SZ Worldwide Restaurant Concepts

HIGHLIGHTS: SHERMAN OAKS, Calif., Aug. 5 /PRNewswire-FirstCall/ -- Worldwide Restaurant Concepts, Inc. (NYSE:SZ) today reported financial results for the fourth quarter and fiscal year ended April 30, 2005. The Company reported revenues of $83.1 million for the fourth quarter of fiscal 2005, a decrease of 5.3 percent from the $87.8 million reported in the prior year period. Net loss for the 2005 fourth quarter was $0.03 million, or $0.00 per diluted share, compared to net income of $0.7 million, or $0.01 per diluted share, in the same period a year ago. The 2004 fourth quarter results reflect the impact of an additional week in fiscal 2004 versus fiscal 2005. The strengthening of the Australian dollar compared to last year contributed $1.5 million to 2005 fourth quarter revenue and $0.1 million to net results. The fourth quarter 2005 net loss was negatively impacted by approximately $1.7 million in on-going legal, consulting and transaction related costs associated with the merger agreement with Pacific Equity Partners announced on April 28, 2005, as well as approximately $1.6 million in costs related to the Company's Sarbanes Oxley compliance work. During the quarter the Company also completed the sale of two real estate parcels yielding a gain of $1.7 million. Fiscal 2005 Results For the fiscal year ended May 1, 2005, the Company reported revenues of $354.8 million, an increase of 2.2 percent, or $7.6 million, over revenues of $347.2 million in fiscal 2004. The fiscal 2005 net loss was $21.3 million, or ($0.77) per diluted share, compared to net income of $3.6 million, or $0.07 per diluted share, in the prior year. The loss is mainly attributable to the third quarter 2005 write-down of Pat & Oscar's goodwill and certain under-performing assets of $24.7 million, as well as the fourth quarter 2005 costs previously mentioned. Merger Transaction Continues to Move Forward The Company and Pacific Equity Partners continue to work towards completing the merger transaction. "Our fourth quarter restaurant operations were strong, but, transaction and administrative costs eroded those gains," commented Chuck Boppell, President and CEO of Worldwide Restaurant Concepts. "Sizzler USA ended the year with strong results thanks, in part, to the successful Steak and Lobster promotion, Pat & Oscar's shows on-going recovery from the food-borne illness incident of last year, and our Australian subsidiary continues to perform well. We are very pleased that we closed out our year with these kinds of results," continued Mr. Boppell. "We are still working diligently to finalize all the necessary requirements for the completion of the merger transaction, and believe strongly that this merger will allow the Company and, ultimately, our brands to thrive," added Mr. Boppell. Rob Koczkar, Managing Director of Pacific Equity Partners, reiterated Mr. Boppell's comments. "We are eager for this transaction to close and fully expect it to do so by the end of September," added Mr. Koczkar. About Worldwide Restaurant Concepts Worldwide Restaurant Concepts, Inc. operates, franchises or joint ventures 310 Sizzler(R) restaurants worldwide, 112 KFC(R) restaurants located primarily in Queensland, Australia, and 21 Pat & Oscar's(R) restaurants. Additional information about the Company can be found at http://www.wrconcepts.com/. The Company uses a fifty-two, fifty-three week fiscal year ending on the Sunday nearest to April 30. Fiscal year 2004 was a fifty-three week year and fiscal year 2005 was fifty-two week year ending on May 2, 2004 and May 1, 2005, respectively. For clarity of presentation, the Company has described all periods presented as if the year ended April 30 in the accompanying statements of operation and balance sheets. Certain statements contained in this document may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may include but are not limited to statements regarding: (i) improving revenues and earnings; and (ii) completion of the pending merger transaction. Worldwide Restaurant Concepts cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected in the forward looking statements contained herein. Such factors include, but are not limited to: (a) the Company's ability to complete the proposed merger transaction; (b) economic conditions, both generally and as they affect the restaurant industry in particular; and (c) other risks as detailed from time to time in the Company's SEC reports, including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. AT THE COMPANY: AT FINANCIAL RELATIONS BOARD: Keith Wall Liz Baskerville Laurie Berman Tricia Ross Vice President Director, General Investor/Analyst and CFO Planning Information Contact (818) 662-9800 (818) 662-9800 (310) 854-8315 (617) 520-7064 WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWELVE