. California’s Attorney General even went so far as to call YTB a pyramid scheme.

Saunders has yet to release any official statement regarding his current affiliation with the direct sales travel company, although he did say that the law suits were “silly.” In this day and age, when every politician’s life is looked into so deeply, this could have serious repercussions for Saunders if YTB is found to have operated an illegal pyramid scheme. I wouldn’t be surprised if Saunders is the next in line to step down from the board.

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