Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
While the Mexico announcement is a positive long-term development, Geezer is correct. When you Google search or even Bing search Carlos Villarreal or Borrega Consulting Inc. ("Borrega"), there is no results that match what is in Pulse's announcement - except for those contained within Pulse PR and the associate articles discussing the PR.
It is curious that an "international business development consulting and brokerage firm with expertise in Latin American business development for over 16 years" does not have a website?
I am not going to say that this is a trick or a joke by the company but it would be interesting to be able to learn more about these guys. May be a good question to ask if a conference call is scheduled after the Q2 results are issued.
dave, where did you hear that Cabana was being market tested in Wal-Mart in Colorado for consideration for national distribution? I have not seen any announcement of this. Do you have a link? Do you live there where you have seen it in the stores? Let us know how you know this - inquiring minds want to know.
All great bullet points. Thanks for keeping those front and center Dave.
Navy, The 120,000 cases ordered is just that ORDERED. Q1 just closed. We know that they sold out of the first 14,000 cases of Coconut water on Feb. 20. It is reasonable to assume that these 14,000 cases will show up as revenue on the Q1 report due out in May. I will be surprised if the number on the Q1 report is much higher than that.
The 120,000 cases on order have to be produced, shipped, delivered, sales price is fixed and payment reasonably assured (see latest 10k on revenue recognition policy under the financial section). I suspect the majority of these will be realized in Q2 - although with the last part of this revenue recognition policy being "payment reasonable assured", some of the sales may slip into Q3. IF Yates was projecting correctly and they do about 500,000 cases of Coconut water in 2014, that still leaves 366,000 to be sold in the later part of Q2, and into Q3 and Q4. This means that top line revenues will still be muted in Q1 but ramp up significantly in quarters after that.
Dave, I tend to agree with you that the Case revenues for coconut water "feels" right at about $22 per case wholesale.
BUT Let's try this a different way. All of the following calculations are based on the numbers you and other posters have discovered through your contacts with the company and IR. If those numbers are wrong, the calculations below are going to be off - especially if the quantity of cans in a case is something other than 24.
If the number Jane gave for the retail price at a convenience store is correct ($2.09), then this is just over $50 retail per case (24*$2.09). They indicate (in the 10k, page 14 under Direct Store Delivery “DSD”) that convenience stores require a 25-30% gross profit on products they sell. Taking $50*70% (30% profit for convenience store) means that the wholesale price is $35. Very much in line with the $34 that the company gave you.
Let's just say that is high and the retail price is $1.79. $1.79*24=$42.96. This is inline with what Jane said the price would be at a retail store like Safeway and correlates to what John-M said the company gave him ($45) as the price for a case of coconut water - once again using 24 cans in a case.
Taking 30% off of $42.96 equals $30 per case wholesale for top line revenue. In order to get to $22 wholesale per case, the retail price would have to be about $1.29 ($1.29*24 = $30.96; $30.96*.70 = $21.76). A retail price of $1.29 seems low to me for a "premium" product. We won't really know until the next quarterly report - and even then there may have to be some dissecting of the numbers to figure out what the case revenue is.
I listened to the Roth conference again and Yates projected 500,000 cases of Coconut water sold by the end of 2014 with another 500,000 of Cabana lemonade and limeade (50% increase and 500,000 cases is what Yates said - 327,000*1.5=490,000).
If, and this is a big IF, they are able to do that, then we are looking at $5.4 Million from lemonade and limeade ($11 per case) and anywhere from $11.0 M (500,000 * $22) to $15.0M (500,000 * $30) or more for the coconut water - AND this does not even include any revenues from the reintroduction of the Pulse drinks. On the low end the company revenues would grow between 4x and 5x in 2014. Now that would be a good year!!!
I also do not want to be accused of being a pumper so if my numbers or any of my assumptions are wrong, feel free to call me out on them.
April is too soon for the Q1 report. The last two years the Q1 report has come out on May 15th. May 15th, 2014 is a Thursday so it may be the date they will target again - most likely after the market closes like today.
