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Strategies & Market Trends : Value Investing

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To: rjm2 who wrote (13104)	9/23/2001 3:35:56 PM
From: peter michaelson	Read Replies (1) of 78519

Hi Everyone: In light of the recent market declines I'm returning to this thread to take advantage of all the great ideas. rjm, I looked at MAIN, and have a concern. I see that depreciation is about half of EBITDA. My concern is that in the restaurant business you really do have to replenish your depreciating assets - which consist of restaurant equipment and decor. The buildings themselves are leased in MAIN's case, I believe. Therefore I would personally not use EBITDA as the measure of the profit of the business, but rather EBIT. 2000 EBIT was $7.5 million, 1999 only $3.8 million. Six month comparison is $4.3 in 2001 vs. $3.2 in 2000. My eyes see MAIN as a company with a market value at $3.50 per share of $100 million including $50 million of debt, and an EBIT of perhaps $8, for a multiple of 12x or so. Peter

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