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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - Q

   For the quarterly period ended July 25, 2004

or

   For the transition period from                      to                     

Commission File Number 1-10711

WORLDWIDE RESTAURANT CONCEPTS, INC.

(Exact Name of Registrant as specified in its Charter)

15301 Ventura Blvd., Suite 300, Building B, Sherman Oaks, California 91403

(Address of Principal Executive Offices, including zip code)

(818) 662-9800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)    Yes  x    No  ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except par value)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE TWELVE WEEKS ENDED JULY 25, 2004 AND JULY 20, 2003

(Unaudited)

(In thousands, except per share data)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE TWELVE WEEKS ENDED JULY 25, 2004 AND JULY 20, 2003

(Unaudited)

(in thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)

FOR THE TWELVE WEEKS ENDED JULY 25, 2004 AND JULY 20 , 2003

(Unaudited)

(in thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated financial statements include Worldwide Restaurant Concepts, Inc. and its subsidiaries (“WRC” or the “Company”). The financial statements include the Company’s worldwide operation of the Sizzler^® family steakhouse concept, including Company-owned outlets and activities related to the development and operation of Sizzler^® franchises, as well as the KFC^® franchises operated by the Company in Queensland and New South Wales, Australia and the operations of Pat & Oscar’s^® Company-owned outlets in the United States.

The information for the twelve weeks ended July 25, 2004 and July 20, 2003 has not been audited by independent public accountants, but includes all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the Company’s condensed consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the requirements of the Securities and Exchange Commission, although the Company believes that the disclosures included in these condensed consolidated financial statements are adequate to make the information not misleading. The results of operations for the periods presented should not necessarily be considered indicative of operations for the full year. The results of operations of restaurants that are held for sale have not been reflected as discontinued operations in the accompanying financial statements as it is contemplated that the substantial majority of such restaurants will be sold to existing or new franchisees. Certain reclassifications have been made to prior period financial statements in order to conform to the current period presentation. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s April 30, 2004 Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

The Company uses a fifty-two, fifty-three week fiscal year ending on the Sunday nearest to April 30. In a fifty-two week fiscal year, the first, second and fourth fiscal quarters include 12 weeks of operations whereas the third fiscal quarter includes 16 weeks of operations. The current fiscal year will include fifty-two weeks.

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The Company uses the intrinsic value method of accounting for stock options granted to employees as prescribed by Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to Employees,” and accordingly does not recognize compensation expense if the exercise price of the Company’s stock options is equal to or greater than the market price of the underlying stock on the date of the grant. Had the Company applied fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation,” pro forma net income and pro forma earnings per share would have been as follows (in thousands, except per share data):

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Comprehensive income for the periods ended July 25, 2004 and July 20, 2003, is as follows (in thousands):

Substantially all of the Company’s revenues result from the sale of menu items at restaurants operated by the Company or are generated from franchise royalties or fees. The Company’s reportable segments are based on geographic area and product brand. Sizzler Domestic consists of all United States and Latin America based Sizzler^® restaurants and franchise operations. Pat & Oscar’s consists of operations of the Pat & Oscar’s^® restaurants and related catering services. Sizzler International consists of all other Sizzler^® restaurants and franchise operations. KFC consists of all KFC^® franchise restaurants operated by the Company in Australia. Corporate and other includes any items not included in the reportable segments listed above. The effects of all intercompany transactions are eliminated when computing revenues, operating income and identifiable assets.

Operating income includes segment operating results before investment income, interest expense, minority interest, income taxes, and corporate overhead. The corporate and other components of operating income represent corporate general and administrative expenses prior to being allocated to the operating segments.

Identifiable assets are those assets used in the operations of each segment. Corporate and other assets include cash, investments, accounts receivable and various other assets.

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10

The Company’s revenues from external customers and long-lived assets by geographic areas are as follows (in thousands):

The Company has established its reporting units based on its current reporting structure and all recognized assets, liabilities and goodwill have been assigned to these reporting units. Approximately $21.9 million of the total goodwill relates to the Company’s Pat & Oscar’s segment. Goodwill is tested annually for impairment during the second quarter. The following sets forth the intangible assets by major asset class (in thousands):

Trademarks consist of costs to register new trademarks and defend existing trademarks. Amortization expense related to intangible assets was $40,000 for the quarter ended July 25, 2004 and is expected to be approximately $170,000 in each of the next five fiscal years. There was no impairment loss recorded during the quarter.

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The following table sets forth the computation of basic and diluted earnings per share (“EPS”):

Self-insurance

The Company self-insures a significant portion of its workers compensation, general liability and health insurance plans. The full extent of certain claims, in many cases, may not become fully determined for several years. The Company, therefore, estimates the potential obligation for liabilities which have been reported and those that have been incurred but not yet reported based upon historical data and experience, and utilizes an outside consulting firm to assist the Company in developing these estimates. Although management believes that the amounts accrued for these obligations are sufficient, any significant increase in either the number of claims or costs associated with claims made under these plans could have a material adverse effect on the Company’s financial results. The workers’ compensation and general liability policies require the Company to set aside cash reserves sufficient to fund existing and estimated future claims. As of July 25, 2004, the Company has letters of credit totaling $5.0

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million for this purpose, which are secured by a corresponding amount of restricted cash. In addition, the Company has restricted cash related to employee benefits and cash collateral for a letter of credit with a bank.

