Q1 2021 Alkaline Water Company Inc Earnings Call
Greetings and welcome to the alkaline water company to discuss this goal 2021 first quarter results.
This time all participants are in listen only mode. A question answer session will follow the formal presentation. If anyone's your acquire operator assistance during the conference. Please press star zero and your telephone keypad.
Please note this conference is being recorded.
Now turn the conference over to Saatchi.
Dowdy director of Investor Relations. Thank you you may begin.
Good afternoon, everyone and thank you for joining us for the I'll find work company's first quarter fiscal 2021 earnings conference call.
Certainly you will hear from Rick you're right, our president and CEO and David Green, Our Chief Financial Officer.
Oh, well be making forward looking statements within the meaning of the safe Harbor provisions of U.S. security laws and we may make additional forward looking statements. During the question answer session.
Forward looking statements involve risks and uncertainties and undue reliance should not be placed on such statements.
Materials doctors or assumptions are applied.
In making forward looking statements and actual results may differ materially from those expressed or implied in such statements for additional information about factors that may cause actual results to differ materially from expectation and about material factors or assumptions applied and making forward looking statements. Please consult the company's form tenq.
Q, which was filed today and its other reports filed with the S. You see.
On after and with Canadian security regulators on SEDAR and.
In addition, such forward looking statements and any projections as to the company's future performance represent management's estimates as of today August 13th 2020.
The company does not undertake to update any forward looking statements or projections, except as required by applicable laws, including the security law laws or the United States in Canada actual results could differ materially from those contemplated by any forward looking statements as a result of certain factors, including but not limited to.
The general economic and business conditions competitive factors changes in business strategy or developing plans ability to truck to retain qualified professionals as well as changes and legal and regulatory requirements. The company issued a press release announcing its financial results and filed.
Form 10-Q with FCC. So participants on this call who may not have done so already done so.
May wish to look at those documents the company will provide a summary of the results discussed on todays call. In addition, the company also finds its animal farm interim report form 10-K, which covers the full fiscal year 2020 financial results. Another disclosures I will now turn the call over to our CEO, Rick you're right. We'll give you an overview of the company.
First quarter fiscal 2021 results.
Allowing recuse comments, David Gray, our Chief Financial Officer will provide an overview.
Provide the company's operating results Ricky will follow David again, providing closing remarks, we'll then open the call for Q1 night after management's uptick and now I'd like to turn the call over to Ritchie.
Thank you Sajid Hello, everyone and welcome to the alkaline water companies first quarter fiscal 2021 conference call.
I'm pleased to announce a we delivered another record quarter of strong growth.
Our sales for first quarter fiscal 2021 were $14.200 million. This represents growth of approximately 40% year over year and 18% sequentially.
We also reduced our loss per share by 56% year over year to five cents per share our lifestyle brand alkaline 80, 888, infuse an 88 CBD continue to gain momentum and our recent strategic actions effectively position us for another solid fiscal year of growth.
We continue to outperform our peers in the value added water category during the quarter, we gained significant market share and per Nielsen 13 week report ending July 11th 2020, we once again became the fastest growing alkaline water company and total U.S. food channel, we outperformed the category.
11.5% and 60% and dollar sales in unit volume respectively.
We continue to see accelerating growth into this fiscal year.
First quarter fiscal 2021, our organic growth with our top five customers exceeded 41% year over year. What's your was in excess of our quarterly growth. Each of these customers has been with us for over two years.
Our growth appears to be continuing as july's purchase orders for the second highest of any month in the company's history history.
Empirical data gain for some of our retailers indicate that our sales to new households, also continue to expand.
We see an old your worst disruption in our supply chain and our bothers continue to keep up with demand. In addition, we executed well during the quarter with operating expenses declined by approximately 5% year over year.
I'm very pleased with our quarterly performance, which positions us for another double digit your growth.
Our team's ability to successfully and consistently deliver our problems because some of the leading national and regional retailers has built substantial goodwill with our category buyers who are the gatekeepers to shelf space.
The tangible benefits are beginning to manifest as our sales team be with numerous buyers without exception there being told that we are a top tier supplier and outperformed most other companies during the Pandemics peak impact internal data shows that our performance at two of the nations largest reach euro Taylor's during.
This period was well ahead of our expectations.
And we saw year over year growth of approximately 24 and 43%.
This is an stark contrast to report by beverage marketing corporations, which show that during the second quarter of 2020, the still bottled water company declined by 10.4%.
