Baristas Coffee Company, Inc. (BCCI)

[BobSinCA]

Net loss improvement is misleading.

$840K of the $820K is due to factors shown in my post 34789. An additional 'help' of $137.5K came from a gain on a loan settlement, not really due to running the business. So, $977K of the $820K total improvement, due to non-operating factors.

That would suggest that operating factors had a deterioration of $150K, despite closing three kiosks.

I would not be buying stock in the business because of improvement in 2014 operating results, particularly with the pending minimum wage increase in its primary market.

Buying due to BMOC's development of an in-line format, however, could be understood -- while BCCI may not make a lot from BMOC (depending on the undisclosed franchising terms), perhaps subsequent franchisees will adopt this format.

The scantily-clad kiosk model has clearly been financially unsuccessful. Not clear how a kiosk franchisee could make money after paying BCCI $25K plus 7% of revenues, if BCCI itself loses $0.60 per $1 of revenue while paying its officers $0.

BCCI ends up with a 'split' brand (scantily glad girls in the kiosks; more conservatively costumed girls (and guys?) in the malls. Given financial non-performance of the kiosks and pending wage increase, I wouldn't be surprised to see closures of the Washington kiosks if the in-line stores are successful. May depend upon whether an individual kiosk's revenues can cover its marginal operating costs (coffee, baristas, utilities) -- since BCCI is 'stuck' with real estate costs and purchased equipment, now depreciating on the books.