Transaction Overview Summary
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[TUCKER ANTHONY SUTRO LOGO] 1
Summary of Proposed Transaction Terms
-------------------------------------------------------------------------------
Using a long form merger structure, ("Merger") Unaffiliated Shareholders
will receive $8.00 per share in cash ("Offer Price") for each share of
common or common stock equivalent ("Stock") (the "Offer")
The $8.00/share offer represents a premium of approximately 20% - 28% over
trading prices just prior to the December Tender and approximately 10% over
recent trading prices
Non-Affiliated shareholders will have appraisal rights
All terms and conditions are subject to final documentation, including
information to be provided in the Merger documents
[TUCKER ANTHONY SUTRO LOGO] 2
Preliminary Sources and Uses
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Sources and Uses
(Amounts in thousands)
Use of Funds Source of Funds
------------------------------------------------------------------------------
Stock Price $ 8.00 Cash & Equivalents $7,386
Term Debt $ 0 Bank Revolver $ -
Common Stock $7,541 Term Debt $ -
Transaction Costs $ 500 Preferred Stock with Warrants $ -
Other (Options & Warrants) $ 655
-------------------------------- -------------------------------------
Total Uses $8,041 Total Sources $8,041
-------------------------------- -------------------------------------
Assumes all shares (including all common stock equivalents) are acquired
for $8.00/share, excluding Class D but including Class E preferred shares;
that is, approximately 933,234 shares are acquired
The Class D is assumed redeemed for a total of $25,000 and the Class E
requires a $50,000 premium <-- The Class E is redeemable only after
April 1, 2003 at $8.62 per share
Excess cash balances from the fully drawn Levine facility provide the
financing required to complete the transaction <-- At closing, cash
balances are projected to be between $3.8 million and $4.2 million
Approximately $1.0 million is in escrow and not available for share
repurchase and $2.0+ million is needed for working capital <-- "Excess"
cash balances are projected to be approximately $0.8 to $1.3 million
[TUCKER ANTHONY SUTRO LOGO] 3
Estimated Closing Balance Sheets
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Estimated June 30, 2001 Opening and Pro Forma Balance Sheets (1)
(amounts in thousands) Estimated Pro Forma
Pre-Transaction Scenario A
933,934 Shares Acq'd
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Available Cash $ 8,750 $ 1,364
Restricted Cash, Working Capital $ 3,000 $ 3,000
A/R 3,800 3,800
Other Current 3,500 3,500
------- --------
Total Current Assets $19,050 $ 11,664
Net PP&E 10,900 10,900
Other Assets 19,550 20,050
------- --------
Total Assets $49,500 $ 42,614
======= ========
Current Liabilities (excl. current mat.) $ 6,975 6,975
Capitalized Leases/Other 725 725
Long Term Sr. Debt 14,263 14,263
Levine Debt 13,862 13,862
Deferred Franchise Fees 19,000 19,000
Stockholders' Equity (5,325) (12,211)
------- --------
Total Liabs + Equity $49,500 $ 42,614
======= ========
(1) All scenarios assume a purchase price of $8.00 per share
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Scenario A All shares and equivalents, except the Preferred D, are acquired;
Preferred D redeemed for $25,000 and Class E requires $50,000 premium
[TUCKER ANTHONY SUTRO LOGO] 4
Pro-Forma Capitalization
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Pro Forma Capital Structure
(Amounts in thousands) Pro Forma Balances (1) Equity
Participation
--------------------------------------------------------------------------------
Cash $ 1,967 0.00%
Revolver $ 0 0.00%
Senior Term Debt 14,988 0.00%
Levine Debt 13,862 14.00%
Preferred Stock 0 0.00%
Common Stock 14,479 86.00%
------------ ------- ------
Total $45,296 100.00%
(1) Uses estimated June 30, 2001 as "opening" balance sheet; also see pro forma
closing balance sheet
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Management has indicated a need for at least $2.0 million in cash balances
for working capital needs
This scenario assumes the Class E preferred stock is acquired, plus a $50,000
