Macfarms Hawaii, page-14

you have listed all valid points happydad. There are opportunities here as well as risks and dilemmas to ponder about. They definitely have the aspiration - no doubt about it. Probably on skill level I d rate it is as 4/10, senior management have been changed over time, new CEO then new CFO, breaking down the silos, new supply chain director, new experienced factory managers, working with sales consultants to increase the sales skills. However I suspect there are a lot of staff which is old fashioned, not up to modern high aggressive sales driven environment (just sit back and relax type of boys and girls - happy go lucky everyday, see what happens culture.). But as CEO mentioned in 2013 or 2014 agm papers lots of staff been replaced cause of lack of skills hence high redundancies payouts.
Re overall capability, there is definitely room for improvement. Roger Masters was CZZ Capilano CEO and under his helm the company was turned around from 1$ in NSX to what it is now. CZZ used to have 30 milion debt and in similar situation as BUG but he managed to turn OCF to be positive and business slowly became much better. Also worth noting that CEO, CFO and other directors have large stakes in the company and accumulated since they joined and also forking out own money for 2014 rights offer. I recently gave office a call and they are very approachable and working hard.

Yea Guam and Saipan is a joke unless we do not know something they do. USA is a large macadamia market for them ~12 mil per year with more potential. China, they started shipping stuff, so this is good start with potential for more so it means they are getting inquires. UK, Canada all nice addition for revenue growth. Also liquor goes to new 150 supermarkets nationally (VC+1st Choice combined). That is significant IMO. Macabella Velvet got ranged in WOW nationally which is 800 supermarkets with more products coming in.

Debt is an issue for sure even IMO debt to equity ratio of 0.5 is not that bad (Buffett enters with that threshold). Not sure if can paid off from OCF, but worst case scenario (or best now) is to do capital raising for debt pay off and more vertical integration e.g purchasing macadamia orchards in Australia.

All in all there is definitely thrilling H2 happening now. We should see the signs of that actions in full year report. If they cannot at least break even for H2 both net profit and OCF then something is really wrong with business model. I have a feel they packed all the disasters into H1 (factory shutdowns, delayed harvest, inventory buildups, one offs: recall and inventory adjustment in USA). 3 months to go to end of FY.