Although it's early based on our outstanding performance. It appears that many buyers are looking to make increased commitments tour, our entire beverage line, including single serve.
88, flavored infused waters, and our sustainable and eco friendly aluminum bottle.
One of our large retail customers has already made a firm commitment and adding our sustainable and equal friendly alumina bottles and I'm working with us on a new packaging configuration, where the test format stores. This is a meaningful opportunity and could potentially represent over 300 stores.
As we onboard our new clients. We typically find does it takes a few quarters to get a steady stream of orders.
As such we expect our order momentum to continue to build in some of our national retailers. We have recently added including family dollar and Rite aid.
We're beginning to see our new normal growth patterns with these new retailers as with most of our accounts, we see significant month over month growth.
As a testimony to the strength of our branded consumer loyalty, our top five customers all of which have been with us for more than two years I've shown <unk> organic growth of over 28%.
Brianna.
Hi, Matt back real scale. According to Nielsen data during the 13 weeks ending July 11th 2020.
Alkaline mediate was the second fastest growing value added brand among competitors.
And with the annual retail sales.
70 million, we achieved this in both turns of dollar sales and unit volume and the total U.S. food chain category.
As we look to the rest of the year beyond we expect the organic growth to continue our sales team is targeted over 40000 stores in our current channels for additions in the next 12 to 18 months.
Many of these stores will include both our bulk offerings and single serve sq use which could catapult our single serve sales to an absolute new level overall, we feel very good about our market position with our core brand outlay 88, and I'm looking forward to driving continued growth and exceeded our existing or new customers expectation in the coming.
Here.
Well the past two years a lot of our company's efforts has been to create an exciting and trusted national lifestyle brand 88.
To this and despite the economic setbacks the country's experience.
88, as well on our way to achieving that goal.
We expect to see placement and strong sales and our new innovative product offerings, which include 88 flavored infused water are equal friendly.
Aluminum cans and our newly launched lineup CBD products.
A few weeks ago during our Q4 and full year earnings call I shared with you. Some some of the progress we have made on the various strategic initiatives and a multiple new growth opportunities we are pursuing.
Today I want to build on some of those objectives and highlight the direction that we're taking to strengthen our brands position in the marketplace even further.
One significant initiative. This calendar year has been the launch of our exciting line of CBD adjustables and topical products. We continue to see solid momentum on this line and have announced a series of new brick and mortar announcement.
Our teams have been finding great success in CBD, only dispensers and muscles in high volume online retailers. We're also expanding our channel partner relationships and strategically selected unify as a distributor and see fortunes are broker to help penetrate traditional retail space.
Both firms specialize in all natural and organic products are growing line of high quality products perfectly complement their offerings and a few short weeks, we have added roughly 25 brick and mortar locations, it's too high volume online retailers for all our lineup product.
Team is nearly finalizing some relatively large partnerships, which will be announced soon.
One of particularly represent the CBD franchise, there will be carrying our 88, CBD injectables and topical product portfolio across all 142 stores as I mentioned, a few weeks ago, our sales target list for our CBD products is more than 72000 retail locations and the post pandemic. Your it appears that the market is evolving quickly.
And some of the smaller independents CBD companies are struggling to keep up with the logistical and supply chain constraints.
It was presented an opportunity for us as we consistently received high marks on our branding quality of our products compliance a product watching documentation needed by major retailers, we're well positioned to the leading CBD product categories, and we remain committed to becoming one of America's trusted and go to lifestyle brands.
We will be expanding or 88, CBD ingestible line up and expect to launch our gummies NCB water. Later this quarter. We're also fast tracking several new CBD items into the marketplace, which include additional government offerings flavored lip balms high dose each temperatures hard candies soft using caramels.
We expect our 88 CBD line to be a meaningful contributor during the second half of our fiscal 2021.
Our ecommerce channels continued growing continue to see strong visitation made metrics sale conversion rates and repeat customers.
With the recent shifting consumer buying habits, having an ecommerce presence.
Since its critical during the current environment.
Our digital strategy complements our brick and mortar approach, especially for 88 CBD line.
Many of the new brick and mortar partnerships, including co branding opportunities to strengthen our brand and increased brand awareness and our partners local markets.
Finally to August augment our digital efforts this year.
We also are including a full scale traditional marketing campaign.
Initially we will watch our campaign in selected markets.
And if we see promising returns we will expand it nationally.
To maximize its effort, we are pursuing appropriate ala celebrity ambassadors support our lifestyle brands and both brick and mortar and ecommerce strategy.
