Release Date: November 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Simply Better Brands Corp (SBBCF, Financial) reported a 124% year-over-year growth in total revenue for the third quarter.
- The TRUBAR division experienced a remarkable 156% year-over-year growth, highlighting its strong market performance.
- The company has significantly improved its balance sheet, with a current cash balance of $3.5 million and available credit lines of $10 million.
- Gross margins have improved from 40% to 50%, indicating better cost management and profitability.
- Simply Better Brands Corp (SBBCF) is on track to be in 15,000 stores by the end of the year, showcasing its expanding distribution network.
Negative Points
- The plant-based wellness business is small, with sales around $1 million to $1.5 million, and the company plans to divest this asset.
- The NextGen Beauty business is also a minor contributor, with sales of only $2 million to $3 million.
- The company has no immediate plans to list on major US exchanges like NASDAQ, which may limit its exposure to a broader investor base.
- There are no specific timelines for international expansion with Costco, which could delay global growth opportunities.
- Despite strong growth, the company is still in the process of building out its team and capital to support its ambitious $100 million revenue target.
Q & A Highlights
Q: How many stores are currently carrying TRUBAR, and what is the market penetration in the US?
A: We are on track to be in 15,000 stores by the end of the year. The US market is massive, with a $6 billion worldwide arena and a category CAGR of 14-15%, indicating significant room for growth. - J.R. Ward, CEO
Q: How should we think about margins as store count grows, and what improvements have been made?
A: We aim for a 50% margin. We've improved from 40% to 50% year-over-year, thanks to better management of raw material prices and Comans. - Brian Meadows, CFO
Q: Are you maintaining your 2024 TRUBAR revenue guidance of USD 45-50 million?
A: Yes, we are very comfortable with that guidance. The expected revenue for Q4 is between $15 million to $19 million, driven by distribution expansion. - J.R. Ward, CEO
Q: What are your plans for international expansion with Costco?
A: We can't share a specific timeline yet, but it should be in the very near future. We are planning a roadshow to promote TRUBAR. - Erica Groussman, CEO of Tru Brands
Q: What are your expansion plans in Canada?
A: We are focusing on Canada with a new salesperson to accelerate growth. We recently launched in Walmart and have a new distributor, Acosta, one of the top three in the country. - Erica Groussman, CEO of Tru Brands
Q: Are there any plans to list on other exchanges like NASDAQ?
A: There are no immediate plans for a major US exchange. We are looking to upgrade our US OTC listing to the OTCQX and expand IR activity in the US. - Brian Meadows, CFO
Q: What is the status of your mini TRUBARs, and when will they be available?
A: The mini TRUBARs should be available by Q2 to Q3 of next year. - Erica Groussman, CEO of Tru Brands
Q: How is your Amazon and direct-to-consumer business performing?
A: Amazon sales have grown from $40,000 to over $600,000 a month. We aim for a run rate of $10 million in 2025, with strong growth expected in our D2C segment. - Erica Groussman, CEO of Tru Brands
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