Litigation

The Company is a party to certain litigation arising in the ordinary course of business which, in the opinion of management, should not have a material adverse effect upon either the Company’s consolidated financial position or results of operations. The following is a summary of the more significant cases pending against the Company:

Two subsidiaries of the Company were named as defendants in 12 lawsuits arising out of an E.coli incident at two Sizzler^® franchised locations in Milwaukee, Wisconsin in July 2000. The plaintiffs sought monetary damages for sickness, and in one case, death as a result of consuming allegedly contaminated food at the two restaurants. The Company’s former meat supplier, Excel Corporation (“Excel”) and the Company’s former franchisee, E&B Management Company, and E&B Management Company’s principals were named defendants in some of the cases. The Company filed cross-claims against its franchisee and Excel. Approximately 130 claims have been resolved and all but two cases have been settled. On June 19, 2002, the trial court issued an order dismissing all claims against Excel, including those filed by the Company and the plaintiffs. On May 13, 2003, that order was reversed in a unanimous decision by a three-judge panel of the Court of Appeals of the State of Wisconsin, and as a result all claims filed by the Company and the plaintiffs were reinstated. On June 12, 2003, Excel filed a Petition For Review in the Supreme Court of Wisconsin to appeal the decision of the court of appeals. The petition was denied on September 12, 2003. On December 11, 2003, Excel filed a Petition For A Writ Of Certiorari in the United States Supreme Court, which was denied on March 22, 2004. The Company believes that the resolution of all claims associated with the Milwaukee E.coli incident will not have a material adverse impact on the Company’s financial position or results of operations.

On October 3, 2001, upon the petition of the Insurance Commissioner of the Commonwealth of Pennsylvania, Reliance Insurance Company (“Reliance”) was declared insolvent and became subject to Pennsylvania state law liquidation proceedings. Reliance was the Company’s primary general liability and workers’ compensation carrier, during the period May 1, 1997 through May 1, 1999, and was the Company’s first level excess general liability carrier with respect to claims against the Company arising out of the July 2000 E.coli incident in Milwaukee. As a result of the legal proceedings affecting Reliance, the Company’s ability to recover funds under its liability policies with this carrier, whether relating to the Milwaukee incident or otherwise, may be substantially limited. However, based on the amount of its primary general liability coverage under policies with other carriers, as well as anticipated results of the pending litigation in Milwaukee and other claims, the Company does not believe that Reliance’s liquidation

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proceedings are likely to have a material adverse impact on the Company’s financial position or results of operations.

On June 1, 2001, The Independent Insurance Co., the Company’s primary general liability insurance carrier in Australia for the period May 1, 2000 through April 30, 2001, commenced liquidation proceedings. Based upon an assessment of the pending and possible future claims which may be filed over a five-year period, the Company’s ability to recover funds under its general liability policies with this carrier may be substantially limited. Nevertheless, the Company does not believe that The Independent Insurance Co.’s liquidation is likely to have a material impact on the Company’s financial position or results of operations.

On October 7, 2003, the Company was notified by various health department officials that Pat & Oscar’s was the focal point of an investigation into a potential outbreak of E.coli at certain of its restaurants. Approximately 45 cases of E.coli were confirmed by the health departments. Pat & Oscar’s has been named as a defendant in four lawsuits filed by patrons who allegedly became ill with E.coli from consuming salad at Pat & Oscar’s^® restaurants in San Diego and Orange Counties. The lawsuits, one of which was filed as a class action, also name Pat & Oscar’s produce distributor, F.T. Produce, Inc. (“Family Tree”) and Gold Coast Produce (“Gold Coast”), the processor of lettuce supplied to Pat & Oscar’s^® restaurants. Family Tree’s insurance company has accepted tender of the Company’s defense pursuant to an insurance certificate issued by Family Tree’s insurance company naming the Company and Pat & Oscar’s as additional insureds. The Company does not believe that the resolution of these cases or the claims of any other individuals who became ill as a result of the alleged E.coli incident at Pat & Oscar’s will have any material impact on the Company’s financial position or results of operations. (See Note 10 - E.coli Incident, to the Condensed Consolidated Financial Statements).

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The Company’s terminated supplemental executive retirement plan (“SERP”) covers 11 former employees and is accounted for under SFAS No. 87 “Employers’ Accounting for Pensions.” The components of net periodic benefit cost for the twelve weeks ended July 25, 2004 and July 20, 2003, is as follows (in thousands):

Minority interest liability is attributable to the collective ownership interests of the minority shareholders of the Company’s subsidiaries, Pat & Oscars and Collins Food Group (“CFG”).

Under the Company’s stock option plan for its Australian Management Group (“AMG”), certain employees were granted options to purchase up to 4.1 million shares, representing a diluted 19.4 percent interest, in CFG, the Company’s Australian subsidiary managing the Sizzler^® and KFC^® restaurants in Australia. The exercise price of the options ranged from Australian $1.00 (U.S. $0.72 at July 25, 2004) to Australian $4.41 (U.S. $3.15 at July 25, 2004), the estimated fair value of the shares on the grant dates.

In accordance with the Company’s stock option plan for AMG, at the end of the fiscal quarter ended July 25, 2004, 4,064,000 options representing 19.0 percent of common stock of CFG were exercised by the AMG. In addition, a retention bonus aggregating $1.4 million Australian (U.S. $1.0 million at July 25, 2004), which could only be applied to the exercise price of the options was paid to the AMG. An additional, 23,000 were exercised subsequent to the end of the quarter and 49,000 expired on August 20, 2004. Net income for the first fiscal quarter ended July 25, 2004 reflects minority interest of $445,000 and during the remainder of fiscal year 2005, net income from the Company’s CFG operations will be reduced to reflect a minority interest of approximately 19.1 percent.

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The CFG options were considered in the computation of diluted earnings per share. See Note 6 – Earnings Per Share, to the Condensed Consolidated Financial Statements.

