dave, I am going to disagree with your assessment that Q4 could have been a "throw away quarter" due to seasonality if Q3 was better than they reported.
Earlier this year, they never disclosed the case sales for Q4, 2012. They only reported the annual amount in their 10K in March and if you do the calculations, you come up with about 34,800 cases. The only reason the stock did not get hammered then is investment community ignored it because of the statements they maded about how they were going to sell between 2.5 and 3 million cases in 2013. Given their experience in launching other product and growth profiles on those items, I am sure management really believed those statements and is now frustrated that it is taking longer than anticipated.
34,800 cases for Q4 2012 was at a time when the large retailers, e.g. Safeway, were not online and there were only about 7000-8000 convenience store outlets. As of the end of September, they are at 17,000 and 3,000 more by the end of the year.
Q4 2013, therefore, has different dynamics. We already know that the Save Mart deal means they stocked 187 stores in October. Safeway is still selling and has a special until Dec. 3. Those stores that are stocked can and will continue to sell. The statement about distributors not leaving was a HUGE statement. Are they going to be above 93,000 cases of Cabana (Q3 sales) because of more outlets even with seasonality? I am not even going to guess because that is what it would be - a guess.
The real question in my mind is what is the impact of the centralized buying. They made a point to stress it in their 10Q as being a reason for slower than anticipated sales. A while back they indicated that it takes 5-6 month, in most cases, from the time they ink a deal until it shows up on the shelves. It seems based on their statement that centralized buying has changed this dynamic and has made it worse. I am not sure how or why and would be a question I would like them to clarify.
One last point to remember is that this company is on target to grow from a $2.3M company to about a $4.5M company in 1 year. A 100% growth rate is still pretty darn good. Some investors, however, don't care about that because they were looking for the quick win - a buy-out from Coke or Pepsi - and are going to move on other stocks.
Paul
Disclosure: Been long on this stock since Feb. 2012
