is working (too hard) for a living
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I do remember the news about franchising.
Through the Prime Research report, the company indicated that 50 franchised stores would be opened in 2012. What is your count on progress to date? I understand that things can start slowly in a year -- so, how many have been opened in the current quarter?
Please post links to 'recently filed financial statements.'
I can't find any covering CY 2012.
Not sure what 'haven't dilute(d) much at all' means.
The company diluted almost 30% of its common stock in 2011 alone, some of which was to pay rent and professional fees -- not exactly a glowing endorsement of the underlying business model as a cash generator.
This is based on the (unaudited) financials for the year ended December 31, 2011. These financials do not record any shares set aside for options -- which I would expect to be substantial, as they have announced a 'high powered' management team and they are not paying salaries to these folks (we know this because G&A did not go up as they were brought on board).
On the other hand, maybe the options are performance-based, in which case there may not be many outstanding given the company's very poor results in the all-important store-opening category.
Hopefully, 2012 financials will provide the same compensation (cash and shares) reporting as required for SEC-reporting companies, then we will have no need to speculate and will know excactly how much dilution has occurred.
Note that once there are earnings substantial enough for a meaningful EPS calculation, options have to be included. Without options, EPS for Q4 was $.000381 per share ($80K of earnings on 210M shares) -- so would be $.00 with or without options.
What is your evidence for:
$BCCI has ...additional locations that are expected to open soon.
Agree with all.
Can't understand no food, and no credit cards, at least the former is inconsistent with other Baristas stores (don't know the cc policy). And both are a detriment vs. nearby competition, always a bad thing.
For sure, no food will continue the negative trend of lower revenue per store, which is very contrary to the Prime Equity research report of January, which said revenue per store would INCREASE from the then-level of $11K/mo/store to $20k/mo by 2014.
Good analysis, could be perfected by figuring out when in the quarter stores opened.
But, franchisees make it complex (San Antonio?), since they presumably pay an upfront fee ($25K) and just a percent of revenues, with no associated expenses.
Given the apparent lack of economic activity in the immediate area, based on vacancy levels, FH has bigger problems if the mayor did NOT attend the opening and speak well of the coffee.
Good news is, BCCI likely got a great lease rate, though the three year term could be a future problem if traffic is not adequate. Another poster's car count statistics were a cause for concern in that regard, and summer is not 'peak season' in the Phoenix area, other than for temperature.
Certainly look forward to BCCI's traditional announcement that the site is at least cash flow positive, and hopefully 'profitable' including coverage of depreciation and corporate overhead.
I relooked at the 2011 financial report, and noticed the following last footnote:
E. Long Term Debt
Prior balance sheets have reflected the debt incurred since Baristas commenced coffee and media operations. The
accounts have been adjusted to reflect the long-term debt of the predecessor corporation.
For LT value, the company must be profitable, or have promise of same.
As a result of the 2011 $1.2M adjustment for previously unrecorded payables, which exceeded total revenues for the year ($1.0M), BCCI has not proven profitability -- particularly as officers and some vendors are being paid in dilutive stock/options (30% diluton in 2011), not cash.
Growth of individually profitable stores would help -- but the plan for 100 new stores this year, per the Prime Equity research report and the company's own PR, is headed for a 90% shortfall unless there is significant pick-up in the second half.
It should be noted that PE stated that dilution would be required to raise the capital to open 50 company-owned stores, and the company should be commended for resisting that urge. However, the fact that franchisees cannot be found in sufficient volume to meet the other 50 suggests a fundamental problem in the store-level business model, or in the company's ability to obtain zoning -- both are deadly.
Also, analysis of Q1 12 versus Q4 11 revenues, after adjustment for the Tampa opening, show no increase in per store revenues -- another critical component of the Prime Equity value proposition (projected at $20K/month by 2014, up from the current level of about $11K).
Company has spoken to various individual stores being 'cash flow positive,' but that is quite different than being 'profitable.'
To meet that criterion, need to be paying back the depreciation on the equipment, covering any prepaid lease, insurance or other payments -- and funding their portion of corporate overhead.
The company has not spoken to individual store profitability, nor should they IMO.
