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Executive Diamond Income Statement

Court records of divorcing distributors can be an especially rich source of information. Public documents available from the Placer County California Superior Court detail the income, expenses, and net profit of an Executive Diamond Distributorship. Subsequently, the business was valued at $600,000, or just two times 1995 net earnings. This distributor reported a profit of $301,000 for 1995. This is a nice income, no doubt, but it is a far cry from having a million dollar income that so many distributors believe such a level to have. Secondly, without the revenue from the "system", and keeping the same level of expenses, the distributor would have a net loss.

Interesting things to note from the data:

Calculation of Best Possible Amway Income

Calculation of Most Likely Amway Income

Total business overhead expenses of $214,00 exceeded the income generated from the Amway product bonuses of $116,000. The business would have not been profitable, a possible loss of $98,000 without the gross margin generated from the system of selling tapes, seminars, books and other business support materials.

Exhibit "F" Sitcler Enterprises Comparative Income Statements

12/31/91

12/31/92

12/31/93

12/31/94

12/31/95

Gross Sales

1,504,685

1,634,845

1,927,728

2,043,359

2,263,945

Cost of Goods Sold
Purchases

978,227

1,100,737

1,313,485

1,343,932

1,747,857

Freight

3,877

6,647

9,108

8,786

0

Function

161,579

144,402

136,389

0

0

Other costs

0

0

0

179,471

0

Total Cost of Goods Sold

1,143,683

1,251,786

1,458,982

1,532,189

1,747,857

Gross Profit

Gross profit % of Sales

361,002

24%

383,059

23.4%

468,746

24%

511,170

25%

516,088

22%

Expenses
Advertising

7,316

7,483

5,458

0

2,266

Car and Truck Expense

0

0

0

5,464

13,246

Commissions and Fees

9,517

9,041

56,792

22,698

20,525

Insurance

7,010

6,287

4,455

5,773

7,209

Legal and Professional

2,650

2,070

1,525

2,996

2,023

Office Expense

4,834

6,861

6,258

8,256

6,676

Rent -Vehicles, Equipment

11,309

15,385

23,226

13,309

13,490

Rent - Business Property

12,016

17,148

22,625

24,579

23,095

Repairs and Maintenance

0

0

7,782

7,253

4,223

Taxes and Licenses

3,776

5,609

3,284

6,674

5,815

Travel and Auto

22,896

23,626

29,935

40,903

50,320

Meals and Entertainment, Net

4,578

3,357

4,704

3,996

3,945

Utilities

11,237

13,738

15,446

13,980

12,523

Wages

19,935

21,823

23,792

25,553

23,284

Symposium Tickets

46,678

42,467

0

0

0

Outside Services

495

0

0

0

0

Moving Expense

619

210

0

0

0

Dues and Subscriptions

0

0

1,510

1,811

0

Printing

0

0

0

4,719

0

Employee Expenses

0

0

0

934

0

Miscellaneous

0

0

0

2,478

13,923

Total Expenses

164,866

175,105

206,792

191,376

202,563

Total Other Expenses

13,071

15,791

9,237

32,153

11,684

Net Profit

183,065

192,163

252,717

287,641

301,841

Source: Individual Tax Returns, Schedule C

 

Additional court documents reveal how the Executive Diamond needed to complete the divorce as soon as possible since the situation of living with his future wife while not being divorced from his first wife was hurting his income in the Amway business. This is "since the distributors are for the most part right-wing, fundamentalist Christians who cannot move on in their acceptance of me and my future wife until I am remarried, causing major confusion and de-edification of me in the business". From declaration below

Impact to his business included:

 

Declaration in Divorce Procedure (for a scanned copy of declaration click here for my downloads page)

1 DIRK R. AMARA, ESQ. #78709

AMARA & KELLER

2 160 CHERRY AVENUE

AUBURN, CA 95603

3 TELEPHONE: 916/888-1511
4 Attorney for Respondent,

ROGER SITCLER

5
6

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

7

IN AND FOR THE COUNTY OF PLACER

8 In the Marriage of: Case No: SDR 6275
9 PETITIONER: GAYLE SITCLER FURTHER DECLARATION OF ROGER SITCLER
10

11

12

AND

RESPONDENT: ROGER SITCLER

DATE: 5/13/96

TIME: 1:30 P.M.

