Driven by a solid improvement in restaurant operators’ outlook for sales growth, capital spending plans and staffing levels, the National Restaurant Association’s Restaurant Performance Index (RPI) rose to its highest level in 27 months in February. The comprehensive index of restaurant activity stood at 99.0, up 0.7 percent from January and its strongest level since November 2007.

“The RPI’s strong gain in February was the result of broad-based improvements among the forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators’ optimism for sales growth stood at its strongest level in 29 months, with capital spending plans also rising to a two-year high.”

“In addition, restaurant operators reported a positive outlook for staffing gains for the first time in more than two years,” Riehle added. “This bodes well for replacing the more than 280,000 eating and drinking place jobs lost during the recession.”

Restaurant Industry Update – February 2010



The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – remained below 100 for the 28^th consecutive month. The index consists of two components, the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.7 in February – up 0.1 percent from January’s level of 96.6. February, however, represented the 30^th consecutive month below 100, which signifies contraction in the current situation indicators.

Restaurant operators reported negative same-store sales for the 21^st consecutive month in February, with the overall results similar to the January performance. Twenty-eight percent of restaurant operators reported a same-store sales gain between February 2009 and February 2010, compared with 27 percent of operators who reported higher sales in January. Fifty-seven percent of operators reported a same-store sales decline in February, matching the proportion who reported negative sales in January.

Customer traffic also remained soft in February, as restaurant operators reported net negative traffic for the 30^th consecutive month. Twenty-five percent of restaurant operators reported an increase in customer traffic between February 2009 and February 2010, down slightly from 26 percent who reported higher customer traffic in January. Fifty-five percent of operators reported a traffic decline in February, compared with 54 percent who reported lower traffic in January.

Along with continued soft sales and traffic performances, capital spending activity continued to drop off. Thirty percent of operators said they made a capital expenditure for equipment, expansion, or remodeling during the past three months, down from 32 percent last month and the lowest level on record.

In contrast to the trends in the current situation indicators, restaurant operators are increasingly optimistic about improving conditions in the months ahead. The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures, and business conditions), stood at 101.4 in February – up 1.2 percent from January and its strongest level in 29 months. In addition, the Expectations Index stood above the 100 level for the second consecutive month, which signifies expansion in the forward-looking indicators.

Restaurant operators are increasingly optimistic about sales growth in the months ahead. Forty-four percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), up from 33 percent who reported similarly last month and the strongest level in 29 months. In comparison, just 16 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 22 percent last month.

Restaurant operators are also more optimistic about the direction of the economy. Thirty-eight percent of restaurant operators said they expect economic conditions to improve in six months, while just 13 percent expect economic conditions to worsen during the next six months. Last month, 29 percent of operators said they expected the economy to improve in six months, and 18 percent expected economic conditions to deteriorate.

Along with an improving outlook for sales and the economy, restaurant operators’ plans for capital expenditures continued to expand. Forty-eight percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 43 percent who reported similarly last month and the strongest level in two years.

The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – remained below 100 for the 28^th consecutive month. The index consists of two components, the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.7 in February – up 0.1 percent from January’s level of 96.6. February, however, represented the 30^th consecutive month below 100, which signifies contraction in the current situation indicators.

Restaurant operators reported negative same-store sales for the 21^st consecutive month in February, with the overall results similar to the January performance. Twenty-eight percent of restaurant operators reported a same-store sales gain between February 2009 and February 2010, compared with 27 percent of operators who reported higher sales in January. Fifty-seven percent of operators reported a same-store sales decline in February, matching the proportion who reported negative sales in January.

Customer traffic also remained soft in February, as restaurant operators reported net negative traffic for the 30^th consecutive month. Twenty-five percent of restaurant operators reported an increase in customer traffic between February 2009 and February 2010, down slightly from 26 percent who reported higher customer traffic in January. Fifty-five percent of operators reported a traffic decline in February, compared with 54 percent who reported lower traffic in January.

Along with continued soft sales and traffic performances, capital spending activity continued to drop off. Thirty percent of operators said they made a capital expenditure for equipment, expansion, or remodeling during the past three months, down from 32 percent last month and the lowest level on record.

In contrast to the trends in the current situation indicators, restaurant operators are increasingly optimistic about improving conditions in the months ahead. The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures, and business conditions), stood at 101.4 in February – up 1.2 percent from January and its strongest level in 29 months. In addition, the Expectations Index stood above the 100 level for the second consecutive month, which signifies expansion in the forward-looking indicators.

Restaurant operators are increasingly optimistic about sales growth in the months ahead. Forty-four percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), up from 33 percent who reported similarly last month and the strongest level in 29 months. In comparison, just 16 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 22 percent last month.

Restaurant operators are also more optimistic about the direction of the economy. Thirty-eight percent of restaurant operators said they expect economic conditions to improve in six months, while just 13 percent expect economic conditions to worsen during the next six months. Last month, 29 percent of operators said they expected the economy to improve in six months, and 18 percent expected economic conditions to deteriorate.

Along with an improving outlook for sales and the economy, restaurant operators’ plans for capital expenditures continued to expand. Forty-eight percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, up from 43 percent who reported similarly last month and the strongest level in two years.

For the first time in more than two years, restaurant operators reported a positive outlook for staffing gains in the months ahead. Twenty-two percent of operators expect to increase staffing levels in six months (compared with the same period in the previous year), while just 16 percent plan to reduce staffing levels in six months.

The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The full report is available online.

The RPI is constructed so that the health of the restaurant industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.

The RPI is released on the last business day of each month, and more detailed data and analysis can be found on Restaurant TrendMapper (www.restaurant.org/trendmapper), the Association’s subscription-based service that provides detailed analysis of restaurant industry trends.

Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 945,000 restaurant and foodservice outlets and a workforce of nearly 13 million employees. Together with the National Restaurant Association Educational Foundation, the Association works to lead America’s restaurant industry into a new era of prosperity, prominence, and participation, enhancing the quality of life for all we serve. For more information, visit our Web site at www.restaurant.org.

Sales and profits are improving slowly at the parent of Outback Steakhouse, but officials Wednesday said a full-fledged fix requires a methodical plan to rejuvenate the brand.

“We expect our industry will continue to be soft in both sales and traffic through 2010,” said Liz Smith, chief executive of OSI Restaurant Partners, which operates 1,477 restaurants and five casual dining chains. “So it is going to take investments in menu, marketing and stores for us to emerge from this economic environment as a winner.”

Speaking on an earnings call for the first time since arriving at the Tampa company five months ago, the consumer packaged goods industry veteran outlined plans to bulk up the company’s research, consumer tracking, technology and training efforts. She also intends to spend up to $90 million on renovations at up to 50 of the 970 Outback stores, but added about half of them need it.

The key element: avoid deep discounting by offering a value menu enhanced with more variety, healthy choices and portion options. That includes launching several sub-500 calorie entrees this month.

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Chipotle Mexican Grill, Inc. (NYSE: CMG), the national chain of burrito restaurants known for serving Food With Integrity, today announced that it will host a conference call to discuss first quarter 2010 financial results on Wednesday, April 21, 2010 at 4:30 PM eastern time. A press release with first quarter 2010 financial results will be issued at approximately 4:00 PM eastern time that same day.

The conference call can be accessed live over the phone by dialing 1-888-204-4349 or for international callers by dialing 1-913-312-1401. A replay will be available one hour after the call and can be accessed by dialing 1-888-203-1112 or 1-719-457-0820 for international callers; the password is 4925049. The replay will be available until April 28, 2010. The call will be webcast live from the Company’s website at chipotle.com under the investor relations section. An archived webcast will be available one hour after the end of the call.

