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Thursday, September 08, 2016 5:29:20 AM
And-of-course-those-FACTS-invalidate-the-"less-than-average-sales" statement that competitors have been using against $KAYS... So, using the numbers supplied by the great State of Oregon, 319 dispensaries sold $60 million dollars worth of recreational pot... in 5 months...
Therefore, 319 stores averaged $37,617 per month or a yearly rate of $451,410...
What did $KAYS report? $246,000 dollars in 3 months = 82,000 per month for 2 stores, = $41,000 per month per store. Since most of these sales were in fact - recreational sales, it seems $KAYS is actually doing BETTER than the average store!
Upon futher study, you see that $116,325 was the gross profit, $KAYS reported, and Salaries were $78,780 leaving a profit balance of $37,545 to pay interest, "professional fees" and administrative fees.
Now, a private company would not have the admin and professional fees that $KAYS has, and would be able to show a NET PROFIT with part of the $37,545 in excess of salaries that $KAYS has shown..
So yes, let's assume the 2 new stores open and all 4 stores actually show 10% higher revenues than the previous two stores... And, since salaries reported include the CEO and Management and the GROW operation, let's assume those part of the salaries do not increase, but only salaries for the new stores will be added... So add $30,000 to the salaries.
Can "professional fees" be cut? I would think so, as $800,000 per year in professional fees seems a bit high... Let's say 50% reduction, to $100,000 per quarter...
Now we are going to report 4 stores with $541,200 in revenues, and cost of goods sold the same 52% of revenues, leaving 48% gross profit margins. Now we have $259,776 in GROSS PROFIT margin.. Deduct 109,000 in wages and salaries and that leaves $150,776 to cover interest, admin. fees, and "professional fees"
So with that revenue rate and expense structure... probably still come up with a slight loss...
However... now let's assume that another 10% increase in sales is achieved in the second half of 2017, as one of the locations is very profitable and overall, all the locations are up 10% more in revenues.
But no employees are added so we still have the same expense structure, and expenses structure... Revenues will come in at $595,320 - gross profit margin = 48% = $285753 - $109,000 in wages and salaries = $176,753 in GROSS MARGIN dollars to pay fees, interest, and admin charges.
That may very well cover them... and now we have a CASH FLOW POSITIVE company!
The numbers used in the above example, for forward looking sales were assumed, and may come in higher and lower than the examples used for demonstration purposes.
Therefore, 319 stores averaged $37,617 per month or a yearly rate of $451,410...
What did $KAYS report? $246,000 dollars in 3 months = 82,000 per month for 2 stores, = $41,000 per month per store. Since most of these sales were in fact - recreational sales, it seems $KAYS is actually doing BETTER than the average store!
Upon futher study, you see that $116,325 was the gross profit, $KAYS reported, and Salaries were $78,780 leaving a profit balance of $37,545 to pay interest, "professional fees" and administrative fees.
Now, a private company would not have the admin and professional fees that $KAYS has, and would be able to show a NET PROFIT with part of the $37,545 in excess of salaries that $KAYS has shown..
So yes, let's assume the 2 new stores open and all 4 stores actually show 10% higher revenues than the previous two stores... And, since salaries reported include the CEO and Management and the GROW operation, let's assume those part of the salaries do not increase, but only salaries for the new stores will be added... So add $30,000 to the salaries.
Can "professional fees" be cut? I would think so, as $800,000 per year in professional fees seems a bit high... Let's say 50% reduction, to $100,000 per quarter...
Now we are going to report 4 stores with $541,200 in revenues, and cost of goods sold the same 52% of revenues, leaving 48% gross profit margins. Now we have $259,776 in GROSS PROFIT margin.. Deduct 109,000 in wages and salaries and that leaves $150,776 to cover interest, admin. fees, and "professional fees"
So with that revenue rate and expense structure... probably still come up with a slight loss...
However... now let's assume that another 10% increase in sales is achieved in the second half of 2017, as one of the locations is very profitable and overall, all the locations are up 10% more in revenues.
But no employees are added so we still have the same expense structure, and expenses structure... Revenues will come in at $595,320 - gross profit margin = 48% = $285753 - $109,000 in wages and salaries = $176,753 in GROSS MARGIN dollars to pay fees, interest, and admin charges.
That may very well cover them... and now we have a CASH FLOW POSITIVE company!
The numbers used in the above example, for forward looking sales were assumed, and may come in higher and lower than the examples used for demonstration purposes.
