Overview

Tootie Pie Company bakes and sells high-quality, handmade pies through three basic sales channels: retail, corporate and wholesale. The retail segment serves individual customers through sales in its Tootie Pie Gourmet Cafe's, in-store sales, orders via telephone and internet on the Company's website. The corporate segment serves businesses that purchase pies as a way to promote their company through client and employee appreciation programs. The wholesale segment is made up of national and regional broad line grocery and foodservice distributors who purchase pies and then resell them through their respective sales distribution channels.

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Investment Highlights

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Profile

Investors have witnessed many economic upheavals over the past few years. During this time, many companies have been forced to close their doors and others have been bailed-out by stronger forces, while others have emerged from these economic storms, positioned to benefit from the turmoil and deliver for their shareholders. These companies have business models that are set to expand operations and grow their companies in manners that will make them winners in today’s economic environment.

The Consumer Confidence Index, a gauge that measures the degree of optimism on the state of the U.S. economy that consumers are expressing through their activities of savings and spending, has steadily been on the rise since plummeting to an all-time low of 25.3 in January 2009. The barometer’s latest reading from February registered a 70.4; up from 64.8 in January, and inching closer to the 90 benchmark that signals a stable economy. The housing market is clearly an anchor that is still weighting down that Index at this point.

Spending among the affluent community, generally regarded as households with an income of greater than $100,000 per year, are leading the pack with regards to consumer confidence. The latest release of the Bloomberg Consumer Comfort index showed that affluent consumers have much more confidence in the economy than the rest of the population does, and that confidence has risen dramatically from its 12-month lows. Additionally, the Luxury Consumption Index (LCI) which is reported by Unity Marketing, was in freefall during 2008, but has reversed course since and recently improved by 4 points to reach 76.1 for the first quarter of 2011. An even brighter spot for companies that target these consumers is the fact that while these indices are steadily on the climb, much like consumer confidence, they are still in negative territory which shows that there is still plenty of room for continued growth in consumer spending. This is good news for companies that have weathered the storm and great news for those who are seeing business flourish at this moment.

Further adding to optimism of ongoing business growth, the number of millionaires living in the United States is growing as well. A report issued last week by Spectrem Group showed that the number of U.S. households worth at least $1 million rose to 8.4 million in 2010, compared to 7.8 million the prior year, an increase of approximately 8 percent. The 600,000 members added to the millionaire community is pushing back towards highs that were achieved in 2007 thanks to the more than 1.1 million households that joined (or re-joined) the exclusive group in 2009.

So how does this “higher-end” population resurgence equate in the business world? It means potential; plain and simple. It taps into some of the most basic characteristics of the general U.S. population of image and quality. In a world where most businesses seemed to be predicated on cost-cutting and mass-production, few companies have maintained a standard of quality that far surpasses the norm and, for that, people are willing to pay for products and services. No matter what the economic condition, consumers still like to identify with the “best in the business” and when presented in a price range that still can be afforded by a wide array of genres, it greatly increases the likelihood of success for the company.

One of the most well-known examples of this sort of business strategy is that of Ben and Jerry’s Ice Cream. An upstart company in 1978 with less than $10,000 in the bank, Ben and Jerry’s is now a household name known worldwide for their premium homemade ice cream. With a “down-to-earth” business plan that included small expansions while maintaining a tight budget and keeping operations local (the first out-of-state Ben and Jerry’s didn’t happen for five years), the Company developed a reputation in the Northeast United States that steadily leaked across the United States and into Canada and then internationally, producing higher sales year after year after year until the industry beast was finally bought by Unilever (NYSE:UN) in 2000 for $326 million…and it all started with a solid business plan.

Following a similar business model to that of Ben and Jerry’s is Boerne, Texas-based Tootie Pie Company, Inc. (OTCQB:TOOT), a micro-cap that is steadily building a legacy of its own. Tootie Pie Company bakes and sells high-quality, handmade pies through three basic sales channels: retail, corporate and wholesale. The retail segment serves individual consumers through in-store sales, orders via telephone and internet on the Company's website. The corporate segment serves businesses that purchase pies as a way to promote their company through client and employee appreciation programs. The wholesale segment is made up of national and regional broad line grocery and foodservice distributors who purchase pies and then resell them through their respective sales distribution channels.

