Preliminary Hearsay NROM Confrence Call Transcript Pieced Together
Thanks to your help others, OBrien, I've been able to piece together a hearsay synopsis of the conference call that can't be found in the 10K. Let me know if you think of anything else or if you disagree with anything you see here so far. It is still a work in progress.
Oh, and for the record, everyone, 100% so far, concur that the conference call was indeed annoying in the fact that nobody had their phones muted. LOL Okay, well, at least they know how to run a restaurant. That's what matters. :)
1) First franchised Craft/Pizza Pub by a multi-unit Dairy Queen operator is due to open by May 1,2019.
2) Testimony from Seeking Alpha
A franchise in Evansville will also be opening sometime this year. They did not give a date, the location hasn't been selected yet. Doesn't sound like it's going to be real soon, but by EOY. In looking at the numbers, I think they have their $30,000 from this franchisee, so it will be happening.
Mobley also suggested that a 3rd franchise is a possibility if the Lafayette location does well. He hinted that there may be other potential franchisees watching the Lafayette location to see how it does before committing.
One overlooked area could be the non-traditional locations. In Q4 '16, they had $1.14M in sales, increased to $1.20M in '17, and $1.28M in Q4 '18. Mobley seemed pretty confident that this would be an area of increased growth with the 14 additional locations signed from Jan 1-March 26, as compared to either 6 or 8 during that timeframe last year. I wasn't a fan of this part of the business before. They always seemed to be adding location, but sales were flat. Now, the additional locations are adding to the bottom line. When I look at a corner with multiple gas stations, one corner usually has sub sandwiches, and the other corner has something else, usually pizza. It does seem to be a business with potential for growth with all of these convenience stores adding express food units.
The other interesting area is the grocery store business. Q4 it did drop from $450,000 to $330,000. However, in Q3, grocery sales were $311,000....so sales actually went UP from Q3 to Q4. Mobley still suggested that there would be decreases in this area, although non-committal on how much, he did say they would be much smaller He did go back to the comment about this being "counter cyclical with the economy", and that this business is built and could go up if the economy slows again. I guess, most importantly, is that this business doesn't seem to be going away. I feared this was going to wind down to 0, so I'd be thrilled if they could at least maintain something around $300,000 per quarter.
3) New Pizza valet with DoorDash was discussed as showing success.
4) A bar enhancement program is coming.
5) They will expand their catering efforts which are successful. I especially love that.
6) A new company-owned store will open by end of year. Possibly a second. One of them will be done by a bank loan of $600K. I will speculate that these will come in the form of tranches from a $1.6M revolving line of credit established 1.5 years ago.
7) Introduce an on-line ordering program and expand their social media footprint.
I would also like to speculate on a personal level that by this time next year, the landscape will look entirely different. For one, there are convertibles due at the end of this year. At this price, they will have to be extended and that could be a dark cloud. And I have full confidence that they will be. I'm absolutely confident and don't see that as a risk at all. Not in the slightest. Therefore, I think the real journey is just around the corner.
