Preliminary Valuation Data
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[TUCKER ANTHONY SUTRO LOGO] 1
Summary Annual Income Statements
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(Amounts in thousands)
December 31, Pro Forma December 31,
OPERATING SUMMARY 1998 1999 2000 2000 2001 2002 2003 2004 2005
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Revenues 19,455 27,908 45,414 45,414 55,579 59,929 67,939 74,676 81,309
Cost of Goods Sold (4,366) (6,207) (8,342) (8,342) (9,198) (9,446) (10,164) (10,707) (11,265)
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Gross Profit 15,089 21,702 37,072 37,072 46,381 50,482 57,775 63,970 70,044
Selling, General & Administrative (13,222) (17,774) (29,890) (29,890) (35,651) (37,125) (40,574) (43,966) (46,793)
Depreciation & Amortization (782) (1,383) (2,085) (2,085) (3,225) (3,531) (3,781) (4,031) (4,265)
Other Income/(Expense) 0 903 (871) (871) (779) (1,321) (1,458) (1,579) (1,738)
Canada Investment (net) 0 0 0 0 0 500 500 800 1,100
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EBIT $1,085 $3,447 $4,227 $4,227 $6,726 $9,006 $12,462 $15,194 $18,347
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Amortization $258 $456 $600 $600 $683 $683 $683 $683 $683
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EBITA $1,343 $3,904 $4,827 $4,827 $7,409 $9,689 $13,145 $15,877 $19,031
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Depreciation 524 927 1,485 1,485 2,542 2,848 3,098 3,348 3,582
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EBITDA $1,867 $4,830 $6,311 $6,311 $9,951 $12,537 $16,243 $19,225 $22,613
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Interest Expense
Interest Expense, Net (341) (708) (2,052) (3,373) (3,373) (3,108) (2,914) (2,481) (2,173)
Other Income/(Expense) 0 0 (4,002) (4,002) 0 0 0 0 0
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Income before Income Taxes 744 2,739 (1,827) (3,148) 3,353 5,898 9,548 12,713 16,174
Provision for Income Taxes 369 (948) 672 1,319 (1,410) (2,428) (4,158) (5,423) (6,808)
Net Income $1,113 $1,791 ($1,155) ($1,829) $1,944 $3,470 $5,391 $7,289 $9,366
Based upon Management's quarterly projections as of May 17, 2001
Includes SAR expenses totaling $14 million during the forecast period and a
gross up of Rick Schaden's salary of $300,000 per year
[TUCKER ANTHONY SUTRO LOGO] 2
Summary Quarterly Income Statements
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Projected Quarterly Performance *
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(Amounts in $000) Quarters Ending
12/31/00 3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 12/31/02
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Revenues $12,380 $13,261 $13,515 $14,206 $14,598 $14,266 $14,726 $15,204 $15,733
EBIT $873 $1,617 $1,803 $1,694 $1,694 $2,284 $2,663 $2,295 $2,279
EBITDA $1,425 $2,373 $2,595 $2,481 $2,502 $2,733 $3,123 $3,517 $3,165
Net Income ($2,082) $361 $554 $491 $497 $667 $898 $1,148 $922
* Quarterly numbers taken directly from Management Projections; December 31,
2000 net income includes "unusual" expenses
[TUCKER ANTHONY SUTRO LOGO] 3
Preliminary Summary Valuation
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Per Share
Method Value Range
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Comparable Transaction Analysis $7.00 - $8.75
Comparable Public Company Analysis $6.50 - $8.75
Financial Buyer Analysis $7.25 - $8.00
Theoretical Future Trading Prices $7.75 - $8.75
Discounted Cash Flow Analysis $12.80 - $16.00
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Preliminary Tucker Anthony Sutro Capital Markets Estimate $7.75 - $8.75
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[TUCKER ANTHONY SUTRO LOGO] 4
Analysis Using Different Weightings for Valuation Methodologies
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Equal Weighting Valuation Analysis
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Per Share
Method Value Range Weighting Valuation Range
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Comparable Transaction Analysis $7.00 - $8.75 20.0% $1.40 - $1.75
Comparable Public Company Analysis $6.50 - $8.75 20.0% $1.30 - $1.75
Financial Buyer Analysis $7.25 - $8.00 20.0% $1.45 - $1.60
Theoretical Future Trading Prices $7.75 - $8.75 20.0% $1.55 - $1.75
Discounted Cash Flow Analysis $12.80 - $16.00 20.0% $2.56 - $3.20
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Tucker Anthony Sutro Capital Markets Estimate $7.75 - $8.75 $8.26 - $10.05
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"Market Oriented" Valuation Analysis
Per Share
Method Value Range Weighting Valuation Range
Comparable Transaction Analysis $7.00 - $8.75 30.0% $2.10 - $2.63
Comparable Public Company Analysis $6.50 - $8.75 25.0% $1.63 - $2.19
Financial Buyer Analysis $7.25 - $8.00 30.0% $2.18 - $2.40
Theoretical Future Trading Prices $7.75 - $8.75 7.5% $0.58 - $0.66
Discounted Cash Flow Analysis $12.80 - $16.00 7.5% $0.96 - $1.20
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Tucker Anthony Sutro Capital Markets Estimate $7.75 - $8.75 $7.44 - $9.07
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[TUCKER ANTHONY SUTRO LOGO] 5
Multiples Analysis - Stock Price Matrix
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($000, except price per share)
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Stock Price
Share price $7.75 $8.00 $8.25 $8.50 $8.75 $9.00
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"Fully-Diluted" Shares outstanding at 4/30/01 3,072 3,072 3,072 3,072 3,072 3,072
Market Value of Equity $23,810 $24,578 $25,346 $26,114 $26,882 $27,650
Net Debt as of 3/31/01 21,008 21,008 21,008 21,008 21,008 21,008
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Enterprise Value $44,818 $45,586 $46,354 $47,122 $47,890 $48,658
===============================================================
Quizno's Results - LTM as of
Revenues - 3/31/01 $48,979 0.92x 0.93x 0.95x 0.96x 0.98x 0.99x
Revenues - 6/30/01 $51,220 0.88x 0.89x 0.90x 0.92x 0.93x 0.95x
Revenue - 12/31/01 $55,579 0.81x 0.82x 0.83x 0.85x 0.86x 0.88x
EBITDA - 3/31/01 $7,594 5.9x 6.0x 6.1x 6.2x 6.3x 6.4x
EBITDA - 6/30/01 $8,647 5.2x 5.3x 5.4x 5.4x 5.5x 5.6x
EBIT - 3/31/01 $5,196 8.6x 8.8x 8.9x 9.1x 9.2x 9.4x
EBIT - 6/30/01 $5,934 7.6x 7.7x 7.8x 7.9x 8.1x 8.2x
Net Income - 12/31/01 (2) $2,012 11.8x 12.2x 12.6x 13.0x 13.4x 13.7x
(1) Fully diluted shares outstanding is based upon treasury method and assumes
all preferred stock (except D) is converted
(2) Pre-tax income taxed at a normalized 40%
[TUCKER ANTHONY SUTRO LOGO] 6
Trading Multiples Analysis - 10/31/00 vs. 4/04/01 vs. 5/04/01