premium and the Class D preferred stock is redeemed for $25,000
[TUCKER ANTHONY SUTRO LOGO] 5
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 Options
--------------- Common -------
Name Class A Class B Class C Class D Class E Stock Employee Board
---- ------- ------- ------- ------- ------- ----- -------- -----
Schadens;
Richard F Schaden 73,000 34,000 34,803 773,667 4,000
Richard E Schaden 73,000 778,006 35,378 4,000
Tim Schaden 4,000
Fred Schaden 2,000 26,000
Board Members;
Brad Griffin 5,000 5,000
Mark Bromberg 14,000
Eric Lawrence 16,000
Lewis Rudnick 26,000
Bruce Golbus 15,000 5,801 26,000
Lyle Stewart 16,000
John Todd 1,000
Total Other 75,000 - 17,403 106,827 - 22,000
Total Employees 75,000 1,473 40,583 232,615 14,000
Other/"Public" 36,000 1,304,838 180,235
Not Issued 65,000
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Total Pre-Tender 146,000 167,000 75,000 59,480 3,007,921 513,228 174,000
401(k) cert not issued - - - - (2,360) - -
Amount Tendered - (110,000) - - (669,055) (477,850) (54,000)
Shs Issued Scott Adams - - - - 933 - -
---------------------------------------------------------------------------------------------------
Total Post-Tender 146,000 57,000 75,000 59,480 2,337,439 35,378 120,000
LLCP % Allocation 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0%
Total LLCP Allocation 23,767 9,279 12,209 9,683 380,513 5,759 19,535
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Net After LLCP 169,767 66,279 87,209 69,163 2,717,952 41,137 139,535
===================================================================================================
Warrants
-------- Total Share
Name RRGC Phoenix Equivalents
---- ---- ------- -----------
Schadens;
Richard F Schaden 919,470*
Richard E Schaden 890,384*
Tim Schaden 4,000
Fred Schaden 28,000
Board Members; -
Brad Griffin 10,000
Mark Bromberg 14,000
Eric Lawrence 16,000
Lewis Rudnick 26,000
Bruce Golbus 46,801
Lyle Stewart 16,000
John Todd 1,000
Total Other 415,056 - 636,286
Total Employees
Other/"Public" 25,000 1,546,073
Not Issued 65,000
---------------------------------------
Total Pre-Tender 415,056 25,000 4,582,685
401(k) cert not issued - - (2,360)
Amount Tendered (415,056) (25,000) (1,750,961)
Shs Issued Scott Adams - - 933
---------------------------------------
Total Post-Tender - - 2,830,297
LLCP % Allocation 14.0% 14.0% 14.0%
Total LLCP Allocation - - 460,746*
---------------------------------------
---------------------------------------
Net After LLCP - - 3,291,043
=======================================
Class D Shares Cancelled/Redeemed 87,209
Class E Remains Outstanding 69,163
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Shares Available for Purchase 864,071
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"Fully Diluted" Shares Outstanding** 3,072,211
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* Indicates shares not tendering
** Based upon overall average strike price of $5.83 and conversion of all
preferred stock
[TUCKER ANTHONY SUTRO LOGO] 6
PRELIMINARY VALUATION DATA
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[TUCKER ANTHONY SUTRO LOGO] 7
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 59,503 67,148 73,957 80,827
Cost of Goods Sold (4,366) (6,207) (8,342) (8,342) (9,198) (9,446) (10,123) (10,677) (11,240)
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Gross Profit 15,089 21,702 37,072 37,072 46,381 50,057 57,024 63,280 69,587
Selling, General &
Administrative (13,222) (17,774) (29,890) (29,890) (35,651) (37,645) (44,832) (47,867) (54,251)
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) (1,316) (1,447) (1,566) (1,728)
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 $ 8,064 $ 7,464 $ 10,616 $ 10,442
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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 $ 8,747 $ 8,148 $ 11,300 $ 11,126
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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 $11,595 $ 11,245 $ 14,647 $ 14,708
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Interest Expense
Interest Expense, Net (341) (708) (2,052) (3,373) (3,373) (3,142) (3,054) (2,821) (2,529)
