EFTA01088716.pdf

ZERO ZERO ZERO sugar sodium calories sugar sodium calones sugar sodium calories Craue Control Hi-Energy Woke-Up Board Presentation November 9, 2012 skinn nutritional corp. EFTA01088716  Table of Contents Summary of Performance 2. Skinny Summary Report 3. Cash Flow Summary Variables 4. COGS Analysis 5. Payables & Cap Ex/Slotting 6. New Business / SKU Additions 7. Marketing Expense 8. Marketing Initiatives 9. Proposed Offering 10. Appendix: CVS BOGO Property of Skinny Nutritional Corp. Conficlentiol & Not For Distribution 2 EFTA01088717  Summary of Performance 2012 2013* ($MM) % NM) 3Q YTD 4Q FCST FY FCST 1Q FCST 2Q FCST 3Q FCST 4Q FCST FY FCST Revenue 730,409 1,216,635 4,558,311 1,380,897 1,753,716 2,048,686 2,343,655 7,526,554 65% COGS 798,849 866,244 3,418,755 898,074 1,171,022 1,388,881 1,560,418 5,018,395 47% Gross Profit (68,440) 350,391 1,139,556 482,823 582,694 659,805 783,237 2,508,559 120% Marketing 741,531 115,423 2,298,927 106,336 173,266 180,531 147,198 607,332 (74)% G&A 497,151 170,954 3,687,848 166,682 215,976 197,623 229,143 809,425 (78)% Net Operating (1,307,122) 64,014 (4,847,219) 209,805 193,451 281,650 406,896 1,091,802 443% Profit (Loss) " Assumes "mid" scenario shown on slide 4 " Cash operating profit loss) (non-cosh not reflected) Property of Skinny Nutritional Corp. Confidential & Not For Distribution 3 EFTA01088718  Skinny Summary Report Skinny Water Monthly Production & Sales Report Actual Actual Actual Actual Actual Actual Actual Forecast Forecast Forecast Forecast Cases Shipped LIQ 2011 1Q 2012 2Q 2012 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 4Q 2012 FY 2012 Skinny Water (12 Pack Equiv) 106,964 162,370 169,148 51,043 57,788 33,792 53,734 40,000 40,000 120,000 607,875 Skinny pH 0 0 0 0 0 0 3,264 5,000 10,000 20,000 18,264 Skinny Other 0 0 0 0 0 0 0 0 0 x 0 Total Cases Produced x x x x x x x x x x 0 Revenue 4Q2011 1Q2012 2Q2012 Jul-12 Aug-12 Sep1.2 Oct-12 Nov-12 Dec-12 4Q2012 FY 2012 DSD Canda Dry Delaware Valley $58,329 $211,197 $118,466 $56,511 $30,367 $48,411 $70,717 $23,040 $39,360 $133,117 $598,069 Canada Dry of New York $41,699 $123,884 $107,287 $21,784 $60,056 $46,068 $62,400 $23,040 $39,360 $124,800 $483,879 Polar $87,339 $148,417 $120,291 $44,928 $43,067 $20,343 $36,288 $23,040 $23,040 $82,368 $459,414 Grocers $0 $21,120 $52,046 $0 $0 $23,040 $26,880 $0 $23,040 $49,920 $146,126 Canada Dry Potomac $54,223 $62,037 $13,974 $20,694 $31,460 ($6,526) $19,874 $11,520 $11,520 $42,914 $164,554 Davis Beverage $21,828 $62,833 $65,405 $21,009 $19,076 $15,695 $19,200 $0 $23,040 $42,240 $226,257 Webb & Gerritsen Inc $17,976 $28,824 $5,917 $10,856 $11,520 ($778) $11,520 $0 $11,520 $23,040 $79,379 Kay Beer Distributing $10,974 $22,908 $11,520 ($768) $0 $0 $11,520 $0 $11,520 $23,040 $56,700 Sery U Success $40,320 $16,320 $25,183 $11,520 $19,200 ($2,843) $9,600 $0 $11,520 $21,120 $90,500 KeHe $0 $10,640 $17,147 $4,278 ($977) $14,885 $7,957 $11,520 $11,520 $30,997 $76,971 Global Group LLC $1,920 $10,560 $6,720 $0 $4,800 $0 $5,760 $0 $0 $5,760 $27,840 Davenport & Sons $0 $0 $0 $0 $24,480 $0 $4,080 $0 $0 $4,080 $28,560 Central $32,640 $35,020 $19,188 $0 $0 $6,192 ($1,143) $0 $11,520 $10,377 $70,777 Seaview $8,286 $18,113 $20,625 $12,996 $0 $8,314 $0 $5,760 $5,760 $11,520 $71,567 LT Verrastro ($97) $18,997 $41,650 ($2,040) $21,738 ($153) $0 $0 $11,520 $11,520 $91,711 All Other DSD $235,610 $77,405 $47,342 $4,877 $20,790 ($1,142) ($53) $51,840 $57,600 $109,387 $258,659 Sub-Total DSD $611,047 $868,275 $672,760 $206,643 $285,577 $171,507 $284,601 $149,760 $291,840 $726,201 $2,930,963 Warehouse CVS $111,384 $299,452 $439,512 $186,892 $72,216 ($352,057) $112,608 $29,376 $58,752 $200,736 $846,751 Target ($2,306) $96,596 $161,017 ($1,881) $47,261 $3,612 $71,443 $11,405 $22,810 $105,658 $412,263 Harris Teeter $42,944 $35,538 $34,338 $10,836 $25,049 $19,790 $8,676 $15,552 $15,552 $39,780 $165,331 Brookshire $13,500 $4,824 ($1,044) $34,500 $965 $19,500 $0 $0 $0 $0 $58,745 Food Lion (New pH) $0 $116,100 $116,100 $116,100 Winn Dixie (New SW) $0 $28,160 $28,160 $28,160 All Other WH x $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sub-Total Warehouse $165,523 $436,409 $633,823 $230,348 $145,490 ($309,156) $192,727 $56,333 $241,374 $490,434 $1,627,349 Total Revenue 776 570 1 304 684 1 306 583 36 991 431 067 137 649 477 328 206 093 533 214 1 216 634 4 558 312 Property of Skinny Nutritional Corp. Confidential & Not For Distribution 4 EFTA01088719  Cash Flow Summary Variables Med Case Sales Skinny 929,280 704,640 592,320 pH+ 217,296 153,648 153,648 Total Cases 1,146,576 858,288 745,968 Net Revenue $ 10,073,107 $ 7,526,554 $ 6,539,693 Working Capital 2,781,049 2,017,276 1,789,407 Expenses Z-H $ 275,676 $ 275,676 $ 275,676 Payroll 714,816 641,875 617,562 Marketing 191,667 191,667 191,667 Professional 270,000 248,000 216,000 Debt Paydown 405,000 385,000 385,000 Other 346,087 335,215 324,679 Total Expense $ 2,203,245 $ 2,077,433 $ 2,010,583 Working Capital Cash Requirement $ (731,136) $ (788,790) $ (802,379) Trim IP Repurchase $ 1,490,250 $ 1,490,250 $ 1,490,250 Convertible Note Repayment (Nov) Net of WC increase $ 97,071 $ 210,281 Total Cash Requirement $ (2,221,386) $ (2,376,112) $ (2,502,910) Property of Skinny Nutritional Corp. Confidential & Not For Distribution 5 EFTA01088720  COGS Analysis Skinny Water Stock Proprietary Bottle 2.03 2.30 Co-Pack Fee 2.68 3.25 Other 0.06 0.06 Freight Out 0.55 0.55 Total COGS 5.32 6.16 Net Selling Price $ 8.26 $ 8.83 Standard Gross Margin 36% 31% * * Includes price of increase of $1 ($8 to $9 DSD) net of billbacks Recommendation: Raise DSD price by pH+ $1.00/case Stock Bottle 2.09 Co-Pack Fee 1.41 Other Common 0.04 Labels 0.74 Freight Out 0.55 Total COGS 4.83 Net Selling Price $ 9.00 Standard Gross Margin 46%** ** Net of billbacks Property ofSkinny Nutritional Corp. Confidential & Not For Distribution 6 EFTA01088721  Payables & Cap Ex/Slotting Cott • $507,000; paid out at $1.00 per case through UCF Directed Pay • Maximum: Cott paid in full mid-June • Minimum: Cott paid in full mid-July • Current balance: $372,627 Zuckerman-Honickman • $73,889 on December 31, 2012 • Balance = $275,676 • Bottles: $201,787; Mold: $73,889 • $0.50 per case of Skinny Water through UCF Directed Pay • $1.00 per case of pH+ Alkaline though UCF Directed Pay • Maximum: ZH paid in full the mid-May • Minimum: ZH paid in full mid-June Cap Ex • Required to change parts for new bottle • $70,000 Dunkirk • $50,000 Fontana Slotting • $72,000 Food Lion • $48,000 Winn Dixie • $40,000 Walgreens (potential) Property of Skinny Nutritional Corp. Confidential & Not for Distribution 7 EFTA01088722  New Business / SKU Additions I Verity P-=.` Ad Calendar Chain Acme d Prese Set Date Confirmed Appointments s YorN YorN Pathmark, Super Fresh, 275 A,R,O,G Y Y Y May-12 N Adding PH to set in Jan 2013 MI. Waldbaums, Food Emporium Big Y 63 NA N Jan-13 Authorized for Jan 2013 Giant Eagle 222 NA N Y Y Apr-13 Setting up Full Circle Distributors to service stores Harris Teeter 201 A,R,O,G,L V Y N 1-Apr N Reviewing pH+ for next sets Walmart TBD Feb-13 Licence through Cott Raley's 133 NA N Apr-12 Meeting in Feb 2013 Rite Aid 4,700 NA N Y N Mar-13 NA Appt for Jan Safeway 1100 NA N 13-Apr Under review for apr-13 set Save Mart / Lucky's 200 A,R,O,G Y N Y N Kehe now distributor for Savemart stores Sheet: 395 NA N Jan-13 No interest at this time Stew Leonards 4 NA N Meeting will be week of July 30 - August 6 Food Lion 1400 A,R,O,G, pH V Y Y Jan-13 N PH to set in Jan,followed by SW in Apr -13 Winn Dixie 483 A R.0 G Y Y N Jan-13 N Jan 2013 set Walgreens 7,500 A,R,O N Y N Apr-13 N Requires new bottle Wegmans 81 VP Y r le 11/12/2012 N Setting pH now Samples Set New pH+ UPDATE Notes & Appointment Y or N BJs Y Working with Polar Bristol Farms Y Need west coast production Costco V Working with broker to expand dub channel = V Will add pH in Jan Gelsons Y Waiting for west coast production