3SOF

BRVO conference call highlight:

Bravo! CEO Roy Warren said, "While the third quarter of 2005 showed a sharp increase in revenue over 2004, additional costs were incurred in preparation for pending initiatives while laying the groundwork for continued growth. Having established comprehensive distribution networks, management is focused on growing capacity while enhancing our popular products to best serve new markets."

I'm holding on for the long term for the reason above. It won't make me rich, but help me buy the farm I'm dreaming for.

sounds good IMO:

Form 8-K for BRAVO FOODS INTERNATIONAL CORP


--------------------------------------------------------------------------------

15-Nov-2005

Regulation FD Disclosure



Item 7.01 Regulation FD Disclosure
Public Conference Call

On November 14, 2005, the Company conducted a public conference call to announce and discuss the results contained in its Form 10-QSB filed on that date for the period ended September 30, 2005. The following matters were discussed at that conference call:

Results of Operations

The Company reported total revenue of $3.2 million with a 27.3% gross margin of $884,000, for the three months ended September 30, 2005, compared to total revenue of $825,400, with a 23% gross margin of $196,000, for the same period in 2004. This represents an increase of 293% in revenue from the same period in 2004. Slotting fees treated as contra-revenue reduced gross revenue from $3.4 million to the reported $3.2 million number. The Company reported a net loss of $4.9 million for the three months ended September 30, 2005, which included a one time non-recurring $3,000,000 charge for a finder's fee payable in

connection with the execution of a Master Distribution Agreement with Coca- Cola Enterprises (CCE) on August 31, 2005, with a net loss per share for the period of $0.04.

Gross margin for the three months ended September 30, 2005 decreased compared to the three month period ended June 30, 2005, owing to increased promotions in anticipation of distribution through CCE, including the Company's sponsorship of the Cagnazzi Racing Team with Erica Enders and the increased packaging costs associated with a trial run of the new Slammers(R) 4-Pack.

The Company reported a capital surplus of $7.5 million owing to computed value of a warrant issued to CCE for the purchase of 30,000,000 shares of the Company's common stock, in conjunction with the CCE Master Distribution Agreement which was booked as a deferred asset. The Company's debt structure also was reduced owing to conversions of the outstanding convertible preferred stock and notes issued by the Company in prior periods for financing.

The Company reported 141,253,757 shares of common stock issued and outstanding and 270,384,233 shares of common stock on a fully diluted basis. Diluted share base using the treasury method is approximately 230,000,000.

Distribution

The Company reported that it shipped 88,000 12-unit cases in July 2005, 93,000 cases in August, and 113,000 cases in September, for a quarter total of 294,000 cases in Q3. The Company reported that it shipped 223,000 12-unit cases in October 2005, consisting of 170,000 to CCE; 8,000 cases of Breakfast Blenders to support the November 14, 2005 launch in 7-Eleven stores; 12,000 9 unit cases to Sam's Clubs; and an additional 36,000 12 unit cases to other retail channels. Product shipped in October represents slightly in excess of $2 million in sales for that month.

The Company reported that it delayed shipments in September 2005 representing approximately $500,000 in sales to retail customers to build inventory for CCE, Sam's Club and the new Breakfast Blenders line.

Capacity

The Company reiterated plans to increase its present domestic capacity for Slammers(R) of 2.5 million units per month to 2.8 million units for November, with additional capacity increases to 3.3 million per month and unltimately to 7.5 million units per month in the spring 2006. The Company reported that it is seeking additional capacity and is exploring third parties that may provide new capacity for the Company in 2007.

Initiatives

The Company reiterated that a number of initiatives were underway, including its new Breakfast Blenders line currently being launched in 7- Eleven convenience stores, with sampling promotions and "Traffic Radio" advertising spots. In addition, new Masterfoods lines are being

2 explored, as well as a product line to reach the toddler demographic. The Company also is reducing the fat content of its Pro Slammers(TM) line and is making improvements to its Starburst Slammers(R) line.

As previously announced, the Company will convert all of its existing product lines from refrigerated, extended shelf life products to the new ambient packaging, which requires no refrigeration throughout the delivery process, and significantly reduces the Company's per case freight cost. Concurrently, the combination of truckload orders and ambient delivery will ultimately address freight costs.

The Company reported that it has signed contracts to sell its products to 150 US Military commissaries on a national basis.