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 4,922 4,410 7,795 7,914
Provision for Income
Taxes 369 (948) 672 1,319 (1,410) (2,037) (2,102) (3,456) (3,504)
Net Income $ 1,113 $ 1,791 ($ 1,155) ($ 1,829) $ 1,944 $ 2,885 $ 2,308 $ 4,339 $ 4,410
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Based upon Management's quarterly projections as of May 8, 2001
Includes SAR expenses of approximately $1.6 million to $1.8 million per year
and a gross up of Rick Schaden's salary of $300,000 per year
[TUCKER ANTHONY SUTRO LOGO] 8
Summary Quarterly Income Statements
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Projected Quarterly Performance*
(Amounts in $000) Quarters Ending
3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 12/31/02
------------------------------------------------------------------------------------------------------------------
Revenues $13,261 $13,515 $14,206 $14,598 $14,158 $14,610 $15,130 $15,605
EBIT $1,617 $1,803 $1,694 $1,694 $1,867 $2,227 $2,540 $2,524
EBITDA $2,373 $2,595 $2,481 $2,502 $2,398 $2,706 $3,081 $3,410
Net Income $361 $554 $491 $497 $456 $636 $874 $1,077
* Quarterly numbers taken directly from Management Projections
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[TUCKER ANTHONY SUTRO LOGO] 9
Multiples Analysis - Stock Price Matrix
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($000, except price per share)
Stock Price
Share price $7.25 $7.50 $7.75 $8.00 $8.25 $8.50
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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 $22,274 $23,042 $23,810 $24,578 $25,346 $26,114
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 $43,282 $44,050 $44,818 $45,586 $46,354 $47,122
=========================================================================
Quizno's Results - LTM as of
--------
Revenues - 3/31/01 $48,979 0.88x 0.90x 0.92x | 0.93x | 0.95x 0.96x
| |
Revenues - 6/30/01 $51,220 0.85x 0.86x 0.88x | 0.89x | 0.90x 0.92x
| |
Revenue - 12/31/01 $55,579 0.78x 0.79x 0.81x | 0.82x | 0.83x 0.85x
| |
EBITDA - 3/31/01 $7,594 5.7x 5.8x 5.9x | 6.0x | 6.1x 6.2x
| |
EBITDA - 6/30/01 $8,647 5.0x 5.1x 5.2x | 5.3x | 5.4x 5.4x
| |
EBIT - 3/31/01 $5,196 8.3x 8.5x 8.6x | 8.8x | 8.9x 9.1x
| |
EBIT - 6/30/01 $5,934 7.3x 7.4x 7.6x | 7.7x | 7.8x 7.9x
| |
Net Income - 12/31/01 (2) $2,012 11.1x 11.5x 11.8x | 12.2x | 12.6x 13.0x
--------
(1) Fully diluted shares outstanding is based upon treasury method and assumes
all preferred stock (except D) is converted
(2) Pre-tax income taxed at a normalized 40%
[TUCKER ANTHONY SUTRO LOGO] 10
TRADING MULTIPLES ANALYSIS - 10/31/00 VS. 4/04/01 VS. 5/04/01
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($ in thousands) October 31, 2000
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QUIZ Median
Multiple Multiple Adjusted Range(1)
-------- -------- -------------------------
Small Cap Peer Group
LTM Sales 0.81x 0.36x 0.17x - 0.47x
LTM EBIT 7.4x 6.9x 4.1x - 9.8x
LTM EBITDA 5.1x 3.6x 2.9x - 4.3x
LTM Net Income 16.1x 12.0x 6.5x - 12.3x
Calendar 2001 Sales 0.65x NA NA - NA
Calendar 2001 Net Income 8.7x 3.9x NA - NA
Large Cap Peer Group
LTM Sales 1.19x 0.55x - 2.23x
LTM EBIT 8.4x 6.2x - 8.9x
LTM EBITDA 6.4x 4.1x - 9.4x
LTM Net Income 13.3x 7.8x - 31.0x
Calendar 2001 Sales 1.06x 0.95x - 1.13x
Calendar 2001 Net Income 11.2x 9.3x - 14.4x
($ in thousands) April 4, 2001
---------------------------------------------------
QUIZ Median
Multiple Multiple Adjusted Range(1)
-------- -------- -------------------------
Small Cap Peer Group
LTM Sales 0.86x 0.48x 0.21x - 0.53x
LTM EBIT 9.2x 7.9x 7.0x - 8.8x
LTM EBITDA 6.2x 4.8x 4.8x - 4.9x
LTM Net Income 18.6x 10.8x 10.1x - 11.4x
Calendar 2001 Sales 0.71x 1.02x NA - NA
Calendar 2001 Net Income 7.3x NA NA - NA
Large Cap Peer Group
LTM Sales 1.18x 0.70x - 1.96x
LTM EBIT 8.5x 7.1x - 12.8x
LTM EBITDA 6.1x 5.1x - 9.9x
LTM Net Income 13.7x 11.1x - 16.3x
Calendar 2001 Sales 1.10x 0.68x - 1.33x
Calendar 2001 Net Income 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
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
Quizno's continues to trade at premiums to the trading multiples for the
small cap group despite the expansion in multiples
[TUCKER ANTHONY SUTRO LOG0] 11