The AMG shareholder’s agreement includes a put option whereby the AMG members may sell their CFG shares back to the Company at fair market value on a cumulative basis at the rate of 1/6^th of the shares per year commencing six months plus one day after the shares are acquired. The agreement further provides that the AMG members may sell or transfer their shares of CFG among themselves, subject to a first right of refusal, held by WRC, to purchase 1/3^rd of any such shares traded. In addition, WRC will have the right to buy the AMG shares from any terminated AMG member. In accordance with Emerging Issues Task Force (“EITF”) D-98, “Classification and Measurement of Redeemable Securities,” the Company has classified the CFG minority interest outside of stockholders’ equity at their fair value as of the balance sheet date. The fair market value of CFG shares on July 25, 2004 was Australian $6.31 (U.S. $4.51 at July 25, 2004). The difference between the fair value of the minority interest over its carrying value of $13.2 million is reflected as a reduction of additional paid-in capital. The following table sets forth the changes in carrying amount of minority interest for the quarter ended July 25, 2004 (in thousands):

On October 7, 2003, the Company was notified by various health department officials that Pat & Oscar’s was the focal point of an investigation into a potential outbreak of E.coli at certain of its restaurants. Health officials focused their investigation on the lettuce that was supplied to the restaurants by Gold Coast and Family Tree.

To date, there have been four lawsuits filed (See Note 7 – Commitments and Contingencies, to the Condensed Consolidated Financial Statements), naming the Company as a defendant, of which one is a class action. The Company has insurance policies to cover this type of event and believes it has adequate insurance coverage to address any liability that the Company is likely to experience. Family Tree’s insurance company has accepted tender of the

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Company’s defense pursuant to an insurance certificate issued by Family Tree’s insurance company naming the Company and Pat & Oscar’s as additional insureds.

The costs related to investigating and minimizing the impact of the E.coli incident through the end of fiscal quarter ended July 25, 2004 are reflected in the Company’s Condensed Consolidated Statements of Income.

The Company anticipates that as a result of this E.coli incident, Pat & Oscar’s will continue to experience weakened sales and profitability through the first half of fiscal year 2005 in an amount not presently quantifiable. As of the date of this report filing, weekly same store sales subsequent to the end of the fiscal quarter ended July 25, 2004 were approximately 7.5 percent below prior year. The Company has made a claim under its business interruption insurance policy for the business interruption losses arising from this incident, in an amount preliminarily estimated to be approximately $8.0 million or more. However, due to the terms of the insurance policy, the Company’s ability to recover thereunder, or in any specific amount, is at present uncertain. The Company believes that it has valid claims for damages for such losses against certain suppliers in its produce supply chain as a result of this incident; however, there can be no assurance that, if the Company does file such claims, it will be successful therein, or in any specific amount.

Restaurant assets held for sale reflected on the Condensed Consolidated Balance Sheets as of July 25, 2004 include eight New York area restaurants and 10 California restaurants. Subsequent to the end of the quarter ended July 25, 2004, the Company has completed the sale of seven restaurants in Southern California for $1.8 million.

During the first fiscal quarter of 2005, the Company sold one restaurant to a franchisee for $0.3 million and classified one additional New York restaurant as assets held for sale. The results of operations of restaurants that are held for sale have not been reflected as discontinued operations in the accompanying financial statements as it is contemplated that the substantial majority of such restaurants will be sold to existing or new franchisees.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated, the Condensed Consolidated Statements of Income of the Company expressed as a percentage of total revenues. Percentages may not add due to rounding.

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RESULTS OF OPERATIONS FOR THE TWELVE WEEKS ENDED JULY 25, 2004 VERSUS JULY 20, 2003

CONSOLIDATED OPERATIONS

Company-operated restaurant sales and franchised restaurant revenues, including franchise fees and royalties, represent the Company’s primary sources of revenue. Consolidated revenues for the quarter ended July 25, 2004 were $82.0 million compared to $77.8 million for the quarter ended July 20, 2003, an increase of $4.2 million or 5.3 percent. The increase is due to a $7.2 million increase in revenues from the international divisions partially offset by declines of approximately $3.0 million in the domestic divisions. The international division increase was due to a 7.6 percent increase in the average Australian dollar exchange rate that represents approximately $3.4 million in revenues, along with same store sales increases from the KFC and Sizzler International divisions and having one new KFC^® restaurant open. These increases were partially offset by a decrease in domestic revenues. Sizzler Domestic division revenues were lower due to having seven fewer Company-owned restaurants open (six were converted to franchise operations). There were two additional Pat & Oscar’s^® restaurants open compared to the prior year, but revenues decreased due to declines in same store sales following the E.coli incident and related news stories (see Notes 7 and 10, to the Condensed Consolidated Financial Statements).

The Company anticipates that as a result of this E.coli incident, Pat & Oscar’s will continue to experience weakened sales and profitability through the first half of fiscal year 2005 in an amount not presently quantifiable. The Company experienced significant same store sales declines in quarters subsequent to the E.coli incident with same store sales declining 25.5 percent, 16.1 percent and 12.1 percent in the third and fourth quarters of fiscal year 2004 and first quarter of fiscal year 2005, respectively. As of the date of this report filing, weekly same store sales subsequent to the end of the fiscal quarter ended July 25, 2004 were approximately 7.5 percent below prior year. The Company has made a claim under its business interruption insurance policy for the business interruption losses arising from this incident, in an amount preliminarily estimated to be approximately $8.0 million or more. However, due to the terms of the insurance policy, the Company’s ability to recover thereunder, or in any specific amount, is at present uncertain. The Company believes that it also has valid claims for damages for such losses against certain suppliers in its produce supply chain as a result of this incident; however, there can be no assurance that, if the Company does file such claims, it will be successful therein, or in any specific amount. The Company has not recorded any asset nor reduced any expense in anticipation of any potential insurance recovery.

