News Details – Smallcapnetwork
Sack Lunch Productions (SAKL) Pumps Up Revenue by 43%. Interested Yet?
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February 2, 2024

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PDT

Welcome to the weekend, one and all. Did everybody scoop up some Sack Lunch Productions (SAKL) on Tuesday after we formally introduced it to you? I hope so, particularly after the company announced its fiscal Q1 results. Revenue grew 43% on a year-over-year basis, and amazingly enough, that's not even the most exciting part about the numbers SAKL unveiled this morning. Just in case you missed it on Tuesday, Sack Lunch Production is the name behind some pretty fun events you've been seeing more and more of lately. It's the organizer of the so-called Dirty Dash mud-laden race, Lantern Fest (the release of hundreds of flying lanterns by a massive group of people all at the same time), and its signature event called Slide the City... an event that turns a city's streets into a 1000-foot slip-n-slide. It's all about fun, and these events usually draw crowds well in excess of 2000. At $30 buck or more per head, one event can mean thousands in revenue for SAKL. Thing is, we've only seen Sack Lunch Productions scratch the surface of what it can do on this front. Last year's 100 or so events are expected to grow to 250 events this year, and I wouldn't be surprised if the final tally ended up being even more than that. With that as the backdrop, the Q1 numbers in the context of all of last year's numbers tell the story about as well as any words could, so I'll let the recent historical chart do the talking. Pay particular attention to the amount of deferred revenue the company's been building up. First and foremost, no, the third quarter numbers aren't a mistake. That's Sack Lunch Productions' busy season, presumably for weather-related reasons. The numbers really worth noting are Q1's revenue versus the year-ago top line, Q1's gross profit versus year-ago levels, and Q1's total deferred revenue compared to Q1-2015's deferred revenue. Those are up 43%, 33%, and 25% respectively. And this chart doesn't yet indicate all the bookings SAKL has made so far in Q2 for Q3.... its biggest time of year. In this light, the company's expected 86% improvement in revenue and triple-digit growth in EBITDA and net income make perfect sense. So too does the rising chart. I'm surprised the stock didn't fly even higher than it did today, though I'm not complaining either. It gives all of you a chance to wade in without paying a fortune for it. I suspect the rest of the market is going to take notice sooner than later though. Speaking of the site's Featured Stocks, I thought Bryan Murphy made a great point about Staffing 360 Solutions (STAF) this morning. That is, after the company made a presentation and spoke with investors at a key conference earlier this week, everything changed for the better. We saw a huge buy-in yesterday, and another high-volume buy-in today. It's the first such activity we've seen from STAF in a while. Anyway, Bryan's point was, now that some major buyers have tipped their hand, odds are good STAF shares were jolted out of a rut and into an uptrend. It would be great if Staffing 360 Solutions could get over the pair of moving average lines that got in its way today, but this week's action most definitely merits putting the stock back on your radar. Something's brewing. What Just Happened? I think it's reasonably safe to say the market wasn't expecting such a disappointing employment report for May. The impact on the stock market itself wasn't that rough - a weak economy staves off any interest rate increases. The degree of shock can be readily seen in the shape of the U.S. Dollar Index though, since the value of the greenback is largely in tandem with interest rates. In most instances we wouldn't assume there'd be any follow-through after a move like today's. In the case of the dollar though, it's already in a downtrend, and it's already demonstrated a likelihood of continuing to fall after a drubbing day like today's. This isn't a small deal. The U.S. dollar's now lost enough battles to say it's losing the war, and the proverbial line in the sand is somewhere in the 93.0 area. If the U.S. Dollar Index breaks under that mark it could start a big technical selloff simply because it would spook so many players. There are enough other people out there also watching the greenback tiptoe closer to the edge of the cliff. This weekly chart of the dollar index puts it all in perspective. Now, to be clear, if the dollar breaks down, that won't be a bad thing all around. In fact, I'd say it would be a good thing, as so many U.S.-based multinational companies desperately need to make themselves more price-competitive overseas. A falling dollar would do the trick. The hitch is, a falling dollar generally coincides with falling interest rates, and a rising dollar generally coincides with rising interest rates. Then again, the U.S. dollar soared in 2014 and 2015, and rates weren't really going higher then. Maybe the dollar can pull back without the help of falling interest rates this time around. Whatever's in the cards, the dollar's potential demise could end up becoming the lynchpin for everything market related during the second half of 2016. That includes earnings. That's why we want to make sure it's on your radar.