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($ in thousands) October 31, 2000 April 4, 2001
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QUIZ Median QUIZ Median
Multiple Multiple Adjusted Range(1) Multiple Multiple Adjusted Range(1)
-------- -------- ----------------- -------- -------- -----------------
Small Cap Peer Group
LTM Sales 0.81x 0.36x 0.17x - 0.47x 0.86x 0.48x 0.21x - 0.53x
LTM EBIT 7.4x 6.9x 4.1x - 9.8x 9.2x 7.9x 7.0x - 8.8x
LTM EBITDA 5.1x 3.6x 2.9x - 4.3x 6.2x 4.8x 4.8x - 4.9x
LTM Net Income 16.1x 12.0x 6.5x - 12.3x 18.6x 10.8x 10.1x - 11.4x
Calendar 2001 Sales 0.65x NA NA - NA 0.71x 1.02x NA - NA
Calendar 2001 Net Income 8.7x 3.9x NA - NA 7.3x NA NA - NA
Large Cap Peer Group
LTM Sales 1.19x 0.55x - 2.23x 1.18x 0.70x - 1.96x
LTM EBIT 8.4x 6.2x - 8.9x 8.5x 7.1x - 12.8x
LTM EBITDA 6.4x 4.1x - 9.4x 6.1x 5.1x - 9.9x
LTM Net Income 13.3x 7.8x - 31.0x 13.7x 11.1x - 16.3x
Calendar 2001 Sales 1.06x 0.95x - 1.13x 1.10x 0.68x - 1.33x
Calendar 2001 Net Income 11.2x 9.3x - 14.4x 12.0x 10.9x - 17.9x
($ in thousands) May 4, 2001
-----------------------------------------
QUIZ Median
Multiple Multiple Adjusted Range(1)
-------- -------- -----------------
Small Cap Peer Group
LTM Sales 0.85x 0.50x 0.23x - 0.53x
LTM EBIT 9.2x 7.9x 7.0x - 9.8x
LTM EBITDA 6.1x 5.0x 3.5x - 5.0x
LTM Net Income 18.3x 13.2x 11.9x - 16.0x
Calendar 2001 Sales 0.71x 1.07x NA - NA
Calendar 2001 Net Income 7.3x NA NA - NA
Large Cap Peer Group
LTM Sales 1.21x 0.85x - 2.07x
LTM EBIT 9.0x 8.1x - 12.9x
LTM EBITDA 6.9x 5.7x - 14.7x
LTM Net Income 15.1x 11.7x - 17.6x
Calendar 2001 Sales 1.22x 0.75x - 1.51x
Calendar 2001 Net Income 14.4x 11.2x - 18.3x
(1) Excludes highest two and lowest two values, unless five or fewer data points
o The median trading multiples for the small cap peer group have increased
since October 31, 2000 (reflecting takeover speculation), while the change
in median multiples for the large cap peer group is more mixed
o Quizno's continues to trade at premiums to the trading multiples for the
small cap group despite the expansion in multiples
[TUCKER ANTHONY SUTRO LOGO] 7
Comparable Publicly Traded Company Analysis
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(Amounts in 000's)
Quizno's Results-LTM as of Valuation Multiple Range Enterprise Value Net Debt(1) Equity Value Price per Share(2)
Revenues - 3/31/01 $48,979 0.50x - 1.00x $24,490 - $48,979 $21,008 n.m. - $27,971 n.m. - $9.10
Revenues - 6/30/01 $51,220 0.50x - 0.93x $25,610 - $47,378 $21,008 $4,602 - $26,370 n.m. - $8.58
Revenue - 12/31/01 $55,579 0.50x - 0.85x $27,790 - $47,242 $21,008 $6,782 - $26,234 n.m. - $8.54
EBITDA - 3/31/01 $7,594 5.0x - 6.5x $37,972 - $49,364 $21,008 $16,964 - $28,356 $5.52 - $9.23
EBITDA - 6/30/01 $8,647 4.7x - 5.8x $40,643 - $50,155 $21,008 $19,635 - $29,147 $6.39 - $9.49
EBIT - 3/31/01 $5,196 7.0x - 9.2x $36,370 - $47,801 $21,008 $15,362 - $26,793 $5.00 - $8.72
EBIT - 6/30/01 $5,934 6.5x - 8.0x $38,569 - $47,470 $21,008 $17,561 - $26,462 $5.72 - $8.61
Net Income - 12/31/01(3) $2,012 9.0x - 12.0x $39,116 - $45,152 $21,008 $18,108 - $24,144 $5.89 - $7.86
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Tucker Anthony Sutro Capital Markets Estimate $6.50 $8.75
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(1) Net debt as of March 31, 2001
(2) Based upon fully diluted shares outstanding of 3.1 million as of April 30,
2001
(3) Pre-tax income taxed at a normalized 40%
[TUCKER ANTHONY SUTRO LOGO] 8
Trading Multiples for Selected Comparable Companies
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($ in millions, except per share amounts)
Enterprise Value Multiples
5/4/01 Market --------------------------------
Stock Common Value of Enterprise Calendar LTM LTM LTM
Company Ticker Price Shares (1) Equity(2) Value (3) 2001 Sales Sales EBITDA EBIT LTM
Comparable Companies Market Cap < $125 million
Blimpie International,Inc BLM $1.50 9.2 $13.9 $5.9 NA 0.19x 3.0x 6.5x 18.3x
Checkers Drive-In Rest. CHKR $5.99 9.8 $58.5 $98.6 NA 0.54x 5.0x 9.8x 13.2x
Jerry's Famous Deli, Inc. DELI $4.95 4.7 $23.1 $34.7 NA 0.50x 5.0x 10.4x 16.0x
Pizza Inn, Inc. PZZI $2.07 10.6 $21.9 $34.4 NA 0.53x 5.5x 7.0x 9.0x
Schlotzsky's, Inc. BUNZ $4.44 7.3 $32.6 $64.3 1.07x 1.09x NM NM NEG
Sizzler International SZ $1.48 27.6 $40.9 $56.3 NA 0.23x 3.5x 7.9x 11.9x
Wall Street Deli Inc. WSDI $0.68 2.9 $2.0 $5.2 NA 0.11x NM NM NEG
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Mean: $27.5 $42.8 1.07x 0.46x 4.4x 8.3x 13.7x
Median: $23.1 $34.7 1.07x 0.50x 5.0x 7.9x 13.2x
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Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. APPB $43.50 24.4 $1,060.7 $1,139.9 1.51x 1.61x 7.6x 10.2x 17.1x
Brinker International, Inc. EAT $28.00 99.1 $2,775.3 $2,884.8 1.08x 1.21x 8.9x 12.9x 14.4x
BUCA, Inc. BUCA $21.75 16.1 $351.2 $343.7 1.88x 2.41x 18.1x NM NM
Cheesecake Factory CAKE $37.85 31.5 $1,193.6 $1,150.6 2.11x 2.49x 18.2x NM NM
IHOP Corp. IHP $20.08 20.1 $404.3 $632.5 NA 2.07x 6.8x 8.0x 11.5x
Landry's Seafood Restaur. LNY $15.26 21.5 $328.1 $457.0 0.65x 0.88x 7.0x 14.5x 22.5x
Lone Star Steakhouse STAR $12.70 20.0 $254.3 $225.2 0.37x 0.39x 4.2x 8.8x 17.6x
Outback Steakhouse, Inc. OSI $28.90 76.1 $2,199.6 2,101.5 0.99x 1.07x 6.7x 8.3x 15.9x
P.F. Chang's China Bistro PFCB $37.88 11.7 $443.3 $454.7 1.45x 1.78x 14.7x NM NM
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Papa Johns International PZZA $27.85 22.7 $633.4 $770.0 0.75x 0.80x 6.5x 9.1x 13.7x
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Ruby Tuesday, Inc. RI $18.13 63.2 $1,145.3 $1,149.6 NA 1.45x 9.3x 13.4x 22.5x
Ryan's Family Steak House RYAN $13.70 31.1 $426.1 $614.6 NA 0.85x 5.7x 7.9x 10.4x
TRICON Global Restaurants YUM $41.96 147.1 $6,171.8 $8,462.8 1.22x 1.21x 6.2x 8.1x 11.7x
VICORP Restaurants, Inc. VRES $25.64 6.8 $135.7 $140.3 NA 0.37x 3.5x 5.8x 11.8x
Wendy's International WEN $25.17 114.3 $2,878.0 $2,960.6 1.22x 1.30x 6.9x 9.5x 16.7x
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Mean: $1,360.0 $1,565.9 1.2x 1.33x 8.7x 9.7x 15.5x
Median: $633.4 $770.0 1.2x 1.21x 6.9x 9.0x 15.1x
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Subject Company
Quizno's - 3/31/00 (7) $7.35 2.3 $17.2 $38.2 0.70x 0.78x 5.0x 7.4x 13.5x
Equity Value Multiples
------------------------------------
Calendar P/E Book 3-5 Yr
Company 2001 2002 Value Growth (4) Type (6)
Comparable Companies Market Cap < $125 million
Blimpie International,Inc NEG NA 0.7x NA F
Checkers Drive-In Rest. NA NA 1.1x NA B
Jerry's Famous Deli, Inc. NA NA 0.8x NA O
Pizza Inn, Inc. NA NA NM NA F
Schlotzsky's, Inc. NA NA 0.4x 12.0% B
Sizzler International NA NA 0.8x NA B
Wall Street Deli Inc. NA NA 0.3x NA O