DEPT: 2

13
15 I, Roger Sitcler, declare:
16 Since I filed my original request for the bifurcation of the
17 marital status, I have recently had the opportunity to review
18 the declaration of David Black in opposition. Unfortunately,
19 his declaration is so misleading and completely lacking in any
20 factual basis, that I am compelled to respond. In that regard,
21 I make the following additional comments:
22 First, Mr. Black cites no factual basis for his conclusion
23 that dissolving the status part of the divorce would somehow
24 have an adverse effect on the valuation of the business. To the
25 contrary, this continued delay creates a significant negative
26 impact because there is absolutely no appearance of marital
27 relationship between myself and Petitioner. As I have
1 previously indicated to Mr. Black as recently as this past week,
2 Gayle's involvement in the business is limited to paying bills,
3 paying bonuses, accounts payable and office management. The
4 approximately 3,000 distributorships with which I am involved, 588
5 of which attended the March Leadership Conference in San Ramon,
6 have not seen Gayle and I together since August of 1995. They
7 all know we are getting a divorce and I have attended all the
8 numerous functions alone. These include home meetings, "Nuts
9 and Bolts" meetings, sponsoring, and day-to-day contracts with
10 my many distributors. Larger functions in which the Petitioner did
11 not participate include the Regional meeting in September, the
12 Free Enterprise day conference at Arco Arena (a three-day
13 event), our Christmas product promotion at the office in
14 October, the Go Diamond Weekend for leaders at the Direct
15 Distributor level and above, held in Monterey, California in
16 November, and the March Leadership meeting, where it was decided
17 by upline distributors that she shouldn't attend. In short, all
18 of my connections know we are getting a divorce. Any delay in
19 the divorce or in my ultimate remarriage which is set for July
20 6th will have a major negative impact on the business since the
21 distributors are for the most part right-wing, fundamentalist
22 Christians who cannot move on in their acceptance of me and my
23 future wife until I am remarried, causing major confusion and
24 de-edification of me in the business.
25 Secondly, the statement of David Black inferring a
26 connection between bifurcation the status portion of the
27 marriage and the business valuation is without basis. The
1 following factors incidental to the dissolution proceeding have
2 already impacted out business, which include:
3 1. I am no longer on the INA speaking circuit resulting in
4 $40,000 per year in lost income;
5 2. I am off the INA Board of Directors;
6 3. I am off the Jim Floor Monthly Diamond meetings;
7 4. One of my major businesses has asked for their own
8 leadership and have been given it due to my living with my
9 future wife and not been remarried, which will result in a major
10 economic loss in March of 1997.
11 Further adding to the difficulties I am encountering in my
12 contacts with distributors, Diamonds and Emeralds, is
13 petitioner's comments to them, as they are continually reminded
14 by her that I am not divorced and am living with my future wife.
15 Many of my contacts are aware of my scheduled wedding date of
16 July 6th and based on my fourteen years in the business,
17 generating these contacts, I feel strongly that they will look
18 favorably on this remarriage which will ultimately serve to
19 reverse the negative impact of the dissolution process.
20 In summary, not only do I feel Mr. Black's declaration is
21 a complete distortion of the truth, I am requesting substantial
22 attorney's fees pursuant to the provisions of Family code
23 Section 271 for having to respond to his spurious declaration.
24 I declare under penalty of perjury under the laws of the
25 State of California that the foregoing is true and correct.
26
27 Date: May 8, 1996 Roger Sticler.

(for a scanned copy of declaration click here for my downloads page)

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