Youngevity records strong revenue growth but stock price continues to languish

30-Mar-2015 - Last updated on 31-Mar-2015 at 13:40 GMT

Youngevity sells a variety of dietary supplement, personal care and food products.

Youngevity International, a company that is both a network marketing firm that sells nutritional and personal care products and a vertically integrated gourmet coffee roaster, reported a 57% increase in annual net revnue amid plans to expand its geographical footprint in Latin America, Asia and in Eastern Europe.

Youngevity, which sells a variety of supplement and personal care brands, opened up a new in Mexico in its fiscal 2014 ended Dec. 31. The company also expanded direct sales operations in Nicaragua, where it also has its coffee operations.

Revenue grows, expenses keep pace

Youngevity has been growing by leaps and bounds, which tends to be typical of success network marketing companies in their early years. Net revenue for the year increased to $134 million, while gross profit increased by 49% to $76.3 million. But after deductions, which include compensation payments to distributors, the company’s net income was only $5.4 million, which was still a gain over the previous year’s figure of $2.7 million. The increase was achieved primarily as the result of a tax benefit of $4.7 million. Stockholders' equity as of December 31, 2014, was $18.6 million, compared to $11.5 million as of December 31, 2013.

“2014 was a strong year for Youngevity as we delivered solid financial results while continuing to make strategic investments to grow our diverse product line and geographical presence. We are excited about our growth opportunities ahead of us and believe that the strategies we have in place will position the Company for long-term growth and produce strong results in 2015,” said CEO Steve Wallach.

The company has also expanded its Asian operaitons with a new office in Singapore and is expanding its operations in Canada. The company has also expanded from Russia into Kazakhstan.

“Youngevity really excels in markets where the health care system is struggling. And that's certainly is the case in Russia and Kazakhstan,” said Dave Briskie, chief financial officer.

Diverted attention?

The company also continues to add new lines of business to its already dizzying array of brands, expanding beyond nutritional products into other consumer goods. The latest addition is a line of scrapbooking products. The market has remained unimpressed, however. Youngevity’s stock, which trades on the OTCQX exchange, has hovered in the $0.20 to $0.25 range for more than a year.

“By no means, are we pleased or happy with the results of the volume in our stock or price of our stock, we all have the opinion that we are undervalued and we're going to work tirelessly to bring the share price to a value that's commensurate with the value of our company,” Briskie said in a conference call detailing the company’s earnings.