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Mean: - - 0.7x 12.0%
Median: - - 0.8x 12.0%
--------------------------------------------
Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. 15.9x 13.7x 3.8x 15.1% B
Brinker International, Inc. 18.5x NA 3.4x NA B
BUCA, Inc. 28.6x 22.0x 3.4x 34.4% O
Cheesecake Factory NM 25.9x 4.8x 25.5% O
IHOP Corp. 10.5x 9.2x 1.5x NA B
Landry's Seafood Restaur. 14.7x 12.9x 0.9x 21.5% O
Lone Star Steakhouse 11.2x NA 0.6x 13.3% O
Outback Steakhouse, Inc. 14.0x 12.2x 2.7x 18.5% B
P.F. Chang's China Bistro NM 24.9x 5.7x 36.4% O
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Papa Johns International 13.9x 13.0x 3.8x NA B
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Ruby Tuesday, Inc. 18.3x NA 4.1x 19.0% O
Ryan's Family Steak House 10.0x 9.4x 1.5x NA B
TRICON Global Restaurants 13.3x 12.1x NEG 15.0% B
VICORP Restaurants, Inc. NA NA 1.0x NA B
Wendy's International 14.7x 13.2x 2.6x 14.9% B
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Mean: 15.3x 15.3x 2.8x 21.3%
Median: 14.4x 13.0x 3.0x 18.7%
--------------------------------------------
Subject Company
Quizno's - 3/31/00 (7) 7.3x 4.0x NEG 22.7% B
Notes:
(1) Latest reported common shares outstanding, in millions.
(2) Market Value of Equity calculated by multiplying current market price by
number of common shares outstanding.
(3) Enterprise Value equals net debt plus market value of equity plus book
value of preferred stock and minority interests.
(4) First Call consensus estimated annual increase in operating earnings over
the next (3-5 years).
(5) 2000 P/E ratio as a percentage of 3-5 year growth rate.
(6) Refers to type of business; F= Franchisor, O= Operator, B= Both
(7) Shares as of 12/31/00 10Q.
* "LTM" or "Latest Twelve Months" represents last four quarters reported.
[TUCKER ANTHONY SUTRO LOGO] 9
Margin Analysis for Selected Comparable Companies
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LTM Margins
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Gross SG&A Net
Company Ticker Profit Expense EBITDA EBIT Income
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Comparable Companies Market Cap <$125 million
Blimpie International,Inc BLM 47.7% 44.8% 6.3% 2.9% 2.3%
Checkers Drive-In Rest. CHKR 21.6% 15.5% 10.8% 5.6% 2.6%
Jerry's Famous Deli, Inc. DELI 60.4% 55.6% 9.9% 4.8% 2.1%
Pizza Inn, Inc. PZZI 14.1% 6.6% 9.6% 7.5% 4.0%
Schlotzsky's, Inc. BUNZ 53.8% 56.7% 3.4% NEG NEG
Sizzler International SZ 34.9% 31.9% 6.6% 3.0% 1.5%
Wall Street Deli Inc. WSDI 4.9% 11.4% NEG NEG NEG
---------------------------------------------------------
Mean: 33.9% 31.8% 7.8% 4.8% 2.5%
Median: 34.9% 31.9% 8.1% 4.8% 2.3%
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Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. APPB 48.3% 32.6% 21.1% 15.8% 9.3%
Brinker International, Inc. EAT 69.3% 59.8% 13.6% 9.4% 5.9%
BUCA, Inc. BUCA 37.6% 29.1% 13.3% 8.5% 5.7%
Cheesecake Factory CAKE 39.5% 28.9% 13.7% 10.5% 7.5%
IHOP Corp. IHP 60.9% 35.2% 30.6% 26.1% 11.7%
Landry's Seafood Restaur. LNY 35.2% 29.2% 12.4% 6.0% 3.1%
Lone Star Steakhouse STAR 59.9% 55.5% 9.4% 4.4% 3.3%
Outback Steakhouse, Inc. OSI 35.5% 22.8% 15.9% 12.9% 7.3%
P.F. Chang's China Bistro PFCB 39.2% 30.3% 12.1% 8.7% 4.4%
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Papa Johns International PZZA 36.0% 27.2% 12.4% 8.8% 5.0%
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Ruby Tuesday, Inc. RI 39.9% 31.6% 15.6% 10.8% 6.6%
Ryan's Family Steak House RYAN 28.7% 18.0% 14.9% 10.7% 5.9%
TRICON Global Restaurants YUM 48.4% 36.3% 19.6% 14.9% 7.6%
VICORP Restaurants, Inc. VRES 38.1% 31.7% 10.7% 6.4% 3.9%
Wendy's International WEN 44.0% 30.3% 18.8% 13.7% 8.1%
---------------------------------------------------------
Mean: 44.0% 33.2% 15.6% 11.2% 6.3%
Median: 39.5% 30.3% 13.7% 10.5% 5.9%
---------------------------------------------------------
Subject Company
Quizno's - 12/31/00 n.m. n.m. 15.5% 10.6% 3.4%
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LTM Leverage Ratios
--------------------------------------------------------
Total Net Net LTM LTM
Debt/ Debt/ Debt/ EBITDA/ Op. Inc./ Return on Return on
Company Ticker Total Cap(1) EBITDA Op. Inc. Int. Exp. Int. Exp. Equity (2) Capital (3)
------------------------------------------------------------------------------------------------------------------------------
Comparable Companies Market Cap <$125 million
Blimpie International,Inc BLM 0.0% NM NM NM NM 3.8% 6.6%
Checkers Drive-In Rest. CHKR 44.5% 2.0x 3.9x 3.3x 1.7x 9.5% 5.1%
Jerry's Famous Deli, Inc. DELI 33.0% 1.6x 3.3x 6.2x 3.0x 5.3% 3.7%
Pizza Inn, Inc. PZZI 100.1% 2.0x 2.6x 6.6x 5.2x 121.9% 19.9%
Schlotzsky's, Inc. BUNZ 31.6% 15.6x NM NM NM NEG NEG
Sizzler International SZ 49.1% 1.0x 2.1x 8.9x 4.0x 7.2% 5.5%
Wall Street Deli Inc. WSDI 43.0% NM NM NEG NEG NEG NEG
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Mean: 43.0% 4.4x 3.0x 6.3x 3.5x 29.6% 8.2%
Median: 43.0% 2.0x 2.9x 6.4x 3.5x 7.2% 5.5%
-----------------------------------------------------------------------------------------
Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. APPB 25.3% 0.5x 0.7x 19.1x 14.3x 24.6% 18.2%
Brinker International, Inc. EAT 15.7% 0.3x 0.5x 40.7x 28.3x 18.8% 15.0%
BUCA, Inc. BUCA 1.9% NM NM NM NM 9.7% 8.3%
Cheesecake Factory CAKE 0.0% NM NM NM NM 15.9% 16.7%
IHOP Corp. IHP 46.3% 2.4x 2.9x 4.3x 3.7x 14.4% 7.2%
Landry's Seafood Restaur. LNY 31.4% 2.0x 4.1x NM NM 4.3% 3.2%
Lone Star Steakhouse STAR 0.0% NM NM NM NM 4.1% 4.7%
Outback Steakhouse, Inc. OSI 2.3% NM NM NM NM 19.1% 20.2%
P.F. Chang's China Bistro PFCB 18.8% 0.3x 0.5x NM NM 15.8% 12.7%
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Papa Johns International PZZA 48.0% 1.1x 1.6x 16.4x 11.7x 21.0% 15.9%
--------------------------------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. RI 5.5% 0.0x 0.1x NM NM 20.7% 18.2%
Ryan's Family Steak House RYAN 42.4% 1.8x 2.4x 7.5x 5.4x 15.0% 9.0%
TRICON Global Restaurants YUM 126.3% 1.7x 2.2x 7.9x 6.0x NEG 27.0%
VICORP Restaurants, Inc. VRES 7.1% 0.1x 0.2x 53.5x 31.9x 10.9% 10.9%
Wendy's International WEN 20.9% 0.2x 0.3x 27.0x 19.6x 16.8% 15.2%
-----------------------------------------------------------------------------------------
Mean: 26.1% 1.0x 1.4x 22.1x 15.1x 15.1% 13.5%
Median: 18.8% 0.5x 0.7x 17.8x 13.0x 15.8% 15.0%
-----------------------------------------------------------------------------------------
Subject Company
Quizno's - 12/31/00 193.5% 2.8x 4.0x 3.7x 2.5x NEG 11.1%
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Notes:
(1) Total Capital represents net debt plus total shareholders' equity plus
minority interest.