And, as previously stated, corporate profitability will not be established until officers and vendors are paid in cash -- and, unlike 2011, all costs are recorded in quarterly statements, rather than a surprise end of year charge ($1.2M) for previously unrecorded liabilities which was more than revenues ($1.0M) for the entire year!!!
Great research and pics!
Would be great to see a network commit to the Reality TV show, but feels like it is getting 'stale.'
Not so sure about the labor economics of taking coffee to parked cars, but if this is a franchisee, might be interesting to try a different model. Sight of ASU baristas wandering through a well-positioned parking lot might drive a LOT of traffic.
Any idea on the timing of new AZ stores? If you see BH again, perhaps also ask about New Jersey.
Open on time? First PR said February.
Although, the most recent PR from 2-3 days ago was right on the money.
Perhaps they are changing their PR strategy, I think second San Antonio store was similar.
Glad you are optimistic about Smart-Win, but dwindling EEGC market cap suggests that your optimism isn't shared.
Hopefully a new attorney will come forward; certainly, if EEGC case is strong, should be able to find someone reputable to front the required out of pocket costs while working against a contingency. With a $3B (is that the requested number) payday looming, would not take much of a percentage.
Fact that such an attorney hasn't been named, at least publicly (and why not announce if there is one, might have helped wind-up case), leads me to believe the EEGC case is not that strong.
Would LOVE to see wind-up removed as an issue, but don't sufficiently understand Australian law and process to know if that is still possible, though I am guessing that a REAL $10 million check (rather than promises), delivered in a timely manner (before too much liquidation progress) could make it happen.
Although, chicken and egg -- wind-up order and lack of a license could well dissuade/prevent anyone from writing such a check.
Note South Koreans have been in discussions since about late last year, but they are apparently just (so far, for EEGC) unsuccessful 'finders.'
I continue perplexed as to why Dyson filed to wind-up GSLM, at a time when GSLM clearly had no cash.
GSLM could not pay, even if they could scrape together $400k, as everyone else would then line up.
And if liquidation were to occur, Dyson would receive $.04 on every $1 of GSLM asset, since total debt is believed to be $10M.
Assuming TXO isn't somehow ahead in line. And that any remaining assets are not secured by other creditors.
And, GSLM assets are likely nominal; note that flare gas, Coleridge coal, and Missouri factories, to the extent to which they exist and have value, are at the parent level.
Of the $22k hoped for return from MRT, Dyson would net less than $1K.
Net: hardly seems worth the legal fees. Why not wait for the South Koreans, hard to see how the GSLM asset situation could further deteriorate.
You are forgetting the mysterious technology for which EEGC paid MB $21M (then at .07/share, now about $120K at.0004/share) in shares about the time of the end of the RO in the summer of 2010 (I think it was, time flies when you are having fun).
My personal bet is that this technology related to the oft discussed flare gas technology which together with the territorial distribution rights, was bouncing around a lot at the time, including purported GMH ownership, although not part of any GMH 8-K filing.
Are you saying company didn't plan 100 stores for this year?
It was clearly in the Prime Equity Research report, which drew heavily on BCCI. This specific quote was on page 3:
Baristas plans to follow an aggressive expansion strategy with 100 new stores to be opened by the end of Q4-2012.
The only way EEGC could have no debt, is if they had raised sufficient funds to pay off their debt.
Such raising would require an 8-K.
PLUS, EEGC would want to trumpet such fund raising to the world, as one of their fund-raising barriers is undoubtedly a concern that funds would go to paying debt rather than to drilling.
Regarding debt being funds owed to execs -- Mr.Bendall already cleared the debt owed to him in the initial 'rights round,' converting such debt to shares. Don't know about debt owed to other execs.
BCCI 2011 Financials are old news.
But, in case folks also missed the analysis -- you have pointed only to the P+L, which shows a $244K profit for 2011 (and, a 30% dilution in shares outstanding).
But, the Balance Sheet shows a 2011 Reduction of $1M in shareholder equity, due to a $1.2M 'account payable and liability' which appeared on BCCI's December 31 2011 balance sheet without going through the P+L, unusual to say the least, and perhaps why the financial statements are not audited.
Net, the company did not have a successful financial year in 2011 from a P+L perspective.