We've made great strides and establish our national footprint, our product surveil from coast to coast with the strong presence in grocery and drug channel.
Given the multiple year secular trend towards health and wellness and sustainable lifestyles. We believe we are well positioned within our client base. In addition, we have an active pipeline and new verticals, which include convenient stores specialty retailers big box retailers and multiple verticals within the hospitality.
Space.
Hospitality is a brand new vertical for us and represents a tremendous growth opportunity.
These include food service providers servicing hotels airports U.S. Park systems go off work courses colleges concert venue is et cetera, a few weeks ago I shared with you that we assume you're not seeing a partnership with the largest food we distributor in the U.S. This partnership is progressing as planned and we spelled still expect to make the scenario.
But soon.
In addition to our Korbren, we expect our flavor infused water and eco friendly illumina bottles.
Do exceptionally well in this segment.
At the country opens up we expect our efforts to gain share and hospital, Saudi space to be meaningful drivers of growth during the second half of our current fiscal year.
Towards or convenience store strategy, we expect to reach at least 25000 convenient stores by the end of our fiscal 2021.
Our momentum in this vertical.
So some early impact from the pandemic. However, we have seen active pick up in recent weeks.
Our team has made great strides with our existing partners and one of the nations largest C store distributors.
Our products are now available in seven of the distributions centers, which service 10000 plus stores. Our teams are developing custom programs for each of the de seized to establish our brand.
And the current fiscal year, we expect this initiative to be a meaningful driver towards scaling our presence in the space. Our flagship brand is currently at approximately 10000 stores with the concentration of South and southwest based on the structure of the C store vertical we need to build an extensive DSD networks to service. These accounts.
As such we are in an active dialogue with some of the major DST distributors and recently announced the addition of must Shaka to service the Midwest region.
The distributors serves over 5000 customers and will carry our entire line a beverage products, including our flavor infused water.
We believe and active DSD network will also be extremely beneficial for 88, CBD ingestible products as C stores have been early adopters of CBD products.
I would now like to shift focus to some of our emerging growth categories.
Our 80 flavored infuse water continues to gain traction in the marketplace. We recently announced a shop right would carry our 80 abuse line early feedback has been extremely positive and we've already seen repeat orders on the line given the nature of our product. Our sales approach is heavily relied on sampling that.
Our pipeline is slow given the retailers have eliminated.
Product demos to do to call Cobot. However, we recently added a new director of marketing Rosy Casino, who comes with Hynix sensitive CPG background. Rosie has been task to work with Davis Allen our advertising agent agency.
Implement alternative guerrilla marketing strategies to put our products and new consumers' hands a mouse.
So my tour efforts in hospitality Arena, we expect this line to pick up the momentum in the second half of the year.
With numerous growth categories on the horizon, new market segments to pursue and overall category strength, we believe we're well positioned for strong growth in the current fiscal year.
I had indicated on the last call that we hope to provide guidance on this call wire prospects look right for the current fiscal year. There are number of mitigating circumstances, mostly timing issues.
They will not allow us to provide definitive guidance at this time.
We hope to be able to offer guidance and our fiscal Q2 earnings call.
With that I would now like to turn the call over to David Guerrino, Our Chief Financial Officer, who will take you through the first quarter fiscal 2021 financials David.
Thank you where he before I begin I liked incurred instead listeners for you. The 10-Q, the we filed with the FCC for more detailed explanation on some of the quarter results I will be highlighted today.
For the three months ended June Thirtyth 2020, we reported a record revenue of approximately $14.2 million, an increase of 4.1 million or 40% from the three months ended June 32019.
Our gross profit in the quarter ended June 32020 was approximately 5.8 million compared to the gross profit of 4.1 million and according to get into 2019.
Total operating expenses for three months ended June 32020 was approximately $8.6 million compared to approximately $9.1 million on part of your corner.
This decrease in total operating expenses was primarily due to declining general and administrative process.
Specifically for the three months ended June 32020, and 2019 sales and marketing South was approximately $4.5 million in both quarters.
During the three months ended June through 2020 general administrative expenses was approximately $3.9 million compared to $4.4 million a part of your quarter.
Reflecting a savings over half a million dollars from nonrecurring expenses there were hurting the quarter ended June Thirtyth 2019, and not occurred in the country corner.
Not loss for the quarter ending June 32020 was approximately $3 million compared to net loss of $5.1 million.