(2) LTM Return on Equity equals LTM net income before non-recurring items
divided by common shareholders' equity.
(3) LTM Return on Invested Capital equals LTM operating income before
non-recurring items divided by total capital.
[TUCKER ANTHONY SUTRO LOGO] 10
Financial Performance for Selected Comparable Companies
--------------------------------------------------------------------------------
($ in millions, except per share amounts)
Fiscal LTM
Year Data Total Cash & Net
Company Ticker End as of Debt Equivalents Debt
Comparable Companies Market Cap < $125 million
Blimpie International,Inc BLM 6/00 12/00 $0.0 $7.9 ($7.9)
Checkers Drive-In Rest. CHKR 12/00 12/00 $40.5 $0.9 $39.6
Jerry's Famous Deli, Inc. DELI 12/00 12/00 $12.9 $1.8 $11.1
Pizza Inn, Inc. PZZI 6/00 12/00 $12.9 $0.4 $12.5
Schlotzsky's, Inc. BUNZ 12/00 12/00 $32.9 $1.2 $31.8
Sizzler International SZ 4/00 1/01 $33.5 $18.1 $15.4
Wall Street Deli Inc. WSDI 6/00 12/00 $3.8 $0.6 $3.2
Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. APPB 12/00 3/01 $91.4 $12.1 $79.3
Brinker International, Inc. EAT 6/00 3/01 $145.2 $35.7 $109.5
BUCA, Inc. BUCA 12/00 3/01 $1.8 $9.2 ($7.4)
Cheesecake Factory CAKE 12/00 3/01 $0.0 $43.0 ($43.0)
IHOP Corp. IHP 12/00 3/01 $230.1 $1.9 $228.1
Landry's Seafood Restaur. LNY 12/00 12/00 $155.1 $26.1 $129.0
Lone Star Steakhouse STAR 12/00 12/00 $0.0 $29.0 ($29.0)
Outback Steakhouse, Inc. OSI 12/00 3/01 $16.6 $131.6 ($115.0)
P.F. Chang's China Bistro PFCB 12/00 3/01 $16.7 $6.4 $10.3
----------------------------------------------------------------------------------
Papa Johns International PZZA 12/00 3/01 $145.1 $8.4 $136.7
----------------------------------------------------------------------------------
Ruby Tuesday, Inc. RI 5/00 2/01 $15.7 $11.4 $4.3
Ryan's Family Steak House RYAN 12/00 3/01 $201.0 $12.5 $188.5
TRICON Global Restaurants YUM 12/00 3/01 $2,487.0 $196.0 $2,291.0
VICORP Restaurants, Inc. VRES 10/00 1/01 $9.6 $12.1 $4.6
Wendy's International WEN 12/00 3/01 $252.3 $169.7 $82.6
Subject Company
Quizno's - 3/31/01 (3) QUIZ 9/00 3/01 $29.3 $8.3 $21.0
($ in millions, except per share amounts)
LTM Financial Data
-------------------------------------------------- Calendar EPS (2) Common
Net ---------------- Book
Company Sales EBITDA EBIT Income EPS (1) 2001 2002 Value
Comparable Companies Market Cap < $125 million
Blimpie International,Inc $31.1 $2.0 $0.9 $0.7 $0.08 ($0.15) NA $18.5
Checkers Drive-In Rest. $181.2 $19.6 $10.1 (8) $4.6 $0.45 NA NA $50.9
Jerry's Famous Deli, Inc. $69.6 $6.9 $3.3 $1.4 $0.31 NA NA $27.5
Pizza Inn, Inc. $64.9 $6.2 $4.9 $2.6 $0.23 NA NA $0.4
Schlotzsky's, Inc. $59.2 $2.0 ($1.7) ($2.3) ($0.31) NA NA $72.5
Sizzler International $241.5 $15.9 $7.2 $3.7 $0.12 NA NA $52.8
Wall Street Deli Inc. $46.7 ($0.7) ($3.0) (4) ($3.2) ($1.10) NA NA $5.7
Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. $707.3 $149.3 $111.5 (5) $65.9 $2.55 $2.74 $3.17 $281.7
Brinker International, Inc. $2,375.3 $322.8 $224.3 (15) $139.0 $1.95 $1.51 NA $816.8
BUCA, Inc. $142.4 $19.0 $12.1 (9) $8.0 $0.57 $0.76 $0.99 $104.4
Cheesecake Factory $462.7 $63.2 $48.8 $34.5 $1.02 $1.18 $1.46 $249.4
IHOP Corp. $304.9 $93.3 $79.5 $35.6 $1.75 $1.91 $2.19 $268.6
Landry's Seafood Restaur. $521.0 $64.8 $31.5 (10) $16.0 $0.68 $1.04 $1.18 $364.6
Lone Star Steakhouse $575.9 $54.1 $25.5 $19.1 $0.72 $1.13 NA $437.8
Outback Steakhouse, Inc. $1,962.5 $312.8 $252.5 (11) $143.3 $1.82 $2.06 $2.37 $807.6
P.F. Chang's China Bistro $255.9 $31.0 $22.3 (16) $11.2 $0.96 $1.19 $1.52 $77.3
--------------------------------------------------------------------------------------------------------------
Papa Johns International $965.6 $119.3 $84.8 (12) $48.0 $2.03 $2.00 $2.14 $165.2
--------------------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. $792.4 $123.3 $85.6 (6) $52.0 $0.81 $0.99 NA $281.1
Ryan's Family Steak House $720.2 $107.0 $77.3 (13) $42.7 $1.32 $1.37 $1.45 $285.5
TRICON Global Restaurants $7,002.0 $1,371.7 $1,045.0 (14) $532.2 $3.58 $3.16 $3.48 ($322.0)
VICORP Restaurants, Inc. $375.3 $40.3 $24.1 $14.8 $2.17 NA NA $130.7
Wendy's International $2,273.9 $427.8 $311.4 (7) $183.9 $1.51 $1.71 $1.91 $1,126.1
Subject Company
Quizno's - 3/31/01 (3) $49.0 $7.6 $5.2 $1.7 $0.55 $0.62 $0.41 ($5.9)
Notes:
(1) Diluted earnings per share.
(2) Estimates are First Call consensus estimates.
(3) LTM Net income and EPS numbers exclude $2.80 million of expenses related to
impairment of long lived assets and financing-related costs
(4) Excludes charge for impairment of long-lived assets of $376,417 and gain
from sale of assets $31,438.