Correction - $20K/month in 2014.
Persistence, 10/10. Performance 0/10.
No funding, no drilling. No flare gas, no medical waste, no credit cards, no anything.
If EEGC's SmartWin case is so strong, the company should be easily able to find an attorney to take it on contingency. Most contingency attorneys have a 30% 'take,' which would be a significant number -- IF EEGC prevails.
As I've said for months, in response to your generalized 'GO BCCI, GREAT STOCK' comments, need some "meat on the bones."
My definition of that is profits -- and the loss of $1M in shareholder equity in 2011 (how this loss didn't go through the P&L remains a mystery, likely not solved until we see audited financials), plus significant stock dilution, went in the wrong direction.
How to go in the right direction? Mr.Henthorn and his esteemed management team need to perform:
- Open stores. 100 were planned this year, per BCCI press releases, 5 so far. 5 committed in Arizona in Q1, 0 happened.
- Increase per stores sales. The 'independent' research report published in January predicted an increase from $12K/month in 2011 to $20K/month in 2012. If Mr.Henthorn documents that per store revenues are on track for such performance, that would help the stock.
- Profits. Doing the above two items should increase profits,which would drive per share profit - if the dilution rate is controlled, which didn't happen in 2011.
Much as shareholders hope that Hooters meets Starbucks will be successful -- proof is in the pudding, and right now it just isn't happening.
The 100 store plan was included in the Prime Equity Research report published on July 11 and was a critical factor in their 'conservative' valuation for the company of $.22/share. From page 3 of the report:
Our valuation of BCCI is based on estimated financial performance according to the company’s development plans. Baristas intends to open 50 new owned stores and 50 franchised shops in 2012.
BCCI should open announced stores (Phoenix 5, New Jersey 1).
So far, not doing very well on the promise of 100 new stores for the calendar year -- anyone keeping count? I think it is less than one per month so far. Tampa, San Antonio, and two in Montana?
And as for a claim of profits. Can't trust BCCI quarterly reports on those; shareholder equity was reduced by $1M last year due to a last minute inclusion of a $1+M account payable/liability that somehow did not go through the P+L. To say nothing of significant dilution during the year. Would love to see audited financial statements from BCCI.
The verbiage on the $8M in spending is typical Mr. Bendall with respect to language:
GSLM has expended approximately AUD$8 million on (emphasis added) commitments to exploration activities
Barista's is not making money, at least per their unaudited financial statements published in early April.
The company's accumulated deficit more than doubled in 2011, going from 900K to $1.9M. If the company were making money, the accumulated deficit would be shrinking.
There is a reason you can't find the financial statements on the company's website.
Will be interested to see their first quarter financial results, due out on or before May 15th. However, it is worth noting that on May 13 a year ago, they advised of a delay, promising a report by May 20th. It was finally published on June 15.
Have to open Phoenix first.
First one was supposed to open in February, rest by end of Q1. None announced so far.
The 'independent' Prime Research report of January 2011 said 100 stores to be opened in 2011: half company, half franchise.
BCCI, you are tracking the company's success, how many so far?? I count four openings so far (Tampa, TX, Montana x2), perhaps I have missed the other 25+ which would have us 'on course' (through April month end) for the committed number?? If I have, please provide links.
Batista's resignation had nominal impact on pps because pps has assumed virtually 0 chance of recovery from SmartWin.
At a market cap of under $5M, clearly the market does not see high likelihood of a fund-producing settlement of the matter -- or of drilling, flare gas, waste products, FASER technology, etc.
But having said that, the stock is down 30% over the last two-three days of trading. Will be interresting to see where pps goes upon lease expiration.
50M shares is 30% dilution, not insignificant. And, shares were not only for personnel, but also for professional fees and rent, not the sign of a cash flow positive company!
Not so sure about the profits. I had thought BCCI was profitable (because of no executive salaries) until the most recent financials were published. They showed $1.2M added to accounts payable and accrued liabilities and deducted from shareholder equity -- all without going through the (unaudited) P+L, not an easy feat.
Note that this $1.2M was more than double the total reported 'profits' for the prior 18 months!