New Personnel

The Company reported that its growth has necessitated the hiring of additional management personnel for corporate and anticipated hiring of field personnel to accommodate the regional business units of CCE. The Company introduced Mr. Jeffrey Kaplan as its new Chief Financial Officer and Mr. Michael Comerford as its new Director of Operations. Mr. Tommy Kee, the Company's former CFO, will assume the duties of Chief Accounting Officer and will continue to report directly to Mr. Warren, CEO. Mr. Comerford will report to Mr. Patipa, the Company's Chief Operating Officer. Six new regional managers will be hired to service the 6 regional business units of CCE and will report to Mr. Edwards, the Company's Executive Vice President of Sales.

Guidance

On the strength of reorders and growth in distribution partners, the Company offered its guidance for expected gross revenues from $6 million to $7 million for the fourth quarter 2005, and $70 to $100 million in gross revenue for 2006. The Company anticipates that it will schedule another conference call in January 2006 after the completion of its budgeting and forecasting process for 2006 and 2007 to refine its guidance for this period.

I kept what I had, and bought another 10k shares at .65 on the way back up, only to panic when sell that same 10k when it hit .65 on the way back down.  Run Forest Run.  That was a cool $750 error at the moment, and growing.   

I bought precisely when you sold (I can't believe I slept through my alarm this AM!), and the world is lookin' good.

I've been chatting back and forth with some BRVO critics on the CCE Yahoo board, some of these guys have real knowledge of the pitfalls BRVO faces dealing with CCE. Here's an exchange I had with one today:

=====================================
Sell...Sell... Sell....
Will not see this price level for at least another 6 months. Bad news in the works.

=====================================
Quarterly rev $3,245,305
Previous Q rev $ 2,448,618
year ago $825,430

yoy increase 293%!

This is all through their own distro channels, of course, CCE distro having started just a few days ago.

The only disappointing aspect of the report is Warren's forward guidance for the Q was $4m revs, the shortfall mostly due to unanticipated capacity issues. He should've known better.

But not being able to make the stuff fast enough is not the worst thing in the world.

"sell sell sell the sky is falling" is not enough. Step up if you have substantive criticism.

IMO, time to load up, you won't see these prices again.

=====================================

Yes but did revenue % gain outpace % spending. Targets are awful high for next few quarters. Currently not sufficent production capabilites in place to meet these heavy targets. Furthermore they are assuming every bottle produced is out the door. I did listen to the last few CC's, they are good at speculating and manipulating rather than facts. Its all hype I will buy at .45.

=====================================

Can't deny that their eyeglasses are a bit too rosy at times, but beneath the spin there's been real, consistent growth. They've got a new guy for guidance and, while he currently is reiterating Warren's numbers through 2006, it would be nice to see him lowball a little in the future. I can hope, anyway.

A $3 million finder's fee for the Coke deal isn't chickenfeed for a co. this size, but that looks certain to pay for itself in short order. Growing capacity quickly is another big expense, but, with the loss in margins in the CCE deal coming back in saved distro costs, that too will be covered quickly going forward.

The share price rise certainly did clean up the balance sheet, and today's cliff-fall had to clean things up further, as well as send the current crop of short-term traders packing (new ones coming in, of course -- as long as its OTC, its a "trading stock").

Worst case scenario, we get bad news in 2 to 3 months, but I don't see how valuation in the very near term can reflect anything other than the strengths outlined above.

"Furthermore they are assuming every bottle produced is out the door."

Unless you think they're BS-ing about deferring .5 million in orders, that seems a decent near-term bet. It will take a while for them to produce more than CCE needs for full distro, and then there's the deferred orders.

The product is marketplace-proven. The only question is whether it can perform as well in vending machines and schools as it has in the c-stores and big box retailers. Some uncertainty there, of course, but I'm inclined to think it will.

=====================================

no further response, and since then price has gone from .65 to .71. Daytraders may take it down at the close, but it still looks like we'll see .77 and better in the very near term.

addendum: closing at .70 -- very nice, indicates buyers today are strong. 

Quote from: don on November 15, 2005, 11:34:10 AM
Thanks, Fish.
I for one would appreciate someone posting what the next support levels are, on the way down.
I don't want to wait to closing to find what I should have bought back in at - if you know what I mean TIA. Don.

Hey don,

I see support levels building near todays low of .62. Resistence is at .797 where price action couldnt manage to close above there to fill the gap. The last candle on the chart i drew myself cause i dont get intraday charts through my data feed with metastock. Buts its what the current candle looks like, and hey.... it works .

Good luck

-fousc

I sold just before the close at .708. I think the CEO is too aggressive with his guidance. I prefer conservative guidance with a nice chance to exceed it. Nice bounce from today's lows and I took the opportunity to lock profits.   

