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AMS founder says worst is over for company(Daily Oklahoman, The (KRT)) Dec. 15--Since the beginning of 2004, AMS Health Sciences Inc. has laid off half its employees while changing its president, its name and its top-selling product. The only constant has been the company's declining stock price, which closed Wednesday at 64 cents, up a penny from Tuesday's all-time low. John Hail, founder and chairman of the Oklahoma City multilevel marketing company, said that may be about to change. But Hail admits things could get worse before they improve. "We were in a precarious position," Hail said. "I don't blame the shareholders for bailing out." One major shareholder, California investor Gary Bryant, said he is "a little optimistic" about the company's prospects. "I don't think it's going to go up until after the first of the year," said Bryant, who owns about 300,000 shares at an average price of about $3.60 a share. "Between here and there, it's a good place to buy. But I wouldn't tell anyone else to buy it." The sliding share price may fall even lower, Hail said, as investors sell AMS before the end of the year to offset 2005 gains in other stocks for tax purposes. "Past performance is what drove it down. We'll deserve what we're about to get," Hail said. "Right after the first of the year I expect it to recover." The company has struggled to replace cash generated by its most popular product, an ephedra-based diet aid that accounted for more than one-third of AMS's net sales in 2003. The Food and Drug Administration banned ephedra last year. At one point, the product accounted for about 90 percent of AMS's sales. In the wake of the ephedra ruling, former President David D'Arcangelo, with Hail's blessing, instituted a free trial program that cost the company millions of dollars before it was shut down late last year. "We took something that was bad and replaced it with something that was worse," Hail said. "We went the wrong direction." President Steven G. Kochen succeeded D'Arcangelo in August with a charge to slash spending and rejuvenate sales. AMS, formerly known as Advantage Marketing Systems, has run through a handful of presidents in recent years, but Hail said Kochen's experience in manufacturing, marketing and legal expertise is ideal for the company. The company, which had 65 full-time and 10 part-time employees at the beginning of the year, now employs 31 people, Hail said. Last week, longtime chief financial officer Reggie Cook resigned, as did Director Harland Stonecipher, a major shareholder who founded and continues to head Pre-Paid Legal Services Inc. in Ada. The company's quarterly losses have narrowed, and Hail projects the company will turn a profit in the first three months of 2006. However, the company has missed the mark several times on predicted profitability. In September, AMS bought a Pontotoc County Styrofoam cup manufacturer in a deal that was openly questioned by some investors during a recent conference call. Hail said Heartland Cup will boost AMS's bottom line. The cup operation also should help AMS determine whether it can become a manufacturing concern instead of continuing to pay suppliers for the diet aids, nutritional supplements and skin care products it sells. Despite the rock-bottom stock price, Hail said the American Stock Exchange has not contacted the company about potential delisting. Before that can happen, Hail said, the company will rebound and the stock price should follow. "The bad stuff, as bad as it was, is behind us," he said. |