About Chipotle

Steve Ells, Founder, Chairman and co-CEO, started Chipotle with the idea that food served fast did not have to be a typical fast food experience. Today, Chipotle continues to offer a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere. Through our vision of Food With Integrity, Chipotle is seeking better food not only from using fresh ingredients, but ingredients that are sustainably grown and naturally raised with respect for the animals, the land, and the farmers who produce the food. Chipotle opened its first restaurant in 1993 and currently operates more than 950 restaurants. For more information, visit chipotle.com.

Shares of restaurant chain Benihana Inc. climbed Tuesday amid speculation that a financier submitted a sweetened buyout offer to the company.

Citing anonymous people, the New York Post reported Tuesday that Russell Glass, who leads RDG Capital, increased his bid for the Asian-themed chain to $8 per share, up from his earlier offer of $7 per share.

CL King analyst Michael W. Gallo told investors in a research note that the $8 offer may still be low “but is moving in the right direction.”

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EPL Intermediate, Inc. (“El Pollo Loco” or the “Company”), parent company of El Pollo Loco, Inc., today reported results for its year ended December 30, 2009. For purposes of simplicity, the Company has described the fiscal years ended December 30, 2009 and December 31, 2008 as December 31, 2009 and December 31, 2008, respectively.

El Pollo Loco reported operating revenue for the year ended December 31, 2009 of $277.7 million, which is a decrease of $21.2 million, or 7.1%, from operating revenue for the year ended December 31, 2008 of $298.9 million. Operating revenue includes sales at company-operated stores and franchise revenue.

The decrease in 2009 operating revenue was primarily attributed to an 8.2% decrease in system-wide same-store sales for the year ended December 31, 2009 compared to a 0.2% increase for the year ended December 31, 2008. Restaurants enter the comparable restaurant base for the calculation of same-store sales the first full week after the 15-month anniversary of the opening.

Also contributing to the decrease in 2009 operating revenue was $4.5 million in company-operated restaurant revenue generated in the 53^rd week of fiscal 2008 that did not occur in 2009 and decreased development fees attributed to fewer franchised restaurant openings in 2009 as a result of the challenging economic environment. These decreases were partially offset by $3.5 million for eight new stores opened in 2008 and $2.8 million for four units opened in 2009.

Commenting on the Company’s 2009 results, Stephen E. Carley, president and CEO of El Pollo Loco, Inc., said, “As we anticipated, 2009 was among the most challenging years in our 30-year history. Further contraction in the economy and disproportionately high unemployment, underemployment and home foreclosure rates in our core markets, and in particular among Hispanics which are a key demographic for our brand, contributed to our first year of negative system-wide same-store sales in a decade.”

“Continued frugality among consumers dining out also impacted us in 2009. Mainstay promotions that worked well in the past did not deliver the top-line results they once did. The Loco Dollar Menu, however, continued to work for us in delivering a value message to consumers. Further, 2009 Sandelman & Associates Quick-Track data in our core Los Angeles market confirmed that, despite our sales softness, we increased our market share of total QSR occasions. This achievement is attributed to our flexibility in responding quickly to deteriorating economic conditions with new marketing programs and also to our Taste the Fire® campaign, which successfully promoted El Pollo Loco’s superiority as the flame-grilled chicken leader on the heels of KFC’s 2009 grilled chicken launch.”

The Company had a net loss for the year ended December 31, 2009 of $52.3 million compared to a net loss of $39.5 million for the year ended December 31, 2008. For both 2009 and 2008, the net loss was impacted by impairment charges to intangible assets of $17.4 million and $42.1 million, respectively. The 2009 loss included an income tax expense of $15.6 million compared to an income tax benefit of $12.1 million in 2008.

Commenting on 2010, Carley said, “While the economy remains challenging, the learning we gleaned in 2009 has made us stronger and more resilient. We recently completed extensive research culminating in a refined brand positioning that is driving our strategic initiatives. The January introduction of citrus-marinated, flame-grilled Sirloin steak aligns well with this research, which elevates our real grills and flame-grilling expertise as important and defining assets for our brand.”

“Our focus in 2010 will continue to be on delivering exceptional guest service; refreshing our restaurants; designing a compelling and lower cost restaurant prototype to fuel growth in a variety of real estate formats; developing appealing new products for our citrus-marinated, flame-grilled chicken and steak; and introducing promotions that deliver the price-value equation consumers demand during challenging times.”

Addressing the Company’s restaurant growth in 2009, Carley said, “We continued our expansion despite the difficult economy. Together with our franchisees, we opened 12 stores, including our first restaurants in the states of New Jersey and Missouri. We also acquired four Atlanta area El Pollo Loco restaurants in September from our Atlanta franchise group, which closed its remaining five El Pollo Loco restaurants.”

The Company plans to open two stores in 2010 in an effort to conserve capital and expects its franchisees to open only three restaurants during the year due in part to the current economic crisis and the difficulty franchisees are having in obtaining financing. New stores opened in 2010 will be in areas where El Pollo Loco already has a presence.

System-wide Sales

Included above is system-wide same-store sales information. System-wide sales are a financial measure that includes sales at all company-owned stores and franchise-owned stores, as reported by franchisees. Management uses system-wide sales information internally in connection with store development decisions, planning and budgeting analyses. Management believes system-wide sales information is useful in assessing consumer acceptance of the Company’s brand and facilitates an understanding of financial performance as the Company’s franchisees pay royalties and contribute to advertising pools based on a percentage of their sales.

About the Company

El Pollo Loco® is the nation’s leading restaurant concept specializing in flame-grilled chicken. Headquartered in Costa Mesa, California, El Pollo Loco, Inc. operates a restaurant system comprised of 172 company-operated and 243 franchised restaurants (as of December 31, 2009) located primarily in California, with additional restaurants in Arizona, Colorado, Connecticut, Georgia, Illinois, Missouri, Nevada, New Jersey, Oregon, Texas, Utah and Virginia. El Pollo Loco’s menu features the Company’s signature citrus-marinated, flame-grilled chicken in individual and family-size meals, along with a variety of contemporary, Mexican-inspired entrees. Such entrees contain the Company’s signature chicken as the central ingredient and include Pollo Bowl® entrees, pollo salads, signature grilled burritos, tacos, and chicken tortilla soup. Chicken meals are served with a choice of corn or flour tortillas, freshly-prepared salsas and an assortment of side orders. For more information about the Company, visit www.elpolloloco.com.

Sales in Canada’s bars and restaurants, which account for about 4% of the national economy, showed signs of recovery in January with two out of four sectors recording gains, government figures showed.

Overall sales for food services and bars sector rose 0.3% from December to January to almost $4.1 billion, StatsCan said. The price of food rose 0.2%. The biggest advance in sales came from limited-service restaurants, where consumers order and pay for meals at the counter, rising 0.9%.

In drinking places, sales gained 0.5%.

“After weathering a very tough year of falling sales, rising costs and shrinking margins, restaurant owners in many parts of the country are starting to see some light on the horizon,” the Canadian Restaurant and Food Industry Association said in an emailed comment. “An improving economy bodes well for the restaurant industry.”

The association said it expects restaurant sales to grow by 2.9% in 2010, compared to an estimated 1.2% decline in 2009.

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Perkins & Marie Callender’s Inc. (together with its consolidated subsidiaries, the “Company”, “PMCI” or “we”) is reporting today its financial results for the fiscal year ended December 27, 2009.

