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Non-Tech : RAINFOREST CAFE
RAIN 3.870-3.3%3:55 PM EST
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To: Milo Klanke who wrote (407)8/10/1996 4:27:00 AM
From: Dennis Vail   of 4704
 
Milo,I have a few small knits to pick with the figures in Reply #407.

First,since DW only opened July 25th and the 3Q started July 1st,they will only be open 68 out of the 91 days in the 3Q or roughly 3/4 of the Q.Second,I believe you used the announced 78.8 K daily average for the first 10 days will I believe the average should be at least 90 K given improving staff efficiency and word of the opening spreading across the nation.Particularly,as I was told that next year is some kind of MAJOR Disney anniversary and DW is expected to be packed from now thru most of 1998.These figures give DW about 6.14 M for 3Q.Next,I would up your estimate of 3 M for the each of the other stores to 3.5 M based on continuing increased efficiency and 2 full summer months when kids are out of school and vacationers roam the land.Plus added public exposure through the DW opening.That gives an additional 10.5 M in revenues for a total of 16.6 M.During 2Q net income after taxes rose from 9.5% of Revs to 11.8%.This figure should continue rising to at least 12% for 3Q thus giving RAIN a net income after taxes of 2 M or $0.14 per share (also a conservative estimate).Double wow!!!

Also by the 3Q of '97 General,Administrative and Development (GNA) expenses are supposed to decrease from 15% of Revs to from 5-6% of Revs for a net gain of 9.5% of Revs.Add this to the 2Q average of 18.2% of Revs as Income Before Taxes (which incidently rose this Q to 18.2% from 14.5% 1Q and is a trend which should continue).That gives a Income Before Taxes of 27.7% of Revs in 3Q of '97.The wild card here is Interest Income has only been about 0.4% below the GNA as a percent of Revs for both 1Q and 2Q thus essencially negating GNA as an expense.However it probable will decrease as a % of Revs along with the GNA in regard to expenses.

BTW.Thanks,Oh Mighty Slayer of Superfluous Rs and Great Bringer of the Chart for your call to SI.

Respectfully,
Dennis

P.S.Tried posting this last night but things when awry.
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