Just forget all about the talking mentioned about ranging and contracts , and picking demand . they say it million of times and it turned out to be only Smoke ! So many things should be addressed immediately
1- the price of whole powder is way lower than one year ago and 2 years ago ( Feb 21 ) , prices went back to lower than they were when HLF sign the deal .
2- When Announced Theland China was 40USD M dollar i.e. 2.5 Mil every month ( 60AUD/24Month ) , after one year HLF could not reach 10% of this .
3- The ( THM ) revenue is only 7.2 M and this on the cost of 2M marketing ( paying 2 M to market 7M Sales is Rubbish ! )
4- Payables are massive 15.5 ( is HLF late on payment terms ) + contract liabilities 2.3
5- Locked capital in inventories are massive as well ( 14.2 M )
6- Borrowings as we all know 10M not 1K paid back
The way I see it , there is only 6 month remaining on this Company life cycle , unless they did the following :-
1- lift the sales to 64M+ for the next Half to get gross profit 15M ( 31/41.5 = 0.75 )
2- reduce the marketing fees
3- reduce the Employee benefits expense by reducing the salaries , is Former CEO still getting the same salary for his new position ? are we still paying the board the same amount with this kind of losses ?
4- clear out the inventory and free cash , and pay back at least 20% of the debt + the payables if they are out side the terms
other wise we might hand over the THM , or sell portion of the Company to some one who can manage properly . any way , my journey with this company ended with big losses , there was a potential , and still think i was correct when i picked this company , but the way the handled it was a big sign for me that i didnt pick on the right time .
if the Theland contract was Valid , we wont be here discussing the Online Blog that need 2$ to Get 7$ ( with out costs ) !
