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Non-Tech : RAINFOREST CAFE
RAIN 3.870-3.3%Jan 6 3:55 PM EST
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To: jimleon who wrote (909)10/6/1996 4:57:00 AM
From: Dennis Vail   of 4704
 
Jim,

Earnings report date is still a question mark.S&P still has 10/10 but Zack's and First Call have early November,which fits RAIN's previous pattern.

I'd say O'Dowd's announcement was extemely bullish.First,he said he was very comfortable with '96 estimates back in early June at a Piper Jaffay conference.So to reiterate wouldn't be news.And "very,very comfortable" is as close to a promise as a spokesman gets.The numbers he gave more or less put it beyond doubt unless he's a pathological liar.
Let's take,"We'll close out 1996 with a $95 million run rate"The implications of that statement is that the 6 Cafes open at the end of '96 can be confidently expected to produce at least $95 million in revenues in '97 barring floods,earthquakes,etc.The current profit margin of 18.6% (and that's been rising) gives an operating income of $17.7 million or $11.5 million after taxes.General Administration expenses and Interest Income should pretty much wash.Using 17.3 million shares,that gives us $.65/share.

His next bold statement is that "We will open 9 units ON TIME in 1997,7 domestic and 2 international".With only $.15/share for those units to produce to meet estimates,I'd say it's pretty much in the bag and then some.

Regards,
Dennis
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