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To
OTC Journal Members:
I woke up this morning to an extremely
nice surprise from our friends and Nighthawk (OTC BB: NIHK), and
the stock has responded by moving up 20% today and regaining pre September
levels.
I wrote an extensive BLOG
on the news, but here's a quick overview. Itron (NASDAQ: ITRI) is
the behemoth in the remote meter reading technology world, and they deliver
about $2 billion in annual sales. Their problem? Glad you
asked. They have the best technology for wireless, remote meter reading.
However, their technology doesn't allow you to turn the meter off and on
remotely.
According to today's news, the mighty
Itron
is now going to become a "reseller" of the Nighthawk remote
disconnect power technology, and offer in their suite of products to their
utility customers. This is the exact credibility NIHK has been looking
for all along. This is a far bigger development than their previous deal
with Verizon. Great stuff, and sets the company up pretty well for
2009. I'm now really interested in their Q3 numbers. Click
here to read my BLOG posting on the event.
The BLOG is your opportunity
to ask questions and offer comments. I will make an effort to answer every
legitimate question. If I don't know the answer, I will contact the management
and get the answer. Alternatively, if you have questions you don't want
publicly displayed, you can always email me directly at editor@otcjournal.com.
If you submit a comment or question, it will not appear on the site until
I have responded.
To use the BLOG, simply go
to the home page at www.otcjournal.com
- the BLOG scrolls down from the upper right hand corner. The most
current journal entries appear on the right hand side of you screen. Check
back frequently for updates particularly when stocks are moving to overbought
or oversold levels in volatile markets.
 |
Spicy Pickle (OTC BB: SPKL)
Gets Up, Dusts Off, and Starts Moving Again |
|
The Nighthawk news was great,
and there's more today. In a desert of bad news, today was a bit of an
oasis. Spicy Pickle is getting past the shock of September and October,
and getting back on the expansion bandwagon.
The recent acquisition of Bread
Garden Urban Cafes is proving valuable to the company. Today, SPKL
announced a lease signing in the Vancouver area for a new Bread Garden
location- coincidentally, SPKL announced the signing of a new lease
for a Spicy Pickle location in Houston, Texas.
At the same time, SPKL announced
its Sioux Falls, South Dakota unit has gone dark- meaning the franchisee
has abandoned the property intact and operations have ceased for the moment.
So, the bottom line- the company
gained two new locations today, and temporarily lost one. The Sioux Falls
store is intact, so someone can walk in and start it back up. SPKL
has no loss exposure here aside from royalty revenue. SPKL does
not own the store, and has no capital invested, and no liability. SPKL
has begun the process of finding someone to take over.
Perhaps more important to the long
term development at SPKL, CEO Marc Geman reveals two important items
in today's news. First, this nasty recession is starting to work in favor
of the company on the expansion side- commercial real estate prices are
falling rapidly. In a conversation with Mr. Geman, I learned commercial
landlords who wouldn't talk to the company last year are now offering prime
spaces at reasonable rates with a kicker- free rent for the first year.
There are still franchisees seeking new locations, so I would expect this
news to be followed by a number of additional new lease signings.
There's another expansion story developing
North of the border. In Vancouver, where Bread Garden has high brand
recognition, the economy is far more stable. They don't have the same hideous
credit environment, and there's a shallower slow down in their economy.
The Bread Garden chain will be expanding rapidly, and today is just
the first new lease signing with a number more to come.
There's not much to say technically
about the stock. It has stair stepped down this year with the overall market,
and seems to like this $.25 level on low volume for now.
It's tough to say the stock is going
to head back up in the short term with the market taking another major
drubbing today. However, it's easy to see the company is getting past the
shock of September and October, and starting to expand once again.
In 2009 there will be more stores.
They will reduce their overhead to bring it more in line with gross profits.
System wide, the stores generate about $25 million in annual sales, so
the doors aren't closing anytime soon despite some misinformed opinions
you may have read. They might raise a little more money, but I believe
management will go into 2009 assuming no new capital will be available.
I'm holding on to the vast majority
of my shares, and looking to make a killing on them in 2010. I know the
rest of this year and 2009 could be tough, but I have faith.
Here is the complete text of today's
news:
| Press Release Source:
Spicy Pickle Franchising, Inc.
Spicy Pickle Announces
Two New Lease Signings and One Closure
Expansion Program
Starting to Get Back on Track
Wednesday November 12,
4:10 pm ET
DENVER, CO--(MARKET WIRE)--Nov
12, 2008 -- Spicy Pickle Franchising, Inc. (OTC BB:SPKL.OB - News) fast
casual restaurants announced its expansion program is beginning to get
back on track.
Marc Geman, CEO of Spicy
Pickle, stated, "The recent financial crisis has put the brakes on retail
development. Now, for the first time in months, expansion activity is regaining
some traction, and we are starting to see the early signs of a return to
expansion in the system."
One new lease in Houston,
Texas has been signed for our Spicy Pickle chain and another new lease
for our Bread Garden Urban Café chain in Western Canada.