In the quarter 18, 32019, an improvement of approximately $2 million.
Net loss per share in the quarter ending June 32020 was approximately five cents per share an improvement of 50% or seven cents better from a net loss per share in the quarter ended June through 2019.
Cash used by operations right. Three months ended June 32020 totaled approximately $1.4 million as compared to the $2.7 million of cash used by operations in the prior year quarter.
The changes primarily due to the approximately $2 million decrease on net operating loss.
Specifically, we believe that the cash on hand as of June 32020 are expected exercise of existing warrants and our credit why we will have sufficient cash to sustain operations through at least June 32021.
And with that I'll turn it back to Ricky Thank you.
Thanks, David once again I would like to thank you for participating in our call today.
Every day I vision for this company becomes clearer and our momentum grows as 80 age is becoming a true national lifestyle brand.
Access to the very sales channel is unprecedent for a company with such a short operating history.
Our record of growth in consistent delivery of high quality products has made us a favorite were both our retail buyers and consumers.
All the elements for successor Presson sufficient capital a great management team a great business model best in class products with all natural ingredients in great taste profiles, and an increasing market driven consumer demand for each of our respective lifestyle products.
Our fully executed ecommerce platform, our channel expansion to hospitality companies, especially retail combined with our organic a new store growth until you as food channels.
I would result in substantial growth over the foreseeable future.
I would also like to thank our shareholders and our board of directors for their continued support.
We're making great strides there, making 80 888 infused in 88 CBD. The most trusted lifestyle brand in America, Thanks, and I'll now turn you back for questions.
Thank you.
Yes. Good question. Please press star one.
Telephone keypad.
<unk>.
Let's start to if he would like.
Thank you.
Yes.
It may be necessary to pick up.
<unk>.
Our first question is from <unk>.
From Canaccord Genuity. Please proceed.
Good afternoon. Thanks for taking my question I wanted to start with the gross margin performance in the quarter you know obviously good performance there up <unk>.
Year over year. So I'm just curious what were the main drivers I'm about to perform.
Well I radically Luke you know, we've always talked about.
Since we went to full truckloads, everything gets better and candidly a lot of they had to do it because of the pantry stocking.
Pretty much at almost all full truckload at quarter and that really up their margins.
Okay. Thanks, that's helpful. And then the other thing I guess I wanted to maybe get a little more clarity on and just make sure I heard it right is that there was the decrease in DNA year over year about it you know, let's call. It about a half a million decrease year over year, and I think that was mostly going to nonrecurring.
Amounts that occurred I'm in the prior year, just curious what exactly those nonrecurring amounts are and then maybe getting a little bit deeper in the DNA line can you just talk broadly about what the broader buckets are there and how we see that we should see that I'm playing over the course of fiscal 2021.
Okay. So I'm going to handle first part of that that's a pretty easy answer for me and then I'll, let David getting to the weeds in terms of the broader buckets.
In terms of the basically at four projects last year that are non recurring one was obviously the Aqua high drayage acquisition that did not get completed and and that obviously is no longer recurring expense, we had a relationship with E. Bird, we launched ourselves into the convenience stores, which was a six.
It's on a on a number of stores, but not on a return on investment. So we've taken a different strategy. We hired Jim been today I have essentially to help us on that strategy going forward. The other one was a water source one I hired an internal guy after a year with them, Nick Salvini, who came on.
This year as well so we we brought those two aspects of our business internally, we think there's a much better return on investment there for US and then the other one was that we finished our rebranding and that was really the charge for arch point.
Project and if you look at the K., we mentioned $45 million or non recurring those are really the non recurring we've either brought them all in house or moved them moving someplace else in the organization.
And this is David just with regard to your second part of the question here.
Our corporate expenses, which are mainly the public company expenses.
And we do do some corporate advertising and so that's one too is we have payroll rent typical overheads and then three especially in the quarter that just ended on you know we had some non cash stock compensation, which you know we disclose as well. So those are really the three buckets.
Gina and from a percentage basis had you'll see for this year as a you know sales are continuing to increase.
The percentage of again fill should be favorable.
And we expect that to continue as it did the first quarter.
Thank you very much.
Our next question from Brian.
Capital Partners. Please proceed.
Hey, Ricky it's Brian work on day based team or can we understand the financial and strategic significance up your recent announcements in terms of DSD.
Huh.
Should we think about additional deities, where you have already it presents to potential increased velocity or expand that skew footprint or simply look at this as continued momentum overall and no change to the bigger picture DSD mix in your distribution.
