I think that part of the reason for the sell-off earlier this year was that the company did not put on meltdown dallas. No explanation of why they didn't put it on. They just didn't.
Part of the reasoning might be that it was unsuccessful. On that note, I also think the reason for the 3rd Q miss was the experimental festival, Beach Blanket Bingo, was also a bust. "crowds were light, problems few..." Gross margin was 31% rather than their usual 45%. Had they hit my expected revenue estimate of $1.75M, gross margins would've been in line with expectations.
That they are expanding the "something wicked" brand with "something wonderful" makes me think the festival was a huge success this year.
I lowered my estimates for revenues year end to $7.6M from $8.5M. I thought they would do better in the third quarter and was also hopeful that meltdown was going to be moved to december. Instead, they scraped it.
Next year should be interesting with something wicked and something wonderful. I think it is bullish.
So far they produced 62 events in the 4th quarter, which is right in line with my projections of a total 238 events by year-end. I'm expecting revenues of $3.2M which would be a 48% increase and ebitda of $304k to $504k. That's assuming 40% gross margin.
I am trying to adjust my outlook to be more conservative. Hopefully they beat expectations this time around.
