Access to technology, the internet and the explosion of social media have all caused the world of entertainment to evolve. Flash mobs, where crowds gather spontaneously in a public place to carry enjoyable, seemingly pointless activities like a group pillow fight or song and dance number, are an example of this evolution as millennials seek for personally engaging social experiences outside the artifice of established paradigms of passive commodified entertainment that earlier generations have grown used to like witnessing a sports event or concert.
Organizers wishing to stay relevant in this multi-billion dollar events industry, have to evolve as well by providing active entertainment which caters to this rapidly growing public desire. Salt Lake City-based Sack Lunch Productions (
OTO: SAKL,
Forum) is one such entity on the leading edge of this public entertainment trend. Stockhouse Publishing reporters sat with Sack Lunch Productions CEO, Richard Surber, to get a deeper look at the company, its offerings and its future prospects within the lucrative events sector.
Richard, how would you describe Sack Lunch Productions and the event services it provides?
We are an entertainment company that specializes in event production and management. Sack Lunch Productions is in the business of selling fun with innovative events that connect with participants on an emotional level. We facilitate events which create nostalgic memories, leaving everyone involved with not only a sense of being part of something larger, but a distinct feeling of joyful accomplishment.
Right now we own four event companies:
Slide the City™, a family-friendly slip-and-slide water party event involving a 1000’ vinyl water slide right there on the streets where participants not only get to ride the biggest slip and slide ever to hit the pavement, but also get to enjoy live music, food and drinks in a positive party atmosphere;
The Lantern Fest™, a community event which celebrates the human spirit, bringing family and friends together through an unforgettable spectacle complete with music, dancing and s’mores;
Color Me Rad™, a wildly-popular 5K color run loosely based on the Hindu Festival of Colors where participants complete a 5K course, running a fun gauntlet of color stations to finish in a polychromatic party with both music and food; then there’s
The Dirty Dash™, a mud run obstacle course where participants get to cater to their inner five year-old while helping contribute to an honourable charity without brutalizing their body.
What have been some major milestones over the last 12 months?
First, we launched
Slide the City™ both nationally and internationally with tremendously positive results. As well, we created an international franchise system that is doing particularly well in Asian markets.
The Lantern Fest™ was also launched to great success and we are on track to more than double the number of events we plan to hold in 2016. Also, there was the acquisition of
Color Me Rad™ and
The Dirty Dash™ back in August; well-established events which cumulatively generated over $12.0 million in gross revenues during 2014 including franchisee sales.
Then in October of 2015, we obtained an equity line of credit for $5.0 million, of which, we drew down $1.8 million to effect the acquisition of
Color Me Rad™ and
The Dirty Dash™. The ability to draw upon these funds may allow us to execute on additional acquisitions or continue the creation of additional events.
What will Sack Lunch Productions focus on for the coming year?
We are focusing on three areas: Growing the amount of our existing events in 2016, keeping our eye open for strategic acquisition opportunities and creating new and innovative events — we will be launching a new event later in 2016.
Q3 2015 saw Sack Lunch Productions reporting a quarterly net income of $718,000, up from a net loss of $348,981 filed in the matching 2014 quarter, as well as a revenue increase of 445% to $6.0 million. How do the books look right now? Will there be another financing round in the near term? If so, why?
Our forecast projects that we will exceed $18.0 million in gross revenues for 2016 with a net income projected to exceed $3.0 million. I am very happy to note that we are exceeding those projections so far!
As for additional financing, we have no plans at this time; cash flows from operations are currently covering our cash needs.
What geographic markets are you focusing on currently? Are there global expansion plans?
We are a major force in North America and as such, the United States and Canada are our focus for corporate events that we operate directly. I would like to note that we will be holding over 156 events across our
Slide the City™, Color Me Rad™, The Lantern Fest™ and
The Dirty Dash™ event brands. This number doesn’t include the over 100
Slide the City™ and
Color Me Rad™ franchised events being held domestically and internationally. We’re getting some great traction in Asia so we are focusing heavily on the region for franchised
Slide the City™ event opportunities.
What is your take on the global events market in these challenging economic times?
That’s an interesting question that I would answer thusly; we are an entertainment company. Like most entertainment companies, we are, to a certain degree, recession proof and are in some ways anti-fragile. People have always looked to celebrate and commemorate the good times, but when things are more challenging, that drive to find enjoyable escapes from daily life stresses while creating memories with families and loved ones becomes ever more powerful.
What makes Sack Lunch events unique and what is the company’s long term potential within the events space?
The global event productions market is estimated to be a $20.0 billion business on an annual basis and we are unique within that space because our events create a sense of nostalgia, accomplishment and emotional connection, leaving our participants with memories that last a lifetime. Our
Slide the City™ event is a prime example of this philosophy and is indicative of the type of events we will continue to create, expertly tapping into the millennial culture which values authentic experiences over things. Through innovation and event creation, we intend to capture our share of this exciting market while leveraging our status as a public company to acquire more traditional events as well. Furthermore, our business model is fully scalable and continues to garner lots of publicity, illustrating the immense potential of our growth. Over the long term, our team will continue to focus on the human need to for fun family and friend oriented experiences.
Will you be adding any more events over and above Color Me Rad, Lantern Fest, Slide the City and The Dirty Dash, to your portfolio in the near term?
Trike Riot is currently in the development stage. We will be announcing new events, sponsorship opportunities and more details in the near future. Google Trike by Razor for a peek at what a Trike is and let your imagination run wild as to what Trike Riot has in store for the world.
What milestones can investors expect over the next 12 months?
We will work toward doubling the number of events we held in 2015. With every month, we will be opening new events in order to achieve double-digit growth over last year. We will also strengthen our bottom line with significant reductions in debt. Also, investors can look forward to the launch of Trike Riot. This is going to be an exciting year with many new milestones that I think will continue to please those that have seen our tremendous opportunity and invested in our potential.
What are the main points of Sack Lunch Productions’ current investment case?
In short, I would have to say explosive growth, scalability and international appeal. We are selling fun experiences which create an emotional tie with our participants. Oddly enough, what our participants, and most investors, do not know is that all of our wildly popular events are held by a singular public company which currently trades at $0.055 per share. Considering what we’ve done so far and where we’re headed, our common share market cap of $6.0 million is an incredible bargain. We also have access to tremendous amounts of built-in visibility as there will be millions of onlookers and participants alike exposed to the investment opportunity that our events offer. Further to this idea, we have over 4.0 million social media followers, an email database that exceeds 3.0 million participants and great video content that continues to go viral; it’s only a matter of time before we are a household word. Now is the time to jump on board with this incredibly exciting opportunity. If you want to learn more, we were part of the RedChip February 2016 Global Online Growth Conference and you can find our presentation
here.
FULL DISCLOSURE: Sack Lunch Productions is a Stockhouse Publishing client.