Question is, can they break even and cover the 1.3 million they are using to cover operating expenses? They would have to lower cost of sales without losing quality. They would have to increase in store sales and equipment sales which are already up 48% and 136% for 6 months respectivly. WHY ARE IN STORE SALES UP 48% & EQUIPMENT SALES UP 136% AND THEY STILL LOSE MONEY?
SOLUTION: REDUCE SGA 250K AND REDUCE 250K FROM COST OF SALES AND INCREASE REV ANOTHER 800K/6MO THERE'S YOUR 1.3 MIL
OPERATING REVENUES FROM BENNY'S AND OTHER AQUISITIONS WOULD PROBABLY HAVE COVERED OPERATING EXPENSES. WITHOUT THE AQUISITIONS THEY WILL HAVE A HARD TIME BREAKING EVEN IHMO.
PS, there is a Sammy's near me that does really well, and a new Goldbergs going up in the next town over in an affluent area so it does not seem that they are out of business. Perhaps someone will just buy them out.
Liquidity and Capital Resources
Since the completion of its IPO in December of 1996, the Company has
operated at a loss, and has continued to raise additional outside
capital to fund its operations. Although the current rent is positive,
and the company believes it will begin to operate profitably by the
fourth fiscal quarter ending October 31, 1998, there can be no assurance that it will achieve that goal; moreover, even if the cash flow trend continues in a positive direction, there can be no assurance that the Company will be able to continue to raise the necessary capital required to fund its current losses, even at the reduced rate.
The Company's revenues are not yet sufficient to support the Company's
operating expenses. Cash used by operating activities for the six months ended April 30, 1998 was $1,294,314 compared to cash used by operating activities of $1,888,432 during the six months ended April 30, 1997. |
