The Late night commercial circuit: Taking advantage of $1000 Gold
I recall the days of Direct Focus advertising the BowFlex exercise machines. The symbol was Nasdaq/DFXI and that stock was a volatile SmallCap stock in 2001 and 2002. Eventually BowFlex sales flagged and DFXI merged with Nataulis NYSE/NLS. What struck me about the BowFlex was how accurate the marketing department could target sales to the dollar by the amount they spent on advertising on ESPN. The late night ads were $6350 per ad and they would sell about $60,000 worth of product or 10x.
I get the sense that the same thing is occurring in the 2010 with the Gold refiners. MGE Enterprises based in Ft. Lauderdale (I plan to drive down to see the operation soon) and is having record quarter after record quarter. This is a good proxy – and a great barometer for Smallcap players to track Gold prices without owning the metal in fact if you think it thru…really what you’re betting is that Gold continues higher and that consumers have a bunch of broken Gold pieces lying around the house.
Too bad we can’t melt down all those old BowFlex’s….below is recent PR for MFGD.
Money4Gold Holdings, Inc. (OTCBB/MFGD), an emerging global leader in direct-from-consumer, reverse logistics specializing in the procurement of precious metals and stones, announced today record revenue for its third quarter ended September 30, 2009. The Company reported gross revenue of $6.8 million, an increase of 871.4% compared to gross revenue of $0.7 million in the year-earlier period and 460.4% compared to gross revenue of $1.5 million in the previous quarter. Gross revenue exceeded the Company’s previous guidance of at least $6 million, Revenue increased primarily due to international expansion and higher advertising spending, which drove increased collections of gold. Higher gold prices also improved revenue. The 2009 third quarter gross profit was $4.8 million, compared to $0.3 million in the year-earlier period and $0.9 million in the 2009 second quarter. Gross margin increased from 40.8% in the year-earlier period, to 69.8% in the 2009 third quarter. Gross margin in the 2009 second quarter was 58.0%. Gross margin increased due to higher levels of gold collection and more efficient customer acquisition. The Company attaches to this release a table with a summary of full operating results. "Our strong revenue growth validates our customer acquisition model,” said Douglas Feirstein, Money4Gold’s Chief Executive Officer. “This quarter’s results demonstrated that we could cost-effectively acquire new customers, using highly effective media channels. We expect that the momentum we generated in the third quarter, along with our entry into promising international markets, will result in another quarter of dramatic growth in the fourth quarter. We are reinvesting the significant returns on our media spending to increase our advertising budget in the fourth quarter to benefit from the economies of scale realized with greater purchasing power. We expect the higher levels of media investment to continue to drive sales growth and improve operating margins." Business Outlook The Company issued the following business outlook today for its fourth quarter ending December 31, 2009. After a strong month in October, the Company expects fourth quarter sequential revenue growth of approximately 100%, or about $13.5 million in revenue. Given the strong expected revenue growth and improving margins, the Company expects to generate positive EBITDA in the fourth quarter for the first time in the Company’s history. EBITDA is a non-GAAP financial measure. About Money4Gold Holdings, Inc. Money4Gold is a direct-from-consumer reverse logistics company specializing in the procurement of precious metals and stones. The Company utilizes consumer oriented advertising efforts to solicit individuals interested in liquidating unwanted items. Through its global platform the Company facilitates an end-to-end consumer solution, from acquisition through liquidation. With Money4Gold's consumer websites, including: www.sobredeoro.com, www.Dollars4Gold.ca, www.MyGoldEnvelope.com, www.money4golduk.com, and www.eurofuergold.de, the Company strives to provide the most convenient, efficient and secure method for individuals to liquidate and recycle items containing precious metals. For more corporate information, please visit www.Money4Gold.com. Safe Harbor This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") including continued growth, improving gross margins and fourth quarter operating results including revenues and EBITDA. Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the events or results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include the impact of competition, the future prices of gold and other precious metals, future economic conditions, the condition of the global credit and capital markets, the acceptance of our services in overseas markets as we expand, and local regulatory issues, if any. Further information on Money4Gold's risk factors is contained in its filings with the Securities and Exchange Commission, including the Form 10-K filed on April 15, 2009. Money4Gold does not undertake any duty nor does it intend to update the results of these forward-looking statements. Summary Results $ in millions (except per share amounts) Q3 2009 Q3 2008 Revenue $ 6.8 $ 0.7 Gross profit $ 4.8 $ 0.3 Gross margin 69.8 % 40.8 % Operating income (loss) $ (1.0 ) $ (.7 ) Net earnings (loss) $ (1. ) $ (.7 ) EPS $ (0.01 ) $ (0.01 )