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McKhenry

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12/02/20

19:04

Post #: 42895229
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Originally posted by Holdtight: ↑

My take on the webinar, in a nutshell.
Negatives first:
(1) No question the 4c was a massive disappointment. Even more so is the reason : shortage of inventory. being unable to fulfil large orders is totally unacceptable now the finance is in place. $14m worth of orders at a 29% margin is $4m to the bottom line that was missed. Whether this is poor management or manufacturing issues, either need to be fixed NOW. They said they realized that and are addressing the issues.
(2) Very few products launched in 2019. Webinar does address why this occurred. Was it personnel issues or other constraints? They say that this has been addressed in 2020 and expect new lines and new revenues including what sounded like a move into the light fitting market.
(3) High return rates for the Tile ( which has now been discontinued ). I can see why they did this. Although they are a great addition to a room, they are a nightmare to connect to each other, they fall from the wall as they are too heavy and they are $499 for a 5 pack. I believe that some people are using the one pack to set on the bedside table. That's not a bad use for them.
(4) Locked into unprofitable retail deals. Surely when they did the DD on the coy originally they knew of these deals. Having now renegotiated these deals to be profitable for 2020 is a good achievement.

Positives.
(1) the move to "direct to customer" sales is a positive and Jim seems the right guy to take this forward. Higher margins and conversion rates is a great start and record sales on Black Friday and Cyber Monday. Having said that 5000 customer interactions is not huge on a global scale.Should be 50,000!! Affording advertising and marketing will greatly assist here.
(2) Bunnings have stopped storing Sengled and only stacking Philips and Lifx. This is a common theme from 2019. The cheaper end of the market failed and so many returns have stopped retailers offering the products.
(3) European sales up 150% to $8.6m despite the overall number falling. Expansion continuing in 2020. This says the US sales numbers must have had a major fall. We are told that the pricing was wrong in USA and that recent manufacturing cost reductions will lead to lower pricing and consequently sales increases.
(4) Gamer bundles in UK made up 25% of Black Friday/Cyber Monday sales. LIFX has a great name in that community. Much higher net margins with bundles.
(5) New easier App launched with the switch.
(6) Asian telco deal remains "imminent".

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More pragmatic view of the Co now @Holdtight hopefully a whale can land soon

BUD Price at posting: 3.1¢ Sentiment: None Disclosure: Held
3 Upvote

0 Great analysis

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Live webinar discussion, page-86

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