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The following table shows the change from the prior year in same store sales for all restaurants open more than 15 months calculated in local currencies:

Consolidated operating expenses for the quarter ended July 25, 2004 were $79.2 million compared to $72.8 million for the quarter ended July 20, 2003, an increase of $6.4 million or 8.8 percent. The increase is due to a 7.6 percent increase in the average Australian dollar exchange rate that represents $3.1 million of the increase. The remaining increase is due to the addition of two new Pat & Oscar’s^®, one KFC^® restaurant and increased sales volumes from the Company’s international operations. The Company also reported a $1.0 million foreign exchange gain in the first quarter of fiscal year 2004 compared to an immaterial gain in the same quarter of fiscal year 2005. In addition, during the first quarter of fiscal year 2004, the Company received a $0.4 million partial reimbursement of expenses from its insurance carrier related to litigation.

Interest expense was $0.7 million for the quarter ended July 25, 2004 compared to $0.6 million for the quarter ended July 20, 2003, an increase of $0.1 million due to higher debt balances and higher exchange rates. Interest expense includes interest on the Company’s debt with Westpac Banking Corporation in Australia (“Westpac”) and financings from GE Capital. Investment income was $0.1 million in the current quarter compared to $0.1 million in the same period of the prior year.

In the first quarter of fiscal year 2005, the AMG group exercised options to purchase 19.0 percent of the Company’s subsidiary, Collins Food Group (“CFG”). Minority interest of $0.4 million primarily represents their share the CFG’s net earnings (see Note 9 – Minority Interest and Australia Management Transaction, to the Condensed

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Consolidated Financial Statements). In addition, an immaterial amount of minority interest represents the portion of the Company’s net earnings or losses that are attributable to the market or operating partnership equity interests of those minority shareholders in the Company’s subsidiary, Pat & Oscar’s. Pat & Oscar’s has a partnership equity plan under which it may enter into partnership agreements with its regional managers or general managers. As of July 25, 2004, Pat & Oscar’s had three market partnership agreements with three regional managers covering 23 restaurants. There was one operating partnership agreement with one restaurant general manager.

The provision for income taxes has been computed based on management’s estimate of the annual effective income tax rate applied to income before taxes and was $1.2 million in the current quarter compared to $1.1 million in the same period of the prior year, an increase of $0.1 million. The effective tax rate increased to 53.0 percent from 23.1 percent compared to same period of the prior year. The increase is primarily due to higher income from the Company’s international division which does not benefit from the domestic net operating loss carryforward as well as operating losses in the United States for which an income tax benefit was not recorded.

DOMESTIC SIZZLER OPERATIONS

Total revenues for the quarter ended July 25, 2004 were $22.0 million compared to $24.1 million for the quarter ended July 20, 2003, a decrease of $2.1 million or 8.8 percent. Restaurant sales for the current quarter were $20.3 million compared to $22.4 million in the same period of the prior year. The restaurant sales decrease is primarily due to a reduction of Company-owned locations when compared to the prior year and a 2.2 percent decrease same store sales driven in part by higher consumer gas prices. The Company has several initiatives in place to increase sales including television marketing programs, new menu items and a new customer feedback system. There were 54 Company-operated Sizzler^® restaurants as of July 25, 2004 and 61 as of July 20, 2003. Since the first quarter of last year, the Company opened one new restaurant, closed two locations due to unprofitable operations and sold six locations to franchisees. From time to time, the Company may sell Company-operated restaurants to its franchisees or third parties, acquire restaurants from its franchisees, close existing restaurants or open new restaurants in accordance with the Company’s strategic objectives.

Franchise revenue was $1.7 million in the current quarter compared to $1.7 million in the same period of the prior year. Franchise revenues were produced by 189 franchised Sizzler^® restaurants, including 15 in Latin America as of July 25, 2004 compared to 183 franchised Sizzler^® restaurants, including 14 in Latin America as of July 20, 2003. Since the first quarter of last year, five new franchise locations opened, six Company-owned locations were sold to franchisees and five locations were closed.

Prime costs were $13.2 million in the current quarter compared to $14.2 million in the same period of the prior year. Prime costs, which include food and labor, increased to 64.9 percent of net restaurant sales compared to 63.2 percent in the same period of the prior year. The increase in the prime cost percentage is primarily a result of higher labor

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costs due to higher hourly wages and higher health and workers’ compensation insurance costs. Food costs were also up due to increased commodity prices for beef, pork, chicken and cheese.

Other operating expenses were $5.5 million for the current quarter compared to $5.9 million for the same period of the prior year, a decrease of $0.4 million or 5.9 percent. This decrease is primarily due to lower operating costs associated with operating fewer restaurants.

Management is continuing to implement its plan to enhance the Sizzler^® concept as an affordable, quick-casual dining concept offering a selection of grilled steak, chicken, seafood, pastas, sandwiches and specialty “Sizzling” platters as well as a salad bar with a selection of fresh fruit, soups and appetizers served in a casual dining environment at prices that are a good value. As part of the enhancement, the Company is continuing to test and implement various new entreès, side-dishes and re-designed menu boards that are accompanied by new marketing programs.

The Company is also implementing a remodel program that includes an exterior upgrade featuring a stone portico, awnings and additional lighting. The new interior remodel features softer yellow and golden wood-tone finishes, contemporary lighting and a more open floor plan, cook line and order area. The Company has completed two remodels in first quarter of fiscal year 2005 and 15 remodels since the program started. The Company is currently evaluating the remodel results and may complete up to 20 additional remodels during the remainder of fiscal year 2005.

During fiscal year 2004, the Company reached a strategic decision to grow the Sizzler^® brand in the United States through franchising. As part of this initiative the Company identified ten Company-owned locations in California that it plans to transition to existing or new franchisees. The Company is continuing to execute its plan to transition eight New York area restaurants to existing or new franchisees, or to third parties and expects this transition to be completed by the end of the second quarter of fiscal year 2005.

