Dylan,
First, RAIN historically has done better 2Q than 1Q. I have a file with the revs on 1996 and 1997 1Q and 2Q somewhere . I'll try to dig it up.
Second, congrats on CAKE and thanks for the continued DD on revenues via receipt #s.
Third, Dan Webster from AOL has posted the first part of some very thorough notes on the annual meeting and here's a repost:
Subject: Re: MEETING
Date: Tue, May 19, 1998 21:01 EDT
From: DWebster99
Message-id: <1998052001011600.VAA11406@ladder01.news.aol.com>
Here's my best effort at writing up a general overview of the meeting. After spending quite a bit of time listening, rewinding, picking key words out of the tape that someone coughed over during the meeting - I have a great admiration for Edible's talent at summarizing the conference calls.
On entering the sign in area, the first thing we saw was a display of new retail items. Lots of attention to Cha-Cha in most of the items. One shirt showed the orangutan character with a look that reminded me of caricatures I'd seen in Mad Magazine when I was a kid. Kind of a comical rendition which imparted the idea that Rainforest Cafe is a fun place.
Ken Brimmer opened the meeting with the news that Norwest Shareholder Services had tabulated votes representing 84.7% of the outstanding shares, and determined that "at least 83%" voted to re-elect the Board of Directors.
Next was the video, including excerpts from Rosie O'Donell's show, CNN, CNBC Bull Session, a Chicago local segment about Cha-Cha on the roof of the Chicago Unit, and a look at the Animal Kingdom Unit, which is pretty impressive and BIG.
Then, the slide presentation:
1997 Key Accomplishments
Delivered record sales and profits by increasing sales 122% to $108 million and earnings per share by 70% to $.46 per share.
More than doubled the number of units opened, including seven domestic and three international Units opened, and one icon Unit at Disney's Animal Kingdom opened in April.
First International Units opened, including London and Mexico. Five Units are projected for 1998.
(Brimmer commentary - "Today, we have contracted with independent parties for the potential development of 24 Rainforest Cafes. And we expect to be developing those over the next several years and we expect to be adding to that number of international Units. This will push Rainforest into becoming an international brand, and it represents a very good opportunity for us to leverage our shareholders investment as the international Units require a
minimal investment on the part of Rainforest Cafe, although sometimes we do take a higher vested interest which results in a very high return on our investments.")
Management team enhanced
-Mark Bartholomay, International Department
-Stephen Cohen, Legal and Real Estate Department
-Tim Gavigan, Domestic Regional Structure Development.
1998 Goals & Objectives
-Complete 1998 and 1999 development schedule
(Brimmer commentary - "Nine units this year and 8-10 Units next year." "We're also well under way to signing leases for 1999." Brimmer also mentioned that 8-10 Units per year is the plan for the future.)
Value engineer development and construction process
"A major goal is to improve our entire development process, certainly the addition to the real estate area is expected to provide a major benefit. We're also taking a look at our actual construction process, and we have a construction budget at Rainforest Cafe and a preopening combined over the next two years, which approaches $100 million. It is our intention to look at everything we do and without compromising the quality or integrity of our
product, we plan to see if we can execute it better, faster and more efficiently." (Brimmer went on to say that they are conferring with their vendors to solicit ideas on new ways to do things that will improve the development of future Rainforest Cafes.)
Continue international progress
"We will achieve greater international progress in 1998 with the opening of five new international Units."
Implement new retail strategies (Brimmer referred to the display in the adjacent room where we registered, commenting that this represents the new products that they've come up with.)
At the end of 1997, we took a very close look at everything we do on the retail side, to see if we could do it more productively, and the result is that we've developed new programs, new strategies and new products. And, the most important result of that study was that we concluded that not all of our Rainforest Cafe Units are alike in terms of the product that the customer wants to buy at each Unit. We found that the desires of the consumer at a
traditional mall location are different from the desires of the consumer at a location such as Disney. And with this knowledge, we've developed a product mix which principally results in more gift items. And the early returns from the first quarter indicate that this strategy is going to be very successful. Finally, a major goal for 1998 isin the marketing area. I'm pleased to announce, without going into specifics, that we have recently
finalized terms with an individual who will be joining Rainforest Cafe as Vice President of Marketing, and we expect that individual to spearhead many new initiatives for us. We've already begun to create programs which will continue to build high level productivity in the Units. In the past, we would open a Unit in a mall in a location that was simply (?) and basically assume that our business would be a by product of the traffic that already
existed in the mall, and the result was certainly that we opened to a great flurry of activity, and our business comp sales the second year were down slightly, or in some cases more dramatically than the first year, because we had opened with so much enthusiasm on the part of the public. Well, we're not satisfied with that performance any more. We're going to embark on a series of marketing initiatives which will address really what happens to a
Rainforest Cafe the second and third year. We're exploring the development of various guest loyalty programs, kids' clubs and various incentive programs, and we've established corporate sales teams, particularly in the Las Vegas and Disney locations, to use corporate sales and special events and groups to derive additional business. We expect our management team and everybody at Rainforest Cafe will deliver on these 1998 goals. We expect to
continue to deliver on our overall goal of increasing shareholder value."
"Achieving these goals, Rainforest Cafe had the same basic elements it had four years ago, even before we opened, or I guess it was shortly after we opened, because we didn't know what the public would think of the product - we thought we did, but we didn't know. We have those same elements today. We have a concept that the public can embrace, and love, and the surveys show that our customers who visit us not only love the product, but they love to
come back and back again. And that's a key point of differentiation from others in the theme based restaurant industry, where they come once, buy a T-shirt and then they've had that experience and don't have a desire to come back again. We have Rainforest groupies that not only come to one Unit, but they travel the country, and they make a point of visiting all the different Rainforest Cafes. So, we have this concept of public love, very high
guest satisfaction scores, we have operated our units in a disciplined fashion, which has delivered profits, we continue to build a strong management organization, and we have the financial resources to grow our business not only this year, but in several years beyond."
Mark Robinow listed the Highest Unit Revenues for the four top restaurant chains:
Chain 1997 Ave. Unit Volume in $millions
Rainforest Cafe $14.9
Dave & Buster's 12.7
Planet Hollywood 10.0
Cheesecake Factory 9.3
And Mark went on to say that we are tied with Cheesecake Factory for best unit returns on investments in the industry, followed by Planet Hollywood and Dave & Buster's. He also mentioned that we have the strongest balance sheet in the industry, which will provide for growth "well into the future".
Greg Carey mentioned that by year end, we will have 22 domestic Units open, annualizing sales in the range of $300 million dollars, and that there will be over 500 managers and 10,000 crewmembers. He described the timeline for opening a new restaurant as an 8-month process that includes 101 steps and is tracked in nine different books (Greg indicated that each of the books is around 18 inches thick with his hands as he spoke) to monitor every
facet of bringing the Unit on line, including the preopening process and also the post opening period and beyond. "To that end, we expect fully to make money the first month of operation. By the second full month of operation, we will deliver 'concept proforma'. What that means is - I'm going to talk out of school a little bit - I would suggest that we are probably the only restaurant retail company of our kind in America today that delivers cash
right out of the chute. And we do it because we build a cultural expectation that not only provides great service for our guests, great food and the most unique physical environment in America today, we build a cultural expectation of making money.
*************
I will write more when I recuperate from writing this message. This experience is giving me an increased respect for all the secretarys in the world. Dan
(end repost)
Regards,
Dennis
|
