Youngevity International (OTCQX:YGYI) Management Interview


Youngevity International
President and CFO: David Briskie



WSA: Good day from Wall Street this is Juan Costello, Senior Analyst with the Wall Street Analyzer, joining us today is David Briskie, the President and the CFO for Youngevity International, the company trades on the OTCQX, ticker symbol is YGYI thanks for joining us today there David.

David:  Hey, good to talk to you Juan.

WSA: starting off, for some of our listeners that are new to the story can you go over a brief history and overview there?

David:  Yeah I’d be happy to.  Youngevity became public with a merger of a coffee company back in July of 2011.  So in July 2011 a company called Javalution Coffee Company, which was trading under ticker symbol JCOF merged through a reverse merger into Youngevity International so at the time of the merger we were a $22 million business.  The coffee business was a separate kind of wholesale enterprise that had a small direct marketing sale division.  And it merged with Youngevity International that has a 17-year history in the direct selling space.  So we took the best of the direct selling industry and then we kept the coffee business as a wholly owned subsidiary.  And since then — since July of 2011 we’ve grown from 22 million and our performance revenue this year, four years later 2015 will be about 165 million.

WSA: Great and can you bring us up to speed on some of your current news there, as you’ve recently launched your hybrid selling platform as well as have some new distribution partnerships in place?

David:  Yeah I mean one thing about Youngevity is that when you take a look at us, you have to kind of segment the business.  So in the direct selling side of the business there’s been a major, major commitment to technology.  Youngevity really is blazing its own trail and we believe we’re taking the best of the direct selling model, which is really that belly-to-belly, face-to-face high touch sales component.  And we’re leveraging it with the best of e-commerce.  And so you’ve seen a lot of the news coming out on Youngevity opening its office in Aliso Viejo where we have a whole technology group that we’re building out.

We really believe we’re in the technology space, we’re an evolving software company.  And as part of that recently you saw us announce a new social selling platform which essentially is taking the best of the direct selling space, the best of social media leveraging, you know Facebook, Twitter, Periscope, Instagram, Pinterest all of those mediums and combining that kind of high touch component which allows us to do virtual presentations around the world through this social selling platform that we built.

And we expect it to contribute greatly to our growth.  These types of platforms, the social selling platform is really good in demonstrable products, you know, products that do very well when you demonstrate it.  And we consider there be about 14 to 18 categories of demonstrable in Youngevity through its multi-vertical strategy.  We have about 11 of those types of product categories.  So we will launched our social selling platform actually next week and we’ve already got — now its approaching 3000 different distributors that will be testing or beta testing this platform which will go 100% live around the globe in April.

WSA: Well good and so what are some of the key trends that you’re seeing right now in this sector and how is the company positioned with some of your key brands to capitalize?

David:  I think what we’re seeing is really the leveraging — those that figure out how to leverage to the high-touch with high tech, are those that are going to take over leadership positions in the business.  We’ve been working on that for several years, Youngevity has got a 20 year history and one of the things we’ve done from the very beginning is we’ve always shipped direct to every customer order that comes into Youngevity.  So now we’re already shipping 100,000 orders a month and every single one of those orders come in through an e-commerce platform and ship direct to the customer.

And what we’re doing is we’re leveraging on that strength and that is really a trend that is happening in the industry, less kind of old school distribution methods where you ship to a distributor and then they distribute on.  Distributors just send us orders and we process the orders and ship direct to the customers and then pay to them.  So we’re seeing that trend and we’re capitalizing on that, that’s why we’ve done the big investment in Aliso Viejo and the big investment in technology.  And you’re noticing each week or so you’re seeing a new key executive added to Youngevity to take advantage of this.

The second key trend really is global growth.  In this sector it’s really all about taking your products globally, and we’re very well positioned going into 2016 for that.  Our office in Moscow, Russia is up and running.  And we finally — a two year process have all of our products approved that we want to launch with and that launch takes place January 30th of this year.  We have our office up and running in Singapore, which is our entry into Asia.  That office is up and running and taking orders and shipping and building a base and then our office in Guadalajara, México is ready to take business and as we march through Latin America.  So it’s a pretty exciting time at Youngevity in terms of the growth that we’ve got going on in all of those hot areas.

WSA: Certainly and what are some of the key factors, Dave, that you feel make Youngevity unique from some of the other players in the sector?

David:  Well I kind of touched on it, I think our commitment technology is well in advance than anyone else’s in the sector.  The second thing is our coffee play is very, very unique.  We own our own plantations in Nicaragua so we literally have a fair trade certified, organic certified, rainforest alliance certified, and organic certified plantation in Nicaragua where we’re sitting on 1,000 acres.  That coffee we grow and process through our own processing plant, we ship it through our processing plant in Nicaragua which we also own on a 28 acre facility where we dry, process and sort the coffee.  That processing plant has its own certification and then we ship it to our roasting facility that we own with the same certifications in Miami, Florida.