PAT & OSCAR’S OPERATIONS

Pat & Oscar’s revenues were $11.9 million for the quarter ended July 25, 2004 compared to $12.8 million in the same period of the prior year, a decrease of $0.9 million or 7.4 percent. Sales reflect 23 restaurants operating during the current quarter compared to 21 restaurants in the same period of the prior year. The decrease in revenues is primarily due to an E.coli incident that occurred in the last week of the second quarter of fiscal year 2004 and resulted in a decrease of 12.1 percent in same store sales for the quarter ended July 25, 2004 (see Notes 7 and 10, to the Condensed Consolidated Financial Statements.) The Company has several initiatives underway that are designed to increase brand awareness of the Pat & Oscar’s concept in new markets. The initiatives include continuing the television marketing campaign that commenced in fiscal year 2004 for restaurants in San Diego, launching a new public relations campaign designed to give the concept a broader public exposure, along with local marketing programs and catering sales initiatives in all markets.

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Prime costs were $7.5 million in the current quarter compared to $7.3 million in the same period of the prior year. Prime costs, which include food and labor, increased to 63.6 percent of net sales compared to 57.0 percent in the same period of the prior year. The increase in the prime cost percentage is due to higher food costs primarily associated with commodity price increases for cheese, ribs and chicken. Labor costs were also up due to the impact of fixed labor on a lower sales base following the E.coli incident, as well as on lower sales volumes at the Company’s Los Angeles locations, and higher workers’ compensation and health insurance costs.

Other operating expenses amounted to $3.8 million for the current quarter compared to $3.3 million for the same period in the prior year, an increase of $0.5 million or 14.1 percent primarily due to new restaurant openings and marketing costs associated with the television campaign in San Diego.

The Company opened one new restaurant in Ventura County during the first quarter of fiscal year 2005 and plans to open up to two additional locations during the remainder of fiscal year 2005 and will focus its expansion in Southern California with emphasis outside of San Diego County.

INTERNATIONAL SIZZLER OPERATIONS

Total revenues for the quarter ended July 25, 2004 were $12.8 million compared to $11.1 million for the quarter ended July 20, 2003, an increase of $1.7 million or 15.8 percent. This increase was driven by an 8.0 percent increase in same store sales for company-owned restaurants and a 7.6 percent increase in the average Australian dollar exchange rate. The increase in same store sales is due to increased customer counts associated with successful marketing promotions and a higher average guest check due in part to a price increase. Restaurant sales for the current quarter were $12.5 million compared to $10.8 million in the same period of the prior year, produced by 29 restaurants operating during the current quarter and comparable prior year quarter. Franchise revenues remained unchanged at $0.3 million. Franchise revenues were produced by two joint venture restaurants and 38 international franchised Sizzler^® locations, compared to two joint venture restaurants and 43 international franchised locations in the same period of the prior year. Since the first quarter of last year, the Company opened one franchise location and closed six franchise locations. International franchised restaurants are located in Japan, Taiwan, Thailand, South Korea and Singapore.

Prime costs were $8.2 million in the current quarter compared to $7.1 million in the same period of the prior year. Prime costs, which include food, paper and labor, decreased to 66.1 percent of sales compared to 66.4 percent in the same period of the prior year. Prime costs as a percent of sales decreased due to lower labor cost associated with increased productivity, resulting from higher sales and guest counts. Prime costs as a percent of sales were also lower due to menu price increases implemented since the first quarter of fiscal year 2004 that passed on to customers wage and certain commodity price increases. These decreases were partially offset by

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higher food costs associated with higher protein value meals and certain commodity price increases.

Other operating expenses were $2.9 million for the current quarter compared to $2.6 million for the same period of the prior year, an increase of $0.3 million or 14.0 percent primarily due to a higher average Australian dollar exchange rate and to costs necessary to support increased sales levels.

Management is continuing to reposition the Sizzler^® concept in Australia by implementing the upgraded food quality and cooking methods consistent with those implemented in the Company’s domestic operations. The Company is presently testing an interior remodel that provides a softer, warmer grill concept feel. During the current fiscal year, the Company completed five remodels. The Company plans to complete remodels for six additional restaurants and relocate one restaurant in fiscal year 2005.

KFC OPERATIONS

Revenues for the quarter ended July 25, 2004 were $35.2 million compared to $29.8 million for the quarter ended July 20, 2003, an increase of $5.4 million or 18.3 percent. This increase is due to a 7.7 percent increase in same store sales, one additional restaurant and a 7.6 percent increase in the average Australian dollar exchange rate. The same store sales increase was driven by successful marketing promotions featuring various snacks combined with family value offerings. The increase is also attributed to an increase in the average guest check due to menu price increases and customer trade-ups to large value meals. Sales reflect 112 restaurants operating during the current quarter compared to 111 restaurants in the same period of the prior year.

Prime costs were $20.3 million in the current quarter compared to $17.4 million in the same period of the prior year. Prime costs, which include food, paper and labor, decreased to 57.5 percent of sales compared to 58.6 percent for the same period of the prior year. The prime cost percent of sales decreased due to lower labor costs as a percent of sales, resulting from increased productivity due to higher sales. Food costs percentage also decreased due to menu price increases and lower kids meal premium costs.

Other operating expenses were $8.1 million for the current quarter compared to $6.9 million for the same period of the prior year, an increase of $1.2 million or 16.3 percent. The increase was primarily due to a higher average Australian dollar exchange rate, cost associated with operating an additional restaurant and costs necessary to support the increased sales levels.

Management is continuing its facilities upgrade program. During the current quarter, the Company completed two remodels. The Company plans to remodel eight additional restaurants, scrape and rebuild one restaurant and relocated one restaurant during the remainder of fiscal year 2005.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management believes that the critical accounting policies discussed in Item 7 of the Company’s Annual Report on Form 10-K for the year ended April 30, 2004, remain appropriate.

CONTRACTUAL OBLIGATIONS

Management believes that there have not been any material changes to the Company’s contractual obligations since those disclosed on the Company’s Annual Report on Form 10-K for the year ended April 30, 2004.

