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Granite City Food & Brewery Ltd. Message Board

  • n_u_a_n_c_e_d n_u_a_n_c_e_d Sep 28, 2005 5:56 PM Flag


    Greetings Fred:

    This links to a post on the BJRI board for you that probably is more appropriate for this board. The post just before this linked one may also be interesting to GCFB board readers as it contains a long-term model for BJRI's growth.


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    • Most interesting discussion here, Nuanced and to add my late nite thoughts about this...take it as such :-)...

      GCFB and BJRI are very much outperforming in the last 5 years some very well established companies...,osi,sbux,bjri


      And...versus Russel 2000....,gcfb

      Very, very impressiv performance here of GCFB and BJRI...

      As far as your remarks about KONA...

      <<<<True KONA looks like it has a great shot, but we need more info to be sure. <<<<<

      I fully agree !

      To answer your question about PFCB from the BJRI board....well...looking at the 1 year chart---

      I do not see much of a bottom here yet....

      But looking at the 5 year-chart... I would say...keep a close eye on the 40 dollar level--in case of---as that was previous support/resistance...

      Cheerio !


    • I am not sure which aspect of the companies you would like to compare and contrast. KONA is probably better compared with other premium casual dining restaurants like PFCB more than BJRI which has an average check of about half of KONA.

      By far, I know more about BJRI than the other two. I have been in BJRI since mid 2001 and enjoying the ride ever since. PFCB I started following mostly because I thought watching its story unfold might shed light on what would happen to BJRI as it grew. It seemed to me that BJRI was/is on the same trajectory only a few years behind. As I learned more about PFCB, I saw that about once a year a large selloff would take place whcih always turned out to be great entry points, so I became a stockholder on the last selloff and added to my position this past Thursday in the mid 43's.

      KONA is in the very early stages of its life and there are still many questions about how well-accepted the concept will be around the country. I believe that it will be accepted, but perhaps a little more slowly than say PFCB or BJRI. Their middle america sites like Indianapolis and Kansas City are doing great which is a very good sign in my opinion. Part of the reason KONA has great same store sales is that their new stores start out slowly compared to their mature stores and then ramp up presumably as word of mouth spreads that it is a fun and tasty place to go.

      On the other hand, it seems like ther is more and more competition in the casual dining sector making the odds of success on a national level less and less. So be careful trying to find the next PFCB, or CAKE, or BJRI. True KONA looks like it has a great shot, but we need more info to be sure.

      I would say that KONA is considerably ahead of where BJRI was when it was a seven store chain, and probably close to PFCB with its fantastic store level margins over 20%. If they can maintain their margins and store volumes KONA will be an amazing cash-generating machine, better than BJRI, better than GCFB, and perhaps even better than PFCB, but still not as good as CAKE, still the gold standard.

    • nuanced, i notice you seem to follow (hold?) both BJRI & PFCB as well as KONA. Im curious as to how long you have followed them - i know little about either, but i am wondering if you have any input as to how KONA at this stage might relate to either. when i look at the charts i see BJRI was flat for nearly 3 years, while PFCB has risen steadily since IPO.Any insight into a relationship between the these and how you think KONA fits?

    • <<- right now the market is valuing each of the 9 stores at 6 million or so->>

      And that is not even counting the more than $20 million or so in net cash. Back that out and the company is currently valued at $40 million or $4.5 million per store.

    • while hard to predict at such an early stage, (before even first CC has been held!), my money is on KONA. i think the concept and management is superior, and early numbers seem to support this. if (and big if) growth happens as indicated/planned, KONA could be a 10 bagger + in 10 years. Pure speculation though- GCFB executing well, has a chance too. Hope both get there!

    • <<Not sure you mean here but Bill is not only the Brewmaster, he is as well Chairman, Director and co-founder--with Steve--of the Company....>>

      I'm just curious who really owns the patent. If Bill has given it to the company, then he only owns a percentage of it. If the patent could have wide commercial appeal, why give 50 or 75 percent of it away? Or is it a case that he felt he could get more out of it by making the company worth more by selling investors on the fact that GCFB have an economic advantage over other brew pubs. Or is he licensing it to the company for free?