Trading Multiples for Selected Comparable Companies
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($ in millions, except per share amounts)
5/4/01 Market
Stock Common Value of Enterprise
Company Ticker Price Shares(1) Equity(2) Value(3)
----------------------------------------------------------------------------------
Comparable Companies Market Cap < $125 million
Blimpie International,Inc BLM $1.50 9.2 $13.9 $5.9
Checkers Drive-In Rest. CHKR $5.99 9.8 $58.5 $98.6
Jerry's Famous Deli, Inc. DELI $4.95 4.7 $23.1 $34.7
Pizza Inn, Inc. PZZI $2.07 10.6 $21.9 $34.4
Schlotzsky's, Inc. BUNZ $4.44 7.3 $32.6 $64.3
Sizzler International SZ $1.48 27.6 $40.9 $56.3
Wall Street Deli Inc. WSDI $0.68 2.9 $2.0 $5.2
-----------------------------------------
Mean: $27.5 $42.8
Median: $23.1 $34.7
-----------------------------------------
Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. APPB $43.50 24.4 $1,060.7 $1,139.9
Brinker International, Inc. EAT $28.00 99.1 $2,775.3 $2,884.8
BUCA, Inc. BUCA $21.75 16.1 $351.2 $343.7
Cheesecake Factory CAKE $37.85 31.5 $1,193.6 $1,150.6
IHOP Corp. IHP $20.08 20.1 $404.3 $632.5
Landry's Seafood Restaur. LNY $15.26 21.5 $328.1 $457.0
Lone Star Steakhouse STAR $12.70 20.0 $254.3 $225.2
Outback Steakhouse, Inc. OSI $28.90 76.1 $2,199.6 $2,101.5
P.F. Chang's China Bistro PFCB $37.88 11.7 $443.3 $454.7
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Papa Johns International PZZA $27.85 22.7 $633.4 $770.0
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Ruby Tuesday, Inc. RI $18.13 63.2 $1,145.3 $1,149.6
Ryan's Family Steak House RYAN $13.70 31.1 $426.1 $614.6
TRICON Global Restaurants YUM $41.96 147.1 $6,171.8 $8,462.8
VICORP Restaurants, Inc. VRES $25.64 6.8 $135.7 $140.3
Wendy's International WEN $25.17 114.3 $2,878.0 $2,960.6
-----------------------------------------
Mean: $1,360.0 $1,565.9
Median: $633.4 $770.0
-----------------------------------------
Subject Company
Quizno's - 3/31/00 (7) $7.35 2.3 $17.2 $38.2
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Enterprise Value Multiples Equity Value Multiples
-------------------------------- -------------------------------------
Calendar LTM LTM LTM Calendar P/E Book 3-5 Yr
Company 2001 Sales Sales EBITDA EBIT LTM 2001 2002 Value Growth(4) Type(6)
-----------------------------------------------------------------------------------------------------------------------------
Comparable Companies Market Cap < $125 million
Blimpie International,Inc NA 0.19x 3.0x 6.5x 18.3x NEG NA 0.7x NA F
Checkers Drive-In Rest. NA 0.54x 5.0x 9.8x 13.2x NA NA 1.1x NA B
Jerry's Famous Deli, Inc. NA 0.50x 5.0x 10.4x 16.0x NA NA 0.8x NA O
Pizza Inn, Inc. NA 0.53x 5.5x 7.0x 9.0x NA NA NM NA F
Schlotzsky's, Inc. 1.07x 1.09x NM NM NEG NA NA 0.4x 12.0% B
Sizzler International NA 0.23x 3.5x 7.9x 11.9x NA NA 0.8x NA B
Wall Street Deli Inc. NA 0.11x NM NM NEG NA NA 0.3x NA O
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Mean: 1.07x 0.46x 4.4x 8.3x 13.7x - - 0.7x 12.0%
Median: 1.07x 0.50x 5.0x 7.9x 13.2x - - 0.8x 12.0%
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Comparable Companies Market Cap > $125 million
Applebee's Int'l, Inc. 1.51x 1.61x 7.6x 10.2x 17.1x 15.9x 13.7x 3.8x 15.1% B
Brinker International, Inc. 1.08x 1.21x 8.9x 12.9x 14.4 18.5x NA 3.4x NA B
BUCA, Inc. 1.88x 2.41x 18.1x NM NM 28.6x 22.0x 3.4x 34.4% O
Cheesecake Factory 2.11x 2.49x 18.2x NM NM NM 25.9x 4.8x 25.5% O
IHOP Corp. NA 2.07x 6.8x 8.0x 11.5x 10.5x 9.2x 1.5x NA B
Landry's Seafood Restaur. 0.65x 0.88x 7.0x 14.5x 22.5x 14.7x 12.9x 0.9x 21.5% O
Lone Star Steakhouse 0.37x 0.39x 4.2x 8.8x 17.6x 11.2x NA 0.6x 13.3% O
Outback Steakhouse, Inc. 0.99x 1.07x 6.7x 8.3x 15.9x 14.0x 12.2x 2.7x 18.5% B
P.F. Chang's China Bistro 1.45x 1.78x 14.7x NM NM NM 24.9x 5.7x 36.4% O
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Papa Johns International 0.75x 0.80x 6.5x 9.1x 13.7x 13.9x 13.0x 3.8x NA B
--------------------------------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. NA 1.45x 9.3x 13.4x 22.5x 18.3x NA 4.1x 19.0% O
Ryan's Family Steak House NA 0.85x 5.7x 7.9x 10.4x 10.0x 9.4x 1.5x NA B
TRICON Global Restaurants 1.22x 1.21x 6.2x 8.1x 11.7x 13.3x 12.1x NEG 15.0% B