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LIQUIDITY AND CAPITAL RESOURCES

Working Capital

The Company’s principal source of liquidity is cash flows from operations, which was $2.8 million for the first quarter of fiscal year 2005 compared to $1.0 million for the same period of the prior year. The increase is due to a net decrease in cash used by operating assets and liabilities of $3.3 million, partially offset by a decrease in net income adjusted for depreciation and amortization expense and other non-cash items of $1.5 million.

The Company’s working capital at July 25, 2004 was $2.7 million including cash, cash equivalents and restricted cash totaling $29.3 million, of which $11.9 million was held by the Company’s International division. In addition, the Company self-insures a significant portion of its workers’ compensation, general liability and health insurance plans. The workers’ compensation and general liability insurance policies require the Company to set aside cash reserves sufficient to fund existing and estimated future claims. As of July 25, 2004, the Company has letters of credit totaling $5.0 million for this purpose, which are supported by a corresponding amount of restricted cash. In addition, the Company has restricted cash related to employee benefits and cash collateral for a letter of credit with a bank. At April 30, 2004, the Company had working capital of $1.1 million. The increase in working capital is primarily due to cash provided by operations partially offset by funds expended for remodel programs and new restaurants. The current ratio was 1.1 at July 25, 2004 and 1.0 at April 30, 2004.

Based on current operations and anticipated sales and franchise growth, management believes that cash flow from operations will be sufficient to meet all of the Company’s current debt service requirements, capital expenditure requirements and working capital needs. The Company is also pursuing additional sources of capital for the expansion of Pat & Oscar’s. Changes in operating plans, changes in expansion plans, lower than anticipated sales, increased expenses, non-compliance with debt covenants, further economic deterioration or other events such as continued sales softness at Pat & Oscar’s from the E.coli incident may cause the Company to seek additional financing sooner than anticipated. Additional financing may not be available on acceptable terms, or at all. Failure to obtain additional financing as needed could have a material adverse effect on the Company’s business, financial position and results of operations.

Capital Expenditures

Capital expenditures were $3.9 million for the quarter ended July 25, 2004 which included $0.9 million used for development of new restaurants and 3.0 million for remodels and improvements of existing restaurants and improvements across all divisions.

During the remainder of fiscal year 2005, the Company plans to expand its international operations through additional investment in Company-owned restaurants. The

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Company intends to commence the scrape and rebuild of one KFC^® restaurant at a cost of approximately $0.5 million, relocate one KFC restaurant at a cost of approximately $0.3 million, remodel eight KFC^® restaurants at a cost of approximately $0.4 million each, remodel six Sizzler^® Australia restaurants at a cost of approximately $0.1 million each and relocate one Sizzler^® Australia restaurant at a cost of approximately $1.1 million. The Company’s domestic operations will primarily be expanded by additional development of U.S. Sizzler franchise operations that do not require the Company’s capital and by growing the Pat & Oscar’s concept through new restaurants. Presently, the Company expects to add two additional Pat & Oscar’s^® locations during the remainder of fiscal year 2005 at a cost of approximately $1.6 million to $2.0 million per location, net of landlord contributions. In addition, the Company may complete up to 20 additional Sizzler^® remodels at a cost ranging from $0.1 million to $0.2 million each during the remainder of fiscal year 2005.

The Company estimates that total capital expenditures in fiscal year 2005 will be approximately $23.5 million and relate principally to the projects described in the preceding paragraph. The Company plans to fund this requirement with existing cash and cash flow from operations and may also utilize lease financing to support its expansion activities.

Debt

The Company has a credit facility (“Credit Facility”) with Westpac Banking Corporation in Australia (“Westpac”). The Credit Facility is subject to certain financial covenants and restrictions such as interest coverage ratios, profitability ratios and others which management believes are customary for a loan of this type. The maximum principal commitment under the Credit Facility is $28.6 million ($40.0 million in Australian dollars) and was drawn down in full in fiscal year 2004. The debt is collateralized by the Company’s Australian subsidiaries’ assets, undertakings, intellectual property, unlimited cross-guarantees and certain negative pledge agreements. The Credit Facility provides for a five-year term expiring July 31, 2008 at an interest rate equal to the Australia inter-bank borrowing bid rate (5.5 percent at July 25, 2004), plus a 2.3 percent margin. At July 25, 2004, the Company’s unpaid principal balance on the Credit Facility was approximately $19.4 million ($27.1 million in Australian dollars).

In addition, the Company has a $10.0 million, seven-year term loan expiring in 2008 with GE Capital that is amortized based on 15 years, with fixed interest rates ranging from 8.7 to 9.7 percent. Under the terms of the agreement, the Company has borrowed the maximum amount permissible. A portion of the Company’s real estate and personal property in the U.S. as well as a letter of credit in the amount of $0.7 million are collateral for the loan. The agreement is subject to certain financial covenants and restrictions such as a fixed charge coverage ratio, minimum EBITDA and others which management believes are customary for loans of this type. At July 25, 2004, the Company’s unpaid principal balance was approximately $8.9 million.

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The Company also has a $0.1 million, variable interest term loan with Bank of America that matures in fiscal year 2007. The loan interest rate was 5.0 percent over the past 12 months.

The Company is in compliance with all debt covenants and restrictions as of July 25, 2004 and expects to be in compliance for the foreseeable future.

Australian Management Options

Under the Company’s stock option plan for its Australian Management Group (“AMG”), certain employees were granted options to purchase up to 4.1 million shares, representing a diluted 19.4 percent interest, in Collins Food Group (“CFG”), the Company’s Australian subsidiary managing the Sizzler^® and KFC^® restaurants in Australia. The exercise price of the options ranged from Australian $1.00 (U.S. $0.72 at July 25, 2004) to Australian $4.41 (U.S. $3.15 at July 25, 2004), the estimated fair value of the shares on the grant dates.

