FOOL CONFERENCE CALL SYNOPSIS*
By Rick Aristotle Munarriz (TMF Edible)

Rainforest Cafe
<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %>
607 Washington Ave. South, Ste. 204
Minneapolis, MN 55415
612-945-5400
http://www.rainforestcafe.com

October 20, 1997 /FOOLWIRE/ -- Rainforest Cafe reported their third quarter earnings today for the thirteen weeks ended September 28, 1997. Revenues rose 78% to $28.0 million from $15.7 million. Net income rose 95% from $1.9 million (or $0.13 a share) to $3.8 million (or $0.21).

Operating margins before pre-opening expenses were at 22.3% -- the strongest showing in the company's history. In the second quarter they were at 21%. While the older units may experience even further improvement in the current quarter, particularly in retail, the fact that six units are slated to open this quarter will weigh that figure down for the company. The company closed out the third quarter with 11 units after opening units at The Source in New York and a licensed unit in Cancun, Mexico.

Cash and investments now stands at $128.3 million as just $9.6 million was spent over the quarter. Internationally, royalties were $122,000 from the two units (a unit opened in London at the end of the second quarter and the Cancun unit opened in August).

Rainforest Cafe, in efforts to carry out its stock buyback announced earlier this year was selling puts again. The move netted the company $500,000 in premiums on 350,000 shares with strike prices between $20 and $22 1/2. The proceeds are not recorded on the income statement.

The company noted with consensus earnings estimates standing at $0.20 a share, beating them by a penny marked the 9th consecutive quarter that the fiscal results have come in at or above analyst projections.

ERRATIC RESULTS AT OLDER UNITS. Sales at the only two units open for at least 18 months were up 0.4%. It was basically a 4% gain in comps at the original Mall of America edging out a 3% decline at the Woodfield Mall eatery in Chicago. Despite the drop at Woodfield it was an improvement over the 11% sales decline it suffered the quarter before. The results varied dramatically at the next two oldest units. Sales at Gurnee Mills were off 15% while the icon unit at Walt Disney World found comps up 22% for the quarter.

DEVELOPMENT SCHEDULE GROWS. Since the end of the quarter the 12th restaurant opened in Downtown Chicago followed by a licensed unit in Mexico City. The two most recent domestic openings have exceeded expecations and are doing better than $250,000 a week in sales. With two of the six Cafes now open it leaves Grapevine Mills in Texas (next week), Arizona Mills (mid-November), Aventura Mall in North Miami (mid-December) and a large unit at the entrance of MGM Grand in Las Vegas set to open at the very end of the year.

The plate for 1998 looks quite full with nine domestic locations projected to open in addition to several international franchised locations. Palisades Mall, which was supposed to have a Rainforest Cafe debut this year, should open in the first quarter.

A huge 34,000 square foot unit will then open at Disney's Animal Kingdom. The eatery, straddling the gate of the park, for all to pass as they go in, will be already open by the time the new Disney themed attraction opens its doors to the public in May. Ontario Mills in California will also open during the latter part of the second quarter. Beyond the already announced locations at Cherry Creek in Denver and Great Lakes Crossing in Detroit and New Jersey's Garden State Plaza there are letters of intent for a unit at Towson Town Mall in Baltimore and Menlo Park Mall in New Jersey.

Times Square is also likely to host a Rainforest Cafe next year. The company expects to close negotiations within the next month of two for a large 600-seat rain forest themed restaurant at 701 7th Avenue.

SEARCH FOR PRESIDENT AND COO CONTINUES. Since Martin O'Dowd's departure six months ago the company has been looking for a successor. The company's only comment was that they were still in the hiring process and interviewing qualified applicants.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.