Terra Tech Corp. (OTCMKTS:TRTC) Moves on New Media Exposure
After spending almost a full week moving a fraction of a percent each day, on Wednesday Terra Tech Corp. (OTCMKTS:TRTC) shuffled back up into heavy volume trading and closed 3.7% up. The reason for the increase of interest is likely attributable to a new piece of media coverage focusing on TRTC.
The company’s CEO, Derek Peterson, appeared on a Bloomberg segment and was interviewed by host Pimm Fox. The short talk did not really reveal anything new and exciting about the company, its plans and activities. However, it did give TRTC the opportunity to display its 2014 revenue projections on TV – $7 million in estimated 2014 revenues, or 250% annual revenue growth against 2013.
This bold figure was first published by TRTC in an April press release. The company expects to achieve its $7 million in annual revenues through growth in its fresh market produce segment, without factoring in any possible revenues coming from marijuana. The company recently announced that the production of its Edible Garden subsidiary will be sold in a number of new retail locations, including Walmart locations in the Northeast.
Traders can only hope the inclusion of Walmart in the list of Edible Garden distribution partners will help TRTC achieve its hugely optimistic revenue targets. Fresh market produce revenues go through seasonal fluctuations. Even with this in mind, TRTC will need to log revenues of $2.1 million in the last three quarters of 2014 to meet its projection. To compare, over all of 2013 TRTC logged exactly $2.1 million in revenues. It’s also true that TRTC was not logging Edible Garden revenues in Q1 of 2013.
Still, Edible Gardens must have scaled things up amazingly in order to be able to virtually generate three quarters worth of revenue in a single quarter, repeating this feat over three consecutive quarters. If the Q2 report that is due soon lists revenues in the $500-$700 thousand range once again, the likelihood of hitting $7 million by December will decrease even further.
Even if we assume TRTC does deliver on its promise of $7 million in annual 2014 revenues, the company will need to dramatically improve its gross margin to turn this revenue growth in an improved bottom line. In 2013 the company’s gross margin was 4%, and 0.3% in Q1 of this year.
Having obtained permits for cultivation and production for Clark County, Nevada, TRTC is now in the process of filing with the state of Nevada to receive its official license later this year. If the company manages that final push, shareholders may have something to cheer about. Until then, the company remains a hydroponics and green produce play that may or may not make it big in marijuana somewhere down the road.