Giant Y Will set Jan 2013 Fairway Y Authorized sets now KeHE Y pH is now authorized Kroger Y Working to get on buyers calendar McLane Y Sent samples to beverage buyer Meijers Y Reviewing for Apr-13 Publix Y Presenting in Jan A and P Y Authroized for Jan Wegmans Y Authorized Whole Foods Y Working locally and regionally 7-Eleven Y Sent samples working through McLane Acme Y Authorized Harris Teeter Y Reviewing pH for Apr-13 pH+ Raleys Y Set Apprpointment for Feb Rite Aid Y Setting apppointment press kit Stop&Shop Y Authorized for Jan Target Y Presenting for Apr-13 Redners Y Presenting through Polar Shop Rite V Authorized for Jan Mr" Property ofSkinny Nutritional Corp. Confidential & Not For Distribution EFTA01088723  Marketing Expense: 2013 Goals • Introduce new package: April 2013 • DSD Incentives t F • Trial creation through coupons/free samples • POS (Skinny Water, pH+) • Redesign of website • Lower marketing spend versus 2012 Ie wastailas; • Demo's/samplings in-store ;an 1.- • Packaging for club channel and multi-packs 6 nny skin4Y Budget • DSD incentives (21%): $40,000; 2 quarterly programs 2012 2013 Decrease for CD Del Val, CDNY and Polar • POS (13%): $25,000; purchase 500,000 pieces at $.05 In-Store $433,136 $50,000 $383,136 per unit • Redesign corporate website (8%): $15,000 DSD Incentives $104,462 $40,000 $64,462 • Branding /package design (13%): $25, 000; design multi-packs, variety packs, new labels for line POS $105,339 $25,000 $80,339 extensions • Coupons (14%): $26,000; 52,000 $.50 off coupons All Other $166,120 $76,667 $89,453 • Sampling/free product (5%): $10,000; trial 25,000 Marketing bottles $809,057 $191,667 $617,390 Expense • In-store demos (26%): $50,000; 500 at $100 per demo Property of Skinny Nutritional Corp. Confidential & Not For Distribution 9 EFTA01088724  Marketing Initiatives The truth in ZERO 11111 .co !!! '.Il111WV smarter. --...,) . Ise lap". torso gyilltL . 11 2 torktiv to , skinny skinny skinny CONTROL , • • 4 • V L B00Y PHI BALANCE Property of Skinny Nutritional Corp. Confidential& Not For Distribution 10 EFTA01088725  Proposed Offering Convertible Preferred $3 Million • Unit includes 1 convertible share and 'A warrant coverage • Units convert into 54% of post reversed common shares at $1.25 per share • Registration rights • Warrants priced at $1.50 per shares, 2 year term (mandatory redemption at $1.50 for 15 straight trading days or $2.00 for 5 straight trading days). • Commission is 8 % (5% cash and 3% equity) Post-Deal Capitalization • 2,000,000 common shareholders • 2,400,000 convertible preferred holders • 1,200,000 warrants at $1.50 per shares • Total capital raised $3,000,000 convertible preferred - $ 4,800,000 convertible preferred + warrant conversion before commissions Property of Skinny Nutritional Corp. Confidential & Not For Distribution 11 EFTA01088726  Appendix: CVS BOGO Issue • Skinny Water launched a "buy-one, get one free" (BOGO) promotion with CVS in June 2012 Impact • Of $1.2MM revenue generated, CVS charged Skinny Water with total billbacks of $425k which hit primarily in September. • With BOGO cases sold hitting in June, this created an uneven revenue trend and drove negative net sales in the month of September. • This will sharply reduce net revenue reported in the 3Q 2012 10O. Resolution Of the $425k billback, $115k represents a disputed charge whereby CVS billed Skinny Water full price for a flavor swap. Negotiations continue on this and an outcome will be reported back to the Board in a future meeting While costly, the BOGO actually generated a significant ramp-up in CVS revenue based on the increased trials: CVS Apr May Jun 2Q Aug Sep Oct 3Q B/(W) % Gross 59,352 116,628 237,948 413,928 97,488 144,267 123,085 364,840 (12%) Cases BOGO 0 0 (127,383) (127,383) 0 0 0 0 0 Impact Net 59,352 116,628 110,565 286,545 97,488 144,267 123,085 364,840 27% Cases Property of Skinny Nutritional Corp. Confidential & Not For Distribution 12 EFTA01088727