In addition to the items already mentioned, here are some things that I found encouraging:
a.) As of March 31, 2014, there were 51,720,596. As of Q3, 2014 there was 51,620,000 shares. NO DILUTION to speak of. They did 110,000 as a part of service contracts. I was concerned we would see some hidden placement of shares, especially in the seasonally low period of Q4. To learn there was no dilution in Q1 either was a bonus. This, in my opinion is a very good sign.
b.) Still no Long term debt!!
c.) Cash on Hand at the end of the year was $1.77M. While this is down from $2.4M, they appear to be managing the money well - No DILUTION - and there is enough money to pay the bills. If the coconut water is selling as well as they say, they will be able to generate profits from sales and maybe even get to cash flow positive in 2014 without further dilution. Remember CASH IS KING!!!
d.) Gross Margin is at 32%. While down 1%, this is still a good healthy number. I remember them saying the Pulse beverages are going to be a little closer to 40%. No mention on the margin on the coconut water but I suspect it will be in the same range.
e.) The lawsuit that was "pending" in Vancouver B.C. appears to have gone away. Pulse previously reported they had never been served and they also noted the plaintiff died. The estate must not have had any case and this reports indicates there is no legal proceedings against them. One less thing to worry about!
Hopefully, the market will see this as good progress.
Dave, the logic in your post seems very reasonable to me. I just don't see the "solid" reaction you describe - unless there is VOLUME. If the result in option 3 occurs, given the limited revenue in Q4 2012, I agree we fall back.
As for guidance, I suspect it will be very similar to the Roth presentation. Inital Cabana Coconut drink sold out and very popular at the show in early March. Going to be a big seller. Projection 500,000 cases by year end. At least 500,000 cases Cabana lemonade sold this year hit 500,000 case. Will hit combined Cabana threshold (lemonade and coconut water) of 250,000 cases per quarter (1 million annualized) at some point this year. Pulse drink reformulated and being reintroduced in Q2. Revenues will ramp up steadily from this drink as the year progresses. I doubt they give any guidance numbers on this.
My guess there will be pluses and minuses that will roughly cancel each other out and we trade sideways. Fortunately, it will only be a quick 6-8 weeks to May and the Q1 report. then we get the impact of the 14,000 cases of coconut water selling out.
Roth Conference Recording is a MUST Listen...
You can find the link on the Pulse website under investors. The slides are shown in this area and you can review them but the recording adds a far amount of "color". Once you link to Roth site, you have to enter your name, e-mail, and company and then it launches. Only about 28 minutes.
Highlights:
a.) Redesigned Pulse bottle looks nothing like the bottles on their website - it is very cool looking.
b.) Pulse distribution to INDONESIA coming soon through a Sunkist distributor.
c.) Pulse being reformulated and repackaged. Should be back on the market by the end of the month.
d.) Limeade bottle shown in presentation material. A Raspberry Limeade is coming out soon.
e.) They are big on the Coconut water and think it will match or exceed the Cabana sales this year. Yates goes into the picking and bottling process for this product.
f.) Paddy Sheya gave an update on how the Expo they recently attended went. Over 30 booths had coconut water but people told them that Cabana was the best coconut water they had ever tasted.
f.)There is a Q&A at the end but some of the questions are hard to hear. Good dialogue though.
Nice to finally see them getting the word out. I suspect this won't be the last conference this year.
Coca-Cola results highlight why Pulse is eventually going to be a buy-out target - IMO
Buffett’s Coca-Cola Complacency Warning Foretells Trouble
By Duane D. Stanford Feb 19, 2014 1:31 PM PT
Warren Buffett, speaking last April at Coca-Cola Co. (KO)’s annual meeting, warned that the beverage giant shouldn’t get complacent about its success. Ten months later, those words could come back to haunt the company.
The world’s largest soft-drink maker, facing sluggish growth overseas and concerns about the healthiness of its product at home, posted its fourth straight quarter of declining sales yesterday. The results sent the stock on its biggest one-day decline in more than two years -- bad news for both Coke and Buffett, the company’s largest shareholder.
