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Thanks for the warm welcome and insights Noyoweb! I started a small position...can't bring myself to go bigger at this point as the company seems to have a history of leading investors on with big promises and is close to needing more cash. Also worried about defensibility of the product...does not seem that difficult to replicate (but what do I know?!) Look forward to some good news!
Hi all - new investor here learning about BRFH. Thanks for the insights...nice to see an active board! My question is does anyone know what happened to the company's Australia business? In watching some videos, they were in Subway and Krispy Kreme, if not other chains. Was that business not successful or did it get sold?
He directly addressed the share price drop and emphasized that there has been no insider selling. He explained the poor LED results as overstocking by the customers in the second half of 2017, leading to excess inventory in 2018 thus lower orders from them. Tone was slightly defiant. Overall I found it encouraging, though my expectations were very low
They announced the name of the new product line - "Capstone Connected Surfaces," a smarthome product - guessing it's something like built in touchscreens in the home. ASPs to be similar to phones and tablets. They hired a new PR firm and will launch a new website
The market cap is $13 million ($0.28*47m shares o/s) so $21 million (or $0.50+) is long gone. Stock price already reflects sales declines. CAPC has $3.9 million (or $0.08/share) of cash and is still cash flow positive. Need guidance on LED for rest of the year
You guys were right...another down quarter. What I find frustrating is that the stock traded down on heavy volume before the release, indicating someone knew. I don't invest in OTC much and that's just another reason not to
What a rough couple weeks. I would welcome a drop into the low $0.20s as I would start adding there. I continue to think Q1 will be higher Y/Y based on the language in the 10-K. I am more worried about the rest of the year as CAPC products don't appear to be on the shelves or online at Costco currently. Hopefully there's some better guidance on the call. I am less worried about the new product at this point and more about maintaining/growing LED revenue.
I think Q1 '18 will be up Y/Y based on the guidance in the 10-K. Keep in mind that Q1 was pretty much in the bag by the time they filed
I finally got through CAPC's 2017 annual report. Some notes below
Outlook - while they provided no 2018 guidance on the call, I thought the sentence below and figures on purchase obligations promising.
"With the continued retail interest in our product offerings, the expansion of the LED Home category products under the Hoover® brand, and with the continued introduction of new products, the Company anticipates its sales volumes to continue to grow in fiscal years 2018-2019."
Purchase obligations (Company's commitments for goods and services in the normal course of business) of $2.7 million is slightly higher than what it was at the same time last year.
I also thought it was a positive sign that Stewart took a pay cut in 2017 (from $428k to $402k). Another sign that he's doing what's right for the company
Hi mov1es - agree with you but having hard assets is a double edged sword. It would also mean having to continually invest to grow or maintain sales. Part of what attracted me to CAPC was the capital light model and high return on invested capital (i.e. not having their own manufacturing facilities and large warehouses). But who knows...maybe I'll be wishing for more hard assets if cash flows fall off ;)
Agreed. This is the second time he's alluded to $30-35m of revenue for the core business. Given Q3 trailing 12 revenue of $39m and Q4 TTM of $36m, I'm not banking on any growth for 2018. At this point, it's all about whether or not we think management can successfully launch a new product line. I think the stock is fairly priced, if not slightly overpriced, based on the core business alone
On the bright side, company continues to generate cash. Now debt free and have $3.7 million of cash on hand
10-K is out. Q4 was a little disappointing. Year over year decline in sales. For full year 2017, operating income was down despite 20% sales growth. Waiting for press release and conference call tomorrow to see if there are any developments for 2018
SMDM is a similar type microcap posting record numbers and sitting at 52 wk lows. They seem to do a ton of IR work and promotion,,,
Look forward to CAPC earnings this week. Will be listening for how the proposed China tariffs could affect the company.
https://www.bloomberg.com/news/articles/2018-03-22/american-lovers-of-lingerie-and-luggage-may-feel-tariff-pinch
Awesome! Thanks for posting
I found it while screening on bloomberg for low price to cash flow stocks
What are the best guesses on the new product line? My money would be on smart home tech. From the Q2 2016 transcript:
"Yes. We have—in the area of home automation, which is predominantly the ntegration of appliances, systems, in-house thermostats, lighting, etc., all operating through Wi-Fi, and in turn, through an intelligent device, like a smartphone, home automation is here. It’s here to stay and it’s going to be a large growth market. We do think that there’s going to be significant pricing fallout over the fourth quarter, and as such, before we launch and introduce our entire Home Automation Program, which we have been in development of over the past year, we developed a few key items that would be very affordable, an easier introduction to the consumer base, incorporating the Wi-Fi control mechanism through smartphones, etc., for a few specific items, one of which is the outlet. If you’ll recall, Michael, we had before, a wireless remote control outlet last year in the marketplace. The intelligent control outlet is a follow-up to that item, basically, an outlet that one would control through their smartphone."
Thanks Mike. Good that you have had a positive experience with the products. Just saw these reviews for the gooseneck lamps: https://www.amazon.com/Capstone-Lighting-Outdoor-Gooseneck-Lantern/product-reviews/B071S918J1/ref=cm_cr_dp_d_show_all_btm?ie=UTF8&reviewerType=all_reviews
Somewhat disturbing as this was a big product launch and product appears to be defective. Many of the customers purchased at Costco
Hello everyone - I have been researching CAPC and was excited to come across the active community here. So far I really like what I've seen. CEO has skin in the game with 20% ownership and a track record of building successful businesses. The valuation is reasonable with the stock trading under 10x free cash flow. Big risk is customer concentration (Costco and Sam's make up 99% of sales) but hopefully this is mitigated by product and channel expansion. Question I want to throw out to the board here is if folks have had first-hand experience with Capstone/Hoover/Duracell lighting products? How do the vanilla LED lights compare to big name products? Does the CPC power failure light actually work for you? This is the next step in my diligence but thought I would try and crowdsource some responses. Thanks!