VICORP Restaurants, Inc. NA 0.37x 3.5x 5.8x 11.8x NA NA 1.0x NA B
Wendy's International 1.22x 1.30x 6.9x 9.5x 16.7x 14.7x 13.2x 2.6x 14.9% B
-----------------------------------------------------------------------------------------
Mean: 1.2x 1.33x 8.7x 9.7x 15.5x 15.3x 15.3x 2.8x 21.3%
Median: 1.2x 1.21x 6.9x 9.0x 15.1x 14.4x 13.0x 3.0x 18.7%
-----------------------------------------------------------------------------------------
Subject Company
Quizno's - 3/31/00 (7) 0.70x 0.78x 5.0x 7.4x 13.5x 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] 12
Margin Analysis for Selected Comparable Companies
-------------------------------------------------------------------------------
LTM Margins
------------------------------------------------------
Gross SG&A Net
Company Ticker Profit Expense EBITDA EBIT Income
-----------------------------------------------------------------------------------------------
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%
-------------------------------------------------------------
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%
-----------------------------------------------------------------------------------------------
Papa Johns International PZZA 36.0% 27.2% 12.4% 8.8% 5.0%
-----------------------------------------------------------------------------------------------
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%
LTM Leverage Ratios
----------------------------------------------------------
Total Net Net LTM LTM
Debt/ Debt/ Debt/ EBITDA/ Op. Inc./ Return on Return on
Total Cap(1) EBITDA Op. Inc. Int. Exp. Int. Exp. Equity(2) Capital(3)
-----------------------------------------------------------------------------------
Comparable Companies Market Cap < $125 million
Blimpie International,Inc 0.0% NM NM NM NM 3.8% 6.6%
Checkers Drive-In Rest. 44.5% 2.0x 3.9x 3.3x 1.7x 9.5% 5.1%
Jerry's Famous Deli, Inc. 33.0% 1.6x 3.3x 6.2x 3.0x 5.3% 3.7%
Pizza Inn, Inc. 100.1% 2.0x 2.6x 6.6x 5.2x 121.9% 19.9%
Schlotzsky's, Inc. 31.6% 15.6x NM NM NM NEG NEG
Sizzler International 49.1% 1.0x 2.1x 8.9x 4.0x 7.2% 5.5%
Wall Street Deli Inc. 43.0% NM NM NEG NEG NEG NEG
-------------------------------------------------------------------------------------
43.0% 4.4x 3.0x 6.3x 3.5x 29.6% 8.2%
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. 25.3% 0.5x 0.7x 19.1x 14.3x 24.6% 18.2%
Brinker International, Inc. 15.7% 0.3x 0.5x 40.7x 28.3x 18.8% 15.0%
BUCA, Inc. 1.9% NM NM NM NM 9.7% 8.3%
Cheesecake Factory 0.0% NM NM NM NM 15.9% 16.7%
IHOP Corp. 46.3% 2.4x 2.9x 4.3x 3.7x 14.4% 7.2%
Landry's Seafood Restaur. 31.4% 2.0x 4.1x NM NM 4.3% 3.2%
Lone Star Steakhouse 0.0% NM NM NM NM 4.1% 4.7%
Outback Steakhouse, Inc. 2.3% NM NM NM NM 19.1% 20.2%
P.F. Chang's China Bistro 18.8% 0.3x 0.5x NM NM 15.8% 12.7%
------------------------------------------------------------------------------------------------------------------------
Papa Johns International 48.0% 1.1x 1.6x 16.4x 11.7x 21.0% 15.9%
------------------------------------------------------------------------------------------------------------------------
Ruby Tuesday, Inc. 5.5% 0.0x 0.1x NM NM 20.7% 18.2%
Ryan's Family Steak House 42.4% 1.8x 2.4x 7.5x 5.4x 15.0% 9.0%
TRICON Global Restaurants 126.3% 1.7x 2.2x 7.9x 6.0x NEG 27.0%
VICORP Restaurants, Inc. 7.1% 0.1x 0.2x 53.5x 31.9x 10.9% 10.9%
Wendy's International 20.9% 0.2x 0.3x 27.0x 19.6x 16.8% 15.2%
-------------------------------------------------------------------------------------
26.1% 1.0x 1.4x 22.1x 15.1x 15.1% 13.5%
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%
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] 13
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
----------------------------------------------------------------------------------------------------------------------------
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 $204,000,000 of unusual item expenses and balance sheet
information taken from 12/30/00 10K.
(15) Quarterly income statement information taken from press release dated
4/24/01 balance sheet information taken from 12/27/00 10Q.
(16) Quarterly income statement information taken from press release dated
4/25/01 balance sheet information taken from 12/31/00 10K.
