TWLN CONFERENCE CALL JUST COMPLETED: Overall impressions.
Participants:
CEO, Dallas Green, Robert Casluzo (sp?) CFO, and a stand-in for the Sales Mgr. who was out of town negotiating a contract.
** Overall impression good, but participants are conservative and a bit dry. If you dug beneath some of the facts provided there were some very interesting points and only one slightly disappointing one.
** Sales were about 11,000 trimmers last year, and they are on a pace for 22,000 and probably more this year and expect more than 44,000 next year
** These numbers will increase if they are able to tap the foreign market, which is a major strategic goal, since the 4th Quarter is their only slow season in the U.S., but a strong one elsewhere throughout the world, particularly in Australia, tropical countries, and Asia.
** They are seeking to actively acquire additional product lines.
** They have shipped or are in the process of shipping to the following dealers. All these high end chains signed irrevocable contracts.
WALMART.... after successful test market in 5% of stores, they are now shipping to 40% of all WalMart stores
TRU Serve (True Value and Coast to Coast)
200 stores...3rd year clients I think I heard
ACE Stores (1st Year)
many stores, don't remember a number
Menard's (committed for 2 years min.)
newer client; many stores in midwest
Meyers
140 stores
Fred Meyer (which I know well)
200 stores and just shipped first order
Blaines in Wisconsin
2nd Year
In Canada, Federated Co-op of Calgary
150 stores and also Co-op Atlantic with xxx stoes
Home Hardware chain
1500 stores under negotiation I believe I heard
Their Home Direct Program allows for 30 day free trial
TOTAL: well over 3,000 stores if you add Home Hardware
** PRODUCT QUALITY:
Made in U.S. (good selling point to the big boys like WalMart), the lawn care industry is $30 Billion and expected to grow. And they have all kinds of patents and trademarks on the product technology and name.
The product also only weighs about 23 lbs which is much lighter than the more expensive models with wheels that Sears and others sell.
Half their market is women, probably due to the wheels and lighter weight.
** MARKETING (IMPRESSIVE)
50,000 TV spots in Q1 and same in Q2 on ESPN, TNT, TBS, CNN, Home and Garden channel
Radio: just starting may 3rd on the Business News Network, a widely followed program for the over 40 crowd, which is a major market because of the lower price and lighter weight of their trimmer. More homeowners in this age group, too.
E-commerce on their secure website at www.trim-a-lawn.com
Storefront coming on the yahoo store with free video and lots of links to their product via Doubleclick, all major search engines, Organic Gardening's website, etc.
FINANCIALS:
** Audit will be done in next 2-3 weeks; form 10 by end of May, so that they will show up on www.freeedgar.com
** They had a 504 which resulted in an increase in shares O/S and float, but shares are tightly held and their 504 funding is totally closed, so no more dilution. They were confident about that. Sahres O/S are about 17 mil.
CEO pointed out this was necessary to move forward and now they have the funding to carry out all their maketing and product shipment programs.
To earn a profit they need to sell about $3-3.5 million worth of product. But their accessories are much higher margin, so less if they have a bigger mix of accessories.
If their foreign sales and product acquisitions in the second half take place, they will easily be profitable throughout the rest of 1999. Q2 sounds like a possible profitable one based on all the shipments just completed to Walmart, Fred Meyer, etc.
SUMMARY and THOUGHTS:
Good report with lots of good info, but could have been delivered a little more dynamically, but at least these guys cannot be accused of hyping. They sound like good, conservative businessmen.
And they have done a very good job of opening up big clients. It sounds like there is no question the product is a good one and also no question that they are getting massive exposure with 20-30 calls per day....
and 5,000 hits per week already on their webiste. |