The slowdown has raised concerns about the long-term plan of Chief Executive Officer Muhtar Kent, who has promised big revenue gains by 2020. Investors are looking for Kent to take bolder steps, said Ali Dibadj, an analyst at Sanford C. Bernstein & Co. While the company announced a $1 billion budget-tightening plan yesterday, it doesn’t go far enough, he said.
“There needs to be much more cost cutting,” Dibadj, who is based in New York, said in an interview. “There needs to be much faster innovation. There needs to be much more return of cash to shareholders.”
Coke’s fourth-quarter sales fell 3.6 percent to $11 billion, missing the average analyst estimate compiled by Bloomberg. Net income slid 8.4 percent to $1.71 billion, or 38 cents a share, from $1.87 billion, or 41 cents, a year earlier.
Kent, 61, responded to the slump by pledging to cut $1 billion in annual costs by 2016. With soft-drink sales slowing in markets such as the U.S. and Mexico, savings from the new cost-cutting program will be plowed into marketing its brands directly to consumers, Coca-Cola said.
Stock Decline
Shareholders weren’t encouraged. Coca-Cola’s stock declined 1 percent to $37.10 at the close in New York after it fell 3.8 percent yesterday, marking the biggest one-day drop since August 2011. The shares have slid 10 percent this year, compared with a 1.1 percent decrease for the Standard & Poor’s 500 Index. Purchase, New York-based PepsiCo Inc. (PEP), the company’s biggest competitor, fell 7 percent in that period.
Buffett, 83, has advised Kent to stay ahead of competitors by anticipating problems that could crimp growth. At Atlanta-based Coke’s annual meeting last year, the executives shared the stage to help sell the company’s message to shareholders.
“I like to study failure,” the billionaire investor, who accumulated the stock through to the end of 1994, said at the time. “We want to see what has caused businesses to go bad, and the biggest thing that kills them is complacency. You want a restlessness -- a feeling that somebody’s always after you, but you’re going to stay ahead.”
Buffett, the CEO of Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), didn’t immediately return a message left with an assistant seeking comment.
New Competitors
Coca-Cola and PepsiCo are facing an array of upstart competitors fighting for shelf space. That includes a host of energy drink brands, pressed juice makers and do-it-yourself appliances from companies like SodaStream International Ltd. (SODA), based in Lod, Israel.
Coca-Cola has taken steps toward diversifying. Earlier this month, it agreed to buy a 10 percent stake in Waterbury, Vermont-based Green Mountain Coffee Roasters Inc. (GMCR) for about $1.25 billion and work with the maker of Keurig coffee brewers to introduce a system for producing single-serve cold drinks.
The move fits into Coca-Cola’s strategy of taking equity stakes in promising new brands and technologies, such as Zico coconut water and Honest Tea, and helping incubate them. Coca-Cola eventually acquired all of Zico and Honest.
Kent, who likes to say he is “constructively discontent,” also shook up his management team in December, aiming to improve the company’s North American distribution system. As part of the move, the company said that Steve Cahillane, president of Coca-Cola Americas, would leave and his unit would be dissolved.
Global Reach
Kent often touts Coca-Cola’s ability to offset troubles in one area of the world with gains in another -- the benefit of operating in more than 200 countries. That advantage may be disappearing as increasing numbers of consumers shun soft drinks for health reasons, currency fluctuations erode sales, and scores of new competitors begin loading their sling shots.
In developed countries, including the U.S., anti-obesity campaigns have made it more challenging to sell sugary drinks. Concerns about the health of artificial sweeteners, meanwhile, have hurt sales volume for one of the company’s biggest zero-calorie soft drinks, Diet Coke. About three-quarters of the company’s volume comes from soft drinks, including energy drinks, with orange juice, water and other beverages accounting for the rest.
Coca-Cola Life
In the U.S., Coke began airing television ads early last year on programs such as “American Idol” to bring attention to the importance of exercise and calories. The commercials sought to counter criticism that Coke’s drinks contribute to the country’s weight problem. Almost 36 percent of adults and about 17 percent of children are obese, according to the Centers for Disease Control and Prevention in Atlanta.
Coca-Cola Life, a cola flavored with both sugar and the natural no-calorie sweetener stevia, was introduced last year in Argentina. It has shown promising results, Kent said yesterday during a conference call with reporters.