[TUCKER ANTHONY SUTRO LOGO] 14
SELECTED RESTAURANT M & A TRANSACTIONS
------------------------------------------------------------------------------
Enterprise Value
Enterprise Target's as a Multiple of:
Date Target Name/ Acquiror Name/ Value Sales EBITDA EBIT -----------------------------
Effective Business Description Business Description ($mil) ($mil) Margin Margin Sales EBITDA EBIT Assets
-------------------------------------------------------------------------------------------------------------------------------
Pending Mortons Restaurant Group, Inc. BFMA Holding Corp. $223.6 $251.1 11.5% 8.3% 0.89x 7.8x 10.7x 1.9x
Owns and operates restaurants Holding company
-------------------------------------------------------------------------------------------------------------------------------
Pending Vicorp Restaurants Inc. Investor Group $178.6 $375.3 11.2% 6.5% 0.48x 4.2x 7.3x 0.9x
Operates and franchises family Financial Buyer
style restaurants
-------------------------------------------------------------------------------------------------------------------------------
Pending NPC international Investor Group $439.0 $481.0 15.6% 9.7% 0.91x 5.8x 9.4x 1.0x
Owns and operates Pizza Hut Financial Buyer
franchises
-------------------------------------------------------------------------------------------------------------------------------
Pending II Fornaio Corp. Bruckman Rosser $76.5 $118.8 9.3% 4.5% 0.64x 7.0x 14.2x 1.1x
Owns and operates full service Sherrill & Co. LLC
Italian Restaurants Financial Buyer
-------------------------------------------------------------------------------------------------------------------------------
Pending Jerry's Famous Deli, Inc. Management/Investor $35.8 $69.6 9.9% 4.7% 0.52x 5.2x 10.9x 0.8x
Owns and operates restaurants Group
Financial Buyer
-------------------------------------------------------------------------------------------------------------------------------
Pending Taco Cabana, Inc. Carrols Corporation $150.7 $165.9 15.2% 9.8% 0.91x 6.0x 9.3x 1.4x
Operates and franchises Operator of quick
Mexican patio cafes primarily service restaurants
in the western US including Burger Kings
-------------------------------------------------------------------------------------------------------------------------------
4/26/01 Triad Restaurant Group, LLC Carolina Restaurant $40.5 NA NA NA NA NA NA NA
Owns and operates restaurants Group
Owns and operates
restaurants
-------------------------------------------------------------------------------------------------------------------------------
2/28/01 Uno's Restaurant Corp. Investor Group $158.7 $231.2 13.2% 7.5% 0.69x 5.2x 9.1x 0.9x
(Remaining 38% interest) Management group led by
Operates and franchises casual Aaron Spencer
dining restaurants
-------------------------------------------------------------------------------------------------------------------------------
12/12/00 Quizno's Corp. Investor Group $34.2 $41.7 9.6% 5.0% 0.82x 8.6x 16.3x 0.8x
Owns and franchises Italian Financial Buyer
Sub restaurants
-------------------------------------------------------------------------------------------------------------------------------
12/1/00 Rainforest Cafe Landry's Seafood $61.8 $265.2 9.7% 2.1% 0.23x 2.4x 11.2x 0.4x
Owns and operates combination Restaurants Inc.
restaurant & retail facilities Owns and operates casual
dining seafood restaurants
-------------------------------------------------------------------------------------------------------------------------------
10/2/00 Buffets, Inc. Caxton-Iseman Capital $499.7 $936.9 12.1% 7.5% 0.53x 4.4x 7.1x 1.0x
Operates Buffet Style Financial Buyer
Restaurants
-------------------------------------------------------------------------------------------------------------------------------
1/13/00 Boston Chicken Inc. McDonald's $173.5 NA NA NA NA NA NA NA
Operates and franchises Corporation Owns, operates
restaurants specializing in and franchises fastfood
complete meals featuring restaurants
rotisserie roasted chicken
1/4/99 Logan's Roadhouse Inc. CBRL Group Inc. $179.0 $90.3 18.4% 13.3% 1.98x 10.8x 14.9x 2.0x
Owns and franchises roadhouse Owns and operates
style restaurants Cracker Barrel
Restaurants
-------------------------------------------------------------------------------------------------------------------------------
10/1/99 Miami Subs Corp. Nathan's Famous Inc. $18.9 $23.5 13.2% 7.1% 0.80x 6.1x 11.3x 0.6x
(Remaining 70% interest) Own's and operates
Owns operates and franchises Nathan's Famous Foods
quick service restaurants Units
-------------------------------------------------------------------------------------------------------------------------------
9/29/99 Sbarro, Inc. (Remaining 65%) Investors (Sbarro $395.4 $357.9 16.1% 15.5% 1.10x 6.9x 7.1x NA
Owns operates and franchises Family)
a chain of Italian eateries Financial & Strategic
Buyer
-------------------------------------------------------------------------------------------------------------------------------
9/2/99 Host Marriott Services Corp. Autogrill SpA $989.1 $1,377.6 8.6% 4.3% 0.72x 8.3x 16.6x 1.7x
Operates restaurants, gift Operates restaurants,
shops and related facilities gift shops and related
at airports, travel plazas, facilities at airports,
and shopping malls travel plazas,
and shopping malls
throughout Europe
[TUCKER ANTHONY SUTRO LOGO] 15
SELECTED RESTAURANT M & A TRANSACTIONS (CONT'D)
--------------------------------------------------------------------------------
Enterprise Value
Enterprise Target's as a Multiple of:
Date Target Name/ Acquiror Name/ Value Sales EBITDA EBIT -----------------------------
Effective Business Description Business Description ($mil) ($mil) Margin Margin Sales EBITDA EBIT Assets
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
8/16/99 Rock Bottom Restaurants Inc. RB Capital Inc. $106.4 $160.1 11.8% 5.5% 0.66x 5.6x 12.2x 1.0x
Owner and Operater of sit Financial Buyer
down restaurants and breweries
---------------------------------------------------------------------------------------------------------------------------
8/10/99 Rally's Hamburgers Inc. Checker's Drive-in $229.0 $147.8 10.5% 3.2% 1.55x 14.7x 48.1x 1.9x
(74% interest) Restaurants Inc.
