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Non-Tech : Boston Market (BOSTQ)
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To: paul goldstein who wrote (1358)6/21/1998 6:40:00 AM
From: PaperChase  Read Replies (1) of 1567
 
>>i believe most of these loses are paper loses and not cash ones.
remember, company has no real debt. only bond debt that is payable over many years<<

I believe you are looking at this situation from the wrong perspective. We know that cash flow was a negative $29 million last quarter. This was real cash losses from operations. (See my previous post.) If we assume that it will take time to turn around this ship, the cash burning will continue. When BOST can no longer raise cash from selling assets like ENBX where will the cash come from???

It doesn't matter if most of the debt is bond debt. What matters is where will BOST get the cash (after asset sales are exhausted) to fund continuing losses? Not more bond debt. Not more equity sales. Certainly not more bank debt.

The key to this situation is too look keenly at cash flow in the next quarter to see if the cash burning can be slowed. The next 2 quarters are extremely critical to guaging whether accounting control of their restaurants is occurring.

Personally, I believe that Boston Market's restaurants have evolved into a flawed concept and customer traffic will drop further. No amount of expense control can make up for this. If Dairy Queen went to the edge and back, then so can Boston Market. But Dairy Queen had to change their concept to regain their balance. So will Boston Market if it is to survive.
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