Bebida Beverage Company (BBDA)

[Whiplash_Investor]

Here's my take on 3/27/13 interview (mostly in my paraphrasing):

Started off with quick history of company since 2009. Of note, he didn't have relaxation products until a couple years later. First couple of years, he spent also dealing with some "pre-existing" conditions relative to the company and share structure. (I think he was paying off debts from the previous shell owner, so had to issue lots of stock to do it...can see this in the fins from 2009 into 2011).

He was asked about share structure. He charted a path 18 mos ago to end market capitalization. He takes issue with calling raising capital in this way as dilution. He went public to raise capital to create products, a good brand, and a business. He feels he is pretty much on target, but had to have some course corrections to get there. The path he charted has two basic components 1) A responsible buyback and 2) A move to the big boards. He wants to share the future and success of the company with shareholders. He mentioned that Monster once sold for $.02, then in 6 months went to $.50, then in another 6 months to a dollar. It is trading for $70 now because they had a good product and plans.

He was asked about buyback progress. He said he had a group of mtgs over the holidays with 2 consultants in NYC and 2 CC attornies (he may have meant SEC or securities attornies). They will buy the stock if it gets low (some target he doesn't mention for obvious reasons). His words were, "will buy anything that becomes available at very low amounts, but not be too aggressive" until big POs start coming in. It doesn't make sense to fund buybacks beyond the excesss of what he needs to fund operations as he'll just be borrowing money to pay interest. They have set a basement price on the stock and will protect that over the next 5 or 6 months by buying as needed.

He has a trip somewhere the day of recording the interview (may have been yesterday) and will go to NYC again to meet with the same group to create a plan to move to the big boards. Once decided, they will "start process right away."

He was asked about being the first relaxation drink to get into Walmart (WM). He said he was introduced to WM last year. The first launch was in 78 SC stores, working under the advice and timelines of WM process (which is lengthy). They made mistakes, but kept correcting along the way, even down to when and where to do "sampling" in the stores...learned alot. WM sets up modulars (permanent shelf space) once per year. Decisions are made in July and implemented in Oct. So KOMA Unwind will be in next implementation to go into 4000 WMs across the country by the end of 2013. He had a meeting with WM in December to review the first launch results and all went great. WM is transitioning Bebida from net 30 payment schedule to "pay on scan" systems that all permanent (annual renewals) products on shelves adhere to. In "high level" mtg he had with WM this past week, KOMA was referred to as the "Golden Child," as first relaxation drink they've carried (is my interpretation) and going into thousands of stores (90% of US stores). He mentioned that some investors understood the trials of starting a business. WM is like turning an aircraft carrier, very slow, but steady.

He said that sales and return on sales is are "amazing." 500 to 1000 cans per store per month. That's 4M cans per month in 4000 stores and $40M annually (must sell to WM for about a buck a can, then WM marks up from there). And that's only this one retailer. Having KOMA in WM will push over into other retailers carrying it.

He was asked about Europe. He responded that he couldn't let the "cat out of the bag" yet, but in a week or two will announce. BW spent last week with new Euro-Asia leader (total team is 6 folks). He actually met him last July, but corresponded for many months before that (so this has been going on for quite some time). On the Slovak corporation that keeps missing in Olaf's screen shots, he said, "...working on a few structural differences than we originally thought we would be going out with. For example, we had already started and already have a Bratislava, Slovakia corporation in play, but decided to change that to Poland..." (My interpretation is they had the corporation IN PLAY [being created], not established as Olaf put it. They have and had the paperwork done, possibly filed, but not completed, before they cancelled and move to Poland). The team consists of 5 plus the leader to market Bebida products in Eurasia. The leader (TBA in the announcement in 1 to 2 weeks) has in excess of 20 years experience in the beverage industry. Among the 6, there is over 100 years experience in the industry with billions of dollars in sales in China, Japan, Dubai, N Africa, ...(only countries he specifically named). The leader developed beverage sales in 58 countries for his unnamed company. BW is trying to pull off a May 1st kickoff of that Eurasia company (so don't expect PR on it until afterwards...as he did say 1 to 2 weeks from today earlier in the interview). The leader started with selling 300,000 cases in his first year to18M cases this past year (so no slouch in the industry).

His final words in the interview summed up his thoughts to current and future investors:

1) His door is always open...come see for yourself...everyone leaves happy

2) He has the 1st relaxation drink carried by WM

3) KOMA has 75% brand awareness already in the world in the relaxation drink category (told to him by the new eurasian leader)

It takes time to develop a new category. Inevitably, the business (and the stock) will climb north. There's no elaborate "scheme" (his dig at the skeptics, IMO) going on. Those wondering should reach out to his employees, vendors, and customers. He will continue to do what he's doing and intends to be the Red Bull of relaxation. His company is growing every day and in every way.

That's about all I got out of it. Listen for yourselves at