Operates and franchises drive Operates and franchises
thru quick service hamburger drive thru quick service
restaurants hamburger restaurants
7/6/99 Coffee People Inc. Diedrich Coffee Inc. $33.5 $44.3 7.5% 3.4% 0.75x 10.1x 22.0x 0.6x
Sells coffee beverages and Sells coffee beverages
various related items and various related
items
---------------------------------------------------------------------------------------------------------------------------
4/5/99 Back Bay Restaurant Group SRC Holdings Inc. $38.5 $95.9 9.0% 4.5% 0.40x 4.5x 8.9x 0.9x
Owns and operates full service Restaurant Holding Company
restaurants in New England
---------------------------------------------------------------------------------------------------------------------------
1/25/99 Spaghetti Warehouse Inc. Cracken Harkey & Co. $60.0 $66.0 9.2% 3.4% 0.91x 9.9x 26.6x 1.0x
Holding company for LLC
subsidiaries who operate Financial Buyer
restaurants
12/15/98 Lyon's Restaurants Inc. ICH Corporation $22.6 $124.2 6.4% 0.8% 0.18x 2.9x 21.6x NA
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% 0.45x 3.6x 7.0x 0.3x
Owns operates and franchises Own's and operates
quick service restaurants Nathan's Famous Foods
Units
11/25/98 Manhatten Bagel Co. New World Coffee & $20.0 $36.9 NEG NEG 0.54x NEG NEG 0.7x
Owns and operates bagel stores Bagels Inc.
and bakeries Owns and operates
coffee and bagel shops
and bakeries
7/21/98 Bertucci's Inc. NE Restaurant $104.9 $136.7 11.1% 4.8% 0.77x 6.9x 16.1x 1.0x
Operates Italian restaurants Company Restaurant
Holding Company
7/9/98 Pollo Tropical Inc. Carrols Corporation $89.4 $67.7 18.0% 14.5% 1.32x 7.3x 9.1x 2.2x
Owns and operates quick Operator of quick
service restaurants in a service restaurants
tropical setting including Burger Kings
7/798 Houlihan's Restaurants Group Scroggin Ventures $127.0 $149.5 NA NA 0.85x NA NA NA
Inc. Inc.
Holding company which owns and Financial Buyer
operates casual dining
restaurants
4/27/98 The Epicure Market Jerry's Famous Deli $9.1 $13.6 NA NA 0.67x NA NA NA
Operates a bread and sandwich Inc.
deli Operates New York style
deli restaurants
--------------------------------------------------------------------------------
Mean-Highlighted $183.2 $269.6 12.1% 7.2% 0.70x 5.7x 10.3x 1.0x
Median-Highlighted $106.4 $165.9 11.5% 6.5% 0.69x 5.8x 10.7x 0.9x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mean-Since 1/1/99 $204.1 $279.0 11.7% 6.6% 0.82x 7.0x 14.4x 1.1x
Median-Since 1/1/99 $154.7 $160.1 11.2% 5.5% 0.75x 6.1x 11.2x 1.0x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mean-All $160.9 $225.1 11.7% 6.6% 0.75x 6.3x 11.0x 1.1x
Median-All $97.2 $130.5 11.2% 5.5% 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] 16
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
Tender 52 Week 52 Week 52 Week 52 Week
Price High High Premium Low Low Premium
----------------------------------------------------
$28.25 $24.50 15.3% $17.75 59.2%
$0.50 $0.88 (43.2%) $0.14 257.1%
$9.75 $12.63 (22.8%) $6.06 60.9%
$7.00 $8.13 (13.9%) $3.19 119.4%
$5.30 $4.63 14.6% $1.16 358.4%
$4.00 $15.06 (73.4%) $2.50 60.0%
$4.50 $5.94 (24.2%) $1.75 157.1%
$5.02 $4.69 7.0% $2.03 147.3%
$25.65 $24.50 4.7% $16.31 57.2%
$23.50 $22.75 3.3% $15.00 56.7%
$1.00 $1.38 (27.5%) $0.38 163.2%
$3.00 $7.90 (62.0%) $4.00 (25.0%)
$7.00 $62.00 (88.7%) $9.20 (23.9%)
$30.10 $26.60 13.2% $19.60 53.6%
$10.50 $9.80 7.1% $4.80 118.8%
$10.00 $9.90 1.0% $7.60 31.6%
$14.00 $10.00 40.00% $6.00 133.3%
$9.04 $9.63 (6.1%) $4.13 118.9%
$44.32 $47.00 (5.7%) $21.00 111.0%
$5.00 $17.31 (71.1%) $4.13 21.2%
$1.75 $2.13 (17.6%) $1.25 40.0%
$13.00 $12.88 1.0% $7.63 70.5%
$11.00 $9.00 22.2% $3.19 245.1%
$5.00 $5.19 (3.6%) $3.00 66.7%
$16.90 $17.50 (3.4%) $10.50 60.95%
$1.00 $5.75 (82.6%) $0.94 6.67%
$13.63 $14.81 (8.0%) $7.50 81.67%
$22.00 $21.88 0.6% $13.00 69.23%
$12.60 $11.94 5.5% $7.31 72.31%
$8.45 $10.13 (16.5%) $3.50 141.43%
$13.85 $12.88 7.6% $8.06 71.78%
$23.00 $23.63 (2.6%) $16.56 38.87%
