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SODA - Doing Some Work Here

|Includes: GMCR, SodaStream International (SODA)

here were our Tweets earlier (we are new to Twitter).

more work is needed, but something is very wrong with management's story on growth.... our early suspicion is that the purchase of the Italian disti accounts for the entire 2H'13 boost to guidance and management MAY have misrepresented the level of sales from the disti when declaring "zero" revenues in Q2 an only $2M in 2H'13 sales. They also blamed the inventory spike on this purchase ($10M), which would imply @ a 54% GM ~ $21.8M of embedded sales. So 1) this disti has ~ 5 years of inventory (at the $4m runrate mgmt stated on the call), 2) organic SODA inventories are much higher than disclosed, or 3) they are lying about the revenue runrate of the Italian disti to overstate organic growth.... much more work to do here - our interest is piqued as no sellsider has pressed these issues yet:

  1. Copperfield Research ‏@CopperfieldRscr6m

    @herbgreenberg will do much more work, but not first time we see. Nordic disti same issue when bought, looking into Czech disti too $SODA

  2. Copperfield Research ‏@CopperfieldRscr8m

    @herbgreenberg $SODA - Debt up QoQ 8M, Cash down QoQ 28M - begs question what did they pay for only "4M run rate revs"... #smellsbad

  3. Copperfield Research ‏@CopperfieldRscr11m

    @herbgreenberg $SODA files annual 20F so no way to check numbers on Italian disti. But 10M of inv, and only 2M sales (900K inv cogs) in 2H?

  4. Copperfield Research ‏@CopperfieldRscr13m

    @herbgreenberg Italy disti- 10M inv, 54% GM = 21.8M sales. for 1/2 yr = 10.9M sales. this is > that 2H'13 was raised by.

  5. Copperfield Research ‏@CopperfieldRscr15m

    @herbgreenberg $SODA has 214 days of inv @ Q2'13. if italian disti has 2x inv turns (it is a disti, so why not), then core $soda would miss

  6. Copperfield Research ‏@CopperfieldRscr17m

    @herbgreenberg If Italy visit bot has 10M of inv (like they said), then > 100% of raise was from the purchase of Italian disti.

  7. Copperfield Research ‏@CopperfieldRscr18m

    @herbgreenberg So $SODA mgmt saying the inventory=21.8M of sales, yet will only add 4M run rate? Implies Italy has 2.5 yrs of inventory #BS

  8. Copperfield Research ‏@CopperfieldRscr20m

    @herbgreenberg $SODA said $10M of inv jump was Italian disci they bought. with 54% GM, this implies 21.8M of sales

  9. Copperfield Research ‏@CopperfieldRscr21m

    @herbgreenberg $SODA said Italy disti was only going t add $2M of revs for 2H'13 and $4M run rate for 2014 (in Q&A). But inventory....

  10. Copperfield Research ‏@CopperfieldRscr22m

    @herbgreenberg $SODA mgmt said on call Italy had zero revs in Q2 yet they bought in early June. No revs for whole month? No part of "beat"?

  11. Copperfield Research ‏@CopperfieldRscr24m

    @herbgreenberg $SODA inventory up 19M QoQ and 57M YoY, sales up only 15M and 19M over same periods. Italy disci buy smells like rotting soda

  12. Copperfield Research ‏@CopperfieldRscr26m

    Sharpening pencil on $SODA. They play loose & fast w/numbers. Not sure was worth work until call this AM. More work to do @herbgreenberg