In accordance with the Company’s stock option plan for AMG, at the end of the fiscal quarter ended July 25, 2004, 4,064,000 options representing 19.0 percent of common stock of CFG were exercised by the AMG. In addition, a retention bonus aggregating $1.4 million Australian (U.S. $1.0 million at July 25, 2004), which could only be applied to the exercise price of the options was paid to the AMG. An additional, 23,000 were exercised subsequent to the end of the quarter and 49,000 expired on August 20, 2004. Net income for the first fiscal quarter ended July 25, 2004 reflects minority interest of $445,000 and during the remainder of fiscal year 2005, net income from the Company’s CFG operations will be reduced to reflect a minority interest of approximately 19.1 percent.

The CFG options were considered in the computation of diluted earnings per share. See Note 6 – Earnings Per Share, to the Condensed Consolidated Financial Statements.

The AMG shareholder’s agreement includes a put option whereby the AMG members may sell their CFG shares back to the Company at fair market value on a cumulative basis at the rate of 1/6^th of the shares per year commencing six months plus one day after the shares are acquired. The agreement further provides that the AMG members may sell or transfer their shares of CFG among themselves, subject to a first right of refusal, held by WRC, to purchase 1/3^rd of any such shares traded. In addition, WRC will have the right to buy the AMG shares from any terminated AMG member. In accordance with Emerging Issues Task Force (“EITF”) D-98, “Classification and Measurement of Redeemable Securities,” the Company has classified the CFG minority interest outside of stockholders’ equity at their fair value as of the balance sheet date. The fair market value of CFG shares on July 25, 2004 was Australian $6.31 (U.S. $4.51 at July 25, 2004). The difference between the fair value of the minority interest over its carrying value of $13.2 million is reflected as a reduction of additional paid-in capital.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the following market risks: interest rate risk, foreign currency exchange rate risk and commodity price risk. Management believes that the market risk associated with our market risk sensitive instruments as of July 25, 2004 is the same as described Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2004, except as follows:

Interest rate risk

The Company has a credit facility (“Credit Facility”) with Westpac Banking Corporation in Australia (“Westpac”). The Credit Facility is subject to certain financial covenants and restrictions such as interest coverage ratios, profitability ratios and others which management believes are customary for a loan of this type. The maximum principal commitment under the Credit Facility is $28.6 million ($40.0 million in Australian dollars) and was drawn down in full in fiscal year 2004. The debt is collateralized by the Company’s Australian subsidiaries’ assets, undertakings, intellectual property, unlimited cross-guarantees and certain negative pledge agreements. The Credit Facility provides for a five-year term expiring July 31, 2008 at an interest rate equal to the Australia inter-bank borrowing bid rate (5.5 percent at July 25, 2004), plus a 2.3 percent margin. At July 25, 2004 the Company’s unpaid principal balance on the Credit Facility was approximately $19.4 million ($27.1 million in Australian dollars).

To hedge the Company’s exposure to interest rate increases on this loan, the Company is party to an interest rate cap contract that prevents the Company’s interest rate (excluding margin) from exceeding 5.7 percent, in which case the Company would receive the difference between the contract rate and the actual interest rate. At July 25, 2004, the interest rate cap covered approximately 23.3 percent of the facility principal outstanding and expires on January 1, 2006.

In addition, the Company is party to an interest rate swap contract to convert part of its variable interest exposure to a fixed rate of 5.7 percent (excluding margin). At July 25, 2004, the interest rate swap contract covered approximately 23.3 percent of the facility principal outstanding and expires on January 1, 2006.

The Company calculated that a hypothetical 10.0 percent change in interest rates, as defined above, in the near-term would change interest expense by $0.1 million.

Foreign Currency Exchange Rate Risk

The Company’s foreign currency exchange rate risk primarily relates to its investment in its Australian operations whereby changes in the exchange rate impact the Company’s net investment. The Company has mitigated the risk through a bank loan payable in Australian dollars, which reduces the Company’s exposure by decreasing its net investment.

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ITEM 4: CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision of the Company’s management, including the Company’s Chief Financial Officer and the Company’s President and Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Company’s President and Chief Executive Officer and its Chief Financial Officer concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document may constitute forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such statements are based upon information, expectations, estimates, and projections regarding the Company, and the industry and markets in which the Company operates, and management’s assumptions and beliefs relating thereto. Words such as “will,” “plan,” “expect,” “remain,” “intend,” “estimate,” “approximate,” variations thereof, and similar expressions are intended to identify such statements as forward-looking statements. These statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict or verify. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such forward-looking statements. These statements may include, but are not limited to, statements regarding: (a) the continuing of the repositioning program to a quick casual concept to enhance the Sizzler^® brand in the U.S.; (b) the possible remodel of up to 20 U.S. Sizzler^® locations in the remainder of fiscal year 2005; (c) the continuing of the repositioning of the Sizzler^® concept in Australia by implementation of upgraded food quality and cooking methods and provision of better service; (d) the plan to open up to two new Pat & Oscar’s^® locations in the remainder of fiscal year 2005; (e) the plan to continue testing an interior remodel program for Sizzler^® locations in Australia and the possible remodel of six Sizzler^® restaurants in Australia in the remainder of fiscal year 2005 and relocate one restaurant in fiscal year 2005; (f) the continuation of the KFC^® scrape and rebuild program at one location, the planned completion of KFC^® remodels at eight locations

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and planned relocation of one restaurant during the remainder of fiscal year 2005; (g) the absence of a material adverse impact on the Company or its financial position, results of operations or cash flows from any of the legal and/or other contingencies reported herein; (h) the absence of a long-term material adverse impact on the Company’s financial position, results of operations or cash flows arising from the San Diego area E.coli incident; (i) the sufficiency of the Company’s cash flow from operations to meet its debt service and working capital requirements; (j) estimates of the Company future capital expenditures and whether any future borrowings will be required; (k) the plan to franchise ten California and franchise or sell up to eight New York area Sizzler^® locations now owned by the Company.