Lucas, few of today's buyers agreed with you, and the current price is back to where it was just three trading days ago. If revs for next Q are "only" $5 million instead of doubled, I don't think BRVO will be severely punished for that, and with .5 million in orders deferred, I doubt that will happen anyway, unless the production capacity issue looms large.

If a Hood Dairy deal is announced, I would expect a major breakout. Warren sounded negative on this prospect, but if he surprises us with a deal, that will certainly make up for his optimistic guidance.

A remote possibility: suppose Warren was deliberately a little too optimistic? Recent share price gains cleaned up the balance sheet, but no one knows how many hedgies were standing by to dump again. This morning's giant sell-off turned that question into past history. Now we know we have strong hands all around.

With his brokerage background, it may be that Warren knew exactly what he was doing.

FWIW-
Having been in this stock for months, and having listened to the entire CC, I think it;s time to put in my 2 cents.  As David has pointed out many times, from a 3 SOF point of view this is a long term hold stock due to their very strong growth potential. The question is how long of a hold?
For the first time ( At least, from what I have heard) they indicated the number of shares O/S and that number is enormous. 273 million shares !
To say that BRVO has great POTENTIAL due to the CCE deal  is an understatement, but there are a couple of things that are starting to bother me.
IF  BRVO does the 100 million that Roy W "guides" for next year ( And let's be honest, his "guidance" hasn't been all that great so far) and we assign a mutiple of 5, that means we're looking at a PPS of $2.25, a 3 bagger from here. Of course, I'm really not sure what kind of a multiple to assign so I'm happy to hear others opinions on that.
He also indicated that the low end of "Guidance"  (72 million )would come about if they did NOT pursue the opportunities in Europe and Latin America and I thought that was kind of an odd thing to say. UNTIL he got into the capacity problems. And those problems appear to be substantial.
So I have to ask myself if I am willing to tie up X amount of dollars for a sunstantial ( for me ) amount of time for a 3-5 bagger from here.
The answer? I'm not sure. but I am certainly beginning to ask queations.  All the best.
Irish

Irish makes some very valid points.

Here's my Question:

If they are stuggling with capacity to do $5 Million per quarter (= $20 Million per year) how do they expect to do 3.5 - 5 x that amount ($70 to $100 million) in 2006?

I agree that unless they announce a substantial agreement for production, the sales projections would seem way to optomistic vs. capacity

Heck:

I read the form 8-k -  8-K or something like that   -

And  it looked to me like they are fixin for capacity of 7.5m every month  in spring of 2006--YEP.  I can cypher and 7.5m is about right for what they is sayen.  Fits for about 100m - yep.

I was talking with Clem and Babe up at Babes Gastation Barber Shop ans Discount- A- RAMA and they said botteling is always slow at first - you got to clean up the bottles and get the dirt and cigarette butts and such out of them - Mason Jars work beast  - - Quarts

Germs don't hurt nothing cause Clems stuff kills germs  -  ITS GOOD FORYA

Irishman, at the time of the distro agreement, they stated a "worst case" of outstanding shares plus convertibles of 233 million. The 8-k indicates "141,253,757 shares of common stock issued and outstanding and 270,384,233 shares of common stock on a fully diluted basis.  Diluted share base using the treasury method is approximately 230,000,000." Yes, a lot of shares, in any case.

Any growth accomplished in the year to come will also  be a promise of future growth, so your three-bagger could easily be a five-bagger; and, while that's a long-term view, the capacity issue must be addressed in the near-term.

There will be immediate reward when this piece falls into place, which could mean a revisit to the previous high, a two-bagger from here, and not terribly long to wait for it, IMO.

KScott, tripling of production at Jasper, to 7.5 m/month, was referred to as a committment back when the distro agreement was announced.  If nothing else, Jasper may have to grow their capacity, which could be expensive for BRVO, but it's doable.

Hood negotiations continue -- I first heard of them by rumor 2 days before the CC, and at that time the rumor was that the deal was a 50-50 proposition. Plenty of reason for Warren to sound negative on a deal still being negotiated. I'm inclined to think Hood will come around, since capacity growth at Jasper would be a direct threat to Hood's share of the long shelf-life milk market.

At any rate, given today's healthy bounce, I think we have a relatively safe place to stand and watch these short term issues play out. There certainly won't be an announcement "we can't make capacity" any time soon, while positive news on capacity could come at any time.