Highlights for 2009:

• Total revenues were down 7.9% to $536.1 million in 2009, primarily due to decreases in comparable sales at Company-operated Perkins and Marie Callender’s restaurants and lower sales to external customers at Foxtail.
• Perkins restaurants’ comparable sales decreased by 6.6% and Marie Callender’s restaurants’ comparable sales decreased by 6.4% in 2009 as compared to 2008.  These declines resulted primarily from a decrease in traffic at both concepts due to difficult economic conditions that affected the entire restaurant industry.
• Food cost for the year declined to 26.0% of food sales in 2009 from 29.2% in 2008 due primarily to lower commodity costs, higher sales prices at Foxtail and improved food cost controls at both our Perkins and Marie Callender’s restaurants.
• The Company’s EBITDA (as defined below) for 2009 increased by $4.1 million from 2008 due principally to improved financial results at Foxtail.  Foxtail’s segment income increased by $7.0 million in 2009 compared to 2008, after elimination of a $1.7 million non-cash goodwill impairment charge in 2008, due to higher sales prices, lower commodity costs and improved manufacturing efficiencies in 2009.
• One Perkins franchised restaurant was opened during 2009; one Perkins Company-operated restaurant and four Perkins franchised restaurants were closed.  Two Marie Callender’s franchised restaurants were closed, and one franchised Marie Callender’s restaurant converted to Company-ownership during the year.

J. Trungale, President and Chief Executive Officer of Perkins & Marie Callender’s Inc., commented, “Perkins & Marie Callender’s Inc. met the challenges of 2009 with a resolute approach focused on maintaining the quality and integrity of our brands while offering the best price/value relationship to our guests.  Although 2009 was a challenging year, we were successful in holding margins, continuing to improve store-level execution, and managing corporate-level costs without adversely affecting our guests.  We were diligent in turning the Foxtail business around, significantly increasing its production capacity, and we look forward to seeing additional improvement at Foxtail in 2010.  Perkins franchising efforts yielded greater levels of interest in the fourth quarter, and the breakfast rollout at Marie Callender’s continued to generate incremental sales and profits.  As we embrace 2010, we continue to focus on promoting brand believable and operationally executable programming for both Perkins and Marie Callender’s and remain confident in the staying power of both brands.”

2009 Financial Results

Revenues in 2009 decreased 7.9% to $536.1 million from $582.0 million in 2008.  The decrease resulted from a $32.9 million decrease in sales in the restaurant segment, a $1.6 million decrease in the franchise segment and an $11.8 million decrease in the Foxtail segment.  Company-owned Perkins comparable restaurant sales decreased by 6.6% and Company-owned Marie Callender’s comparable restaurant sales decreased by 6.4% in 2009 as compared to 2008.

Food cost for 2009 decreased to 26.0% of food sales from 29.2% in 2008.  Restaurant segment food cost was down by 1.5% to 25.4% of food sales in 2009, primarily due to lower commodity costs, particularly red meat, produce, dairy products and eggs.  In the Foxtail segment, food cost decreased to 56.8% of food sales in 2009 from 65.9% in 2008, primarily due to lower commodity costs, particularly fruit and eggs, increases in sales prices over all major product lines during the second half of 2008 and improved pie manufacturing efficiencies.

Labor and benefits costs, as a percentage of total revenues, increased by 0.7% to 33.1% in 2009 compared to 2008.  The labor and benefits ratio increased by 0.6% in the restaurant segment due to a greater impact from fixed store management costs and higher employee insurance costs, while the Foxtail segment labor and benefits expense decreased from 13.5% in 2008 to 12.6% in 2009. The decrease of 0.9% in the Foxtail segment was due primarily to a decrease in production labor, resulting from improvements in production efficiency.

Operating expenses for 2009 were $145.6 million, or 27.2% of total revenues, compared to $152.3 million, or 26.2% of total revenues in 2008.  Restaurant segment operating expenses increased by 1.0% to 29.3% of restaurant sales in 2009 due primarily to the decline in revenues.  Operating expenses in the Foxtail segment decreased by $1.5 million to 10.5% of segment food sales due primarily to lower repairs and maintenance, energy, transportation and warehouse costs.

General and administrative expenses were 8.6% of total revenues, an increase of 0.4% from 2008.  The percentage increase results from the decrease in total revenues, as overall G&A expenses declined by $1.7 million due primarily to lower marketing program costs and allowances at Foxtail.

Depreciation and amortization was 4.5% and 4.2% of revenues in both 2009 and 2008, respectively.  

Interest, net was 8.2% of revenues in 2009, compared to 6.3% in 2008.  The 1.9% increase was primarily due to an increase in the average effective interest rate to 11.6% from 10.1%, an approximate $14.1 million increase in the average debt outstanding during 2009 and lower revenues as compared to 2008.

During the third quarter of 2008, we recorded a non-cash goodwill impairment charge of $20.2 million, comprised of $18.5 million related to our franchise segment and $1.7 million related to our Foxtail segment.  In 2009, the Company recorded a non-cash charge of $1.5 million to write-off an intangible asset resulting from the termination of a customer contract at Foxtail. No additional charges were required during the remainder of 2008 or during 2009.  

On September 24, 2008, the Company issued $132.0 million of 14% senior secured notes and entered into a new $26.0 million revolving credit facility in connection with the refinancing of its then existing $100.0 million term loan and $40.0 million revolver.  The pre-existing credit agreement terminated upon the consummation of the refinancing.  In connection with this transaction, we recognized a loss of $3.0 million due to the write-off of deferred financing costs related to the terminated credit agreement.

Other, net was $3.5 million of income in 2009 compared to $0.4 million of expense in 2008.  The 2009 income primarily represents gains on invested deferred compensation assets and a one-time benefit from unredeemed gift cards amounting to $2.2 million.

Based on the above factors, total net loss attributable to PMCI decreased from $53.0 million in 2008 to $36.2 million in 2009.  

Adjusted EBITDA

The Company defines adjusted EBITDA as net income or loss before income taxes or benefits, interest expense (net), depreciation and amortization, asset impairments and closed store expenses, pre-opening expenses, management fees, certain non-recurring income and expense items and other income and expense items unrelated to operating performance.  The Company considers adjusted EBITDA to be an important measure of performance from core operations because adjusted EBITDA excludes various income and expense items that are not indicative of the Company’s operating performance.  The Company believes that adjusted EBITDA is useful to investors in evaluating the Company’s ability to incur and service debt, make capital expenditures and meet working capital requirements.  The Company also believes that adjusted EBITDA is useful to investors in evaluating the Company’s operating performance compared to that of other companies in the same industry, as the calculation of adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending, all of which may vary from one company to another for reasons unrelated to overall operating performance.  The Company’s calculation of adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies.  Adjusted EBITDA is not a presentation made in accordance with U.S. generally accepted accounting principles and accordingly should not be considered as an alternative to, or more meaningful than, earnings from operations, cash flows from operations or other traditional indications of a company’s operating performance or liquidity.

About the Company

Perkins & Marie Callender’s Inc. operates two restaurant concepts:  (1) full-service family dining restaurants, which serve a wide variety of high quality, moderately-priced breakfast, lunch and dinner entrees, under the name Perkins Restaurant and Bakery, and (2) mid-priced, casual-dining restaurants specializing in the sale of pies and other bakery items under the name Marie Callender’s Restaurant and Bakery.  As of December 27, 2009, the Company owned and operated 163 Perkins restaurants and franchised 314 Perkins restaurants.  The Company also owned and operated 77 Marie Callender’s restaurants, two Callender’s Grill restaurants, an East Side Mario’s restaurant and 12 Marie Callender’s restaurants under partnership agreements.  Franchisees owned and operated 38 Marie Callender’s restaurants and one Marie Callender’s Grill.