Adding to Coke’s challenges: a slump in emerging markets such as China, India and parts of Latin America. Worldwide volume sales of soft drinks branded with the Coca-Cola trademark, including Diet Coke and Coke Zero, grew just 1 percent last year. That compares with a 3 percent gain in 2012.
“The growth rates in emerging markets are slowing down,” said Jack Russo, a St. Louis-based analyst at Edward Jones & Co. who recommends buying Coca-Cola’s stock. That’s not just a problem for Coke, he said. “Almost every company in the universe is telling us that.”
Stock Buybacks
To keep investors happy, Coca-Cola should return more cash to shareholders by way of share repurchases and higher dividends, Russo said. More aggressive cost cutting also could help, he said.
Coke’s management will ask directors this week to raise the dividend for 2014, Chief Financial Officer Gary Fayard said yesterday during a conference call. He expects the company to repurchase between $2.5 billion and $3 billion of its stock this year, less than the $3.5 billion worth bought back in 2013.
“Coke is not going to be able to grow as quickly as it did in the past with these issues looming,” Russo said. “They need to continue to battle it out.”
I remember one day in August of 2012 when only 600 shares were traded for the entire day.
Not sure how we can go from 200k+ to <10k but I guess that is one of the markets little mysteries.
New Distribution - More K-Marts
Posted on their facebook page on 1/3/14 - "Starting the New Year with more distribution! Natural Cabana now in Southern California K-Mart locations (50+ stores)."
The elimination of the Mens and Womens labeling is speculation based on the the front page (home page) on Pulse's website. The Pulse bottle on that page clearly states "Health" only and has different text around the front of the bottle.
The order portion of the site still show Mens and Women's. I am sure it will take some time to get everything converted over since there is existing product with the old labeling. My guess is that they left the information alone in the presentation so they would not confuse investors (both old and new) until they have a clearer direction on what the label will actually read.
Updated Corporate Presentation
While there has not been much in the way of news recently, Pulse did take the time to update its corporate presentation.
http://www.pulsebeverage.com/investors/
There is a nice slide on Page 10 which shows their national coverage and some of the distributors in those areas.
Sorry Guy - no Mississippi yet.
The graphic and one bullet point on Slide 7 seems out of date since it appears there are only 5 flavors of Cabana instead of 6. Good high level overview though.
It is not surprising there is some downward pressure. As metrodave noted, there will be some tax loss selling (people who bought higher price who will be looking to sell at a loss to offset other capital gains). With the low volume, it will take some time to liqudate some positions. Maybe they are getting an early start on it?
John, I will try to help with the math...
There is a caveat to my calculations. These are "ballpark" because of accounting rounding the company is allowed to do. For example in the 10Q, they state they spent $112,000 on advertising when in the income statement, the actual amount was $111,703. Additionally, the numbers below vary from quarter to quarter because they are VARIABLE COSTS. They may be able to get cheaper prices on ingredients or glass based on volume. Please take these with a "grain of salt" and know they are just "ballpark" and only valid for this quarter.
To answer your question about the COST per bottle, Using the Q3 2013 10Q, the Cost of Sales is $662,944. Dividing this by the 98,000 cases (Cabana and Pulse - although the Pulse has a higher margin, for this calculation we will assume the same since the case sales were pretty small) we get about $6.76 per case to produce. Dividing this by 12 bottles per case and you get a ROUGH COST TO PRODUCE A BOTTLE OF PRODUCT at $0.56 cents. This includes the bottles, ingredients, cardboard cartons, plastic wrap, labels, etc, etc.
To answer the wholesale price to the distributors, which is the same as saying how much does the company receive in revenue per case, this also will vary based on the deal. The way to calculate THE AVERAGE is to take the revenue less the slotting fees ($1,008,710) divided by the case volume (98,000) and you get a rough amount of $10.30 per case.
New Distribution Deal....
Per Pulse's facebook page on November 26, 2013, "New listing for Natural Cabana - Rocky Mtn. Albertson's 100 locations in Montana, Idaho, Wyoming and Colorado!"