What do you read my mail no we actually said in the.
In the actual press release, we or excuse me in his opening comments.
We actually do talk about an expanded DSD presence as everybody knows a one of our major objectives for the last two years. He Berg with the first phase of that.
To get into convenience channel, where we had virtually no presence two years ago.
We're over 11000 stores already a nationwide our goals 25000 for this year total and we will need a DSD network to do that our first when we started with is obviously in the Midwest that helps us in a number of convenient stores you could not have otherwise gotten into a high V which is a major.
Count up there probably the premier count in that area.
We were able to.
Work with them they like the DSD models. So we will expand a presence in there as well and then we will actually as I've mentioned this before we will look for DSD in the northeast the northwest and we probably will take one other because it covidien and some.
Delay and opening up those will probably take one other major area of our our production and our distribution now and trying to just saturate the convenience store strategy there as well so I would say they'll be for this year that we will use the DSD model N. It will accelerate growth in each one of those areas.
So very good very good question in very good insights.
Great. Thank you. The second question relates to be hospital hospitality segment. When do you think we see financial benefits from any deals how material well be from a quarterly perspective is there an initial large order will be similar to a reset for large chain or how will the cadence look.
Thank you.
So great question actually I have this conversation my sales group all the time in terms of that the difference in the cadence.
And that's really what what the difference is obviously when you pick up a public sir.
Bentley dollar Rite aid general more recent ones. There's a there's an initial large order for the reset and then we see a traditional cadence.
Really it's a six month, but the nine month build where every month, we get a little bit bigger a little bit bigger a little bit bigger I happened to look at one of those two numbers before this call and and that progression has continued that pattern has continued and that account, which obviously, we're pleased about in the hospitality industry, it's a little bit different.
You're exactly right. We won't have was quite a big his initial order and then it will be a build but we do have some some commitments from the partner in terms of what they believe they will be able to sell through this year and so that's encouraging because that will be a build in the third and fourth quarter.
Great. Thank you.
As a reminder to star one on your telephone keypad, if he would like to ask the question. Our next question is from our in Gray the Lions CLO.
Please proceed.
Hi, good evening, congrats on the quarter. Thanks for question.
First one for me is just on the CB side of things I'm just might think about you know the retail rollout and are in a couple of stores now as well as E. Commerce. You know just one thing that's and being in CBD industry is in terms of like.
You know brand awareness and any kind of building consumer education 'cause it remains a very fragmented space. So just.
If you could talk about some of the initiatives you have in place to kind of build brand awareness both online as well as you know within the brick and mortar store she knows that the outcome. If the other day in checking out <unk> you guys products. There. There's obviously a number of other products. So how do you guys think about making sure your product stand out in consumer to get educated on them any color there will be great. Thanks.
Okay. Thank you for the question and this is again actually you buy I'm flying to.
Ali Tomorrow to have a have a conversation with that entire team bring a couple of people from here. So we're on that almost every day.
I don't know few caught that the person we just brought in from a marketing standpoint, she's from one of the major CPG companies in the country I think there number four or five and so she's been brought in and she'll be meeting with us and we'll be discussing strategies with her as well what you've seen as work. The main thing we're doing with most of these initial programs though.
Actually doing a very aggressive come come co branding.
And you will see right now I think we've got 25 or or more billboards or bus stop boards out in L.A. in a similar number out in New York a co branding when we make this next amount announcement on the 142 stores that also is a big co branding.
Opportunity for US I think we'll have a 107 billboards throughout those eight states.
So we're we're definitely taking that very seriously. In addition, utac, who we hooked up with on the Internet marketing I don't know how many banner AD you see I don't know how aggressive you you've seen us beyond there, but one of the things we're doing there as well as you know there they're Google special partner I'm sure I got that phrase wrong.
But they that allows us again to have very very good inside so of what's going on on the E. Commerce platforms, we will be continuing to get our ROI. The one thing I love working about them as a we're not doing a million dollars add that to get a million dollars in sales were very ROI conscious we're very conscious.
We review every week, our acquisition cost per and our sales per and we've driven that down to probably 25% of where we started.
And we kind of got an idea, where we where we work we canceled somethings.
That weren't working and we're moving towards things that are and so we're very conscious on that and then another thing we're still waiting for a PK study, which is the kinetic study that we run on two of our adjustables, which will allow us to begin to educate the markets specifically with respect to our rescue use.
