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#Letter to Shareholders
stale
Last edited 4 years ago

25/1/21

SUMMARY:

~ October + November 2020 consolidated revenue of A$6.2 million; combined EBITDA of - A$724k, a 45% improvement over the prior corresponding period

~ November 2020 recorded positive EBITDA of A$16k despite ongoing supply shortages

~Consolidated margins were strong at 36% over the period

~As at 30 November 2020, the Company had trade receivables of A$5.1 million, inventories and work-in-progress of A$5.8 million, and cash on hand of A$7.3 million

~All of the Company’s worldwide holiday inventory sold into the channel for Black Friday/Cyber Monday + holiday was sold through                                                                       ~ 90% of the Company’s holiday inventory at Best Buy was sold over the Black Friday / Cyber Monday weekend

~ Following the completion of the PFG finance arrangements, the Company currently has more product (by $ value) ordered/in manufacturing, than it had for all of 2020.

.We were delighted to recently report (refer to the ASX announcement dated 4 January 2021) that Buddy has secured new financing arrangements that have immediately removed the deeply impactful commercial trading terms and operational restraints (such as manufacturer exclusivity, manufacturing trade terms, etc…) that so limited the Company’s ability to deliver superior results in 2020.

Disc: I hold in Strawman & TRW

 

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#results & Guidance9/2/21
stale
Added 4 years ago

Buddy Announces H2 FY2021 Revenue + Earnings Guidance

SUMMARY

~ Buddy announces expected results for H2 FY2021

      - Revenue in the range of A$24 million to A$28 million

      - Positive adjusted EBITDA for the half

~ Results for H2 FY2021 are anticipated to more than double the (unaudited) revenues for the prior corresponding period (H2 FY2020 - A$10.8 million)

~ The revenue and EBITDA guidance for H2 FY2021 are derived from manufacturing orders placed, contracted and paid for (in part or in full) and do not include any expected orders not yet placed. 

Disc: I hold

I had previously held this company as it has gone through many transformations. So it was on my watchlist. I bought a small holding back in May after a few good announcements & starting to work out their debt.

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Valuation of $0.090
stale
Added 4 years ago
30/11/20 I'll be honest and say that I don't know how to value Buddy or even project the revenues in the medium term (next 3 years). However, the reason I can't project is due to their exponential growth in sales. Doing rough math I came to the conclusion that the revenue growth is undervalued by the market, so I added them for the "Christmas sales" play. The price for Lifx smart light bulb is different depending on product type (there is the mini, wifi LED, Clean (antibacterial product) etc...) but they can all connect to smart home devices like Amazon Alexa, Amazon Echo, Google Home, Apple Home etc... What Amazon did recently during Prime Day was bundling Lifx with Echo to joint sell both products to customers - this drove sales. "The sale event was wildly successful, with the Echo+LIFX White bundles hitting a peak sales rate of 4 per second or some 12,000 per hour. At this rate, the Echo+LIFX White bundle sat atop the table of top deals while it was live, only falling off when Amazon ran out of stock." Looking at key aspects of the business - Last year 2m sales = $30M revenue. In 1QFY21 they did $7.7M of revenue which I am guessing is around 500k sales. - They have signed many distribution agreements recently such as Costco and are leveraging their existing partners (Amazon especially) - They have raised equity and debt to replenish inventories as the product is selling quickly. They need to build more lightbulbs to keep up with demand. This is a very rapid growth company so it is really hard to know when sales would slow (no predictability in the DCF for me). It seems that they are accelerating despite COVID surges in Europe and the US. Their products sell like hotcakes and I am gonna put a big bet and predict that during this holiday period that they will pass 5m total sales. Which means in 1HFY21 Buddy generate 3m sales - more than FY20 and then some. So, this quarter alone, I would not be surprised to see $30M revenue during the quarter (a lofty prediction). Hence maintaining price to sales ratio of 6 would mean Buddy could be a $250M company so share price target ~ $0.09. I am very likely wrong on this and would like to see counter-arguments. My guess would be around profitability and debt servicing. This is what management is preparing for: "Having recently passed the 3 million smart lights sold milestone (and the fourth million is closer than ever and a milestone we’re accelerating towards), we look forward to bringing on a second manufacturer to help us meet the scale and cost competitiveness that we need to maintain and build upon our global market position." There are many more risks on this business I may have missed, but for me, it is worth a punt. Reward > Risk before Christmas. P.S. Buddy Tech also has a commercial business but the revenues are tiny compared to the consumer (Lifx) business. Also the commercial business is negatively impacted by COVID.
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#New Anti-Bac Smart Light !
stale
Last edited 5 years ago

28-Aug-2020:  LIFX Announces World-First Disinfecting Anti-Bac Smart Light

BUD's SP (share price) rose +33.33% from $0.069 to $0.092 today on the back of this announcement, beaten it would seem only by the +86.67% rise of Pointsbet (PBH) on the back of their announcement concerning their results and their NBC Partnership.

BUD:  LIFX Announces World-First Disinfecting Anti-Bacterial Smart Light

SUMMARY

  • LIFX Clean is a fully functional white + colour smart light that also uses germicidal antibacterial light to disinfect surfaces and surrounding air
  • In a smart lighting world-first, by using 405 nanometre High Energy Visible (HEV) light that is safe for humans, pets and plants, LIFX Clean offers an effortless way to maximise the cleanliness of home environments
  • LIFX Clean has passed efficacy testing in laboratory testing conducted by the Department of Chemistry and Biotechnology at Australia’s Swinburne University of Technology, as well as IEC and safety testing at UL Verification Services in Guangzhou
  • Whilst LIFX Clean is currently in the testing queue for efficacy against the SARS-CoV-2 virus (which can cause the COVID-19 disease), no claim is currently being made that the product is effective in an antiviral capacity of any kind, including on SARS-CoV-2
  • Priced at A$99.99 / US$69.99 / CA$79.99 / €69.99 / £59.99, LIFX Clean is an affordable and accessible new anti-bacterial product, providing broad access to consumers in a time of enormous demand for cleaning products. It is expected to be released to the market in calendar Q4.