AND THIRTEEN WEEKS ENDED APRIL 30, 2005 AND APRIL 30, 2004 (In thousands, except per share data) April 30, April 30, 2005 2004 Revenues Restaurant sales, net $80,864 $85,646 Franchise revenues 2,281 2,185 Total revenues 83,145 87,831 Costs, Expenses and Other Costs of sales (excluding depreciation and amortization reflected below) 27,786 29,410 Labor and related expenses 22,253 24,591 Other operating expenses 18,020 18,143 Depreciation and amortization 2,937 2,869 General and administrative expenses 11,038 8,081 Gains on property sales, sale- leasebacks and legal settlements (1,758) -- Asset impairments -- 1,764 Total operating costs, expenses and other 80,276 84,858 Operating income 2,869 2,973 Interest expense 434 858 Investment income, net 166 128 Income before income taxes and minority interest 2,601 2,243 Provision for income taxes 1,806 1,567 Minority interest expense 822 15 Net income (loss) $(27) $661 Basic earnings per share $-- $0.02 Diluted earnings per share $-- $0.01 WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE FIFTY-TWO AND FIFTY-THREE WEEKS ENDED APRIL 30, 2005 AND APRIL 30, 2004 (In thousands, except per share data) April 30, April 30, 2005 2004 Revenues Restaurant sales, net $345,375 $338,308 Franchise revenues 9,469 8,846 Total revenues 354,844 347,154 Costs, Expenses and Other Costs of sales (excluding depreciation and amortization reflected below) 118,650 116,572 Labor and related expenses 93,603 94,114 Other operating expenses 83,080 82,548 Depreciation and amortization 12,449 11,836 General and administrative expenses 34,567 28,930 Gains on property sales, sale- leasebacks and legal settlements (4,919) -- Asset impairments 3,067 1,764 Goodwill impairment 21,924 -- Total operating costs, expenses and other 362,421 335,764 Operating income (loss) (7,577) 11,390 Interest expense 2,702 3,215 Investment income, net 658 551 Income (loss) before income taxes and minority interest (9,621) 8,726 Provision for income taxes 9,030 5,255 Minority interest expense (benefit) 2,679 (94) Net income (loss) $(21,330) $3,565 Basic earnings (loss) per share $(0.77) $0.13 Diluted earnings (loss) per share $(0.77) $0.07 WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands) As of April 30, 2005 2004 ASSETS Current assets Cash and cash equivalents $34,379 $24,755 Restricted cash 5,330 5,131 Receivables, net of an allowance of $437 in 2005 and $641 in 2004 2,760 2,042 Inventories 5,670 4,807 Deferred income taxes 5,485 3,169 Prepaid expenses and other current assets 4,371 2,718 Assets related to restaurants held for sale 2,232 5,417 Total current assets 60,227 48,039 Property and equipment, at cost Land 2,547 6,864 Buildings and leasehold improvements 91,286 92,810 Equipment 79,062 76,128 Construction in progress 2,597 1,350 175,492 177,152 Less accumulated depreciation and amortization (106,763) (101,681) Total property and equipment, net 68,729 75,471 Long-term notes receivables including $160 and $200 of related party receivables in 2005 and 2004, respectively 1,460 912 Deferred income taxes 7,192 10,757 Goodwill 1,723 23,647 Intangible assets, net of accumulated amortization of $1,322 in 2005 and $1,068 in 2004 2,278 2,090 Other assets 925 1,127 Total assets $142,534 $162,043 WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except par value) As of April 30, 2005 2004 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $7,077 $7,156 Accounts payable 16,426 12,396 Other current liabilities 29,630 23,334 Income taxes payable 4,327 4,056 Total current liabilities 57,460 46,942 Long-term debt, net of current portion 7,496 30,809 Deferred gains, rent and landlord incentives 18,917 11,894 Pension liability 13,817 14,031 Minority interest 32,028 14 Commitments and contingencies Stockholders' equity Preferred stock, authorized 1,000 shares, $5 par value; no shares issued and outstanding -- -- Common stock, authorized 50,000 shares, $.01 par value; issued and outstanding of 29,880 and 27,880 and 29,438 and 27,438 at April 30, 2005 and 2004, respectively 299 294 Additional paid-in capital 256,066 280,442 Accumulated deficit (226,036) (204,706) Treasury stock, at cost, 2,000 shares, at April 30, 2005 and 2004 (4,135) (4,135) Accumulated other comprehensive loss (13,378) (13,542) Total stockholders' equity 12,816 58,353 Total liabilities and stockholders' equity $142,534 $162,043 DATASOURCE: Worldwide Restaurant Concepts, Inc. CONTACT: Keith Wall, Vice President and CFO, +1-818-662-9800, or Liz Baskerville, Director, Planning, +1-818-662-9800, both of Worldwide Restaurant Concepts, Inc.; or Laurie Berman, General Information, +1-310-854-8315, or Tricia Ross, Investor/Analyst, +1-617-520-7064, both of Financial Relations Board, for Worldwide Restaurant Concepts, Inc. Web site: http://www.wrconcepts.com/

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