Right now we can break make broad based statements with respect to the C. 10, we use but we can't be specific with respect to our products and we expect that out any day now again, there were some koby delays or candidly, we expected it probably a month and a half ago, but unfortunately that lab is not working every day.
So there's a lot of good there's a lot of good differentiation is the only thing I do want to say, which I mentioned on last call is about half of the CBD companies are out of business now that that were there are pre coded pre pandemic. Yeah. We have really stepped up to the table there. They trust us they know us we have all the appropriate document.
Station that allows them to get comfortable one you know we've done over $200 million and retail sales on water since inception, now, which you don't for company only business for six years going into the top 10 is actually an incredible story.
You know, there's there's been few of us it up at able to accomplish that and we know that those people those banners have sought all its out now.
To say, Hey look it we're tired of dealing with moms and Pops, we talk to you last fall you missed our first reset we want you to come in and be part of our team and so we feel really really good about my statement earlier this year that will be number one or two and the brick and mortar by this time next year.
Super helpful color. There and then second question just want to kind of continue on with the competitive landscape that you just kind of mentioned not the latter.
Part of your commentary. So so certainly can agree and I think a lot of people think there's going to be some shake out, especially at the bottom end in terms of CBD player and you guys kind of fit right in right now kind of being more you know maturing your existing business kind of provide some you know maturity for for the retailers, but how do you think about when the regulations do change.
And because our number of larger companies, who are looking you know nine the industry to come in in a major way. So it's kind of strategy for you guys kind of fit right in right in the middle there and become a trusted partner and feel that big a mode. As you can answer those bigger guys come in.
Right and we're just kind of love to know your strategy there and in terms of what you're thinking in terms of how big you can grow before.
The FDA kind of opens up the door for some even bigger players coming thanks.
Well you know the interesting part there is twofold. One is that you don't we're already in unit by so we're already gaining a foothold there with respect to our CBD products.
We know that when you're dealing with a with a category buyer I'll go back to our water for for My example that if you pull through.
Right now.
We are performing at a level that is unprecedented in my space I mean, our unit volume change you know, we're up 15% or 60% above what the what the category is and what I didn't say in that but you can you can find it on the Nielsen reports on the 711 is that you know every.
But in front of us with exception of one.
Brand is negative.
And so you know we've had positive growth in some of our competitors have had a 23% native and so that is a huge thing for us is that we're pulling off where a lot of people are pulling out out off the shelves continue to we're continuing to get new family to taste us to try our product we feel.
Very much the same way one of the things that we developed here was we didn't do right away all of this white label, we actually develop products with shape butter and then on the Topicals with great taste profiles and buffers for taste profiles on the on the adjustable so we think and better efficacy and absorptions.
So we really believe that we have product differentiation and once people start using it just like without plant 88, we're always fair enough pricing, we know that they'll come back to us enough. We're pulling off the shelf is going to be very very difficult just like it was with alpha and 88 for them to kick us out let's categories managers get get.
You know their bonuses in there there are no future is all laid on he did you put the right product on the show so they're getting a turns and we believe that that's the key to our future regardless of who comes into the market. The one of the reasons. We hired you Tech candidly on the E Commerce sites could we do believe there there.
They are tops in the game.
Thanks for calling that makes a lot of sense I'll go and jump back in the Q.
Thank you.
Yeah.
Yes.
I would like to China, Alright, great.
Okay. Thank you very much operator.
That was wanted to say that.
Hey, good again, thank you for your time today, you know we have momentum we've been very blessed with the.
With the numbers that have been pulling through for us I know that each one of these I don't know if you paid much attention to the stat on our our top pipelines in the amount of organic growth. We have a we do have targeted over 40000 stores in our traditional channels. This year, which is just fabulous for us.
Don't know cobot opened up some of those opportunities or what but we certainly have been able to bring new opportunities into our fold in the last couple of months that we did not have in front of us before.
The CBD group again, I can't stress enough you always by management never the idea how we have a great group of.
People there that are running that division excellently and of course, you all know that over the last six years.
Team has been a fabulous team.
And we continue to execute.
Can't tell you how Ah how excited Frank Chessman is everyday use my head sales Guy and we both know our goal just on the outline 88 side is to try to get this brand over $100 million in wholesale sales, which would put us about 150 on the retail side. So thanks again for your time this is still great.
Growth story I appreciate your commitment to Tonight.
Every day every one.
Thank you. This does conclude today's conference you may disconnect your lines at this time.
For your participation.