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Non-Tech : The Children's Beverage Group (TCBG) -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (1208)	7/30/1998 12:34:00 PM
From: gambler	Read Replies (3) \| Respond to of 2452

*******TO ALL******* I have been a little out of touch lately, being gone for the past two weeks, so I wanted to clear up a few issues floating around. I contacted Jon Darmstadter this morning and had a discussion with him about a few issues. --------------------------------------------------------------------------------------------------------- The most important issue I had was about these reports of the broken packages people received. Darmstadter said that these packages were from the first run of product and after this first run of product it was found that two adjustments needed to be made: 1.) The first adjustment was that the straw needed to be slightly higher in the package. The machine was placing the straw below the tear line causing kind of a sword like effect on the packages causing them to rip like we heard some people say. The straw needs to be above the tear line for two reasons: Number one to prevent the ripping of the package and number two so that the straw is more accessible when you tear the package. 2.) The second adjustment that needed to be made was that the laser score line needed to be deeper in the package. This would insure easier tearing of the package. Darmstadter said that they would be running a final test run of the product a week from today. He apologized for the broken packages and said that anyone who received some of these initial problem packages could request a new sample and he would be happy to have it shipped out. He also said that the product will be shipped much differently from the way they were shipped in these cases. These were loose packets. He assures me this will not be an issue. Somebody also had mentioned the number of machines being received by TCBG and I thought that this needed clarification.** Currently they have 3 machines and on a staggered basis from now until April of 1999 they will be receiving and installing another 7 machines from Volpak bringing the total to 10. They will all be received by Feb of 1999, but it takes a few months to get them all running. So they will be all up and running by April 1999. So if we do some staggered math calculation: Since they have 9 months to deliver and get 7 machines running lets assume they get about one per month running, but I will be conservative in the time frames. 1998 -------- August: 0 Sep: 1 new machine Oct: 0 Nov: 1 new machine Dec: 1 new machine 1999 ------- Jan: 1 new machine Feb: 1 new machine Mar: 1 new machine April: 1 new machine $5,000,000 revenue per machine/ per year So at the beginning of 1999 they have 6 machines total running. So let's say 3 from now and 3 new from '98. Here is how the year of 1999 will go: ---------------------------------------------- 6 machines (full year) x $5,000,000= $30,000,000 1 machine (11 months) 11/12 x $5,000,000= $4,583,333 1 machine (10 months) 10/12 x $5,000,000= $4,166,667 1 machine (9 months) 9/12 x $5,000,000= $3,750,000 1 machine (8 months) 11/12 x $5,000,000= $3,333,333 So total revenue for the year would be approximately: $45,833,333 * Which does not include additional machines that will be ordered after the first quarter of 1999. Some people had questions about the lease agreement and I asked for clarification.* It is $150,000 down per machine and $18,000 per month/ per machine in lease payments. So those lease payments will be coming out of the bottom line as expenses obviously. So 2 years down the road when they are paid for they become assets and TCBG will be making a greater bottom line profit because they will no longer have this expense. The bottom line profit, according to the release, will be increased by approximately $2.5 million per year. Last, but not least, we discussed the status of being fully reporting. Darmstadter said that on August 5 all the accounting documents will be turned over to the accounting firm and that he believes it will not take more than 30 days for completion of the audit. An announcement of the date of fully reporting status will be made in the next week to 10 days along with the name of the accounting firm which he said was a well known accounting firm. ----------------------------------------------------------------------- I enjoyed talking to Mr. Darmstadter and felt even more confident in the future of this great company after our conversation. Just a little more indication of how incredible this whole deal is. I love all the positive comments from children on these products. Nothing else is important. We are here to please the kids, right? The only reason I invested in this stock was to help TCBG help the kids. I don't care about the money, just those poor kids spilling juice all over themselves. LOL I also like the fact that the few minor problems folks had with the packages have already been addressed. One step ahead of all of us. Sounds like these guys have some good heads on their shoulders. They have to get up pretty early in the morning to be one step ahead of the gambler. LOL Time to kick back in the sun with a cool brainforest and dream of all those dollar signs. Uh Um... oops, I mean dream of all those kids that we are helping out... VBG Take care all Gambler