28 August 2020 - Adelaide, South Australia:

Buddy Technologies Limited (ASX:BUD), a leader in IoT [the Internet of Things] and cloud-based solutions for making spaces smarter, is proud to announce that it has successfully passed efficacy and safety testing for a brand new product which is expected to launch an entirely new category of smart lighting - a smart, antibacterial disinfecting light called “LIFX Clean”.

Built on top of the award-winning and multi-patented LIFX A19/A60 1200 lumen smart light platform, LIFX Clean offers a fully functional white + colour smart light that includes the mobile app control, internet connectivity and native integration with voice and automation partners such as Amazon Alexa, Apple HomeKit and Hey Google that customers have come to expect.

In a smart lighting world-first however, LIFX Clean also includes additional and specially designed LEDs that emit visible light at a germicidal wavelength of 405 nanometres. At this specific wavelength in the High Energy Visible range, light has a disinfecting effect (called porphyrin excitation) on bacterial microbes on surfaces and in the surrounding air. While the use of UV-C light has a much quicker antimicrobial effect, HEV lighting is safe for use in the presence of humans, pets and plants and unlike UV-C requires no protective measures for its safe use.

As a consumer antibacterial product, LIFX Clean meets the regulatory requirements to be sold in LIFX’s key markets of Australia, New Zealand, the United Kingdom and the European Union. The North American markets of the United States and Canada are subject to different regulatory requirements, and those are currently being progressed. The Company does expect to be able to sell LIFX Clean into all of these markets, including North America, at the time of product launch.

The efficacy of any light-based cleaning product is a function of the energy output of the light and the distance of the light from the subject being cleaned. Currently available disinfecting lights targeted at hospital operating theatres and recovery room bathrooms have a typical efficacy of 70% of bacteria killed in 2 hours of light exposure. In a typical desk lamp fixture, or if used in under-cabinet lighting, LIFX Clean has an efficacy of greater than 80% in 2 hours, or more than 99.99% overnight (40cm distance for 8 hours).

Unlike chemical or ultraviolet light (UV - which cannot be used in the un-protected presence of humans, pets or plants) based products which are episodic, LIFX Clean is a non-contact, continuous disinfection product. LIFX Clean can be used as a normal white or colour smart light by day or evening, and then the Clean lighting may be scheduled to come on overnight, or the Clean lighting may be left on continuously (in cleaning mode, LIFX Clean emits a light blue light).

LIFX Clean will initially be sold as a standalone light bulb, but the Company does expect to offer it for sale with a specially designed desk or counter-top fixture that will include a tray to hold items like keys, mobile phones, wallets and other day to day items that commonly mobilise bacteria.

“LIFX Clean is a ground-breaking product that we believe will help create a whole new category of smart lighting, one that we intend to lead with a combination of innovation and relentless pace. This might be our most important step yet towards making every space smarter”, said David McLauchlan, CEO of LIFX. “When the pandemic that has spread throughout the world first took hold, we asked ourselves, ‘What could our team do to contribute to more hygienic environments?’, and ‘How could we help our customers avoid secondary bacterial infections that would worsen the impact of the pandemic?’. The result is LIFX Clean, and I couldn’t be more proud of the team for developing such an affordable and highly innovative product that will help to meet the enormous and currently unquenchable worldwide demand for cleaning products”.

The LIFX Clean product has been tested to meet the IEC 62471 standard for photobiological safety of lamps at UL Verification Services in Guangzhou, China, which is a globally recognised and accredited certification and testing laboratory. These tests ensure that there are no risks from skin exposure and exposure to eyes (including cornea, conjunctiva and lens). LIFX Clean passed this testing, resulting in placement in the "exempt" classification meaning there is no photobiological hazard from the product. Efficacy testing was performed in laboratories at the Department of Chemistry and Biotechnology at Swinburne University of Technology in Melbourne, Australia (see the Testing & Technology addendum below).

While LIFX Clean has been tested for safety and efficacy in an anti-bacterial capacity, it has not been tested for any antiviral impact, including impact on SARS-CoV-2. Accordingly, no claim is being made that the product has any effect on SAR-CoV-2, however it is currently in the queue to be tested as such, and once results are known, details will be made available by way of further ASX announcements.

LIFX Clean is expected to be priced at A$99.99 (inc. GST) / US$69.99 / CA$79.99 / €69.99 (inc. VAT) / £59.99 (inc. VAT), will launch shortly via pre-sales on LIFX.com and is expected to be available at retail locations in the fourth quarter of this calendar year.

Webinar

The Company will host an investor webinar to discuss this important new product and its impact on the business, opportunities for expansion into new markets, and early reaction by retailers and customers. The webinar will be held at 11am AEST, Tuesday 1st September 2020 (6pm US-PDT, Monday 31st August 2020), no advance registration will be required, and attendees may participate at http://bit.ly/LIFXClean.

--- click on the top link for the full announcement, with pictures ---

[Kinda wish I did hold BUD shares...]

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