For the fiscal year ended January 3, 2010, Mexican Restaurants (NASDAQ: CASA) reported a net loss of $848,699 or ($0.26) per diluted share. This compared with a net loss of $3,987,011 or ($1.22) per diluted share for fiscal year 2008. For the fourth quarter ended January 3, 2010, the Company reported a net loss of $588,001 or ($0.18) per diluted share, compared with a net loss of $3,917,026 or ($1.20) per diluted share for the same quarter in fiscal year 2008. During the fourth quarter ended January 3, 2010, the Company recorded $190,000 of severance expense as part of staff reductions. During the 2008 fourth quarter, the Company recorded a goodwill impairment of approximately $5.1 million, and a resulting approximate $1.3 million tax benefit.

The Company’s revenues for the fiscal year ended January 3, 2010 were down $1.8 million or 2.5% to $72.0 million compared with fiscal year 2008. Restaurant sales for fiscal year 2009 decreased $1.76 million or 2.4% to $71.3 million compared with fiscal year 2008. For the fiscal year ended January 3, 2010, Company-owned same-restaurant sales decreased approximately 8.6%, or $6.2 million. Offsetting the decline in same-restaurant sales was the 53^rd week of sales, which added $1.3 million of restaurant revenue to fiscal year 2009, new restaurant sales of $1.4 million and approximately $2.0 million in revenue from restaurants that were temporarily closed in fiscal year 2008 because of two restaurant fires and Hurricanes Gustav and Ike. Franchised-owned restaurant sales, as reported by franchisees, decreased approximately 3.7% over the same period in 2008 (franchise sales are accounted for by calendar months). The franchised-owned sales were not adjusted for sales that were lost due to Hurricanes Gustav and Ike in fiscal year 2008.

Commenting on the Company’s fiscal year 2009 results, Curt Glowacki, Chief Executive Officer, stated, “Fiscal year 2009 was a challenging year for our Company. Due to the economic recession, same-store sales dropped precipitously, putting pressure on our margins, especially labor, and forcing us to respond by reducing general and administrative staff. There were some positive results in 2009. We experienced improvements in food costs, utilities and group health insurance premiums, all of which helped to mitigate revenue deductions. As of the end of the fourth quarter, we remained in compliance with all debt covenants. We do however, continue to remain cautious regarding the economy and consumer spending, and are managing our operations accordingly.”

Mr. Glowacki concluded, “Based on our current economic outlook, we plan to focus our energies on improving existing restaurant same-store sales, growing cash flow, and paying down existing debt. Although we do not plan to open new Mission Burrito or other brand restaurants in fiscal year 2010, we will continue to work on refining our concepts for future growth. The timing of that will be dependent on the economy and our Company’s performance. We continue to focus on the fundamentals of running great restaurants that offer delicious food at very affordable prices while positioning the Company to exit the recession stronger both financially and operationally. As an example of our current approach, we recently initiated a program where we will retrain the staff of each of our existing restaurants to better ensure that all of our standards for food quality, service and hospitality are being met. The initial consumer response to these efforts has been positive. ”

Mexican Restaurants, Inc. operates and franchises 73 Mexican restaurants. As of today, the current system includes 55 Company-operated restaurants, 17 franchisee operated restaurants and one licensed restaurant.

Brinker International Inc. will spend $100 million to improve the kitchen technology at its Chili’s Grill & Bar chain, one of several “transformational changes we are going to make to our business,” chief executive Doug Brooks said Friday.

Brooks updated analysts on the future of the Dallas-based company, one day after announcing plans to slim down from three chains to two. Brinker plans to sell On The Border Mexican Grill & Cantina to an affiliate of San Francisco-based Golden Gate Capital.

Also Friday, Brinker, which also owns Maggiano’s Little Italy restaurants, raised its profit outlook, boosted its dividend by 27 percent and added $250 million to its stock buyback authorization.

For the 2010 fiscal year, which ends in June, the company estimates profits before special items will be $1.40 to $1.44 a share. That’s down 3 percent to flat compared with fiscal 2009. But it’s higher than the previous guidance of $1.15 to $1.30 a share.

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Brinker International, Inc. (NYSE: EAT) today estimates earnings per diluted share, before special items, of $0.41 to $0.44 for the company’s third quarter ended Mar. 24, 2010 as compared to earnings per diluted share, before special items, of $0.45 for the third quarter of fiscal 2009. On a GAAP basis, earnings per diluted share are estimated to be $0.38 to $0.41 for the third quarter of fiscal 2010 as compared to $0.34 for the third quarter of fiscal 2009. Comparable restaurant sales are estimated to decline between 3.5 to 4.5 percent for the third quarter. For the third quarter of fiscal 2010, special items of approximately ($0.03) per diluted share consist primarily of lease termination charges related to the company’s decision in the second quarter of fiscal 2010 to close underperforming restaurants. For the third quarter of fiscal 2009, special items of ($0.11) per diluted share were primarily related to lease termination charges and severance.  

For the third quarter of fiscal 2010, earnings before special items were impacted by costs related to the rollout of the new menu at Chili’s, significant weather events and lower than expected tax expense. The costs associated with implementing the new Chili’s menu lowered earnings by approximately $5.0 million before tax, weather negatively impacted comparable restaurant sales by approximately 100 basis points, mostly in the month of February, and the resolution of certain tax positions resulted in a positive impact of approximately $3.0 million to tax expense. Excluding the impact of weather, the company experienced an improvement of approximately 150 basis points in March comparable restaurant sales as compared to January and February combined.

Brinker previously announced that it has entered into a purchase agreement with OTB Acquisition LLC, an affiliate of Golden Gate Capital, to sell its On The Border Mexican Grill & Cantina® brand. The company expects the transaction to close by the end of fiscal 2010 and anticipates recording a gain upon completion of the transaction. Due to the pending sale, the results of On The Border will be presented as discontinued operations in the company’s financial statements beginning with the third quarter fiscal 2010 Form 10-Q filing. Brinker has agreed to provide transitional corporate support services to On The Border through the end of fiscal 2011 which will generate additional fees to offset the internal cost of providing the services.    

Earnings per diluted share, before special items and On The Border, are estimated to be $0.36 to $0.39 for the third quarter of fiscal 2010 as compared to earnings per diluted share, before special items and On The Border, of $0.40 for the third quarter of fiscal 2009. Comparable restaurant sales excluding On The Border are estimated to decline between 3.5 to 4.5 percent for the third quarter.

Fiscal 2010 Outlook

For the full-year fiscal 2010, the company estimates earnings per diluted share, before special items,  to range from a three percent decline to flat compared to fiscal 2009, or $1.40 to $1.44 as compared to $1.44 in the prior year, before special items and excluding Macaroni Grill. Current expectations of fiscal 2010 earnings per diluted share, before special items, are higher than the previous guidance of a range of $1.15 to $1.30 presented in connection with the release of the company’s fourth quarter fiscal 2009 results. The revised outlook is based on a projected decrease in comparable restaurant sales of approximately one to two percent for fiscal 2010. This compares to the company’s previous estimate of a decrease of two to four percent. Fiscal 2010 includes a 53rd week versus 52 weeks in fiscal 2009.

Earnings per diluted share, before special items and On The Border, are projected to range from a six to three percent decline compared to fiscal 2009, before special items and excluding On The Border and Macaroni Grill, or $1.20 to $1.24 for fiscal 2010 compared to $1.28 in the prior year. Excluding On The Border, comparable restaurant sales are expected to decline one to two percent for the fiscal year.

The company believes that providing fiscal 2010 earnings per diluted share guidance excluding other gains and charges and On The Border from its financial results provides a clearer perspective for investors into the company’s ongoing operating performance.  

