Q1 Guidance 12/13 $1.1M
Q1 Guidance 01/17 $1.425M (+30%)
Q1 Actual Revenue: $1.490M (+4.6% over guidance)
Q2 Guidance, 1/17 was $2M, Cliff emphasized exceed $2M on call. I think $2.5M minimum.
Cash burn was less than I expected, 12/31 cash, $1.9M, Ted stated $300K received in Feb on warrants, approx 1M warrants still out. I believe these are at $.60, they will start coming in quickly. Cash is not a concern.
Equity -$5.7M, however Ted stated there is $8.1M in unregistered stock NOT included in this figure
Morgan Beaumont has NO Long Term Debt.
Ted says goal to have Gross Margin positive this quarter, definitely in Q3.
400 Distribution outlets in South Florida, this was 300 on 12/13 call (55 days ago). On December call, revenue was stated as $1K per site/ per month. 100 additional outlets adds $300K per quarter, when ramped. Now marketing debit products as well as pre-paid phone cards to retail outlets.
Initiating sales force in Tampa-Bradenton area this month.
**** At least 3 INSTITUTIONS were on call. ****
I-Prepay (This contract was announced 11/29/04, they have 250K outlets, their distribution estimate at that time was 55K cards per month.) rollout began January.
Western Union, activation (45,000 terminals) this week.
Moneygram (From PR today) (Contract 11/11/05, 20,000 sites) deployed successfully on 11/29/05.
ServiBancos Card (MetaBank / Symmetrix) launched Q1.
New products with MetaBank: Main Street M/C launch Q2, Sire Elite Card, Rex Card, ServiBanco/Main Street ATM Card.
There are now 93,000 functioning POP’s including Western Union. Cliff stated this is 3 times as many as next largest network (33,000), which is a closed network. Cliff thinks MB can get to 200,000 POP’s this year. Target areas, Pharmacy / Gas Stations. Over 60K pharmacies in US, ties in to HSA program with Products Benefits Corp/MaxUM Plan which Eric discussed for several minutes. Cliff later went into some detail on the ability of this program to strip and itemize transactions as deductible/non-qualifying based on IRS regs. There will be a significant announcement soon on this program.
Eric is speaking at a Pre-Paid Card Expo in new york, 2/16-2/17. Am Exp, Discover, MC & Visa also presenting. Look for a good piece of business to come out of this down the road.
Both Cliff’s and Eric’s comments included “announcements by the end of this quarter” and “banks” (plural) as sponsors / issuers for product lines.
There was also a PR today on MB debit products now enabled for use on phone products as well, the previously announced enhancement of writing money orders of debit card will deploy this month. Also touched on is the ability of certain products to enable reporting to Trans Union, Equifax & Experion, allowing customers to build credit files.
Another revenue stream Cliff touched on is that of outside traffic utilizing the Sire Platform, for any type of financial load/posting/transaction. They continue to pursue other joint/partnership products with banks, processors, distributors.
The only area that really wasn’t touched on was the IVR product and payroll card. However, Bostrom brought in a 35,000 employee payroll service on 1/12, and MB signed with a benefits network with 13,500 imaging/lab facilities just 10 days ago.
Did I mention:
**** At least 3 INSTITUTIONS were on call. ****
I think that Cliff & Eric had an excellent presentation, this is REAL business being delivered, not a spin job of “any day now.” There was detail given on specific client rollout and new product deployment. Cliff & Eric were clear and concise in the presentation, and responded thoroughly to the institutional questions. Ted was straightforward with financials. Cliff held firm to the company’s focus and direction: This company has spent years, not weeks and months developing its technology and building a solid base, an extremely difficult focus for a start up to maintain. MB has resisted the temptation to launch a generic line of products for short term relief. Every product line now being introduced is top shelf, with unique features, and without peer when integrated into the Sire platform.
I was disappointed again on not being able to get into the question queue, but everything I would have asked was covered.
I’ll tell you what I think of this company. I took a small position in January 2005. I added 5 times from August to January. I added twice today, got only a partial fill on 2nd. I sold the last mutual fund I had today and will add again Thursday when it clears, regardless of price. At that point I will be stacked 85% in Morgan Beaumont.
**** At least 3 INSTITUTIONS were on call. ****