No timeline on when product is going to be on the shelves on this one. It also appears Pulse is starting to use social media to release some of these deals. It is nice to know work continues on expansion - even during the Thanksgiving week.
New distributor agreement...
Posted on the Pulse Beverages Facebook page on November 19 - "7-11 (independent division) in Texas will begin carrying Natural Cabana Lemonade in January! 160 Stores!"
At least with this little post, we know when sales will likely start.
yeen, they specifically indicated in the press release about Save Mart that product would be on the shelves by the end of October. They made no such statement in the recent 380 store Albertson add. Apparently each deal has its own timing as to when product is on the shelves. I wish the company would provide a little more clarity on this.
dave, I am going to disagree with your assessment that Q4 could have been a "throw away quarter" due to seasonality if Q3 was better than they reported.
Earlier this year, they never disclosed the case sales for Q4, 2012. They only reported the annual amount in their 10K in March and if you do the calculations, you come up with about 34,800 cases. The only reason the stock did not get hammered then is investment community ignored it because of the statements they maded about how they were going to sell between 2.5 and 3 million cases in 2013. Given their experience in launching other product and growth profiles on those items, I am sure management really believed those statements and is now frustrated that it is taking longer than anticipated.
34,800 cases for Q4 2012 was at a time when the large retailers, e.g. Safeway, were not online and there were only about 7000-8000 convenience store outlets. As of the end of September, they are at 17,000 and 3,000 more by the end of the year.
Q4 2013, therefore, has different dynamics. We already know that the Save Mart deal means they stocked 187 stores in October. Safeway is still selling and has a special until Dec. 3. Those stores that are stocked can and will continue to sell. The statement about distributors not leaving was a HUGE statement. Are they going to be above 93,000 cases of Cabana (Q3 sales) because of more outlets even with seasonality? I am not even going to guess because that is what it would be - a guess.
The real question in my mind is what is the impact of the centralized buying. They made a point to stress it in their 10Q as being a reason for slower than anticipated sales. A while back they indicated that it takes 5-6 month, in most cases, from the time they ink a deal until it shows up on the shelves. It seems based on their statement that centralized buying has changed this dynamic and has made it worse. I am not sure how or why and would be a question I would like them to clarify.
One last point to remember is that this company is on target to grow from a $2.3M company to about a $4.5M company in 1 year. A 100% growth rate is still pretty darn good. Some investors, however, don't care about that because they were looking for the quick win - a buy-out from Coke or Pepsi - and are going to move on other stocks.
Paul
Disclosure: Been long on this stock since Feb. 2012
Pulse Label redesign...
In their 10Q, they indicated they were in the process of redesigning the label on the Pulse product to make it simplier for the consumer to understand.
On their front page of their website, pulsebeverage.com, the Pulse bottle gives us a preview of some of the changes:
1.) Removal of the gender and just the word Health (This is a good change)
2.) A natural product under Health
3.) ____ nutrients supplement along the top (Can't read the first word)
4.) Nutrition made simple under the Pulse logo.
I haven't gone anywhere and still watch what is posted here - more of a lurker than a poster - LOL. I have not had time to read through the 10Q yet but the highlighted items in the Letter to Shareholders caught my attention. If I notice anything else, I will post it.
Not sure if many of you have noticed, Pulse changed their Investor Relations during the quarter. It is now:
Investor Relations:
Judy Sfetcu /Evan Pondel
(310) 279-5980
investors@pulsebeverage.com
I contacted them after the change to ask a question. They kept my e-mail address and sent a copy of the press release from today (Foodtown and United Grocers) and a Q3 letter to shareholders. They seem to be taking a different approach to try to keep investors up-to-date - which is why the change may have occurred.
Here is the letter with a few bolded items for consideration:
Dear Fellow Shareholders:
As 2013 draws to a close, I want to provide an update on the company's progress and recent activities. Given Pulse Beverage Corporation's relatively brief history -- having launched operations in the latter part of 2011 -- I can say with pride that we have come a long way in a short period of time.
