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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (2839)	5/30/2001 12:27:49 PM
From: Moominoid	Read Replies (1) \| Respond to of 4691

I am a little concerned that the net margins they reported in the Sep. 2000 year (6.1%) are unsustainably high. Those margins represent the best profitability in a decade and might be subject to pressure. Any thoughts? This is from the annual report: Net earnings were $100.3 million, or $2.55 per diluted share in 2000, $76.5 million, or $1.95 per diluted share, in 1999 and $66.7 million, or $1.66 per diluted share, in 1998. Each year includes unusual items, which increased our net earnings. In 2000, we reached a final agreement with the U.S. Internal Revenue Service to settle a tax case as described above. This settlement increased 2000 net earnings by $22.9 million or $.58 per diluted share. In 1999, restaurant operating costs were reduced by $18.0 million due to a change in estimates as described above. This change in estimates increased 1999 net earnings by $11.4 million, or $.29 per diluted share, net of income taxes. In addition, 1999 included a 53rd week that contributed an extra $1.4 million in net earnings, or $.04 per diluted share. In 1998, net earnings included approximately $25.7 million, or $.64 per diluted share, net of income taxes, from the Litigation Settlement income offset by the aforementioned non-cash charge, and the extraordinary loss of $4.4 million, or $.11 per share. Excluding these unusual items, earnings increased 22% to $77.4 million or $1.97 per diluted share in 2000 from $63.7 million or $1.62 per diluted share, in 1999, which had increased 40% from $45.4 million, or $1.13 per diluted share in 1998. Will have to check what earnings were in 1997.... Analyst forecasts for 2001 are $2.17 which is a forward P/E of 12. The 2002 consensus estimate is $2.50. David