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Filed by Rainforest Cafe, Inc.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Rainforest Cafe, Inc.
Commission File No. 0-27366
THE FOLLOWING IS THE PRESS RELEASE DISSEMINATED BY RAINFOREST ON March 31, 2000:
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RAINFOREST CAFE, INC.
720 South Fifth Street A Wild Place to Shop and Eat(R)
Hopkins, MN 55343
For Further Information Contact:
Robert Hahn
Chief Financial Officer
612-945-5400
www.rainforestcafe.com
NATIONAL MARKET: RAIN
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RAINFOREST CAFE COMMENTS ON 2000 OUTLOOK
(MINNEAPOLIS, MN - MARCH 31, 2000) - RAINFOREST CAFE, A WILD PLACE TO SHOP AND
EAT(R), Rainforest Cafe today announced that it projects sales for fiscal 2000
will be in the range of $255 to $265 million. The 2000 sales forecast is based
upon the disappointing first quarter sales for most of the company's mall
locations. This 2000 forecast represents only a slight change in total sales
compared to sales of $257 million in 1999, despite the addition of three units
in 2000 and a full year's sales for the six units opened in 1999. The
disappointing store sales, if realized, could place additional pressure on
operating margins, as fixed costs become a larger component of total costs.
Assuming sales fall in the projected range, operating net income for the year
would be in the range of approximately $2 million to $4 million or $.10 to $.15
per share. This net income estimate is prior to any impairment charges that may
be necessary if sales in mall units continue to erode. Our current estimate is
for operating earnings to be approximately 75 percent below analyst consensus
earnings estimates for 2000. The 2000 forecast follows the company's
announcement yesterday of an expected first quarter net loss. These expected
results are forecasted based upon first quarter performance, and are prior to
the effect of the substantial synergies and cost savings that are expected to be
realized from the proposed merger with Landry's Seafood Restaurant (NYSE: LNY).
The company's cash and investments at the end of the first quarter are
anticipated to be approximately $22 million. Based upon current development
plans and commitments, the available cash is expected to fall below $10 million
during the year. Cash flow from operations is
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anticipated to decrease by $7 to $10 million from 1999 levels. As previously
disclosed, the comparable store sales declines have required the company to
adopt a no unit growth strategy for 2001 and beyond. Also impacting the
company's growth plans is the fact that the company's efforts to obtain third
party financing have been unsuccessful to-date.
Commenting further, Rainforest Cafe President Kenneth Brimmer noted, that "we
are continuing to monitor the performance of our mall-based units and we will
closely review exit strategies and or attempt to renegotiate underlying leases
if these units approach breakeven unit cash-flow. We believe the proposed merger
with Landry's could result in significant savings in general and administrative
expenses and will allow an experienced restaurant management organization the
opportunity to address issues with the mall locations. The proposed merger gives
Rainforest Cafe shareholders the opportunity to participate in the potential
growth of the combined company after the merger." Since the well-publicized
announcement of the proposed transaction with Landry's, the company has received
only one inquiry regarding a possible purchase or merger. This one indication of
interest was withdrawn following a request that the group discloses information
regarding its identity and the source of its potential funding.
As previously announced, Rainforest Cafe has entered into a definitive Merger
Agreement with Landry's Seafood Restaurants, Inc. (NYSE: LNY). The company
anticipates that the merger will close in April, assuming the requisite
shareholder vote has been obtained and all other conditions have been satisfied,
and has scheduled a special meeting of shareholders for April 18, 2000. For a
complete discussion of the merger, investors are urged to consult the proxy
statement/prospectus, as filed with the Securities and Exchange Commission,
dated March 14, 2000.
Rainforest Cafe, Inc. develops, owns and operates combination restaurant/retail
facilities offering a stimulating and entertaining rain forest theme, providing
visitors with "A Wild Place to Shop and Eat"(R). There are currently 38
Rainforest Cafe(R) units open including 28 domestic locations and 10
international units. Rainforest Cafe, Inc. common shares are traded on the
NASDAQ National Market under the symbol RAIN.
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This news release (as well as information included in oral statements made or to
be made by the Company) may contain forward-looking statements that involve
risks and uncertainties relating to future events. Actual events or the
Company's results may differ materially from those discussed in any such
forward-looking statements. The Company does not expect to update
forward-looking statements continually as conditions change. These risks and
uncertainties include, but are not limited to, those relating to the merger with
Landry's Seafood Restaurants, Inc. Statements regarding estimated results are
preliminary and based on partial information and management assumptions. The
Company plans to announce its complete first quarter results on or about April
27, 2000. The information in this release including information regarding
expected revenues, net income and net income per share is forward looking and
preliminary. Actual results for the quarter may differ depending upon a number
of factors including, but to limited to, accounting adjustments, competition,
fluctuations and changes in consumer preferences and attitudes, intellectual
property protection, development and construction activities, and results of
shareholder litigation. Investors are referred to the full discussion of risks
and uncertainties associated with forward-looking statements contained in the
Company's Form 10K filed with the Securities and Exchange Commission for the
fiscal year ended January 2, 2000.
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