(5) Excludes loss on disposition of restaurants and equipment $1,265,000.
(6) Excludes loss on sale of American Cafe and Tria's Tex-Mex Restaurants.
(7) Quarterly income statement information taken from press release dated
5/2/01 numbers exclude $18,370,000 in International charges, balance sheet
information taken from 12/30/00 10K.
(8) Excludes charges for Non-cash compensation of $1.73 million, Impairment of
long-lived assets of $629,000, and Gain on sale of assets of $307,000.
(9) Income statement information taken from press release dated 4/25/01 and
balance sheet information taken from 12/27/00 10K.
(10) Excludes special charges of $2,000,000.
(11) Income statement information taken from press release dated 4/23/01 and
balance sheet information taken from 12/31/00 10K.
(12) Quarterly income statement and balance sheet information taken from press
release dated 5/1/01, numbers exclude special charges of $24,105,000 and
advertising litigation expense of $1,017,000.
(13) Quarterly income statement and balance sheet information taken from press
release dated 4/25/01.
(14) Quarterly income statement information taken from press release dated
5/1/01 excludes $204,000,000 of unusual item expenses and balance sheet
informationtaken from 12/30/00 10K.
(15) Quarterly income statement information taken from press release dated
4/24/01 balance sheet information taken from 12/27/00 10Q.
(16) Quarterly income statement information taken from press release dated
4/25/01 balance sheet information taken from 12/31/00 10K.
[TUCKER ANTHONY SUTRO LOGO] 11
Comparable Company Transaction Analysis
----------------------------------------------------------------------------------------------------------------------------
(Amounts in 000's)
Quizno's Results -
LTM as of Valuation Multiple Range Enterprise Value Net Debt (1) Equity Value Price per Share (2)
----------------------------------------------------------------------------------------------------------------------------
Revenues - 3/31/01 $48,979 0.60x - 0.90x $29,387 - $44,081 $21,008 n.m. - $23,073 n.m. - $7.51
Revenues - 6/30/01 $51,220 0.55x - 0.80x $28,171 - $40,976 $21,008 n.m. - $19,968 n.m. - $6.50
EBITDA - 3/31/01 $7,594 5.5x - 7.0x $41,769 - $53,161 $21,008 $20,761 - $32,153 $6.76 - $10.47
EBITDA - 6/30/01 $8,647 5.1x - 6.3x $43,993 - $54,478 $21,008 $22,985 - $33,470 $7.48 - $10.89
EBIT - 3/31/01 $5,196 7.5x - 9.2x $38,968 - $47,801 $21,008 $17,960 - $26,793 $5.85 - $8.72
EBIT - 6/30/01 $5,934 6.9x - 8.2x $41,165 - $48,656 $21,008 $20,157 - $27,648 $6.56 - $9.00
----------------------------------------------------------------------------------------------------------------------------
Tucker Anthony Sutro Capital Markets Estimate $7.00 $8.75
----------------------------------------------------------------------------------------------------------------------------
(1) Net debt as of December 31, 2000
(2) Based upon fully diluted shares outstanding of 3.1 million as of April 30,
2001
[TUCKER ANTHONY SUTRO LOGO] 12
Selected Restaurant M & A Transactions
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Enterprise Target's
Date Target Name / Acquiror Name / Value Sales
Effective Business Description Business Description ($mil) ($mil)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending Mortons Restaurant Group, Inc. BFMA Holding Corp. $223.6 $251.1
Owns and operates restaurants Holding company
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending Vicorp Restaurants Inc. Investor Group $178.6 $375.3
Operates and franchises family style Financial Buyer
restaurants
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending NPC international Investor Group $439.0 $481.0
Owns and operates Pizza Hut franchises Financial Buyer
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending Il Fornaio Corp. Bruckman Rosser Sherrill $76.5 $118.8
Owns and operates full service Italian & Co. LLC
Restaurants Financial Buyer
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending Jerry's Famous Deli, Inc. Management/ Investor Group $35.8 $69.6
Owns and operates restaurants Financial Buyer
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Pending Taco Cabana, Inc. Carrols Corporation $150.7 $165.9
Operates and franchises Mexican patio Operator of quick service
cafes primarily in the western US restaurants including Burger
Kings
----------------------------------------------------------------------------------------------------------------------
4/26/01 Triad Restaurant Group, LLC Carolina Restaurant Group $40.5 NA
Owns and operates restaurants Owns and operates restaurants
----------------------------------------------------------------------------------------------------------------------
2/28/01 Uno's Restaurant Corp. (Remaining 38% interest) Investor Group $158.7 $231.2
Operates and franchises casual dining Management group led by
restaurants Aaron Spencer
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
12/12/00 Quizno's Corp. Investor Group $34.2 $41.7
Owns and franchises Italian Sub restaurants Financial Buyer
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
12/1/00 Rainforest Cafe Landry's Seafood Restaurants Inc. $61.8 $265.2
Owns and operates combination restaurant Owns and operates casual dining
& retail facilities seafood restaurants
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
10/2/00 Buffets, Inc. Caxton-Iseman Capital $499.7 $936.9
Operates Buffet Style Restaurants Financial Buyer
----------------------------------------------------------------------------------------------------------------------
1/13/00 Boston Chicken Inc. McDonald's Corporation $173.5 NA
Operates and franchises restaurants Owns, operates and franchises
specializing in complete meals fastfood restaurants
featuring rotisserie roasted chicken
1/4/99 Logan's Roadhouse Inc. CBRL Group Inc. $179.0 $90.3
Owns and franchises roadhouse style restaurants Owns and operates Cracker
Barrel Restaurants
----------------------------------------------------------------------------------------------------------------------
10/1/99 Miami Subs Corp. (Remaining 70% interest) Nathan's Famous Inc. $18.9 $23.5
Owns operates and franchises quick service Own's and operates Nathan's
restaurants Famous Foods Units
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
9/29/99 Sbarro, Inc. (Remaining 65%) Investors (Sbarro Family) $395.4 $357.9
Owns operates and franchises a chain of Financial & Strategic Buyer
Italian eateries
----------------------------------------------------------------------------------------------------------------------
9/2/99 Host Marriott Services Corp. Autogrill SpA $989.1 $1,377.6
Operates restaurants, gift shops and related Operates restaurants, gift
facilities at airports, travel plazas, shops and related facilities
and shopping malls at airports,travel plazas,
and shopping malls throughout
Europe
-------------------------------------------------------------------------------------------------------------
Enterprise Value
as a Multiple of:
Date Target Name / EBITDA EBIT -----------------------------
Effective Business Description Margin Margin Sales EBITDA EBIT Assets
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending Mortons Restaurant Group, Inc. 11.5% 8.3% 0.89x 7.8x 10.7x 1.9x
Owns and operates restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending Vicorp Restaurants Inc. 11.2% 6.5% 0.48x 4.2x 7.3x 0.9x
Operates and franchises family style
restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending NPC international 15.6% 9.7% 0.91x 5.8x 9.4x 1.0x
Owns and operates Pizza Hut franchises
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending Il Fornaio Corp. 9.3% 4.5% 0.64x 7.0x 14.2x 1.1x
Owns and operates full service Italian
Restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending Jerry's Famous Deli, Inc. 9.9% 4.7% 0.52x 5.2x 10.9x 0.8x
Owns and operates restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
Pending Taco Cabana, Inc. 15.2% 9.8% 0.91x 6.0x 9.3x 1.4x
Operates and franchises Mexican patio
cafes primarily in the western US
-------------------------------------------------------------------------------------------------------------
4/26/01 Triad Restaurant Group, LLC NA NA NA NA NA NA
Owns and operates restaurants
-------------------------------------------------------------------------------------------------------------
2/28/01 Uno's Restaurant Corp. (Remaining 38% interest) 13.2% 7.5% 0.69x 5.2x 9.1x 0.9x
Operates and franchises casual dining
restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
12/12/00 Quizno's Corp. 9.6% 5.0% 0.82x 8.6x 16.3x 0.8x
Owns and franchises Italian Sub restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
12/1/00 Rainforest Cafe 9.7% 2.1% 0.23x 2.4x 11.2x 0.4x
Owns and operates combination restaurant
& retail facilities
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
10/2/00 Buffets, Inc. 12.1% 7.5% 0.53x 4.4x 7.1x 1.0x
Operates Buffet Style Restaurants
-------------------------------------------------------------------------------------------------------------
1/13/00 Boston Chicken Inc. NA NA NA NA NA NA
Operates and franchises restaurants
specializing in complete meals
featuring rotisserie roasted chicken
1/4/99 Logan's Roadhouse Inc. 18.4% 13.3% 1.98x 10.8x 14.9x 2.0x
Owns and franchises roadhouse style restaurants
-------------------------------------------------------------------------------------------------------------
10/1/99 Miami Subs Corp. (Remaining 70% interest) 13.2% 7.1% 0.80x 6.1x 11.3x 0.6x
Owns operates and franchises quick service
restaurants
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
9/29/99 Sbarro, Inc. (Remaining 65%) 16.1% 15.5% 1.10x 6.9x 7.1x NA
Owns operates and franchises a chain of
Italian eateries
-------------------------------------------------------------------------------------------------------------
9/2/99 Host Marriott Services Corp. 8.6% 4.3% 0.72x 8.3x 16.6x 1.7x
Operates restaurants, gift shops and related
facilities at airports, travel plazas,
and shopping malls
[TUCKER ANTHONY SUTRO LOGO] 13
Selected Restaurant M & A Transactions (cont'd)
--------------------------------------------------------------------------------
Enterprise Target's
Date Target Name / Acquiror Name / Value Sales EBITDA EBIT
Effective Business Description Business Description ($mil) ($mil) Margin Margin
8/16/99 Rock Bottom Restaurants Inc. RB Capital Inc. $106.4 $160.1 11.8% 5.5%
Owner and Operater of sit down Financial Buyer
restaurants and breweries
8/10/99 Rally's Hamburgers Inc. (74% interest) Checker's Drive-in Restaurants Inc. $229.0 $147.8 10.5% 3.2%
Operates and franchises drive thru Operates and franchises drive thru
quick service hamburger restaurants quick service hamburger restaurants
7/6/99 Coffee People Inc. Diedrich Coffee Inc. $33.5 $44.3 7.5% 3.4%
Sells coffee beverages and various Sells coffee beverages and
related items various related items
4/5/99 Back Bay Restaurant Group SRC Holdings Inc. $38.5 $95.9 9.0% 4.5%
Owns and operates full service Restaurant Holding Company
restaurants in New England
1/25/99 Spaghetti Warehouse Inc. Cracken Harkey & Co. LLC $60.0 $66.0 9.2% 3.4%
Holding company for subsidiaries Financial Buyer
who operate restaurants
12/15/98 Lyon's Restaurants Inc. ICH Corporation $22.6 $124.2 6.4% 0.8%
Owns and operates restaurants Restaurant Holding Company
11/30/98 Miami Subs Corp. (30% interest) Nathan's Famous Inc. $10.5 $23.4 12.6% 6.5%
Owns operates and franchises quick Owns and operates Nathan's
service restaurants Famous Foods Units
11/25/98 Manhatten Bagel Co. New World Coffee & Bagels Inc. $20.0 $36.9 NEG NEG
Owns and operates bagel stores Owns and operates coffee and
and bakeries bagel shops and bakeries
7/21/98 Bertucci's Inc. NE Restaurant Company $104.9 $136.7 11.1% 4.8%
Operates Italian restaurants Restaurant Holding Company
7/9/98 Pollo Tropical Inc. Carrols Corporation $89.4 $67.7 18.0% 14.5%
Owns and operates quick service Operator of quick service restaurants
restaurants in a tropical setting including Burger Kings
7/7/98 Houlihan's Restaurants Group Inc. Scroggin Ventures Inc. $127.0 $149.5 NA NA
Holding company which owns and Financial Buyer
operates casual dining restaurants
4/27/98 The Epicure Market Jerry's Famous Deli Inc. $9.1 $13.6 NA NA
Operates a bread and sandwich deli Operates New York style deli
restaurants
Mean - Highlighted $183.2 $269.6 12.1% 7.2%
Median - Highlighted $106.4 $165.9 11.5% 6.5%
Mean - Since 1/1/99 $204.1 $279.0 11.7% 6.6%
Median - Since 1/1/99 $154.7 $160.1 11.2% 5.5%
Mean - All $160.9 $225.1 11.7% 6.6%
Median - All $97.2 $130.5 11.2% 5.5%
Enterprise Value
as a Multiple of:
Date ----- ------ ---- ------
Effective Sales EBITDA EBIT Assets
8/16/99 Rock Bottom Restaurants Inc. 0.66x 5.6x 12.2x 1.0x
Owner and Operater of sit down
restaurants and breweries
8/10/99 Rally's Hamburgers Inc. (74% interest) 1.55x 14.7x 48.1x 1.9x
Operates and franchises drive thru
quick service hamburger restaurants
7/6/99 Coffee People Inc. 0.75x 10.1x 22.0x 0.6x
Sells coffee beverages and various
related items
4/5/99 Back Bay Restaurant Group 0.40x 4.5x 8.9x 0.9x
Owns and operates full service
restaurants in New England
1/25/99 Spaghetti Warehouse Inc. 0.91x 9.9x 26.6x 1.0x
Holding company for subsidiaries
who operate restaurants
12/15/98 Lyon's Restaurants Inc. 0.18x 2.9x 21.6x NA
Owns and operates restaurants
11/30/98 Miami Subs Corp. (30% interest) 0.45x 3.6x 7.0x 0.3x
Owns operates and franchises quick
service restaurants
11/25/98 Manhatten Bagel Co. 0.54x NEG NEG 0.7x
Owns and operates bagel stores
and bakeries
7/21/98 Bertucci's Inc. 0.77x 6.9x 16.1x 1.0x
Operates Italian restaurants
7/9/98 Pollo Tropical Inc. 1.32x 7.3x 9.1x 2.2x
Owns and operates quick service
restaurants in a tropical setting
7/7/98 Houlihan's Restaurants Group Inc. 0.85x NA NA NA
Holding company which owns and
operates casual dining restaurants
4/27/98 The Epicure Market 0.67x NA NA NA
Operates a bread and sandwich deli
0.70x 5.7x 10.3x 1.0x
0.69x 5.8x 10.7x 0.9x
0.82x 7.0x 14.4x 1.1x
0.75x 6.1x 11.2x 1.0x
0.75x 6.3x 11.0x 1.1x
0.72x 6.0x 10.7x 1.0x
Notes:
1) Bolded items excluded from means and medians
2) The Rainforest Cafe deal was announced on 9/26/00 and is a 2nd attempt at the
merger
[TUCKER ANTHONY SUTRO LOGO] 14
Take Private Premiums vs. 52 Week Highs and Lows
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Acquiror Name
----------------------------------------------------------------------------------------------
5/1/01 Pending Morton's Restaurant Group BFMA (Carl Icahn-controlled)
4/20/01 Pending Giant Group, Ltd. Giant Group, Ltd.
4/19/01 Pending Uno Restaurant Corp. Management Group
4/16/01 Pending Ugly Duckling Corp. (Remaining Interest) Investor Group
4/3/01 Pending Jerry's Famous Deli, Inc. Management Group/Self Tender
3/26/01 Pending CSFBDirect Credit Suisse First Boston
3/15/01 Pending Dairy Mart Convenience Stores, Inc. DM Acquisition Corp.