Capital Allocation

The company remains committed to returning capital to shareholders through the payment of quarterly dividends and ongoing share repurchases while maintaining an investment grade rating. Effective with the fourth quarter fiscal 2010 payment, the company will increase the quarterly dividend by 27 percent from $0.11 to $0.14 per share. Brinker will use a 40 percent dividend payout ratio as a guideline to provide additional return to shareholders. The fourth quarter dividend will be paid on July 1, 2010 to shareholders of record as of June 17, 2010. Brinker’s Board of Directors has also authorized an additional $250 million of share repurchases, which brings the total available authorization to $310 million. Management will repurchase shares with the proceeds stemming from the On The Border divestiture as well as with excess free cash flow over time as the business results permit.

Forward Calendar

• Third quarter earnings release, prior to market open on April 20, 2010.
• Third quarter conference call, via a live webcast at 9 a.m. on April 20, 2010.
• SEC Form 10-Q for third quarter fiscal 2010 filing on or before May 3, 2010.

About Brinker International

Brinker, International Inc. is one of the world’s leading casual dining restaurant companies. Founded in 1975 and based in Dallas, Texas, Brinker currently owns, operates, or franchises 1704 restaurants under the names Chili’s® Grill & Bar (1,499 restaurants), On The Border Mexican Grill & Cantina® (160 restaurants) and Maggiano’s Little Italy® (45 restaurants). Brinker also holds a minority investment in Romano’s Macaroni Grill®.

NPC International, Inc. (the “Company”), today reported results for its fourth fiscal quarter and fiscal year ended December 29, 2009.

FOURTH QUARTER HIGHLIGHTS:

• The fourth quarter of 2009 was comprised of 13 weeks while 2008 contained 14 weeks.
• Non-GAAP Adjusted EBITDA (“Adjusted EBITDA”) from continuing operations (reconciliation attached) of $19.0MM was below the prior year by $4.2MM or 17.9%.
• Loss from continuing operations of $0.3MM compared to income of $3.2MM recorded last year.
• Debt remained equal to the third quarter at $433.7MM while cash increased by $4.2MM to $14.7MM.
• Comparable store sales from continuing operations declined -10.5% rolling over a decrease of -3.4% last year.

YEAR-TO-DATE HIGHLIGHTS:

• Fiscal 2009 was comprised of 52 weeks while 2008 contained 53 weeks.
• Adjusted EBITDA from continuing operations (reconciliation attached) of $94.5MM exceeded the prior year by $13.3MM or 16.4%.
• Income from continuing operations of $10.4MM was $2.9MM or 38.9% greater than the $7.5MM recorded last year.
• Debt declined $20.1MM and cash increased by $9.3MM from last fiscal year end on strong free cash flow despite investing $13.3MM in net acquisition/divestiture activity in our first fiscal quarter.
• Our Leverage ratio increased to 4.51X Consolidated EBITDA, as defined in our credit agreement from 3.92X at last fiscal year end compared to maximum leverage per our credit agreement of 5.25X at fiscal year end.
• Comparable store sales from continuing operations declined -10.2% rolling over growth of 2.0% from last year.

FIRST QUARTER 2010 OUTLOOK:

• Comparable store sales for the first quarter 2010 are estimated to be around 10.0%.
• We are required to make a mandatory excess cash flow payment on our senior secured credit facility of $31.3MM, which we intend to pay from our cash reserves on March 30, 2010. If this payment were applied to fiscal 2009 results, our leverage ratio at fiscal year end 2009 would have been 4.19X in lieu of the 4.51X reported.

The Company’s annual financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations are set forth in the Company’s Form 10-K for the fiscal year ended December 29, 2009 which can be accessed at www.sec.gov.

NPC’s President and CEO Jim Schwartz said, “We are not pleased with the performance of the Pizza Hut brand and consequently, our own performance during fiscal 2009, and the fourth quarter’s results were essentially a continuation of this disappointment. However, the brand did some ground breaking work on value during the fourth quarter and as a result we are optimistic that we have identified a message that resonates with the consumer and we are reaping the benefits during the first quarter of fiscal 2010.

As expected our fourth quarter comparable store sales improved versus our third quarter result but remained soft despite much easier comparisons as we lapped the initial effects of the recession a year ago. Our operators controlled the business admirably but the loss of sales volume was too significant for our operators to completely overcome as two year comparable store sales declined 13.9% compared to a decline of 8.0% in the third quarter of 2009. As a result, Adjusted EBITDA from continuing operations fell below the prior levels by 17.9% for the only negative Adjusted EBITDA comparison quarter this fiscal year. In spite of this quarter’s results we grew Adjusted EBITDA on a full year basis from continuing operations by $13.3MM or 16.4% and maintained Adjusted EBITDA flat with last year when including the impact of discontinued operations.

As we look forward to fiscal 2010, the sales environment is no less challenging than it was in 2009. The consumer remains under extreme pressure with unemployment stagnating at record levels and no employment recovery visible on the immediate horizon. As a result, the brand has focused upon giving the consumer a combination of the value and abundance that they have been searching for from our segment. We believe that our new value initiative has reset the quality/value bar in the pizza segment and our stores are reaping the benefits of this change with improved sales and traffic during our first fiscal quarter of 2010. Currently, we expect to generate comparable store sales of around 10.0% during the first quarter of 2010 due to the effectiveness of this promotion. Obviously this is a significant and welcome change in the trajectory of our business from fiscal 2009. Further, we intend to make our required $31.3 million excess cash flow payment on March 30, 2010, which we expect to fund wholly through our cash reserves. If this mandatory excess cash flow payment were applied to fiscal 2009 results, our leverage ratio at fiscal year end 2009 would have been 4.19X in lieu of the 4.51X reported.

There is much work to be done in our brand and at NPC on a local level to drive greater market share and increased profitability. We expect to experience only modest commodity inflation during 2010 at this point, and for the first time in three years we are not facing a pending federal minimum wage increase. We are determined to make 2010 a year of recovery and we look forward to sharing our results with you as we progress on this journey back to the leadership position in this category.”

The fourth quarter loss from continuing operations was $0.3 million compared to income of $3.2 million for the same period last year. Increased net product sales and fees and other income, lower product ingredient costs, lower interest expense and lower income tax expense provided year-over-year benefit to the quarter. However, these favorable variances were more than offset by lower restaurant margins due to soft sales and higher costs in the acquired units including direct labor costs and increased other restaurant operating expenses largely due to a higher cost structure (higher royalty expense, higher depreciation expense, among other items). Also offsetting the favorable variances were increased general and administrative expenses associated with increased direct supervisory personnel and related costs in support of the acquired unit operations, as well as one less week of operations than the prior year.

On a full year basis, income from continuing operations was $10.4 million compared to $7.5 million last year. This increase was due to increased net product sales and fees and other income, lower product ingredient costs, lower interest expense and lower income tax expense. These favorable variances were partially offset by lower restaurant margins due to soft sales and higher costs in the acquired units including direct labor costs and increased other restaurant operating expenses largely due to a higher cost structure (higher royalty expense and higher depreciation expense, among other items). Also offsetting the favorable variances was increased general and administrative expenses associated with increased direct supervisory personnel and related costs in support of the acquired unit operations, as well as acquisition assimilation and training costs incurred and the prior year benefit of an additional week of operations.

We recorded a net loss of $0.3 million for the fourth quarter compared to a net loss of $25.4 million last year. We reported a loss, net of taxes, from discontinued operations of $28.6 million for the fourth quarter of last year due to the loss on the sale of 70 and 42 units to PHI on December 9, 2008 and January 20, 2009 and no effect in the current quarter.

On a full year basis we reported net income of $10.4 million this year compared to a loss of $18.1 million last year. We incurred a loss from discontinued operations, net of taxes, of $0.1 million this year compared to a loss of $25.6 million last year due to the aforementioned loss on sales of units to PHI.