Our acclaimed Natural Cabana® Lemonade and PULSE® brand of functional beverages continue to gain outstanding and growing consumer acceptance, as we are making excellent progress establishing our presence throughout the country in some of the nation's leading supermarkets and convenience stores. Listings for Natural Cabana® Lemonade increased 88 percent from the start of the year to 17,000 locations.
Following are recent company highlights that I'd like to share with you:
1.) Pulse adds iconic Texas grocery chain, H-E-B, for Natural Cabana® Lemonade.
2.) Natural Cabana® Lemonade available at more than 380 Albertsons locations, including 98 stores in the company's Rocky Mountain division (CO, E.WA, ID, MT, WY).
3.) Expanded distribution agreement with Geyser Beverage Company now includes PULSE® Brand of Functional Beverages.
4.) Natural Cabana® Lemonade rolled out across 187 Save Mart locations in Northern California.
5.) Kmart introduces Natural Cabana® Lemonade in 87 locations in California and Oregon.
6.) Pulse unveils direct-to-consumer sales of PULSE Beverage and Natural Cabana® Lemonade at http://www.pulsebeverages.com.
This morning, we issued a news release announcing that gross sales for the third quarter ended September 30, 2013, increased 30 percent to $1.1 million from $846,000 for the corresponding prior year period.
Our growth during the quarter continued to reflect deeper market penetration and growing brand awareness, along with new packaging and flavor profiles. We are particularly pleased that all of the stores that initially began selling our lemonades and functional beverages since launching the Company are still doing so.
Net loss for the 2013 third quarter was $736,000, or $0.01 per share, based on 51.5 million weighted average shares outstanding, versus $766,000, or $0.02 per share, based on 35.4 million weighted average shares outstanding, in the same quarter last year. Net loss for the first nine months of 2013 was $2.1 million, or $0.04 per share, based on 49.3 million weighted average shares outstanding, compared with $2.2 million, or $0.06 per share, based on 34.3 million weighted average shares outstanding, in the same period in 2012.
Changes in grocery industry purchasing patterns, with many of the large retailers moving to centralized buying, along with a protracted period from when agreements are signed until products hit the shelves, have delayed the timeline until 2014 for reaching the milestone mark of an annualized sales run rate of one million cases for Natural Cabana® Lemonade. Nevertheless, we remain confident as ever about the company's future.
Several new and exciting products are on the near-term horizon. We are on solid financial footing with $2.4 million in cash at the end of the third quarter versus $745,000 at December 31, 2012, and total assets of $6.4 million, up from $3.5 million at the end of 2012.
At the same time, our distribution network has grown rapidly in an industry that historically takes five to seven years to achieve what we have accomplished in a fraction of that time. As of September 30, 2013, Pulse had 141 distributors across 47 states in the United States, in addition to distribution in Canada, Mexico, Panama, Bermuda and Ireland.
We greatly appreciate your continued support and look forward to keeping you apprised of our progress.
Robert Yates
President and Chief Executive Officer
Finding product when traveling can be a little tricky. While Pulse is in or have sign deal for 14,000 stores, there are over 440,000 retail outlets that sell drinks. They are currently only in about 3% of the total. This will grow to ~4.5% at the end of the year. As someone else said - lots of growth potential.
When traveling you almost need to know what types of stores a local distributor supplies to or find one of the name brand location, e.g. Safeway. If you don't, you could have a hard time finding it. It does not mean it isn't in the market or is not selling well. It just means you found a store that does not carry it yet.
Here is an interesting IPO in the Beverage Industry. Granted it is in Japan but the beverage market is not just limited to the US.
[url][/url][tag]http://dealbook.nytimes.com/2013/06/24/suntory-beverage-unit-prices-tokyo-i-p-o-at-4-billion/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+CapitalMarketsPulse+%28Capital+Markets+Pulse%29&_r=0[/tag]
How to tell if Cabana is selling in your area
Paultheoctopuss has claimed several times that just because the product is being put onto shelves, it does not mean it is selling.
Rather than argue with him, there is a way you can determine it for yourself. On the "neck" of each bottle is the lot code. It may look like this JL307712:46A or JL 3077 12:46A.