$9.00 $7.44 21.0% $4.63 94.59%
$8.05 $8.75 (8.0%) $4.00 101.25%
$16.00 $15.69 2.0% $6.00 166.67%
$22.00 $18.38 19.7% $9.38 134.67%
[TUCKER ANTHONY SUTRO LOGO] 17
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
Tender 52 Week 52 Week 52 Week 52 Week
Price High High Premium Low Low Premium
------------------------------------------------------
$12.00 $14.25 (15.8%) $9.50 26.32%
$8.90 $8.72 2.1% $2.44 265.13%
$18.75 $24.00 (21.9%) $10.00 87.50%
$1.10 $1.13 (2.2%) $0.41 170.77%
$20.00 $25.63 (22.0%) $12.50 60.00%
$100.00 $97.01 3.1% $51.50 94.17%
$29.00 $28.94 0.2% $16.50 75.76%
$10.00 $8.97 11.5% $4.44 125.35%
$11.25 $10.38 8.4% $5.88 91.49%
$5.34 $6.00 (11.0%) $3.44 55.35%
$27.00 $24.00 12.5% $11.94 126.18%
-------------------------------------------------------
Mean: (9.2%) 99.5%
Median: (2.2%) 81.67%
-------------------------------------------------------
Source: Securities Data Corp.
[TUCKER ANTHONY SUTRO LOGO] 18
FUTURE TRADING PRICE ANALYSIS
--------------------------------------------------------------------------------
(amounts in 000's) June 30, 2001 December 31, 2001 December 31, 2002
----------------------------------------------------------------------------------------
Sales $51,220 $55,579 $59,503
Multiple 0.90x 0.90x 0.90x
Implied Value $46,098 $50,021 $53,553
Debt Net of Available Cash $20,100 $14,517 $11,268
Equity Value $25,998 $35,504 $42,285
Present Value @ 37.5% $24,008 $27,961 $24,219
Fully Diluted Shares Outstanding 3,072 3,072 3,072
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Value per Share $7.81 $9.10 $7.88
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EBIT $5,934 $6,726 $8,064
Multiple 8.00x 8.00x 8.00x
Implied Value $47,470 $53,807 $64,512
Debt Net of Available Cash $20,100 $14,517 $11,268
Equity Value $27,370 $39,290 $53,244
Present Value @ 37.5% $25,275 $30,943 $30,496
Fully Diluted Shares Outstanding 3,072 3,099 3,116
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Value per Share $8.23 $9.99 $9.79
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Net Income(1) n.m. $2,113 $3,101
Multiple 10.5 10.5 10.5
Equity Value n.m. $22,182 $32,558
Present Value @ 37.5% n.m. $17,470 $18,648
Fully Diluted Shares Outstanding 3,072 3,072 3,087
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Value per Share n.m. $5.69 $6.04
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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
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DISCOUNTED CASH FLOW ANALYSIS
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Terminal Value (X 2005 EBITDA)
(Amounts in 000) 4.50X 5.00X 5.50X 6.00X 6.50X
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Valuation Matrix Discounted Value of Cash Flows (Enterprise Value)(1)
22.0% $45,781 $48,502 $51,222 $53,943 $56,664
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23.5% $43,695 $46,255 $48,815 $51,374 $53,934
Discount Rate 25.0% $41,745 $44,154 $46,564 $48,974 $51,384
26.5% $39,918 $42,188 $44,458 $46,728 $48,999
----------------------
28.0% $38,206 $40,346 $42,486 $44,626 $46,767
Debt Adjusted DCF (Equity Value)(2)(3)(4)
22.0% $24,933 $27,654 $30,375 $33,096 $35,817
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23.5% $22,848 $25,407 $27,967 $30,527 $33,086
Discount Rate 25.0% $20,897 $23,307 $25,717 $28,126 $30,536
26.5% $19,070 $21,340 $23,611 $25,881 $28,151
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28.0% $17,358 $19,498 $21,638 $23,779 $25,919
Per Share Debt Adjusted DCF (Equity Value Per Share)(2)(3)(4)
22.0% $8.12 $9.00 $9.89 $10.77 $11.66
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23.5% $7.44 $8.27 $9.10 $9.94 $10.77
Discount Rate 25.0% $6.80 $7.59 $8.37 $9.16 $9.94
26.5% $6.21 $6.95 $7.69 $8.42 $9.16
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28.0% $5.65 $6.35 $7.04 $7.74 $8.44
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%
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