Net -- absent some sort of explanation from the company other than 'adjustment for unrecorded debt,' I don't think one can say that BCCI has profits.
Correction -- $1M added to accounts payable and accrued liabilities in 2011 without going through the P&L.
Agree -- these are good guys, at least on paper. But so far, have not done well in selling franchises.
When BCCI start paying them (and Mr. Henthorn) cash and putting those expenses on the P&L, will feel a lot better about the company claiming to be 'profitable.'
Will absolutely believe it when BCCI also tells us how $1M was added to accounts payable and accrued liabilities during 2010, without going through the P&L.
Regarding minimum to open a franchise, $25K is what a franchisee pays to BCCI.
But there is also $100K 'cost to open a shop' and 30% of annual revenues (so, .3*144 = $43K) in working capital -- both per page 4 of the 'independent' research report published in January -- plus of course whatever it costs to gain permits, form a business, etc.
That works out to about $200K per location.
Re:
anyone can buy a franchise which is pretty bad ass
When I was quoting financials, I got them from www.secfiling.com.
The 'independent' research report said revenue per store would increase in 2014, I think it was, from $12K/mo to $20K/mo.
We should be able to test the hypothesis of whether the concept is gaining traction (or losing novelty, as you suggest) by reporting 'same store sales' compared to a year ago. Most retail operations driven by location growth, do report this.
Why doesn't BCCI?
I should not have posted the original version, ran out of editing time, so I tried to be 'cute' with the next post, my bad. Also, I was responding to the poster's assertion of 'outstanding growth,' not to the PR itself. I like to go back and use company data, where possible, rather than simply make assertions.
how can u ask this late and then answer ur self 5 min later Lol...
So, I'll answer my own question.
The recent annual financial statements do not compare operating results to the prior year or quarter (highly unusual, in my experience).
- But, the balance sheet shows that cash remains nominal, and accounts payable and accrued liabilities were 5x higher at the end of 2011 compared to the end of 2010 due to 'unrecorded debt' (did not flow through the P&L).
- Shares outstanding went from 164M to 210M.
- Looking at the 2010 report, revenue went up from $500K to $1M for the year (100% growth), but in Q4 only up from $163K to $284K (70%), indicating de-acceleration of growth over the year, despite a December PR indicating 'excitement' about holiday business as the country exited recession with strong job growth.
The published financial statements did not include the opinion of an independent auditor, simply an attorney's letter which said the company had complied with a certain set of public market regulations. Would love to see an auditor opine on the 'unrecorded debt.'
I don't think this is the kind of 'growth' which is valued by financial markets.
Not to say that the concept of 'hooters meets starbucks' is not interesting, but so far there is no evidence that there is a viable business model to attract franchisee investment, or sufficient debt/equity investment in BCCI to finance the opening of 50 company-owned stores as forecasted in the December 'independent' research report.
I do not believe this is a scam as suggested by some posters. There is a real business here, with management attempting growth through marketing. Certainly the concept has attracted some strong individuals to the management team. It just doesn't seem like a successful business, at least so far.
Please provide some metrics (sales growth, PPS growth, store growth) to support your assertion:
baristas coffee is growing at an astounding rate
Dead cat bounce.
EEGC is green today!!!
You speak to BCCI 'positive cash flow.'
Look forward to next set of financials; but I do notice that in the last set (if I remember right, please correct if wrong) there was suddenly a set of liabilities which had never gone through the P&L (how did that happen??). Being cash flow positive by not paying your liabilities does not work for me.
And we have previously discussed that management is not taking salaries, but is instead taking shares/options which dilute the shareholders while 'inflating' the P&L and cash flow.
Correct me if I am wrong -- BCCI has apparently elected not to be part of the SEC reporting process (8-K, 10-K, etc.). If they were to choose this transparency option, we could talk about the business in more objective terms.
I like the concept -- Starbucks meets Hooters, in brief -- but I am not convinced that a profitable business model can be built from this concept. Need to raise capital for company-owned stores, and sign up 'deep pockets' for franchising -- neither of which has happened.
Four stores opened this year (including two purchases of previously 'failing' kiosks in Montana, not even shown on the ihub map of stores) against a target of 100 for the year -- not convincing.