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Tuesday, April 29, 2014 2:41:27 PM
The company, not so much. Consider recent financials: Net: company not growing, profits falling, dilution increasing, and accounting questionable. Data points:
- The balance sheet doesn't even balance!! That is, Assets ($8.3M) did not equal Liabilities plus Shareholder Equity ($8.0M). That is Accounting 101. Actually, Accounting 1 (grade school).
- Q4 sales down 5% from Q3, despite the reported successful opening of a new Florida store. So, the 'growth company' story having a problem.
- But, cost of goods went UP 30%!!! Bad accounting or bad management, don't know.
- Profits down from prior quarter, maybe -- profits on P&L ($52K) does not match profits on Cash Flow statement ($84K). Only reason Q4 profits not down disastrously, is that G&A dropped to $13K from prior three quarter average of $50K, suspicious IMO.
Maybe they couldn't figure out what was cost of goods, and what was G&A, not a good sign if you are running a business. And as previously pointed out, most of personnel costs should be in cost of goods (store level costs) -- management of BCCI not taking salaries.
- A significant number of new common and preferred shares were issued, likely for the media funding buy -- but the shareholders statement shows them at $0! And the balance sheet shows no increase in paid-in capital from Q3. WRONG!
- Balance sheet shows that the mysterious 'Unidentified tangible and intangible assets' account on the balance sheet went up by $700K! If that was for the stock paid for advertising, it is pretty identified -- and ought to be in expenses (some in Q4, some in Q1, some in Q2, etc.). But who knows, with balance sheet not balancing.
- Statement of cash flow shows cash flow from operations of $125K for the quarter, no further entries, but then 'net change in cash' of -$36K. Impossible arithmetic. How can $125K, then no further line items, add up to -$36K??
IMO, if you are investing in this company it is as a pinky with an interesting chart and stock promotional capabilities, not as a company with a robust business model. More specifically, store count has been constant for last couple of years, with openings and closings. Indeed, closings of entire states which had multiple stores (TX, AZ); with declining sales (at least in Q4, when it is getting colder and coffee should be more desirable -- indeed, company put out a PR a couple of years ago about great December sales) and profits, how is this growth? Other than in number of advertisements heard/seen nationally??
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