The sales price was the normal price for over 50% of their product until last summer. That is when they finally raised the prices for the 2 biggest skus at their 2 biggest customers Trader Joe's and Whole food and they were able to show a profit. Over 50% of sales were at 3.99.
The gross margin that the company is showing is based on a wholesale price of approx between .50 and .55 per bottle based on unit sales and revenue last quarter.
The company will need to break the 50 to 55 million mark to break even because of the ne expenses they carry.
The three added expenses that are going to make the break even point higher than it was are the 220,000 in quarterly debt payments.The higher salaries for the new professionals that were brought on board for key positions in the last year or so. Finally the lower margin the company will get as a larger percentage of the product is is being produced outside of the LA factory (even more of the margin is eaten up when someone else is the bottler and the distributor).
All that I am looking for in this quarter is the resumption of revenue growth. At the 1 month mark for the second quarter Chris Reed said that they were running 1 million behind last year for the quarter.It is fun to see that at the beginning of the quarter posters were screaming for 40 million in sales for the year and now the posters are conceding that sales could be flat or slightly up for the quarter. Of course they love to add how Reed must be losing money on each 4pack they sell at 3.99, I am sure that is just what IBC or Stewarts do with their 4packs, they lose money each time they sell them at 3.99.