some basic sales projections and valuations that t
Post# of 15187
assume 30 dealers up and running and averaging 50 stores per dealer, 1.5 cases, a week sold, and $1.25/bottle avg revenue to HJOE:
DEALER REVENUES
Dealers 30
Stores/Dealer 50
Cases/week/store 1.5
HJOE rev/bottle $1.25
HJOE rev/case $15.00
HJOE Rev/store/yr $1,170
HJOE Rev/Dealer/yr $58,500
HJOE Rev/All Dealers/yr $1,755,000
DEALER FEES/LICENSING
Avg License/dealer $30,000
HJOE Rev/Dealers $900,000
Total Revenues: $2,655,000
that is just below the target zone of the $3-5MM that the company put out and reiterated. granted, they got a slower start than they wanted but that is business. that is only 30 dealers. lets assume same sell through rate and 100 dealers:
DEALER REVENUES
Dealers 100
Stores/Dealer 50
Cases/week/store 1.5
HJOE rev/bottle $1.25
HJOE rev/case $15.00
HJOE Rev/store/yr $1,170
HJOE Rev/Dealer/yr $58,500
HJOE Rev/All Dealers/yr $5,850,000
DEALER FEES/LICENSING
Avg License/dealer $30,000
HJOE Rev/Dealers $3,000,000
Total Revenues: $8,850,000
now - lets assume they just go from 50 accounts/stores to 250 (target is 300 per dealer/territory).
DEALER REVENUES
Dealers 100
Stores/Dealer 250
Cases/week/store 1.5
HJOE rev/bottle $1.25
HJOE rev/case $15.00
HJOE Rev/store/yr $1,170
HJOE Rev/Dealer/yr $292,500
HJOE Rev/All Dealers/yr $29,250,000
DEALER FEES/LICENSING
Avg License/dealer $30,000
HJOE Rev/Dealers $3,000,000
Total Revenues: $32,250,000
Now - the licensing fee is a one time revenue source but at a mere sell through rate of 1.5 cases/week in 250 stores with only 100 dealers - that is $30MM in revenues/year. that does NOT include chips, new products, or ANY international sales. also does not include the big box stores or larger c-store chains once the brand gains traction.
Now - Taking a look at profitability from above standpoint and only including revenues from product sales (not licensing since it isnt reoccurring and only SMS sales on current shots):
PROFITABILITY
Avg Rev/Bottle $1.25
Laid in Cost per Bottle $0.25
GM/bottle $1.00
Assumed overhead 75%
(marketing/advertising, SG&A, legal, etc)
Net profit/bottle $0.25
Net Profit/revenue % 20.0%
Net Profit on Product Revenues: $5,850,000
Corporate Tax Rate 40%
Corporate Tax Due $2,340,000
GAAP Net Income $3,510,000
more importantly for today's price consideration on best guess for CURRENT sales situation of 30 dealers, 50 stores, 1.5 cases/week, $1.25/bottle rev to $HJOE:
MARKET CAPITLIZATION AND RATIOS
O/S (assumed per last filing) 1,900,000,000
Current Price $0.0015
Market Cap $2,850,000
Revenues (product) $1,755,000
Price to Sales (P/s) Ratio (MC/Rev) 1.624
Comparative P/s 11.24 Monster Beverage 6/16/2016
Comp P/s applied to Revenues: $19,726,200 (FV Market Cap)
FV PPS $0.0104
I used Monster (MNST) as it is publicly traded, still in growth mode, and probably the closest in terms of history/story. now - if I include dealer revenue as it IS pertinent in initial FV (Fair Value) calculations before SMS model matures - that brings FV PPS to $0.0157
now - excluding licensing fees and going to 50 stores with 100 accounts - FV PPS becomes: $0.0346
so - when I (and others) start talking about $0.03-0.05 PPS based on current business environment - it is NOT pie in the sky. due to their growth mode being dramatically larger than MNST - one could double or triple the P/s multiple to project that future growth (from 30 dealers to 50 to 100 or from 50 accounts per dealer to 100 to 300). that ratio will be assigned a larger premium once the growth curve can become somewhat validated.
when financials are reported - and revenues look ANYTHING like the above model (wrt to SSS through SMS business model) - the price per share will quickly start reflecting the potential. even if OS was 3BB - FV today would be closer to $0.01 PPS based on the $3MM in revenues. that is only with a 11.24 multiple applied. so - again, if/when they file and revenues look like this - a penny should come very quickly and then possibly 3-5 cents shortly thereafter.
finally - the $1.00 PPS target (with no splits or buybacks). if one provided a 28.1 P/s ratio (or 3X current Monster P/s) - the company would have to have 100 dealers, 300 accounts per dealer, and doing 3 cases a week at $1.25/bottle to justify $1 PPS at 1.9BB OS. at current P/s to MNST (11.24), there would need to be 541 dealers with 200 accounts and 2 cases a week per store. not impossible but definitely years out.
now - from a totalrevenue side: at 100 dealers, 200 stores, 2 cases/week - that gives $31.2MM in revenues. at current 11.24 P/s multiple - it would take an ADDITIONAL $137.8MM in revenues to give a $1 PPS. if the multiple were tripled to take into account the future growth - it would only take an additional $25MM in revenues (or $56.3MM total) to give $1. regardless - this would more than likely be years away but certainly possible based on the multiplier effect of retail sales and a brand taking off.
all the more reason shareholders need filings to be published and company allowed to move forward. also why i think PPS will start moving aggressively before they do file and/or when it become imminent. if a TRO is granted today preventing KBM from further conversions - that would go a long way.