ARMA财务状况强劲（高ROIC、增长），被视为良好的投资机会。

So, when I first met with the see the chairman uh March 31st of 2025, he was still in the process of um hiring a CEO. But by the time the CEO joined in early May of 2025, I was already changing emails with the CEO um like 3 days after she had started. And the goal for me to help the CEO was primarily to help um coordinate the annual meeting because we needed we needed to do this. We needed to be a legit business. But also help develop an investor presentation and strategy for uh the company going forward because the CEO had just joined. The prior CEO, the I think there was a little bit differences in strategy. And so we're basically creating a new strategy as we're creating this investor presentation. Um and so that was kind of what I was brought on to at [clears throat] Armanino Foods.

So, it's a company located out of the Bay Area that specializes in selling frozen pesto to food service companies. So, think primarily restaurants, but within that food service space is also cruises, hotels, universities, like small food service operators, even like industrial kind of uh uh companies. So, anything that isn't to the grocery store. And that's their primary product and that's their primary product line. There's some other SKUs in portfolio, but that's the bulk of the the business.

They were OTC and non-SEC filing. So, they were Nasdaq listed up until 2002 or 2000 No, it was 2005 officially. And um um I think since then their justification by the board was that we wanted to save costs and buy money. And it wasn't until a new CEO that there was a shift in attitude in corporate governance. The company did save a lot of money by by delisting. Um and I think shareholders would have benefited for a long time with a better corporate governance, but I think the corporate governance is being set in in place now.

Yes. Yeah. Yeah. Yeah. They were paying almost a 50% plus dividend payout ratio. Um the company was essentially from 2010 up until like 2024 or 2025, it was generating generating almost 100% returns on invested capital if you take out the cash. Um it was an extremely profitable business and it was growing between 6% and 8% per year top line. So all that is translating straight into free cash flow.

Um and so there wasn't I guess a reason for shareholders to necessarily um demand an annual shareholder meeting because there was already good capital allocation set and the company was quite cheap in terms of being conscious of costs. Like there's no other There's not really another publicly traded company that has such high gross margins or such high EBIT operating or free cash flow margins.

Um that's being in consideration right now at the board. Um I I am not uh consulting or contracted with the company right now, so uh that's that's their decision, but um the company has publicly stated before that um it is a desire to get onto Nasdaq. Um they did upgrade to OTCQX in 2024. Um the primary focus right now is making sure the CEO has a the operations and strategy set. Um it's a new slightly newer strategy and also they just signed a lease for a 91,000 square foot facility. The context of is that the old facility which they had since 1997 it's 25,000 square feet. So they're they're going through a big big transformation in terms of really scaling for for future growth.

when the company went public they went under the ticker b l u e blue and the reason why they did that is because they were raising money to launch a pasta line that would be sold in pasta sauce line that would be sold in grocery stores and the pasta sauce line was in partnership with Frank Sinatra and so the ticker was blue and then the pasta sauce name was Artanis which is is also launching a sausages. Like Newman's Own.

as you can imagine it did not work. Although there were other celebrities with pasta sauce lines that or sauce or dressing lines that have worked right like Newman right he has a large line of dressings that are still sold throughout thousands of stores across the country but Frank Sinatra's did not so um the company doubled down just on the pesto sauce which was really their the bread and butter and since then the company has continued to remain public family still involved they still hold a very large considerable ownership um stake and then um they're still Armanino family as part of the board so it still very much feels like a family affiliated company it's just in the public markets and for me as a concentrated small cap micro cap investor that's exactly what I love to to see

I think Armanino Foods was a great experience as an investor obviously it's it hasn't been a mistake at least yet since my initial investment in 2021 but but after also consulting with the company, I I realized a few things. uh One of the most important things is that this relationship between capital allocation and like competitive dynamics in the core, and that's kind of what I'm I'm looking for now. So, Armanino Foods when I invested, it had net cash. It had basically no goodwill. And it hadn't issued any equity.

And usually, what that means when you think about it on a quantitative basis, how do they have net cash if they've never issued equity? And what does that mean about the core business if they've never acquired another company? This means that this is a This is a profitable core with a long runway.

like my involvement at Prax American and Armanino Foods taught me that it's very hard to have good, stable, predictable, accretive capital allocation when you're in a bad business.