Hi Paul,
On the downside, revenue cannot be recognized until delivery to the distributor or customer (depending on the return-ability of product in the contract). Thus, the revenue may be $0 this year, $1m next year, $1 M this year, $0 next year, or anything in between (although logic would dictate that we will see more sales in year two as word spreads, manufacturing is in high gear, and the sales infrastructure is more firmly established.
On the upside, I have a gleam in my eye thinking about the 10 multiple of the US market..plus all the sales that wont go through these channels (like the Army for instance). I can't speak for this industry, but many with products in this price range that don't market to direct consumers use distributors to meet the low-mid volume markets...and service the high volume / high profit markets themselves.
A good question for Mr. Jacobs is the distribution channel strategy: Will some sales be held away from the distributors to be handled by Pyng management / sales staff alone?
Best Regards...go PYT! (Its been a while since I could say that)!
Chris |