      To look ahead Bill is what - like 65 years old? I guess I'd feel a lot more comfortable if the company owned the patent.

    • Hi Nuanced,

      Here we go again...crunching the numbers...we have been there before and done that on the GCFBU board....but I will give you some numbers at the end...First some other numbers..

      GCFB closed @ 3,64 on May 23, 2005 and Kdm wrote on the BJRI board...

      On May 24, 2005, GCFB closed @ 3,50 and my humble person wrote the following...

      Based on the closing price of yesterday, Sept 28, a whopping 50 percent plus in just 4 months....Formidable !

      Not to speak of the warrants--GCFBW--trading as low as0.06- 0.08 cents in May 2005--as high as 2,50 meanwhile and now last traded @ 1.62.

      The best is yet to come...

      I do not follow Kona and know too little about the Company to have an opinion about it. But as far as your predictions for Kona...

      <<<My back-of-a-napkin guess: End of 2007, 20 stores, $95-110 milllion in revenue (run rate), $190-220 million in market cap.<<<<

      I do see a very similar scenario here for GCFB, having 26 restaurants running by the end of 2007 and as newer stores in large markets use the 2003 store-prototype--250-seats--should be raking in 5 million+ in revenues per year--and taking an average of 5 million for all units---brings in about 120-130 million revenues on a yearly basis. In such scenario, the risks factors for this sector has to be always watched but if not a major disturbance ahead...I do see very well a stockprice of 20+dollar for GCFB within the next 2-3 years.

      The days are not that far off that Grolsch will be widely known in Granite City as well :-)

      Cheers !


      • 2 Replies to the_flying_dutchman2002
      • Thanks for your reply Fred.

        I wish I had listened to you back on 24 May. I am certainly rooting for GCFB to do well. Are you playing the warrants here as well?

        Does anyone know how many stores they can open before they will need to raise more cash (assuming the warrants convert)?

        If you get a chance, take a look at KONA and tell me what you think. I value your opinion.

      • Well, if you believe what the Think Equity said:

        <<In traditional terms, our $10 price target
        is 3.0x our 2005 revenue estimate of $35.6 million, a multiple that we believe is in line with those achieved by similar longterm
        but high-growth companies.>>

        then with 11.62 million shares or so outstanding, this company is heading for $20-30.

        With a full year of 26 stores open, Revenue would be 91 million if you take the company's 3.5M baseline per store or 130M if we use your 4M.

        91M x 3x = $273M/11.62M shares outstanding = $23.49

        130M x 3x = $390m/11.62M shares = $33.56

        I think there will be stores which do $5M in revenue, but I don't see the average being more than $4-4.2M per store.

        Either way it comes up to $20 plus; probably by mid 2008. I just hope they can make SSS look better or it may be an uphill climb.

    • Nuanced, I know you have been following KONA as well. Ironically I have also taken a large pos in it and finished buying today. Started a bit too soon, but avg now in low 11s. Looks to me like near term bottom - I always keep a bit on the side to buy down if opp presents. I am sure your listened to the recent presentation - I thought others here might want to take a look - the slide show alone is impressive. Opinion - are you still looking for a bottom or do you think KONA is near?

      Like to KONA presentation above!

      • 1 Reply to tr2000man2000
      • I have no idea if it is at a near term bottom. Actually, one of the things I like about the company is that there really is not enough data for the guys that trade on technical analysis to have confidence about trading it yet. That lowers to pool of potential buyers now and lessens the competition for shares. That won't last long, though, as more data points get established each day. Anyway, a near-term bottom here wouldn't surprise me, but neither would a bit of a further drop. I don't try to time these things perfectly. Pigs usually get burned. If I see value I buy, and I do think we are in the general neighborhood of a bottom, but again I really have no idea. What I can do is look three years out and I see enough appreciation in value to warrant a purchase here.

        My back-of-a-napkin guess: End of 2007, 20 stores, $95-110 milllion in revenue (run rate), $190-220 million in market cap.

        I saw the webcast. Looking at their slides makes one realize how far BJRI has come. In the casual dining sector, all the slides compare KONA to CAKE, PFCB, and BJRI!

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