BJ's Restaurants Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : BJ's Restaurants Inc.

BJRI 36.77

+1.6%

Nov 12 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Lhn5 who wrote (103)	3/25/1998 2:27:00 PM
From: Eric DuVall	Read Replies (2) of 865

I plan to write a series of postings on this thread about BJ's pizza.ÿ I have a unique perspective in the stock because: ÿÿÿÿÿÿ I work in the industry (small pub brewer) in Orange County. ÿÿÿÿÿÿ I lived in Oregon as a brewer an have been to some of the properties they bought-ÿ Pietro's.ÿ I understand what type of buildings they bought and the beer drinking culture up there. ÿÿÿÿÿÿ I know most of the BJ's brewery staff in Orange County. ÿÿÿÿÿÿ I want to write a coherent report on why I bought some of the BJ's warrants and what I think the strength of the company is.ÿ I have not done all the DD I should have so it will take me a little time with the numbers.ÿ My feeling is that the strength of the company is that they have bought a partial chain of restaurants in the Pacific Northwest that were old and tired.ÿ Something equivalent to Shakee's pizza here- a concept that had long since died.ÿ An image that said "old and tired" ,ÿ not "great food and family fun."ÿ Now they will convert them to an updated theme.ÿ This should bring value into the company.ÿ We have seen all the press released that sales are surging after the new locations get converted.ÿ This should continue as they still have locations to convert.ÿ When finished, they should be a thriving restaurant chain.ÿ ÿÿÿÿ Converting an old chain should be cheaper than buying all new units.ÿ And from what I understand some ot the properties are in prime locations.ÿ These are the ones that were converted first. ÿÿÿÿ Someone close to the company told me that the present management's strength is that they will get rid of all non profitable locations.ÿ They will run a tight group of restaurants.ÿ He cited evidence of some Orange County closings in recent history.ÿ (Sorry I'm being ambiguous but I know they aren't going to convert all the Peitro's in Oregon either-ÿ the Bend location) This is gossipy, will try to get closing locations later. ÿÿÿÿ Now to your question Larry.ÿ BJ's does sell some of its beer to second party restaurants-ÿ contract brewing.ÿ This is probably a small amount of revenue.ÿ Maybe 25 kegs a week @ $60-70 a keg.ÿ I only know of one outside sales arangement.ÿ There maybe more.ÿ The margins here are small.ÿ They are making a profit at these levels but not a killing.ÿ Retail is where you make you money!ÿ There are maybe 120 16oz servings in a keg with a price of ~ $3.ÿ I addition, there brewery is not a efficient pro-style brewery.ÿ It is a nice 30 barrel rig that was designed to satisfy the Orange County pubs.ÿ They probably wouldn't be able to expand much more, to an actual wholesale beer producer because of space.ÿ Microbrewery beer is nice because it costs you (not labor) about 18 cents a glass that you sell for $3.ÿ Bud costs you abut 50 cents.ÿ But you have huge capital costs and labor.ÿ Look at all those smiling faces on their web page.ÿ Don't plan on having bottled beer in a store anytime soon. ÿÿÿÿ One thing you people should realize, at least with the Orange County and Pacific Northwest locations.ÿ The brewery restaurant system is a satellite system.ÿ They have one central brewery the feeds the other restaurants.ÿ The central brewery are beautifully done.ÿ I've only seen the one in Brea but it looks nice.ÿ I hear they do good bussiness but also have a full bar.ÿ The other restaurants are smaller and box like.ÿ From what I can tell most are lacking ambiance,ÿ it is like eating in a closet.ÿ In the Huntington Beach location you really don't get a sense of where the kitchen is.ÿ The food comes out of what could be a closet.ÿ I don't like this as a diner.ÿ But it keeps costs down, so maybe good as an owner.ÿ Also the food items are high margin.ÿ (Pizzas are some of the highest margin food items- thats why you see a lot of wood fire pizza places springing up.)ÿ So don't think all the BJ's are like the Brea location.ÿ While they are boxy they seem to be in good locations.ÿ Maybe not the nice place to eat, but a profitable way to sell food.ÿ ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Will try to write more soon ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Eric ÿ

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next