The new Spicy Pickle
in Houston will be located at an existing end cap space at the South East
corner of I-10 (Katy Freeway) and Kirkwood Road, in the Nottingham Shopping
Center. It is positioned on the eastern side of Houston's "energy corridor";
already one of Houston's largest employment centers. The space is expected
to be delivered within 60 days, and architectural planning is already underway.
The new location for
the Bread Garden Café extends the reach of the chain to the magnificent
setting in Vancouver on the campus of the University of British Columbia.
This new restaurant will be located in a newly constructed housing project
a block from the student union and in the middle of university housing.
It has its own heated outdoor seating area which is weather protected.
Marc Geman, CEO of Spicy
Pickle Franchising, Inc., commented: "The Houston location marks the end
of a long process for our franchisee. From here, we can get started on
the design, build out, training and grand opening. The premises will be
available to the franchisee at the start of 2009. Our Houston franchisee
is already looking at additional sites."
Mr. Geman further stated:
"As we said before we have been working on sites in the Vancouver area
even as we were negotiating the purchase of the Bread Garden Urban Café
chain. This new site, along with the new Vancouver Airport site, represents
the fruits of our labor and the hard work on the part of the team in Vancouver.
"It's a tough environment
for expansion domestically, but there is a bright spot. Commercial real
estate prices are finally starting to come down, and we are now in a position
to negotiate some very favorable terms in prime locations for those franchisees
that are ready to expand. We are on the verge of a number of additional
new lease signings. We are still looking for locations in several US cities.
Our Canadian subsidiary, Bread Garden Urban Cafés, is also looking
for a number of additional locations. Western Canada is not experiencing
the heightened financial turmoil we have in the US, and we anticipate continued
expansion there as well."
The Spicy Pickle location
in Sioux Falls, South Dakota was closed without notice to the franchisor
in October and the premises, in full operational condition, was abandoned.
The franchisee apparently has left the area. We are looking for another
operator and have been in contact with the landlord who has secured the
premises.
Mr. Geman commented,
"In these economic times I expect we are going to see some fallout from
franchisees that are not sufficiently capitalized to work through an economic
downturn. We are confident the whole the system will continue to grow and
most likely will be stronger by the time the economy starts to recover.
Overall system-wide sales are what become important to achieving profitability
and we are cumulatively adding to those sales.
"At the corporate level,
we have been taking some cost savings steps to bring our overhead down
to a level commensurate with the new environment and our ongoing cash flow.
We plan to increase revenues while reducing costs at the corporate level
to protect our shareholders as we move through this painful recession."
About Spicy Pickle(TM):
Founded in 1999, Spicy
Pickle Franchising, Inc. (OTC BB:SPKL.OB - News) serves high quality meats
and fine artisan breads, baked fresh daily, along with a wide choice of
eight different cheeses, twenty-two different toppings, and fourteen proprietary
spreads to create healthy and delicious panini and sub sandwiches with
flavors from around the world. As a leading "fast-casual" concept, Spicy
Pickle offers menu items that are far beyond traditional fast food but
without the price point of casual dining. The hallmark of a Spicy Pickle®
restaurant is quality, service and an enjoyable atmosphere. The company
is headquartered in Denver, Colorado, with restaurants open or under construction
across 14 states and several more in development nationwide. Spicy Pickle
Franchising, Inc. also operates as franchisor for Bread Garden Urban Cafés,
a concept with 11 restaurants in the metropolitan Vancouver, Canada area.
Bread Garden Urban Cafés serve coffee, pastries and breakfast items
as well as lunch and dinner along with a wide variety of desserts. To find
out more about Spicy Pickle (OTC BB:SPKL.OB - News), visit our website
at www.spicypickle.com/.
Forward-Looking Statements:
Certain statements in
this press release, including statements regarding the number of restaurants
we intend to open, are forward-looking statements. We use words such as
"anticipate," "believe," "could," "should," "estimate," "expect," "intend,"
"may," "predict," "project," "target," and similar terms and phrases, including
references to assumptions, to identify forward-looking statements. The
forward-looking statements in this press release are based on information
available to us as of the date any such statements are made and we assume
no obligation to update these forward-looking statements. These statements
are subject to risks and uncertainties that could cause actual results
to differ materially from those described in the statements. These risks
and uncertainties include, but are not limited to, the following: factors
that could affect our ability to achieve and manage our planned expansion,
such as the availability of a sufficient number of suitable new restaurant
sites and the availability of qualified franchisees and employees; risks
relating to our expansion into new markets; the risk of food-borne illnesses
and other health concerns about our food products; changes in the availability
and costs of food; changes in consumer preferences, general economic conditions
or consumer discretionary spending; the impact of federal, state or local
government regulations relating to our franchisees and employees, and the
sale of food or alcoholic beverages; the impact of litigation; our ability
to protect our name and logo and other proprietary information; the potential
effects of inclement weather; the effect of competition in the restaurant
industry; and other risk factors described from time to time in our SEC
reports.
Contact:
Company Contact:
Marc Geman
Spicy Pickle Franchising, Inc.
(303) 297-1902
Email Contact
http://www.spicypickle.com
Source:
Spicy Pickle Franchising, Inc. |
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