Net product sales for the fourth quarter were $203.3 million, for an increase of $13.4 million or 7.1% compared to the same quarter of the prior year, due to a 28% increase in equivalent units resulting mostly from the acquisition of 288 units in the fourth quarter of 2008 and 105 units in the first quarter of 2009. This increase was largely offset by a comparable store sales decline of 10.5% and an additional week of operations in the prior year, which contributed an additional $14.5 million or 7.6% to the fourth quarter of last year’s sales volume.

Net product sales for the fiscal year were $845.1 million, for an increase of $178.2 million or 26.7% compared to the same period of the prior year, due to a 42% increase in equivalent units resulting mostly from the aforementioned acquisitions. This increase was partially offset by a comparable store sales decline of 10.2% and an additional week of operations in the prior year which contributed an additional $14.5 million or 2.2% to last year’s sales.

Fees and other income were $9.1 million this quarter, an increase of $1.8 million over last year. On a year-to-date basis, fees and other income were $37.4 million, for an increase of $14.5 million over last year. These increases for the quarter and year-to-date were largely due to a higher mix of delivery transactions in the acquired units versus our comparable operations which more than offset the fees and other income attributable to the additional week of operations in the prior year.

Adjusted EBITDA from continuing operations for the fourth fiscal quarter was $19.0 million which was $4.2 million or 17.9% less than last year. Increased net product sales and fees and other income were more than offset by lower restaurant margins due to soft top line sales, increased general and administrative expenses and an additional week of operations in the prior year. Based on a pro-rata allocation of sales assuming Adjusted EBITDA margins realized in the fourth quarter, we estimate that this contributed approximately $1.8 million in incremental Adjusted EBITDA to prior year’s result.

On a full year basis Adjusted EBITDA from continuing operations was $94.5 million which was $13.3 million or 16.4% more than last year. This increase is attributable to higher net product sales and fees and other income, which were partially offset by increases in general and administrative expenses, and an additional week of operations in the prior year, which we estimate contributed approximately $1.8 million in incremental Adjusted EBITDA to prior year’s result.

Adjusted EBITDA for the fourth quarter, including the effect of discontinued operations, was $19.0 million which was $7.1 million or 27.2% less than last year. On a full year basis Adjusted EBITDA including the effect of discontinued operations, was $94.6 million which was $0.6 million greater than last year.

NPC International, Inc. is the world’s largest Pizza Hut franchisee and currently operates 1,149 Pizza Hut restaurants and delivery units in 28 states.

Sbarro, Inc. (the “Company”) announced today results of operations for the fourth quarter and the fiscal year ended December 27, 2009. The Company’s detailed results are included in its Annual Report on Form 10-K, which was filed with the SEC on March 26, 2010.

Fourth Quarter Financial Results

Revenues were $94.0 million for the quarter ended December 27, 2009 as compared to revenues of $98.7 million for the quarter ended December 28, 2008. The decrease in revenues was due to a 4.6% decrease in Company-owned comparable-unit sales, lost sales from stores strategically closed and a decline in royalties on franchise sales, offset by sales generated by new Company-owned stores opened in 2009 and 2008. Domestic franchise comparable-unit sales declined 6.2%. The decrease in Company-owned and domestic franchise comparable-unit sales primarily reflects continued reduced mall traffic throughout the United States as a result of the current economic environment. Without consideration for foreign currency fluctuations, international franchise comparable-unit sales declined 4.4%. The strengthening of the U.S. Dollar relative to virtually all foreign currencies added an additional 2.7% decline in international franchise comparable unit sales.

EBITDA, as calculated in accordance with the terms of the Company’s bank credit agreements, was $16.2 million for the quarter ended December 27, 2009 as compared to $17.1 million for the quarter ended December 28, 2008. The decline was primarily the result of the decline in Company-owned comparable-unit sales and royalties on franchise sales, partially offset by cost savings initiatives and reduced commodity costs during the quarter.

As discussed in Exhibit A, EBITDA is a non-GAAP financial measure that management believes is an important metric for us to report to our investors, as we consider it a helpful additional indicator of our ability to meet future debt obligations and to comply with certain covenants in our borrowing agreements which are tied to this metric. Exhibit A includes a reconciliation of EBITDA to net loss, which is the most directly comparable financial measure under United States Generally Accepted Accounting Principles (“GAAP”). Exhibit A also identifies adjustments to EBITDA that are provided for under the Company’s bank credit agreements.

Year to Date Financial Results

Revenues were $339.3 million for the year ended December 27, 2009 as compared to revenues of $359.2 million for the year ended December 28, 2008. The decrease in revenues was primarily due to a 4.9% decrease in Company-owned comparable-unit sales, lost sales from stores strategically closed and a decline in royalties on franchise sales, offset by revenues generated by new Company-owned stores opened in 2008 and 2009. Domestic franchise comparable-unit sales declined 5.6%. The decrease in Company-owned and domestic franchise comparable-unit sales primarily reflects reduced mall traffic throughout the United States as a result of the current economic environment. Without consideration for foreign currency fluctuations, international franchise comparable-unit sales declined 7.8%. The strengthening of the U.S. Dollar relative to virtually all foreign currencies added an additional 13.7% decline in international franchise comparable unit sales.

EBITDA, as calculated in accordance with the terms of the Company’s bank credit agreements, was $44.7 million for the year ended December 27, 2009 as compared to $43.7 million for the year ended December 28, 2008. The improvement was primarily the result of cost savings initiatives and reduced commodity costs, partially offset by the decline in Company-owned comparable-unit sales and royalties on franchise sales.

The Company was in compliance with all covenants as calculated in accordance with the terms of its bank credit agreements for the twelve months ended December 27, 2009.

Peter Beaudrault, Chairman of the Board, President and CEO of Sbarro, commented, “Our results for the quarter and the year continued to be impacted by the challenging economic environment; however, as a result of aggressive cost controls and lower commodity costs, we were able to produce higher year over year bank EBITDA for 2009.”

Conference Call Scheduled

Sbarro, Inc. will host a conference call on April 15, 2010 at 11:00 AM Eastern Daylight Time to discuss results of operations for the quarter and year ended December 27, 2009. There are two ways to participate in the conference call-via conference call or webcast. Domestic callers may dial in at 1-877-941-4774. International callers may dial in at 1-480-629-9760. Request to be connected to the Sbarro, Inc. Year End Fiscal 2009 Earnings Conference Call, confirmation number 4275185. Callers should dial in five to ten minutes before the scheduled start time. You may also access the conference call via webcast by visiting Sbarro Inc.’s website (http://www.sbarro.com), selecting Investors, and going to Investor Presentations.

An archived copy of the call will be available for a week to replay beginning at 2:00 PM (EDT) on April 15, 2010. Domestic callers may dial 1-800-406-7325 and International callers may dial 1-303-590-3030. The replay PIN number is 4275185. An archived copy of the call will also be available by accessing Sbarro, Inc.’s homepage.

About the Company

Based in Melville, New York, we are the world’s leading Italian quick service restaurant concept and the largest shopping mall-focused restaurant concept in the world. We have 1,056 restaurants in 41 countries. Sbarro restaurants feature a menu of popular Italian food, including pizza, a selection of pasta dishes and other hot and cold Italian entrees, salads, sandwiches, drinks and desserts. Additional information is available at http://www.sbarro.com.

Real Mex Restaurants, Inc. filed its 2009 Form 10-K for the fiscal year ended December 27, 2009 on Monday, March 22, 2010. The results indicate that total revenues were $500.6 million, a decrease of $53.1 million or 9.6% in fiscal year 2009 from fiscal 2008.

The Company has scheduled a telephone conference for Wednesday morning, March 31, 2010 at 8:30 AM Pacific Daylight Time to provide an overview of the reported results. To participate in the telephone conference, interested parties should contact Deborah Whitlow at Real Mex Restaurants, Inc. at (562) 346-1225 to get dial in instructions.

