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

To: rjm2 who wrote (13104)	9/23/2001 3:35:56 PM
From: peter michaelson	Read Replies (1) \| Respond to of 78521

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

To: rjm2 who wrote (13104)	9/23/2001 5:40:44 PM
From: Bob Rudd	Respond to of 78521

<<But, olive garden on a friday night is not a good indicator by itself. Many of these type have waiting lists every weekend.>>Quite true and if that had changed it would have been very negative. But it didn't at that one unit. Part of reason for my comment is to elicit other anecdotal observations from thread participants on how things are looking from this point forward. Not just restaurants, but shopping and entertainment venues generally. Have things changed? The week of the event would clearly be anomalous. Some activities like air travel are gonna be hurting. But the hypothesis that the consumer goes into hybernation needs some real testing before I buy it. Sometimes direct observations are better and faster than gov't/industry statistics.