Well, Mark. Typical shorter's twist by pulling one sentence out of an entire post to try to prove something. Here is the entire laundry list of items in the post you replied to. Why don't we go down them one by one?
<Sales up 84% YTY in the first three quarters of 99.>
This was stating a fact.
<Sales estimated to be up ~450% YTY in the fourth quarter 99.>
Sales were actually up 431.3%. Pretty darn close, no?
<Sales estimated to be up ~300% sequentially from the third quarter 99 to fourth quarter 99.>
Sales were actually up 290.8%. Pretty darn close, no?
<Gross margins much improved in Q3 99 and will improve even more in Q4 99.>
Gross margin up from 17.4% in 1998 to 37.4% in Q3 99 to 68.5% in Q4 99. Right again, no?
<The company will most likely report their first profit in Q4 99 after 15 consecutive quarterly losses, and the profit in the first quarter 00 will accelerate (my estimate).>
Gum Tech did indeed report a profit in Q4 99. I was wrong about Q 00, but revised my outlook to a loss before the earnings were actually released. Are analysts not entitled to revise an outlook when the circumstances change, or is the first thing they say held in stone forever and ever?
<Sales in the first quarter 00 are estimated to be up ~125% sequentially from Q4 99 and 1100% from Q4 99.>
Sales were actually down 54.7% sequentially from Q4 99 to Q1 00 and were up 64.2% year to year. My initial estimate was off, but again, I revised this down well before the earnings were released.
<Nicotine gum products with joint venture partner Swedish Match will likely produce revenues and profits beginning in the third quarter 00 and accelerate in 2001.>
I was wrong here, but feel like the company led me to believe that they would ship nicotine gum products in 2000. While it has taken longer to start shipping nicotine gum, it is coming and will be a very large revenue and profit producer at some point.
<A dental gum agreement with a company such as Procter & Gamble or Colgate is nearing finalization (my estimate).>
I was right on this, although it has taken longer than I originally thought. Again, I feel like the company led me to believe it would happen sooner.
<The independent clinical studies that will prove that Zicam reduces the duration and severity of the common cold and prevents the common cold will be released any day (my speculation on the results and timing).>
I was right on the therapeutic studies, and the company later decided not to release the results of any preventative studies that they conducted.
<Earnings of $2.05 likely this year (my estimate).>
I was wrong on this initially, but my estimate most recently hasn't been anywhere near this. In fact, I have been posting that I expected a loss in Q4 00 for several weeks.
<Institutional ownership has increased four quarters in a row and appears to be picking up steam the last month.>
This was true but I didn't update it.
The term channel stuffing has a negative connotation. It generally means that a company intentionally unloads a bunch of product into the channel that they know won't sell just to temporarily prop up their sales. You might think that's what Gum Tech did, but I know better. Retailers demanded a large quantity of Zicam last December because they sold a lot of it in November after the publicity created from AJIC. In other words, consumers demanded Zicam, so retailers ordered it. Gum Tech didn't push it on retailers and they didn't "stuff the channel". Neither retailers nor Gum Tech expected the abrupt end to the cold season last year, and retailers had a lot of Zicam left as a result. I attribute the slightly lower sales this year to an inventory correction, and I think this is backed up by the fact that sales at the retail level were up 40% in Q4 00, although wholesale sales were down. If sales continue to grow at 40% at the retail level and the inventory correction has run its course, wholesale sales will eventually increase at a similar rate as retail sales. The fact that wholesale sales were only down slightly from 2000 to 2001 despite a large inventory correction is indicative of the underlying strength of the Zicam brand.
Retail sales are much more important than wholesale sales in the long run. For another example of this, take a look at KSWS over the last two years. They had a similar inventory correction at the wholesale level, but their sales at the retail level were very good throughout the entire period. Eventually the inventory correction worked its way through the retail channel and their orders rose substantially, as did their stock price, from $10 to over $30 recently. Check back in a few months and let's see if this parallel works out in Gum Tech's favor.
What is clear to me is that most of the shorts, you included, twist my words, twist the words of others, and intentionally paint only the picture that you want others to see. Stick to the whole story and maybe you'll be taken more seriously. |