About Real Mex Restaurants

We are one of the largest full service Mexican casual dining restaurant chain operators in the United States in terms of number of restaurants. As of December 27, 2009, we had 187 restaurants, located principally in California. Our four primary restaurant concepts include El Torito, El Torito Grill, Chevys Fresh Mex and Acapulco Mexican Restaurants. We operate ten additional restaurant locations under the brands, Las Brisas, Sinigual, Who?Song & Larry’s, Casa Gallardo and El Paso Cantina. Real Mex Restaurants is committed to the highest standards and is dedicated to serving the freshest Mexican food with excellent service in a clean, comfortable, and friendly environment. For more information, please visit the Company’s website at www.realmexrestaurants.com

The 500 largest U.S. restaurant chains registered a decline in sales, posting 0.8 percent annual sales decline in 2009. According to data released today by Technomic Inc., in its annual reporting on the top U.S. restaurant chains, the leading foodservice consultancy found that U.S. systemwide sales for the Top 500 declined to an estimated $230.0 billion in 2009, down almost $2 billion over 2008.

“As the U.S. economy remained in a recession, restaurant operators continued to face a host of challenges, including cost pressures followed by declines in consumer dining demand. The data in this report clearly supports what we’ve been hearing in our consumer research surveys over the past year. Sales among the Top 500 restaurant chains contracted 0.8 percent in 2009, versus 3.4 percent growth in 2008,” said Ron Paul, President of Technomic. “Many chains scaled back their U.S. unit expansion efforts and shuttered underperforming stores, growing units by just 0.3 percent compared with 1.8 percent a year ago.”

Growth came from the limited-service Mexican, Bakery Café and Donut categories with Chipotle, Panera Bread and Dunkin’ Donuts posting 2009 sales growth of 13.9 percent and an estimated 7.1 and 3.7 percent, respectively. McDonald’s, the largest U.S. restaurant chain, grew 2.9 percent with sales estimated at $30.9 billion. Subway continued to dominate the growing Other Sandwich segment with 4.2 percent sales growth and total sales of $10 billion, which is considerably better than the 0.8 percent growth posted by the Other Sandwich chains collectively. Subway continues as the second-largest restaurant chain in the U.S., followed by Burger King, Wendy’s Old Fashioned Hamburgers and Starbucks.

Limited-service chains within the Technomic Top 500 accounted for 85 percent of all U.S. “fast food” restaurant sales. As a whole, this group grew at a rate of 0.1 percent. Asian, which grew at 5.9 percent, was another limited-service subsegment with sales growth well above their segment average. Within this group, Panda Express, a California-based chain, grew 8.8 percent with sales of $1.2 billion.

Growth continued to be driven by fast-casual chains. The Mexican category was led once again by Chipotle Mexican Grill and Qdoba Mexican Grill, posting U.S. systemwide sales growth of 13.9 and an estimated 6.5 percent, respectively. Standouts in the hamburger segment included Five Guys Burgers and Fries and The Counter with estimated sales growth of 50.2 and 67.3 percent, respectively.

Full-service chains within the Technomic Top 500 accounted for roughly 40% percent of all U.S. restaurant sales within this segment. As a whole, this group decreased sales 2.9 percent. Asian, which grew at 2.9 percent, was the only full-service subsegment with positive sales growth. Within this group, several mid-sized brands, including RA Sushi Bar Restaurant, Stir Crazy Asian Grill and MuHot Mongolian Grill, drove its growth with double-digit sales increases.

Within Top 500 full-service restaurants, the real story was in the Steak category, which experienced a decline in sales of 6.4 percent, a deeper decrease than the 0.7 percent decline seen in the prior year. This group continued to be affected by declining customer traffic and check averages, slowing unit expansion and closures. Seafood and Mexican categories also posted below-average results with sales declines of 4.2 and 4.0 percent, respectively.

In total, the top 10 fastest-growing chains’ sales accounted for $5.9 billion, a 19 percent increase over 2008. Unit counts grew 16 percent.

While the Top 500 chains posted a decline in sales in the aggregate, individual results varied dramatically with sales ranging from Yogurtland’s 157.7 percent growth to Bennigan’s Grill & Tavern’s 71.8 percent estimated sales decline. Only 40 percent of the Top 500 restaurant chains posted at least nominal sales increases; 283 of these chains suffered sales declines in 2009 compared to only 213 in 2008. Both winners and losers appeared in each segment and menu category. These widely-mixed results demonstrate the overall competitiveness of the industry and the need for suppliers and operators to carefully identify and focus on the winners.

International performance by the Top 500 restaurant chains significantly outperformed their domestic counterpart growth in 2009. International sales (up 3.3 percent) outpaced U.S. sales (down 0.8 percent); international unit growth was also up 5.2 percent versus 0.3 percent for U.S. units.

The Technomic Top 500 Chain Restaurant Report provides Technomic’s exclusive 5-year sales forecast by menu category, update on franchise and international activity, 5-, 10- and 20-year trend analyses, outlook for the future, market share by menu category, and much more.

To purchase or learn more about this and other industry reports from Technomic, please visit www.technomic.com or contact one of the individuals listed below.

Investors are betting Wendy’s is finally building momentum after company restaurants posted a surprising 330-basis-point improvement in operating margins. Credit Wendy’s President J. David Karam, who owns the 150-unit Cedar Enterprises, among the Columbus, Ohio-based restaurant chain’s largest franchisees. He expects to add another 100 basis points in 2010 in his quest to top 500 by 2013.

Karam explains the advantages he has as a franchisee in the top corporate spot to Chain Leader Senior Editor David Farkas.

Franchisees, especially those with large operations, often say that corporate can’t run stores the way franchisees can. You’re living proof given the last 18 months at the helm of a troubled chain.

It was troubled. We had been losing share since 2002, and frankly we are not out of the woods yet. We have a long, long way to go. There are no generalizations that apply in life, and certainly not in situations like this. I have also heard the indictment that franchisees don’t have the skill to manage a franchisor’s challenges. It’s another form of bias that really that clouds judgment. It’s a case-by-case basis. I certainly haven’t been the only one responsible for Wendy’s turnaround. We have the support of our franchise community.

Continue reading . . .

Two brands that Darden Restaurants is trying to reinvent but have had struggling sales in the recession – LongHorn Steakhouse and Red Lobster – both showed significantly better performance in the company’s earnings report released this week.

But analysts are more enthused about LongHorn’s results and say it will take more time to tell whether the 42-year-old seafood chain is really turning things around.

“Things aren’t great at Red Lobster yet,” said Steve West, an analyst for Stifel Nicolaus.

Results for Orlando-based Darden, discussed Wednesday with analysts, included sales increases for its three major chains’ established restaurants after several quarters of declines. LongHorn had the biggest jump – 1.9 percent – at restaurants open at least 16 months. Olive Garden’s sales increased by 1.5 percent and Red Lobster’s by 0.9 percent.

“The true rock star of the three would be LongHorn,” said Jeff Farmer, an analyst with Jefferies & Co. “For that concept to spend 18 months in meaningful negative territory and trend into positive territory was pretty impressive.”

Continue reading . . .

Arcos Dorados, the largest restaurant operator in Latin America and the most important McDonald’s franchise in the world, announced today that during 2009 it reached a record of US$ 3.6 thousand millions of total sales, an 8.7% increase in local currency and a 2.9% increase in dollars. The result has been the highest obtained by McDonald’s brand in Latin America since the opening of the first restaurant in 1967.

“The results obtained in 2009 exceeded our expectations, and even more so if considering the recent world economic crisis and the high comparative base achieved in 2008,” declared Woods Staton, President and CEO of Arcos Dorados.