The Tootie Pie Company is a true American story, with its roots firmly embedded in Texas soil. Its creator, Ruby Lorraine “Tootie” Feagan, built a reputation with her award-winning, secret pie recipes. In mid-2005, she sold her recipes and name to an investor group headed by Don Merrill, the Company’s current President & CEO. From that day forward, “Tootie” Feagan, (who to this day is still a shareholder of TOOT) has seen her dream of sharing her pies with the world truly coming to fruition. What started as a “Mom & Pop” operation, has seen steady growth and expansion in only five short years; with sales in 2010 nearing $2 million (which, incidentally, parallels sales for Ben and Jerry’s for the same time frame).

Tootie Pie recently reported record revenues of $1,061,215 for the 3-month period ending December 31, 2010, versus revenues of $910,837 for the same period in 2009, a 17 percent increase. For the nine-month period ended on the same day, sales rose from $1,408,864 to $1,711,197, an increase of nearly 22 percent. Gross profit jumped to $704,796 for the period, versus $639,536 for the same period in 2009. Gross margin after depreciation remained virtually unchanged at 66% of net sales for the period. Operational cash flow came in at a record $300,088 for the period, versus $154,024 for the same period in 2009, a 95% improvement. Even more impressive is the fact that January 2011 sales were recently released which demonstrated a whopping 53 percent increase over January sales from 2010 and marked the 15th consecutive month of increasing profits over the year prior period.

With a sophisticated mix of wholesale distribution, online advertising and a priceless level of “word of mouth” about the quality of Tootie Pie, the Company has invested heavily in establishing and building its brand. Now, the business plan moves into what management calls its “aggressive growth model”, which takes the Company directly to its loyal customer base through the opening of Tootie Pie Gourmet Cafés in affluent neighborhoods in the San Antonio, Dallas, Austin and Houston areas. The first Tootie Pie Gourmet Café was opened in 2009 and, since then, four additional locations have been opened with plans to continue adding locations in the future.

"We will continue to invest in our accelerated growth model, as represented by our Gourmet Cafes," said Don Merrill, Tootie Pie Company's President and CEO. "The Cafes represent significant revenue growth, but they also enable us to sell more pie at higher margins. We believe they are the next logical extension of our brand. We are adding Cafes at an average of about $100,000 per location, which is well below the national average for quick serve restaurants of this size. We think this is an excellent investment that should produce both short term and long term benefits for the Tootie Pie Company.”

National distribution will continue to spread through distribution agreements with some of the biggest names in the food service industry such as Ben E. Keith Food Services, US Foodservices and Sysco Food Services. In total, Tootie Pie Company’s current market coverage includes 15 distributors which places Tootie Pies in restaurants and high-end grocery stores in 13 different states. In Texas alone, Tootie Pies are available for purchase at more than 40 HEB stores, the largest grocery chain in the state and have been part of major promotions with industry-leaders such as Kraft Foods “Cool Whip”.

Financially, Tootie Pie is well-capitalized, having raised approximately $4 million in equity, including $1 million from Dawson Holdings, LP, a private equity group that recently upped their equity stake in Tootie Pie from 15% to 25% through an additional $600,000 investment. Even with the costs associated with adding the Gourmet Cafés, Tootie Pie still had nearly $1 million of cash and cash equivalents on hand, only carries a long-term debt of a paltry $100,000 and does not have any convertibles or “hidden debt” (as of 12/31/10). Gross margins after depreciation for the latest quarter, as recently reported to the SEC, are still an amazing 66 percent.

Technically speaking, the TOOT chart has been on a slide off its highs last November when it found resistance at 74 cents, but it is now approaching a very strong support level at 40 cents. The price per share has dipped below the support at $0.40 on several occasions, but has quickly pulled back up each time indicating that investors are seeing the opportunity as a value chance to grab some shares. The large candles, however, indicate that there was a wide bid/ask spread, so the likelihood of a retail trader ever being filled on the bid side would have probably been few and far between and would also explain why traders took the opportunity to hit the ask in order to acquire shares. The last three days of trading, as indicated by the smaller candles, show that the spread appears to have tightened into a much closer range.

Technical traders always look to historic trading patterns and what happens when a indicators and the price per share reach certain levels. In the case of TOOT, the RSI tends to bounce off of 30 and not break into “oversold” territory. The same is true for the commonly used MACD with bouncing into a bullish cross upon touching -0.035, which happens to be right in the vicinity at this point. The Full Stochastics, another very commonly used indicator to gauge the momentum of a stock, is still holding an uptrend and trending above 50. This positive divergence is often considered a prelude to a reversal in price and keenly watched by the technical community. Other indicators that are not shown here, but will be featured in our video presentation of TOOT will show indicators such as the ADX which is at an extremely exaggerated level, registering a whopping 84.99, which is also going to be requiring a correction which is typically fueled by a change in direction of trend. As always, this assessment of the TOOT stock chart is merely AllPennyStocks.com's assessment, and we always encourage investors to do their own due diligence and consult with a financial advisor prior to making any trading decisions.

