Leading Brands, Inc. (LBIX)

[NewJerichoMan]

Vancouver, We Have A Problem.

I estimated the company would do about $8M Canadian in 2017. They nearly did. Problem is, about $6.5M came from the plant. Bigger portion of the pie than I realized. Naively assumed it couldn't be that big given the executive compensation. Wrong. Big time wrong.

All rounded and all Canadian dollars

Gross Sales = $1.7M
Slotting Fees = $500K (~30%, way too much free product)
Net Sales = $1.2M
COGS = $1.35M = negative gross margins
SGA = $3M - includes Executive Compensation of $1.2M.

On a brighter side, albeit a very dim brighter side, the beverages are growing at 52% CAGR from 2015 through 2017. They basically have $1M in debt, with $6M in cash and accounts receivable. Cash makes up about $4.3M of that. +5M on the debt position. So, if the company is gearing to take itself private, the balance sheet, if not the business model, could justify it.

Put up a quarter of my position at the bid price, sold at the ask. Someone is buying.