“Our investments increased 29% in relation to our original plans. Between August 2007 and August 2010, we will have invested 450 million dollars in Latin America,” added Woods Staton. Regarding comparative sales, considering the same number of restaurants from last year, the growth was 5.5% in local currency.

According to Staton, the main reasons for the 2009 results were an attractive product menu, convenient prices and efficiency regarding internal controls. “We exceeded our objectives by intensifying McDonald’s brand exposure in the region, thanks to innovative marketing campaigns, a great number of openings and the redesign of the image of the points of sale. We also offered a wider variety of items on the menu with a focus on quality and nutritional value, always taking into account affordable prices,” claimed Staton.

This is the second consecutive record obtained by Arcos Dorados, in its second year in operation. The company received from McDonald’s Corporation the license for the management of McDonald’s restaurants for Latin America in July 2007. The results position the company among the top 100 biggest private companies in Latin America.

Expansion: Over one new restaurant per week

In Latin America, 68 new restaurants, 41 McCafes and 145 dessert centers were opened during the year. The company closed the year with 1,800 restaurants, 263 McCafes and 1,217 dessert centers.

Investments were also focused to offer customers a more agreeable and comfortable experience, with the image redesign of 48 restaurants that incorporated the new more contemporary brand design. “We worked hard not only to grow by opening new restaurants but also to improve those we already had,” stressed Staton.

Jobs: More than 410 job openings a month

Expansion brought together the creation of 5,000 new jobs in the region, which made Arcos Dorados end the year with more than 100,000 employees, placing the company among the top five biggest employers and one of the biggest workforce trainers in the region.

“We are the first job option for young people and one of the companies that invests the most in education, training and skills development. Apart from contributing to the economic and social development of the communities where we operate by generating jobs and income, we are proud to have been acknowledged once again as one of the best employers in Latin America, according to Great Place to Work Consultant,” said Woods Staton.

Social performance: approximately US$ 1.5 millions in donations per month

Arcos Dorados supports the work of the Ronald McDonald Association. These associations, which work throughout the entire region for the benefit of children and teenagers’ health, have managed a budget of over US$ 18 million, collected and entirely allocated to local programs.

During 2009, five new Ronald McDonald House Programs and Ronald McDonald Family Rooms were created with a total of 22 programs in 11 countries:

- 13 Ronald McDonald Houses, which offer free accommodation, food and transportation to children, teenagers and their families while they undergo medical treatment;

- 4 Ronald McDonald Family Rooms, built in hospitals to provide shelter to families during the course of treatment;

- 2 Ronald McDonald Outpatient Pediatric Units, which operate in the poorest areas, providing basic pediatric attention and first diagnosis; and

- 3 Ronald McDonald Associations that support local pediatric programs, together with local foundations that offer support for children.

McDia Feliz (Happy McDay), the biggest collection campaign for Latin American children, obtained, in 2009, a record collection of US$ 10,175,383, thanks to the full donation of Big Mac sales during the day of the event in all the restaurants in the region.

The support of Arcos Dorados to local social programs is carried out throughout the year. For each sale of a Cajita Feliz (Happy Meal), the company earmarks one cent per dollar for the Association in Latin America, which reaches an annual amount of approximately US$ 1 million.

At the beginning of 2010, Arcos Dorados carried out a campaign in Latin America for which it set aside more than US$ 1.6 million for victims of the Haiti earthquake. The network also organized a campaign in Argentina, Chile, Uruguay and Paraguay together with the foundation “Un Techo para Chile” (“A Roof for Chile”) for the benefit of the victims of the earthquake suffered in that country. The money raised, US$ 202,700, is part of what the Foundation set aside for the building of 20,000 emergency houses.

Environmental performance: the second ecological restaurant

In the environmental area, Arcos Dorados opened its Latin American ecological restaurant in Lindora, Costa Rica, following the trend started in 2008 with the opening of the first one in Brazil. The new concept incorporates the philosophy of ecologically responsible constructions, according to the current certification of LEED (Leadership in Energy and Environmental Design), which aims at the incorporation of sustainable technologies in the construction and the operation of efficient buildings. The opening of a third ecological restaurant is scheduled for 2010 in Argentina.

Throughout the year, the company invested heavily in initiatives according to its policies to reduce the consumption of natural resources, recycle and reuse resources. The most relevant example is the use of Biodiesel in the fleet of trucks by recycling the vegetable oil used in the kitchens of McDonald’s, in Brazil and Argentina.

“Our strategy of sustainable growth obtained record results in 2009. We commit ourselves to the economic, social and environmental development of the communities where we operate, and we respect the different cultures from the top of Mexico to the bottom of Patagonia,” said Woods Staton.

About Arcos Dorados

Arcos Dorados is the largest restaurant operator in Latin America and the biggest McDonald’s franchise in the world. It is a Latin American company which operates in more than 3,200 McDonald’s points of sale in Latin America, with 1,800 restaurants, 1,217 kiosks and 263 McCafes distributed in 28 countries and territories (operating directly in Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, Guadalupe, French Guyana, Martinique, Mexico, Panama, Peru, Puerto Rico, Saint Thomas, Saint Croix, Uruguay and Venezuela, and indirectly by lending advice to brand licensees in the Bahamas, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay, the Dominican Republic, Saint Martin, Saint Croix and Suriname). With over 100,000 employees, it serves more than 3.5 million customers a day. Apart from being one of five biggest employers in the region, Arcos Dorados is acknowledged as one of the best companies to work for in Latin America and one of the main companies that provides young people with an opportunity to gain access to the workforce. Arcos Dorados also operates in the logistics sector through Axis, a company with seven distribution centers in Argentina, Chile, Venezuela and Mexico, with 600 employees and more than 100 customers.

OSI Restaurant Partners, LLC will host a conference call on Wednesday, March 31, 2010 at 10:00 a.m. Eastern Daylight Time to discuss its financial results for the three months and year ended December 31, 2009, which will be filed with the Securities and Exchange Commission (SEC). The call will be hosted by Elizabeth (Liz) Smith, Chief Executive Officer and Dirk Montgomery, Chief Financial Officer.

The event will be broadcast live over the Internet and interested parties may listen to the webcast via the Company’s website at www.osirestaurantpartners.com under the Investor Relations section.  

A replay of the discussion will be available shortly after the event.  

About OSI Restaurant Partners, LLC

OSI Restaurant Partners’ portfolio of brands consists of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar and Roy’s.  It has operations in 49 states and 24 countries internationally.

Starbucks Corporation today announced that its Board of Directors has approved the initiation of a cash dividend to its shareholders. The quarterly dividend of $0.10 per share will be paid on April 23, 2010, to shareholders of record on the close of business on April 7, 2010. While future dividends will be subject to Board approval, Starbucks announced that it is initially targeting a dividend payout range of 35 percent to 40 percent of net income.

Starbucks Board of Directors has also authorized the repurchase of 15 million shares of the Company’s common stock. This authorization is in addition to 6.3 million shares that remain available for repurchase under previous authorizations.

“We are confident in the overall financial strength of our business and the strong cash flow it continues to generate,” said Troy Alstead, executive vice president and cfo. “Starbucks solid cash position and cash flow outlook enable the Company to invest in future profitable growth through stores, innovation and new platforms, while also returning cash to our shareholders through the initiation of a dividend and future share repurchases.”

Later today, Starbucks will hold its 2010 Annual Meeting of Shareholders, where Howard Schultz, Starbucks chairman, president and ceo, and the Company’s leadership team will outline future plans for disciplined, profitable growth. The event will be broadcast live over the Internet and can be accessed at http://investor.starbucks.com.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.