Good Thursday morning everybody.
Remember in Wednesday afternoon's newsletter we pointed out how Sack Lunch Productions (SAKL) was unusually strong that day, bouncing back sharply from Tuesday's steep selloff? Yeah, well, it's starting to make lot of sense now. The company unveiled some big news this morning ... the kind that would want to make the masses plow in if they somehow knew it was coming. We're just making sure you know about it as soon as possible, as it could end up really lighting a fire under the stock.
Just a quick refresher first. Sack Lunch Productions is the name behind some unique events you may have heard about, and maybe even participated in. Some of these events are The Dirty Dash (a mud-laden foot race), LanternFest (filling up the sky with a few hundred lighted flying lanterns), and its signature event, Slide the City (a 1000-foot long slip-n-slide).
Revenue is generated by selling tickets straight to consumers, or by setting up these events for corporate sponsors. Either way, each event generates tens of thousands of dollars worth of revenue. With about 250 such events already on the calendar this year -- up from the 100 events it hosted in 2015 -- the company is projecting $18 million worth of revenue this year. That's 86% better than 2015's top line. Not bad for a $4.8 million organization.
Fast forward to June 3rd. That's when we learned Sack Lunch Productions grew Q1's top line (ending in March) by 43%, to $1.3 million. Deferred revenue, for booked but not-yet-held events, was up 40% to $2.3 million on a year-over-year basis.
Fast forward to June 8th. That's when SAKL announced May's top line reached $1.9 million...and that was before the company got into its busy season.
Fast forward to this morning. Sack Lunch Productions just announced June's sales reached $2.0 million, and it's still not the heart of the busy season yet. The peak won't come until August, when the company will start to deliver on some of what was $2.3 million worth of deferred revenue... a figure that has likely become a bigger number in the meantime. If SAKL was able to do $2.0 million in June before the ball really got rolling, just think how big August could be! That $18 million revenue outlook for 2016 is starting to look awfully conservative, knowing the company's international expansion takes away a great deal of the business' seasonality. [Some locales don't see the weather change a whole lot from one season to the next.]
The bottom line is, the math just makes sense. This is a $4.8 million company on pace to generate at least $18 million in revenue this year, and turn it into about $3.4 million worth of net income. That translates into a P/E ratio of just a little more than 1.0, versus the market average of around 15. The price/sales ratio of 0.25 is about a tenth of the normal price/sales ratio. Sooner or later (and I suspect sooner), traders will figure it out. Today's going to help... a lot.
And there's most definitely a long term future to these kinds of "experiential" events.
We mentioned it when we first presented Sack Lunch Productions to you back on May 31st; people are becoming more interested in buying memories rather than buying things. In a recent poll of millennials and the gen-y crowd, 78% of them said would rather spend money on an event or experience rather than a physical luxury item.
Here's the thing... it's not just millennials. Although millennials are taking the lead, gen-Xers, baby-boomers, and most other groupings are starting to want experiences and memories more than goods.
And this isn't just a cyclical shift either. This is a cultural thing -- a secular trend. I can see SAKL adding events by the hundreds every year for several years. The company's top and bottom line could keep growing at this impressive pace for a long while. The story is just beginning.
Here's the press release. I'd be willing to bet this gets the stock moving pretty well.
SAKL Reports System-Wide Sales in June of $2.05M
SALT LAKE CITY, UT--(Marketwired - Jul 7, 2016) - Sack Lunch Productions, Inc. (OTC PINK: SAKL), reports total sales of $2,051,726 across all corporate and franchised events in North America for the month of June. Ticket sales for all North American corporate and franchised events were $1,360,496 and $414,181, respectively. The lion's share of ticket sales for June were generated by corporately run Slide the City® events. Our Green Endeavors, Inc. (OTC PINK: GRNE) entities contributed $277,049 in realized revenues. GRNE's revenues continue to trend up from last year across all three of its Landis locations.
Richard Surber, CEO of SAKL, commented, "The number of Slide the City® events being held will continue to increase through August as the summer heats up and before school is in session. This coming weekend the various brands will hold 8 events including 6 Slide the City®, 1 Dirty Dash® and 1 Color Me Rad®."
Readers should note that ticket sales are not recorded as realized revenues until the event(s) are held. Ticket sales made in advance of the event are booked as deferred revenues, a liability on the balance sheet, until the events are held. Furthermore, franchisee's ticket sales are not booked as SAKL revenues, only the franchise fees paid to SAKL. In addition, sponsorship revenues, international ticket sales and franchise fees are not included in the June sales report for purposes of this press release.
Please visit our websites to find the next event in your area: www.slidethecity.com, www.thelanternfest.com, http://www.thedirtydash.com, www.trikeriot.com and www.colormerad.com.
About Sack Lunch Productions, Inc.:
Sack Lunch Productions, Inc. (OTC PINK: SAKL) is an entertainment company that operates and franchises action oriented events in the U.S. and internationally. SAKL's events include: Slide the City™ (1,000 foot long water slide for families and kids), Color Me Rad™ (5k color race), The Dirty Dash™ (mud and obstacle run), The Lantern Fest™ (nighttime party with lantern lighting and launch) and Trike Riot. Learn more about SAKL's operations at www.sacklunchproductions.com, www.slidethecity.com, www.thelanternfest.com, www.thedirtydash.com, www.colormerad.com, www.trikeriot.com and www.green-endeavors.com.
SAKL strongly encourages the public to read the above information in conjunction with its reports filed at www.otcmarkets.com. The actual results that SAKL may achieve could differ materially from any forward-looking statements due to a number of risks and uncertainties, including but not limited to adverse weather conditions, equipment failure, state and local health code laws which may impact obtaining permits, low attendance and other risks associated with judgment calls made by various government officials. Investors should not invest more than they can afford to lose.
Video Available: http://www2.marketwire.com/mw/frame_mw?attachid=3030557
Contact:
IR CONTACT:
Bruce Haase
RedChip Companies, Inc.
800.733.2447, ext. 131
bruce@redchip.com