Sizzler International:

Highlights:
  • Fourth-quarter revenues increase to $55.3 million from $54.6 million

  • Fourth-quarter same-store sales growth of 5.7% for Sizzler USA and 3.7% for KFC
    • Sizzler USA and KFC guest counts continue to increase

    • Fourth-quarter net income improves to $2.7 million vs. $2.5 million

  • Company enters into an agreement to acquire Oscar's restaurants

  • 23 of 64 company Sizzler remodels completed

Sizzler International Inc. (NYSE:SZ - news) today reported financial and operational improvements for the fourth quarter and fiscal year ended April 30, 2000.

For the fourth quarter, the company reported revenues of $55.3 million, an increase of 1% over the $54.6 million in the comparable period in fiscal 1999. Excluding the effect of the weakening in the Australian dollar exchange rate, revenues would have been $56.6 million, an increase of 4%.

Sizzler reported net income for the fourth quarter of $2.7 million, or $0.10 per basic share, an 8% increase over net income of $2.5 million, or $0.09 per basic share, in the same period a year ago. For the fiscal year ended April 30, 2000, the company reported revenues of $239.5 million, an increase of 6% over revenues of $226.3 million in fiscal 1999.

Excluding one-time items, Sizzler reported net income of $8.6 million, or $0.30 per basic share, for fiscal 2000, compared with net income of $7.4 million, or $0.26 per basic share, in fiscal 1999. Including the non-recurring items, the company reported net income of $2.4 million, or $0.08 per basic share, for fiscal 2000.

Positive Trends in Same-Store Sales Growth

For the fourth quarter, same-store sales increased 5.7% across company-owned U.S. Sizzler locations; 0.8% in the Australian Sizzler locations; and 3.7% from Sizzler's KFC units. The increase in same- store sales for the U.S. Sizzler locations was primarily driven by a 2.5% increase in customer counts.

"Sizzler experienced growth across all business segments for the fourth quarter and fiscal year," said Charles Boppell, president and CEO of Sizzler International. "Although we'll be facing the challenge of the upcoming goods and services tax in Australia, as well as a potentially weak Australian dollar, we expect to maintain positive growth in the quarters ahead.

"Our recent gains have been primarily as a result of our continued success in the improvement of our restaurant operations, including positive customer response to the enhanced food quality and cooking methods, and the continuing success Sizzler is experiencing with its store remodeling and re-imaging program," continued Boppell.

"We have successfully completed the re-imaging of 23 of our stores," commented Thomas E. Metzger, FMP, president of Sizzler USA. "We're experiencing solid increases in sales and customer counts that we believe will continue in the quarters ahead as we continue to roll out the re-imaging program."

Oscar's Acquisition

Following the end of the fourth quarter, the company entered into an acquisition agreement with Oscar's, a successful San Diego-based restaurant company. Under the agreement, Sizzler will acquire an 82% stake in the growing company in return for $16 million in cash, warrants on 1,250,000 shares of Sizzler stock at $4 per share, and a performance-based earnout that may amount to $3.1 million or more.

"The Oscar's acquisition, which is expected to be accretive after its first full year, is the final element of our four-pronged growth strategy. We are already on-track and progressing as expected with the three other elements of the strategy -- growing the domestic Sizzler revenues, expanding in Australia through new units and co-branding, and improving our stores in the Asian region. As all of these strategies come together, we believe we will experience continued success throughout fiscal 2001 and beyond," concluded Boppell.

Due to the pending announcement of the Oscar's transaction, Sizzler did not repurchase shares during the fourth quarter. The company has completed the repurchase of approximately 706,700 of the 1.5 million shares of common stock it has been authorized to repurchase by its board of directors. Subject to applicable law and other factors, the company expects to resume its stock repurchase program.

Discussion of Non-Recurring Items

The company's fiscal 2000 financials include a net charge of $6.2 million for non-recurring items that were recognized in the third fiscal quarter ended Feb. 6, 2000. These items consist of a $6.6 million non-cash charge representing the final accounting of its reorganization, a $5.5 million loss on the sale-leaseback of certain Australian properties, and a $5.9 million tax benefit.

