Sam’s Club – We now have an authorization (previously announced as a commitment), we will be shipping to 600 locations, jumbo meatballs package (retail package) – 600 locations: will add at least 15% to the sales starting this summer (!!!) They (Sam’s) want to see a minimum sales per location. Similar products as Costco and they’re far exceeding that minimum. If it’s not successful after a period of time, you eventually have to sell your product and have enough turns to stay in. We start with Sams Jumbo in June with 600 locations and if successful (after 17 weeks) we’ll continue and it will be very high volume.

Walmart – Walmart is our largest partner. The family pack that went in test in October did well. We now have a formal commitment to begin shipping in August – from 500 stores previously announced to 1200 or 1500 stores (Carl asked for 3500) : 1500 stores would add 5% to 7% additional sales.

Costco – just ran a promotion on our product and sold close to 4 times what is considered the minimum sales per week per store to be successful. Expecting additional rotations and eventual hope to be in Costo full year in 5050 locations  – That is over $20M per year per product volume. 

Many of their products in our category are there on a 8 week rotation. In those 8 weeks your product is in and out because they want to surprise the clients. And if your product sells well, they’ll book you back for additional rotations and at some point you become a permanent product. You have to win all divisions. You take the data of your success from one division to the others. At some point you’re in all divisions. It doesn’t go through a national headquarters but through several divisions (northwest, northern cali, southern cali, San Diego, Chicago, etc). 

As those increase, by their estimates it’s 20M per 1 item. The April test was in 1 region. We are in 2 right now. Northeast and SF (recent). For a promotion period, one of those was very good (4 times minimum). Next step is to get the 2nd rotations, get more divisions and more rotations, and eventually become a national product line selling all year round. Completed a second rotation at a Costco division in SF. Sold out at one point. Expect that rotation to continue this summer. Also sell in Costco Northeast very successfully. We hope to move into all 7 divisions (5500 locations) and move from rotations to continue placement. If that occurs that would mean $20 to $25 Million dollars per SKU. We have other items we’re presenting to Costco as well.

I’ve sent an email to Carl asking when he believes he’ll be in all the Costco divisions.

Albert and Safeway – authorized for test for 10 new pasta bowl items. Next month (June) start the test. 2200 stores (total). 5 bowls at the beginning. New! Not announced before. If the company can get in 1100 stores: at least 15% additional volume for the company. There’s more new business coming like that.

Goal by the end of the year is to be making at least $50M in run rate. And if we do additional $10m in sales, it will add $2M plus to profits (high leverage). It’s very possible that we’ll be at 60 to 70M, however I don’t feel comfortable yet with that number, but that’s our goal by the end of the year. And that’s not the next year. It’s this year.

Did he just say that their internal goal is to be at $60 or $70 million run-rate by the end of the year?!?! They just did $40 million last year. That could mean a 50% increase in sales. Another golden nugget that we already new, but it’s interesting nonetheless is that for each $10 million in sales, there will be $2 million in profit.

Aquisitions – We’re moving very very diligently looking for acquisition prospects. We’ll probably make at least 1 acquisition in the next 4 months. No guarantee. The one we’re negotiating right now, it would be extremely accretive. 

What I read here is that they’re not looking for acquisition targets. They have already found at least one and are now negotiating.

Nasdaq – Hoping to uplist to the Nasdaq. Need $3 for 5 days (immediate) if not $2 wait until the end of June. Not planning to do a reverse split.

Questions & Answers – What is the opportunity when we talk about expanding within your current customers? We have 3 plus products per average customer (9 in Publix hopefully going to 14). You take a customer like Costco, if you’re successful 20M+ (at this point he changed subject). Pasta bowl and jumbo packs are selling very well. We believe we can increase business with both new and existing customers. 

Here’s where I think Carl was going before he changed subject. If they have 3 products per average customer and 1 item at Costco represents $20 million, that means that, in Costco alone, they could be seeing their revenue go up to $60 Million!!!

QVC – Without Dan Mancini being there, do customers still buy? There are 3 ways Mama sells in QVC. Direct on air, website, and auto-ship program (customers make 1 purchase and then the product is automatically shipped to them during 1 year). QVC indicated a very very substantial increase in volume. We’re usually number 1 or 2 in the program. Typically on for 8 to 10 minutes.

Direct to consumer have been accepted in Amazon fresh. We’re waiting for a start date. (think the business will be pretty good, take a little while to develop, another option for DTC). 

Canada (and not only) – going after the convenience store business with pasta meatball cup. Initial indications in convenience stores. We should be announcing that very soon.

Kroger is coming.

CONCLUSION

So, to finalize, great insights into the business. Below are my conservative estimates for the next 3 years. 

I’m estimating the revenue to get to $70 million in 2023. According to Carl, we could be seeing that as soon as 2022. I’m also attributing a market multiple of 16x earnings. Surely, the company will be trading way above that if it keeps growing at 20%.

Even with my conservative assumptions, I get to a share price of around $5 three years from now, or a 28% rate of return.