3/13/01 Pending Roy F. Weston Investor Group
02/15/01 05/02/01 VICORP Restaurants Investor Group
01/26/01 Pending Perry County Financial Corp. Jefferson County Bancshares
01/18/01 Pending Hahn Automotive Warehouse, Inc. Management Group
12/27/00 Pending Venturian Corp. Investor Group
12/26/00 02/25/01 Netcreations Inc. Seat Pagine Gialle SPA
12/22/00 04/10/01 Michael Foods Inc. Investor Group
12/16/00 03/08/01 Crown Central Petroleum Corp. Rosemore Inc.
12/11/00 04/30/01 PBOC Holdings Inc. FBOP Corp.
11/16/00 Pending Il Fornaio Corp. Bruckmann, Rousser, Sherrill & Co.
10/06/00 12/20/00 Taco Cabana, Inc. Carrols Corp.
09/19/00 Pending Stratosphere Corp American Real Estate Partners
09/19/00 11/02/00 US Franchise Systems Inc Pritzker Group
09/18/00 12/28/00 Langer Biomechanics Group Inc OrthoStrategies Inc
08/28/00 Pending 800-JR Cigar Inc Investor Group
08/04/00 09/22/00 EndoSonics Corp Jomed NV
08/04/00 11/08/00 PDK Labs Inc PDK Acquisition Corp
08/02/00 11/28/00 MascoTech Inc Heartland Industrial Partners
06/27/00 09/22/00 National-Standard Co Heico Holding Inc
06/22/00 02/28/01 Johns Manville Corp Hicks, Muse, Tate & Furst
06/20/00 08/02/00 Justin Industries Inc Berkshire Hathaway Inc
06/16/00 08/31/00 Pacific Gateway Properties Mission Orchard Statutory
06/06/00 Pending PSC Inc Welch Allyn Inc
06/05/00 09/28/00 Buffets Inc Investor Group
05/29/00 09/29/00 Mark IV Industries Inc Investor Group
05/26/00 11/21/00 Acme Electric Corp Key Components LLC(Kelso & Co)
05/26/00 07/20/00 KLLM Transport Services Inc High Road Acquisition Corp
05/25/00 08/11/00 Protocol Systems Inc Welch Allyn Inc
05/17/00 10/15/00 Petco Animal Supplies Inc Investor Group
--------------------------------------------------------------------------------
Date Tender 52 Week 52 Week 52 Week 52 Week
Announced Price High High Premium Low Low Premium
--------------------------------------------------------------------------------
5/1/01 $28.25 $24.50 15.3% $17.75 59.2%
4/20/01 $0.50 $0.88 (43.2%) $0.14 257.1%
4/19/01 $9.75 $12.63 (22.8%) $6.06 60.9%
4/16/01 $7.00 $8.13 (13.9%) $3.19 119.4%
4/3/01 $5.30 $4.63 14.6% $1.16 358.4%
3/26/01 $4.00 $15.06 (73.4%) $2.50 60.0%
3/15/01 $4.50 $5.94 (24.2%) $1.75 157.1%
3/13/01 $5.02 $4.69 7.0% $2.03 147.3%
02/15/01 $25.65 $24.50 4.7% $16.31 57.2%
01/26/01 $23.50 $22.75 3.3% $15.00 56.7%
01/18/01 $1.00 $1.38 (27.5%) $0.38 163.2%
12/27/00 $3.00 $7.90 (62.0%) $4.00 (25.0%)
12/26/00 $7.00 $62.00 (88.7%) $9.20 (23.9%)
12/22/00 $30.10 $26.60 13.2% $19.60 53.6%
12/16/00 $10.50 $9.80 7.1% $4.80 118.8%
12/11/00 $10.00 $9.90 1.0% $7.60 31.6%
11/16/00 $14.00 $10.00 40.00% $6.00 133.3%
10/06/00 $9.04 $9.63 (6.1%) $4.13 118.9%
09/19/00 $44.32 $47.00 (5.7%) $21.00 111.0%
09/19/00 $5.00 $17.31 (71.1%) $4.13 21.2%
09/18/00 $1.75 $2.13 (17.6%) $1.25 40.0%
08/28/00 $13.00 $12.88 1.0% $7.63 70.5%
08/04/00 $11.00 $9.00 22.2% $3.19 245.1%
08/04/00 $5.00 $5.19 (3.6%) $3.00 66.7%
08/02/00 $16.90 $17.50 (3.4%) $10.50 60.95%
06/27/00 $1.00 $5.75 (82.6%) $0.94 6.67%
06/22/00 $13.63 $14.81 (8.0%) $7.50 81.67%
06/20/00 $22.00 $21.88 0.6% $13.00 69.23%
06/16/00 $12.60 $11.94 5.5% $7.31 72.31%
06/06/00 $8.45 $10.13 (16.5%) $3.50 141.43%
06/05/00 $13.85 $12.88 7.6% $8.06 71.78%
05/29/00 $23.00 $23.63 (2.6%) $16.56 38.87%
05/26/00 $9.00 $7.44 21.0% $4.63 94.59%
05/26/00 $8.05 $8.75 (8.0%) $4.00 101.25%
05/25/00 $16.00 $15.69 2.0% $6.00 166.67%
05/17/00 $22.00 $18.38 19.7% $9.38 134.67%
[TUCKER ANTHONY SUTRO LOGO] 15
Take Private Premiums vs. 52 Week Highs and Lows (cont.)
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Acquiror Name
----------------------------------------------------------------------------------------------
05/11/00 10/01/00 Old Guard Group Inc Ohio Farmers Insurance Co
05/10/00 06/26/00 WMF Group Ltd Prudential Mortgage Capital
04/24/00 07/17/00 Cherry Corp Investor Group
03/24/00 05/26/00 Tubby's Inc R Corp
03/23/00 10/04/00 US Can Corp Investor Group
03/07/00 06/01/00 Duff & Phelps Credit Rating Co Fitch IBCA(FIMALAC SA)
03/06/00 04/24/00 Data Transmission Network Corp VS&A Commun Partners III LP
02/04/00 07/26/00 BNC Mortgage, Inc. Investors
01/31/00 08/04/00 Jason, Inc Saw Mill Capital Fund LLP/Investor Group
01/26/00 Pending Omega Worldwide Inc. Investors (Todd Robinson)
01/19/00 06/16/00 Dayton Superior Corporation Odyssey Investment Partners/Investors
------------------------------------------------------------------------------------
Date Tender 52 Week 52 Week 52 Week 52 Week
Announced Price High High Premium Low Low Premium
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05/11/00 $12.00 $14.25 (15.8%) $9.50 26.32%
05/10/00 $8.90 $8.72 2.1% $2.44 265.13%
04/24/00 $18.75 $24.00 (21.9%) $10.00 87.50%
03/24/00 $1.10 $1.13 (2.2%) $0.41 170.77%
03/23/00 $20.00 $25.63 (22.0%) $12.50 60.00%
03/07/00 $100.00 $97.01 3.1% $51.50 94.17%
03/06/00 $29.00 $28.94 0.2% $16.50 75.76%
02/04/00 $10.00 $8.97 11.5% $4.44 125.35%
01/31/00 $11.25 $10.38 8.4% $5.88 91.49%
01/26/00 $5.34 $6.00 (11.0%) $3.44 55.35%
01/19/00 $27.00 $24.00 12.5% $11.94 126.18%
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Mean: (9.2%) 99.5%
Median: (2.2%) 81.67%
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Source: Securities Data Corp.