The Company cautions that these statements are qualified by important factors that could cause results to differ materially from those reflected in the forward-looking statements contained herein. Such factors include, but are not limited to: (a) the extent to which the Company continues to consider new U.S. Sizzler^® marketing and menu programs to be a successful means of repositioning the concept to quick casual while increasing sales and improving customer service; (b) the sufficiency of cash or capital to fund the U.S. Sizzler^® remodel program, open the forecasted number of new Pat & Oscar’s^® locations, continue the repositioning of the Australian Sizzler^® concept, continue the facilities upgrade of KFC^® locations, and fund the Australian Sizzler^® and KFC^® remodels and scrape and rebuilds; (c) the ability of Pat & Oscar’s to acquire a sufficient number of suitable sites to open the forecasted number of new restaurants; (d) the Company’s ability to resolve successfully the legal and other contingencies reported herein; (e) Pat & Oscar’s ability to reverse the sale declines in its Pat & Oscar’s^® restaurants attributable to the San Diego area E.coli incident; (f) the Company’s ability to recover for any lost business income under its insurance coverage for food borne illness or from its suppliers; (g) the Company’s ability to manage effectively its costs and expenses and meet all of its debt service requirements and working capital needs; (h) the ability of the Company to successfully complete the California and New York area Sizzler^® franchising program; and (i) other risks and factors 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. Readers should take these factors into account in evaluating any such forward-looking statements. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required to do so by applicable securities laws.

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WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

The Company is a party to certain litigation arising in the ordinary course of business which, in the opinion of management, should not have a material adverse effect upon either the Company’s consolidated financial position or results of operations. The following is a summary of the more significant cases pending against the Company:

Two subsidiaries of the Company were named as defendants in 12 lawsuits arising out of an E.coli incident at two Sizzler^® franchised locations in Milwaukee, Wisconsin in July 2000. The plaintiffs sought monetary damages for sickness, and in one case, death as a result of consuming allegedly contaminated food at the two restaurants. The Company’s former meat supplier, Excel Corporation (“Excel”) and the Company’s former franchisee, E&B Management Company, and E&B Management Company’s principals were named defendants in some of the cases. The Company filed cross-claims against its franchisee and Excel. Approximately 130 claims have been resolved and all but two cases have been settled. On June 19, 2002, the trial court issued an order dismissing all claims against Excel, including those filed by the Company and the plaintiffs. On May 13, 2003, that order was reversed in a unanimous decision by a three-judge panel of the Court of Appeals of the State of Wisconsin, and as a result all claims filed by the Company and the plaintiffs were reinstated. On June 12, 2003, Excel filed a Petition For Review in the Supreme Court of Wisconsin to appeal the decision of the court of appeals. The petition was denied on September 12, 2003. On December 11, 2003, Excel filed a Petition For A Writ Of Certiorari in the United States Supreme Court, which was denied on March 22, 2004. The Company believes that the resolution of all claims associated with the Milwaukee E.coli incident will not have a material adverse impact on the Company’s financial position or results of operations.

On October 3, 2001, upon the petition of the Insurance Commissioner of the Commonwealth of Pennsylvania, Reliance Insurance Company (“Reliance”) was declared insolvent and became subject to Pennsylvania state law liquidation proceedings. Reliance was the Company’s primary general liability and workers’ compensation carrier, during the period May 1, 1997 through May 1, 1999, and was the Company’s first level excess general liability carrier with respect to claims against the Company arising out of the July 2000 E.coli incident in Milwaukee. As a result of the legal proceedings affecting Reliance, the Company’s ability to recover funds under its liability policies with this carrier, whether relating to the Milwaukee incident or otherwise, may be substantially limited. However, based on the amount of its primary general liability coverage under policies with other carriers, as well as anticipated results of the pending litigation in Milwaukee and other claims, the Company does not believe that Reliance’s liquidation proceedings are likely to have a material adverse impact on the Company’s financial position or results of operations.

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On June 1, 2001, The Independent Insurance Co., the Company’s primary general liability insurance carrier in Australia for the period May 1, 2000 through April 30, 2001, commenced liquidation proceedings. Based upon an assessment of the pending and possible future claims which may be filed over a five-year period, the Company’s ability to recover funds under its general liability policies with this carrier may be substantially limited. Nevertheless, the Company does not believe that The Independent Insurance Co.’s liquidation is likely to have a material impact on the Company’s financial position or results of operations.

On October 7, 2003, the Company was notified by various health department officials that Pat & Oscar’s was the focal point of an investigation into a potential outbreak of E.coli at certain of its restaurants. Approximately 45 cases of E.coli were confirmed by the health departments. Pat & Oscar’s has been named as a defendant in four lawsuits filed by patrons who allegedly became ill with E.coli from consuming salad at Pat & Oscar’s^® restaurants in San Diego and Orange Counties. The lawsuits, one of which was filed as a class action, also name Pat & Oscar’s produce distributor, F.T. Produce, Inc. (“Family Tree”) and Gold Coast Produce (“Gold Coast”), the processor of lettuce supplied to Pat & Oscar’s^® restaurants. Family Tree’s insurance company has accepted tender of the Company’s defense pursuant to an insurance certificate issued by Family Tree’s insurance company naming the Company and Pat & Oscar’s as additional insureds. The Company does not believe that the resolution of this case or the claims of any other individuals who became ill as a result of the alleged E.coli incident at Pat & Oscar’s will have any material impact on the Company’s financial position or results of operations. (See Note 10 - E.coli Incident, to the Condensed Consolidated Financial Statements).

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ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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