The first two letters are the bottler. The JL is the Forest Grove, OR co-packer. There is also a TB manufacturer. I do not know if that is the Virginia or Texas co-packer. There is another one or two letter code for the remaining packer. If someone spots this, I would be curious to know what it is and where you found it.
The next four or 5 numbers is the actual lot code and then the time it was produced. For this example, the bottle was produced at the JL packer, the lot code was 3077 and the time 12:46 AM. It also could be 30771 and the time 2:46 am. To determine which look at the other flavors. The numbers should be in the same area, i.e. all 2800-3000 or all 30000's.
Remember or write down these numbers. When you see a new lot code, it means the supplier (the distributor or the warehouse in the case of Safeway) has run out of their stock and has reordered from Pulse. If you see a new lot code every couple of months, it is selling very well. The will be seasonality and at different times of the year, the product may move faster or slower. When a store puts them on sale, like Safeway's 2/$3 sale, they may also move faster.
You will find that some flavors sell faster than others. In my local Safeway, I have seen two lot codes for most flavors. The only one lagging is the Regular Lemonade.
Finally, it is important to remember these are third party manufacturers that produce product for other companies so you probably should not draw any conclusions on gaps between lot codes. For example, you may see a 3077 lot code on the Mango and then the next lot code may be 3600. This is just likely the next lot code in their production cycle.
If you are in an area where the product is turning over fast, let us know.
Let’s play the game what if Paultheoctopuss is right?…..
He wants to go down the rabbit hole, I’ll chase him for a little bit.
Let’s say he is right and Pulse will not hit 3M cases in 2013. Before doing calculations, we need to review two key statements from Pulse a.) new distributors - “these listings produce case sales, on average, five to six months after listing.” Distributors signed in Q4, 2012 will generate case sales in Q2 2013; those in Q1 2013 in Q3 and so on. There are exceptions but that is not the norm. b.) In the Q1, 10Q, “We expect the remainder of 2013 revenues to be significantly higher than our first quarter due to timing of shipments into our distribution system and the increased number of regional and national chain and convenience store listings secured for Cabana™ and the rollout of PULSE® into many of the same stores.” This was made on May 15, 2013 when they knew cases sales for April and what May was looking like.
Why is that important? It is important because they still believed at that time, they would pass the 1 million case THRESHOLD (their word) at the end of Q2, i,e 83,333 cases of Cabana per month. Given my case analysis that Guynms26 posted, they may even pass it in June.
For arguments sake, let’s just pick a number for year end cases sold. I am going with 900,000 – less than 1/3 of 3M (June 80,000 cases, July 100,000 cases, Aug. 110,000, Sept. 125,000, Oct. 120,000, Nov. 110,000, Dec. 100,000 – small drop off for seasonality, if there is any). Using a case revenue of $10.25 per case, this would translate into $9,225,000.
So ask yourself, Do I want to invest in a company that:
1.) Grew from $2.2M to $9.2M - more than 400% Y-O-Y. Don’t forget to add the revenue from Pulse case sales too!
2.) Jumped to 7th spot in the Lemonade category in 2 years. See BevNet chart recently released.
3.) Has a great tasting low cal lemonade (6 flavors) and a nutritional drink (5 flavors) that is just hitting the market
4.) Is in a niche market that society is trending towards – Low cal, non-carbonated drinks that are good for you.
5.) Is in a niche market (nutritional drinks) that even the Coke’s, Pepsi’s, and Jones Soda say they are seeing the largest growth and in a direction they are trending.
Even at $9M, it would get the attention of Coke, Pepsi and Dr. Pepper. Is a buy-out possible? Sure – anything is. Even if it is not, this is a fast growing company!
Thanks Guynm26 and Hello
First I would like to thank Guynm26 for posting some of the information that I sent to him - especially my case analysis from the latest announcement. You have been a great moderator. Thanks.
The name is Paul - not to be confused with Paultheoctopuss. I have been an investor in Pulse since Feb. 2012. I occasionally post on the message board at Yahoo finance under the same alias name. My apologies if you read both sites, you may see the same posts there.
I have been reading the posts on both sites for 6-8 months and have decided it is time to join the fun here! I am looking forward to a lively conversation.