At AllPennyStocks.com, we have been following Tootie Pie closely for over a year; watching the Company steadily increasing revenue on an uncannily consistent basis while maintaining a tight share structure (only 13 million shares outstanding) to protect shareholder value. Tootie Pie is a rarity in the OTC markets, as it is truly a sound company, inside and out, with a real product to sell. It is led by a seasoned, opportunistic management team that has proven it is focused on its business model that is built around low overhead, high profits and a concise expansion plan of a product with rapidly growing demand. A recent pull-back in price has resulted in a slip in market cap to the area of $6 million, which, at 1.5 projected sales, is well-off a typical valuation of 5 times projected sales. It is for these reasons, as well as the ones mentioned above, that we have decided to turn our latest U.S. spotlight upon Tootie Pie Company, Inc. (OTCQB:TOOT) and encourage our members to perform their due diligence immediately and follow along with this resilient company that has not only weathered the storm of the recession, but actually grown bigger and stronger during that time.

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Recent News and Press Releases

Tootie Pie Company Trading in its Common Stock Moves to Electronic OTC Marketplace
Business Wire (Mon, Mar 7)

Tootie Pie Company Sales Up 53% for January
Business Wire (Thu, Mar 3)

A New Audio Interview With Don Merrill, President and CEO of Tootie Pie Company Regarding the Company's Record Revenues Is Now at SmallCapVoice.com
Marketwire (Wed, Feb 16)

Tootie Pie Company Reports Record Revenues
Business Wire (Tue, Feb 15)

Tootie Pie Company Sales Up 18% for December
Business Wire (Wed, Feb 2)

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Management

Don L. Merrill, Jr. has been the Company`s Chief Executive Officer and a Director since Tootie Pie`s inception. Mr. Merrill has over twenty years experience in capital markets, where he began his career with Merrill Lynch in 1983. In May 1989, Mr. Merrill left Merrill Lynch and began consulting directly with primarily early stage companies until September 2005 when he joined the Company. Mr. Merrill has provided his expertise on a consulting basis to companies in many business sectors, including specialty retail, telecommunications, financial services, and high tech communications, for close to twenty years. Mr. Merrill has evaluated many young companies and provided his expertise in raising both public and private equity.

Bobbie Keese has been the Company`s Vice President of Baking Operations since its inception. Ms. Keese has over 25 years of retail business administration experience; as well as several years of working with early stage companies. Ms Keese worked alongside her mother, Ruby Lorraine “Tootie” Feagan, in baking pies and operating her pie business at various intervals for over ten years prior to helping Mr. Merrill start the Tootie Pie Company, Inc. As the Company`s Vice President of Baking Operations, Ms. Keese will work to ensure the preservation and continuation of the Tootie Pie brand and its quality reputation.

Randy G. Graybill has a 25 year track record of excellence in competitive sales, management and developing high performance teams. Working with M&M/Mars and PepsiCo, Mr. Graybill has distinct expertise across a diverse range of businesses including retail, specialty and foodservice. His roles involve the sales and development of branded products for market, as well as overseeing the restaurant division, through its management and development of the Tootie Pie Gourmet Cafés. During his career he has successfully implemented and improved customer service, distribution and packaging operations within existing and start-up operations.

Kirk Jones was promoted to Controller, after two years as the Company`s Head Accountant. Kirk has an accounting degree from the University of Texas at San Antonio, where he worked for Tootie Pie Company while finishing his degree.

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Contact

Corporate Office:

Tootie Pie Company
129 Industrial Drive
Boerne, TX 78006

Investor Relations:

Carla Carter
Phone: 210-737-6600
Email: Carla.Carter@tootiepieco.com

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FORWARD LOOKING STATEMENTS

This report includes forward-looking statements that reflect Tootie Pie Company, Inc. current expectations about its future results, performance, prospects and opportunities. Tootie Pie Company, Inc. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Tootie Pie Company, Inc.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.

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Disclaimer

AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Tootie Pie Company, Inc. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

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