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Non-Tech : RAINFOREST CAFE

RAIN 5.595

-1.5%

Dec 8 3:54 PM EST

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To: SE who wrote (3668)	1/3/1998 2:35:00 PM
From: Dennis Vail	of 4704

Hi Scott, From MF RAIN: Apparently the Palisades Unit is all but complete and basically is waiting for the mall to open. Palisades Mall itself is reported to be like really huge ( four floors) and will begin opening piecemeal at the end of January which is in line with what Marshall heard at Aventura. However Woyanne from MF (and a regular SI observer) was told by the Tyson's staff that a March opening for RAIN is most likely. The 12/11/97 Ladenburg Thalmann report I quoted has not updated their 1998 number since at least last summer and probably earlier. I would expect earnings estimates to be updated after 4Q earnings are reported. The fact of the matter is most analysts just increase their numbers by the 40-50% growth rate on projections ovweer the current year. Since 1998 is now the current year I'd expect a little more thought behind the numbers which should benefit RAIN particularly in light of recent announcements on the 1998 openings. Fourth Quarter Earnings would seem to be a lock as Robinow has said as much. Since the general info on the weakness in same store sales at Tyson's (-15%) and Woodfield ( -7.5%) has already been suggested in the press release and given in specifics to the analysts ( Ladenburg Thalman report), I would asume that is what is responsible for the current price weakness. It looks like Woodfield Mall closed the last three weeks of December very strongly. I was there last Monday and the place was packed. RAIN was full with a crowd out front throughout our stay at the mall and the restaurant was full througfhout our leisurely meal from 1 to 3. ( John, I found a few Margarilla's lowers my bite rate to 1.5 chew a second regardless of the speed opf the music :-) ) . Merchants were mildly positive about the quarters revenues and very enthusiastic about thge last few weeks before Christmas. I'd assume that Woodfields Same Store Sales should benefit from this with as well. Hopefully the final results for 4Q will be less than 5%. Woyanne claimed Tyson's seemed to close out the year very strongly as well. Rumor has it that at least one brokerage house is pushing the idea that RAIN has narrowed the COO/Pres search down to two candidates and will announce the new COO some time in January. Hope so and the sooner the better in my view. After all this time he better be top drawer too. Once 4Q earnings are announced RAINs p/e will take a nice dip based on the change in trailing and/or forward (name your poison) years earnings the report creates. As reported in the S3, some accounting practices will change as per new SEC guidelines. This will cause all preopening expenses reported immediately rather than amortized over 11 months. No big deal but it will cause RAIN and just about all other growth companies a few pennies a year in reported earnings. As the money had to paid eventually anyway in real terms all this amounts too is a tax break in my view and a simpler balance sheet to keep track of. All in all it seems to me RAIN is in great shape long-term with Asia deflation still the only threat on RAIN's horizon. Thanks for stopping by to chat Scott. Have a great 1998!!! I hope you get back in soon. I'd appeciate hearing some more details on the why those funds you mentioned are shying away from RAIN. Do you thing a new and well respected COO might change their minds? Best regards, Dennis

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