[TUCKER ANTHONY SUTRO LOGO] 16
Future Trading Price Analysis
--------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
(amounts in 000's) June 30, 2001 December 31, 2001 December 31, 2002
-----------------------------------------------------------------------------------------------
Sales $51,220 $55,579 $59,929
Multiple 0.90x 0.90x 0.90x
Implied Value $46,098 $50,021 $53,936
Debt Net of Available Cash $20,100 $14,560 $7,873
Equity Value $25,998 $35,461 $46,063
Present Value @ 37.5% $24,008 $27,927 $26,383
Fully Diluted Shares Outstanding 3,072 3,072 3,072
----------------------------------------------------------------------------------------
Value per Share $7.81 $9.09 $8.59
----------------------------------------------------------------------------------------
EBIT $5,934 $6,726 $9,006
Multiple 8.00x 8.00x 8.00x
Implied Value $47,470 $53,807 $72,046
Debt Net of Available Cash $20,100 $14,560 $7,873
Equity Value $27,370 $39,247 $64,173
Present Value @ 37.5% $25,275 $30,909 $36,756
Fully Diluted Shares Outstanding 3,072 3,099 3,116
----------------------------------------------------------------------------------------
Value per Share $8.23 $9.98 $11.80
----------------------------------------------------------------------------------------
Net Income(1) n.m. $2,113 $3,716
Multiple 10.5 10.5 10.5
Equity Value n.m. $22,182 $39,015
Present Value @ 37.5% n.m. $17,470 $22,346
Fully Diluted Shares Outstanding 3,072 3,072 3,087
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Value per Share n.m. $5.69 $7.24
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(1) Pre-transaction, reported net income (assuming normalized tax rate of 37%)
Multiples based on comparable company analysis and Quizno's trading multiples
[TUCKER ANTHONY SUTRO LOGO] 17
Discounted Cash Flow Analysis
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Terminal Value (X 2005 EBITDA)
(Amounts in 000) 4.50 X 5.00 X 5.50 X 6.00 X
Valuation Matrix Discounted Value of Cash Flows (Enterprise Value)(1)
22.0% $65,223 $69,407 $73,590 $77,773
23.5% $62,201 $66,136 $70,072 $74,007
Discount Rate 25.0% $59,371 $63,076 $66,781 $70,486
26.5% $56,720 $60,211 $63,701 $67,191
28.0% $54,234 $57,524 $60,815 $64,106
Debt Adjusted DCF (Equity Value)(2)(3)(4)
22.0% $44,376 $48,559 $52,742 $56,926
23.5% $41,353 $45,289 $49,224 $53,159
Discount Rate 25.0% $38,524 $42,229 $45,934 $49,638
26.5% $35,873 $39,363 $42,853 $46,344
28.0% $33,386 $36,677 $39,967 $43,258
Per Share Debt Adjusted DCF (Equity Value Per Share)(2)(3)(4)
22.0% $14.44 $15.81 $17.17 $18.53
23.5% $13.46 $14.74 $16.02 $17.30
Discount Rate 25.0% $12.54 $13.75 $14.95 $16.16
26.5% $11.68 $12.81 $13.95 $15.08
28.0% $10.87 $11.94 $13.01 $14.08
Notes:
(1) Enterprise Value excludes opening cash balance.
(2) Equity Value equals Enterprise Value less Net Debt (debt outstanding less
cash balance).
(3) Equity Value Per Share equals Equity Value divided by diluted shares
outstanding as of April 30, 2001; approx. 3,072,211
(4) Includes proceeds from options and warrants in cash balance
The estimated cost of the Levine subordinated debt with warrants is
approximately 30%-33% based upon estimated five-year IRR --> Implies a cost of
equity of 36% to 40%+
Assuming an after-tax cost of debt of 6.2% and a target capital structure of 40%
debt, 60% equity, the implied weighted average cost of capital of 24% to 26%
[TUCKER ANTHONY SUTRO LOGO] 18
Comparison of Management Projections Across Time
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
Comparison of Management Projections Over Time
(Amounts in $000)
LTM Ending 12/31/00 LTM Ending 6/30/01 LTM Ending 12/31/01 LTM Ending 12/31/02
November April (A) May (A) November April May November April May November April May
-------------------------------------------------------------------------------------------------------------------------------
Revenues $44,465 $45,414 45,414 $48,173 $50,292 $51,220 $51,335 $54,651 $55,579 $58,973 $58,973 59,929
------------------------------ ----------------------------- -------------------------- ----------------------------
EBITDA $7,004 $6,311 $6,311 $8,559 $8,435 $8,647 $9,723 $9,739 $9,951 $13,135 $13,335 $12,537
------------------------------ ----------------------------- -------------------------- ----------------------------
EBIT $4,881 $4,227 $4,227 $6,190 $6,049 $5,934 $7,221 $7,189 $6,726 $10,384 $10,500 $9,006
-------------------------------------------------------------------------------------------------------------------------------
The Company's actual performance for calendar 2000 missed EBITDA projections by
approximately $700,000
For the twelve month periods ending June 30, 2001 and December 31, 2001, Company
projections for EBITDA are slightly higher than those used in the initial tender
offer, but slightly lower for EBIT
For calendar 2002, the Company is projecting slightly lower EBITDA and EBIT
[TUCKER ANTHONY SUTRO LOGO] 19
Quizno's Ownership Table as of April 30, 2001
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THE QUIZNO'S CORPORATION - OWNERSHIP SCHEDULE
as of April 30, 2001
Preferred Stock
--------------- Common
Name Class A Class B Class C Class D Class E Stock
---- ------- ------- ------- ------- ------- -----
Schadens;
Richard F Schaden 73,000 34,000 34,803 773,667
Richard E Schaden 73,000 778,006
Tim Schaden 4,000
Fred Schaden 2,000
Board Members;
Brad Griffin 5,000
Mark Bromberg
Eric Lawrence
Lewis Rudnick
Bruce Golbus 15,000 5,801
Lyle Stewart
John Todd
Total Other 75,000 - 17,403 106,827
Total Employees 75,000 1,473 40,583
Other/"Public" 36,000 1,304,838
Not Issued
-----------------------------------------------------------------------------
Total Pre-Tender 146,000 167,000 75,000 59,480 3,007,921
401(k) cert not issued - - - - (2,360)
Amount Tendered - (110,000) - - (669,055)
Shs Issued Scott Adams - - - - 933
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Total Post-Tender 146,000 57,000 75,000 59,480 2,337,439
LLCP % Allocation 14.0% 14.0% 14.0% 14.0% 14.0%
Total LLCP Allocation 23,767 9,279 12,209 9,683 380,513
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Net After LLCP 169,767 66,279 87,209 69,163 2,717,952
=============================================================================
<Caption>
Options Warrants
------- -------- Total Share
Name Employee Board RRGC Phoenix Equivalents
---- -------- ----- ---- ------- -----------
Schadens;
Richard F Schaden 4,000 919,470 *
Richard E Schaden 35,378 4,000 890,384 *
Tim Schaden 4,000
Fred Schaden 26,000 28,000
Board Members; -
Brad Griffin 5,000 10,000
Mark Bromberg 14,000 14,000
Eric Lawrence 16,000 16,000
Lewis Rudnick 26,000 26,000
Bruce Golbus 26,000 46,801
Lyle Stewart 16,000 16,000
John Todd 1,000 1,000
Total Other - 22,000 415,056 - 636,286
Total Employees 232,615 14,000
Other/"Public" 180,235 25,000 1,546,073
Not Issued 65,000 65,000
-------------------------------------------------------------------------------
Total Pre-Tender 513,228 174,000 415,056 25,000 4,582,685
401(k) cert not issued - - - - (2,360)
Amount Tendered (477,850) (54,000) (415,056) (25,000) (1,750,961)
Shs Issued Scott Adams - - - - 933
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Total Post-Tender 35,378 120,000 - - 2,830,297
LLCP % Allocation 14.0% 14.0% 14.0% 14.0% 14.0%
Total LLCP Allocation 5,759 19,535 - - 460,746 *
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net After LLCP 41,137 139,535 - - 3,291,043
===============================================================================
Class D Shares Cancelled/Redeemed 87,209
Class E Remains Outstanding 69,163
Shares Available for Purchase 864,071
"Fully Diluted" Shares Outstanding** 3,072,211
* Indicates shares not tendering
** Based upon overall average strike price of $5.83 and conversion of all
preferred stock
[TUCKER ANTHONY SUTRO LOGO] 20