In my search for more information on KONA, I found people talking about the company on other boards. It is by someone named n_u_a_n_c_e_d. I thought it was a nice summary.
finance.messages.yahoo.com
Here is some of the info I have on KONA:
$5.5 million average unit volume (for 4 stores open at least 18 months)
20%+ cash flow margins
50% cash on cash roi
25% avg. annual unit growth
American Grill cuisine combined with full sushi menu
55 menu items and over 40 hand-made signature sauces
Award-winning sushi
"tremendous amount of emphasis on training" wait staff
Utilize food runners to free up wait staff
Low table to server ratio (max of 4 tables per server at peak periods)
Monitoring: At least 2x/month mystery shopper checks
Very low turnover, Less than 20% for managers
2,000 gallon salt aquarium
Alcohol accounts for 35% of revenue:
Unique indoor-outdoor bar separated from the restaurant
40 wines by the glass
Expansion: Projecting 25% per year, opportunity for 200+ units nationwide
Average check without alcohol (2004): KONA: $14.25, PFCB: $15.36, CAKE: $14.44, BJRI: $8.30
Average check including alcohol (2004): KONA: $21.98, PFCB: $17.50, CAKE: $16.60, BJRI: $10.50
2004 sss up 7.3% no price increases
First 6 months of 2005 sss up 5.3% including 0.4% price increase
Unit Economics:
Projected-----Actual
$4,500--------$5,479 Sales
$2,300--------$2,300 Cost (net of TIA)
$810----------$1,147 Cash Flow
18%-----------21% Margin
35%-----------50% Cash on Cash
2.5%----------5% SSS growth
$4,500 sales is a 2nd year number
Comparable store-level margins (2004): KONA: 20.2%, CAKE: 19.6%, PFCB: 19.5%, BJRI: 19.2%
Financial guideance:
2005 Revenue: $35-37 million; Net loss $0.5-1 million; openings: 2
2006 Revenue: $53-55 million; Net loss $1-1.5 million; openings: 5
Profitable in 2007
Not much of a honeymoon period after openings
Pre-opening expenses run about $300K per unit
Current prototype at about 7,000 s.f.
G&A will rise significantly from 04 to 05 (new CEO and CFO, Sarbanes Oxley, I.S. infrastructure (???)
Losses are only generated by the amount of pre-opening expenses, otherwise profitable
$29 million in cash, $4 million in debt 6.3 million in dilutive shares
Most of this comes from the corporate presentation I heard last month. The numbers seem rather attractive to me. If they do $54 million in revenue in '06 and can attain a 2x revenue valuation the stock should rise in excess of 50% by the end of next year (in 14 months). |
