The company has been vapor since IPO, bad acquisitions and new COO lives in Chicago - last time I checked company is in NC. Exchange business is low margin and Nestle/DS Waters will ensure this is cutthroat low margin. They have no hope of beating glacier at refill so no chance to grow there either. Hard to see how this ever gets to $2
You are correct that the company has been run terrible since the IPO. I believe that the company will have improved margins and strong growth in revenue compared to 2012
With focus on the water business, I see increased shelf space from 20000 plus locations to their goal of 50000 by the end of 14. This alone will lead to the stock price increasing to 3 dollars a share.
Best of all, the Flavorstation revenue from Cusinart is a call option for the company.
What makes you think they can get to 50,000 locations for water? They've been trying to get into the retailers where they don't have distribution for years now and those retailers have repeatedly said "no thanks"
Grocery Retailers don't want to deal with the hassle of water exchange for very little volume it delivers. The problem is that only 4% of US households have a water cooler so their target audience is very small.
BTW...as of their last Earnings Release (Q3) they have distribution in 16,500 locations not 20,000 as you stated. They had 16,400 locations in Q3 of 2011. They managed to acquire an extra 100 locations in a year and you think they can add 33,500 by the end of next year?
I actually think the reverse is going to start happening and they are going to lose distribution. Water sales per location were $1,048 for Q3. So for a 13 week period the average Primo water retailer purchased $80 of water per week...and that was during peak water season of July-September. That is an awful return to the retailer for the amount of space they're allocating to PRMW. A display of a brand name bottled water will sell more than $80 in a day.
And what Cuisinart revenue? Cuisinart has distribution in one retailer (BBBY) and they got outsold 17-1 by SodaStream in that account over the holidays. They are non-existent in the category.
Hamilton Beach just announced they are introducing a soda maker and they are going to use SodaStream's CO2 cartridges and their vast existing CO2 exchange system. Do you think retailers are going to add a second soda maker that utilizes the CO2 cartridge they already stock and exchange or one that uses a completely different CO2 system. I wouldn't count on any revenue from Cuisinart.