So it’s a very unique value proposition that we are a fully integrated, fully vertical roasting operation on our coffee sector, which allows us to take advantage of the wholesale distribution business as well as make Youngevity’s coffee for its distribution around the world.  So we think that’s a key selling advantage and a really great part of the story and really the diversification of our revenue model adds to the excitement and makes us certainly a unique value proposition when you look at what Youngevity has got its hands involved in.

WSA: Great and what are some of the key goals and milestones that you’re hoping to accomplish over the course of the next six to twelve months?

David:  I would say the key milestones for us in 2016 are to finally experience significant revenue growth on our global strategy.  It’s been a two-year process in getting the product approvals, the legal setup, our accounting systems in place to fully scale that launch.  And I feel 2016 is going to be the year that we experience true revenue and true profits for that investment. I think that’s number one.  Number two is the leveraging of our technology, our technology teams are in place and growing and that investment will begin to pay off in month six of this year.  And the then the third investment, we really scaled up our coffee growing operations to be ready to produce significant scalable revenue growth and going into this year all of those components are in place.

So I feel like we’re kind of at that perfect storm place where we’ll see global growth happen, we’ll see organic growth happen on our domestic operations with Youngevity through the technology play.  And we’ll see the coffee business finally scale up and turn the corner in terms of its profitability, and significant growth coming from that.  So I really look at 2016 to be the convergence of those three significant areas that we’ve been investing in over the last 24 months.

WSA: Certainly and perhaps you can walk us through your background and experience and talk a little bit about key the management there

David: Yeah, I’d be happy to.  My background — I was actually a CEO of a company called Drew Pearson Marketing before I got in to the direct selling space.  So Drew Pearson Marketing was a 19-year run for me, I started off there when the company had four people; this is a traditional business, not a direct selling sector business.  We grew that business from four people in just operating in a small region in Texas to 4,000 people over 19 years that accommodated with offices throughout Europe, distribution throughout North America.  And we built the largest manufacturing facility in the world for headwear in Shenzhen, China and we exited that business by taking it public on the Hong Kong Stock Exchange.  So it was a very nice lucrative career that spanned some 19 years.  And so I’ve taken that experience and I’ve kind of brought it into the coffee space where I became CEO of Javalution and then helped orchestrate the merger with Youngevity.  So my position currently with the company here is CFO and President.

Our CEO Steve Wallach has been in the direct selling space really his whole life.  That type of experience is hard to come by.  He is, you know, him and I share very common vision of where we are taking this business so we are locked at the hip.  Our VP of Global Content Scott Salik is the best in the business when it comes to creating content around the world, has worked at a very large-scale companies like Beachbody, Visalus.  Our VP of Analytics that we just brought on a gentleman by the name of Scott Bell.  Scott was with Herbalife from 700 million to 5 billion and really created the category of analytics and predictive analytics.  He’s just come aboard our team.

Alex Theis has been in the business 25 years weeding the field in direct selling.  We have some of the best distribution people in the business.  Our IT team is really second to none.  So we’ve really taken our team, put it in place and we’re really ready to scale this thing so I couldn’t be more excited about the future of Youngevity.

WSA: Well good and as far as investors and the financial community are concerned what are some of the key drivers that you wish perhaps they better understood about the company?

David:  I think probably the big challenge for most investors is understanding our position in two distinct categories; CLR Roasters our coffee division is a wholly own subsidiary of Youngevity.  And I think really we’re not – we’re getting valued as if we’re just in one of those sectors.  I’ve had several analysts that I’ve had conversations with that have taken the time to understand our coffee operations.  And after understanding the commitment and the investment and the scale that we’ve created to grow that sector I’ve heard several comment “I think you are only being valued as if you’re in one of those sectors.”

In other words the coffee business on itself could carry our valuation or the direct selling business on its own could carry the valuation.  So it’s almost like you’re getting a buy one get one free at this point because of the way we built the companies to scale.  I think the second piece is people are underestimating the value and the strength of the global platform that we put in place and how quickly that can grow over the coming years.  So those are the two things I’d like investors to take away from what we’ve setup and what we’ve positioned over the last 24 months so I think the time really is now.

WSA: Great and once again joining us today is David Briskie, the President and Chief Financial Officer of Youngevity International.  The company trades on the OTCQX, ticker symbol is YGYI.  Currently trading at 28 cents a share, market cap is around 110 million and before we conclude here Dave recap some of your key points.  Why do you believe investors should consider the company as a good investment opportunity today?

David: Well investors are getting a diversified revenue model.  They are actually investing in two spaces.  They are in a very significant coffee space, they’re in a direct selling space that is really in a trendsetting area where Youngevity is doing something that no one else is doing, combining everything great about direct selling that high touch component with technology.  So you get those two areas and then you are getting the leverage of our global growth strategy and we’ve got the people in place to deliver on all three of those areas.  So hopefully people will take a harder look at us, do their due diligence, see that we do what we say we are going to do and get excited about what we’ve got going on particularly as we enter 2016.

WSA: Well we certainly look forward to continuing to track the company’s growth and report on your upcoming progress.  And we’d like to thank you for taking the time to join us today Dave and update our investor audience on Youngevity, it was great to have you on.

David:  Juan, I appreciate your time today, thanks for the opportunity.



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