Fella's
1.  This stock has gone from .50 to above .70  3 times in past 2 months. WHAT MORE CAN YOU ASK FOR?   Load up at .50 and sell on the way up, leaving enough so you will be satisifed if it ever breaks out.
2.  Brvo is the SOF baby.  we constatnly watch it and mention news on it.  No other stock recieves this care ( analysis or data).
3.  Correct me if im wrong, but was this stock not at 1.40 with 270 million shares?  whats that got to do with anything.  this company is undervalued.
3.  We all agree that this company will be worth more then the nickles and dimes it is now.  So worst case, you dont have all the fun buying and selling other stocks and just get profits on this. So if you are one of the guy that buy a stock higher thanr dave does and then sell alot lower the dave does (like me), this stock is more my style.
While it is at this price however, im watching not buying or selling.  the news is so damn mixed.

I have been a supporter for brvo from the start, so my opinion is biased, i admit.  Im not here to convince anyone.  I know 1 or 2 of you are nevious and do not know what to do and just need that little pep talk.  Im sure this will go lower on the news, but not enough for me to want to sell.  I will just buy more and more the lower it goes.  1 person tell me that this will not atleast sky rocket again once nect quarte comes out.  It will be a bumby ride, but thats a good thing. 
1.  I do not see this going under .45  if it does i will do something realy funny for you guys.  I will also sell my house and buy all i can.

Puenthouse,

Don't mistake questioning for bashing.
None of us are bashing BRVO, only questioning things to help each of us derive our own value:

Quote from: puenthouse on November 15, 2005, 08:44:54 PM

1.  This stock has gone from .50 to above .70  3 times in past 2 months. WHAT MORE CAN YOU ASK FOR?   Load up at .50 and sell on the way up, leaving enough so you will be satisifed if it ever breaks out.

 

My first buy was at .64 early in my 3SOF days. What I didn't know then was that it would pull back to .50 I bought and held till I saw what Jeff (fill_the_gap) had heard from IR and made an informed decision to take profit. Now I'm looking for the right spot to buy in again. Although I've traded for a few years, I never played the penny stocks due to lack of solid information.

Unfortunetly, my recent experiences have been EYII and HYRF for losses around $10K 
I'm somewhat jaded based on those, but like you, I'm learning.

Quote2.  Brvo is the SOF baby.  we constatnly watch it and mention news on it.  No other stock recieves this care ( analysis or data).

Agreed, Knowledge is power. And as with any group dynamic, I want to hear dissenting opinions.
I can't get a full picture of what's right with a stock until I also know what may be wrong with it

Quote3.  Correct me if im wrong, but was this stock not at 1.40 with 270 million shares?  whats that got to do with anything.  this company is undervalued.

Never forget, a stock is only worth what someone else will pay for it
Take a look at VPHM for example. It's value is far below what it should be.
But you couldn't sell it for it's value, only what someone else is willing to pay.
And as of the last 5 days that's dropped 30% +

As for what BRVO is worth on a fundamental side?
There are no earnings yet, so we are paying for anticipated growth.
Right now the market cap around $191M or roughly 2x next years projected sales.

What if I told you about a company, that has gone up 5000% since it's IPO, has dominant market share, pays a dividend and whose market cap is only 68% of next years sales?
You could buy Wal Mart shares for 48.79 tomorrow.
So which is the better value?

But I digress.........

I don't know what the value of BRVO is, but as of today it's .71

Quote3.  We all agree that this company will be worth more then the nickles and dimes it is now. 

Will buyers pay more? That's what we all hope to discover.
This is speculation, and when .07 = 10% up or down, I'm going to err on the side of caution.

QuoteI know 1 or 2 of you are nevious and do not know what to do and just need that little pep talk. 

Just some advice, If you need a pep talk to stay in a stock..... sell it.
It's not worth the mental anguish.
If you really believe in your stock, then stay for the long haul and don't look at it day to day.

Again, I've learned the hard way.
I've held falling knives and sold rockets before they took off.
Those experiences are worth what I lost, beacuse of what I learned.

Good Luck Puenthouse, and keep your head down over there.
You need to make it home in one piece so you can spend those profits.

Scott in KC

I look at the open, close, high, and the low of the day and can't help but think people who sold today simply had their shares taken away from them.  Today is the day to buy, not sell!!!  I think once $0.72 is cleared it will continue to do whatever it was doing yesterday.

good looking out KCSCOTT.  I know you guys were not bashing.  And I say again: I dont have a clue wether this is going to go up or down from here over the next week.