Sale-Leaseback Accounting

To date, Sizzler has closed sale-leaseback transactions for 49 of the 67 Australian KFC and Sizzler restaurants expected to be monetized via sale-leasebacks as announced in November 1999. The company expects to realize approximately AU $55 million in cash once the sales are complete. Of this amount, Sizzler has received approximately AU $42 million from the transactions that have closed.

The company expects to utilize the proceeds of the sale-leasebacks to finance the capital expenditures made as part of its strategic growth plan, including the Oscar's acquisition, restaurant remodeling and repositioning.

Dismissal of Lawsuit

The lawsuit filed by a former employee last August has been resolved with no material financial impact on the company.

Investor Conference Call

Sizzler will be holding an investor conference call to discuss the company's financial and operational results today at 11 a.m. EDT. Investors will have the opportunity to listen to the conference call over the Internet through Vcall at http://www.vcall.com.

To listen to the live call, go to the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.

About Sizzler

Sizzler International Inc. operates, franchises or joint ventures 348 Sizzler restaurants worldwide, in addition to the 101 KFC restaurants in Queensland, Australia.

To the extent that certain statements contained in this document may be deemed under federal securities laws to be forward-looking statements, Sizzler intends that they be subject to the safe-harbor applicable to forward-looking statements under such laws. Such statements may include, but are not limited to, statements regarding (i) the closing of additional sale-leaseback transactions, (ii) the amount of cash proceeds and the gain or loss to be realized from such sale-leaseback transactions, (iii) the utilization of the proceeds of such sale-leaseback transactions; (iv) the continued positive impact of the remodel program on sales and customer counts, (v) the closing of the Oscar's transaction, the amount of any earnout payments, and the time at which such acquisition will be accretive; (vi) the continuation of the company's stock repurchase program, and (vii) the continued success of the company's four-pronged growth strategy and continued growth across all business segments through fiscal 2001 and beyond. Sizzler cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein. Such factors include, but are not limited to, (a) the market for the company's properties, which may affect the company's ability to close additional sale-leaseback transactions or the values realized in such transactions or; (b) changes in the company's cash needs, which may impact utilization of the sale-leaseback transactions proceeds; (c) the failure of the company's newly remodeled stores and/or new food offerings to continue to appeal to customers; (d) the failure to complete the remodel program as scheduled; (e) the satisfaction of all conditions to consummation of the Oscar's acquisition, including but not limited to any required government and other approvals; (f) the company's ability to operate the Oscar's division profitably and successfully open new units; (g) possible negative impact on the company's Australia operations as a result of the implementation of the new goods and services tax in Australia (h) the possible negative impact of exchange rate fluctuations; and (i) other risks as detailed from time to time in Sizzler's SEC reports, including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Annual Reports on Form 10-K.

For more information on Sizzler International Inc. via facsimile at no cost, simply call 800/PRO-INFO and dial client code "SZ."


              SIZZLER INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)

Twelve Weeks Ended
April 30, April 30,
2000 1999

Revenues
Restaurants $ 52,991 $ 52,708
Franchise operations 2,330 1,924
Total revenues 55,321 54,632
Costs and Expenses
Cost of sales 19,223 19,446
Labor and related expenses 14,527 13,611
Other operating expenses 11,381 11,463
Depreciation and amortization 1,744 2,468
Non-recurring items -- --
General and administrative expenses 4,881 4,146
Total operating costs 51,756 51,134
Interest expense 853 628
Investment income (527) (147)
Total costs and expenses 52,082 51,615
Income before income taxes 3,239 3,017
Provision for income taxes 535 502
Net income $ 2,704 $ 2,515

Earnings per share
Basic $ 0.10 $ 0.09
Diluted $ 0.09 $ 0.09

Weighted average common
shares outstanding
Basic 28,066,845 28,795,000
Diluted 28,612,122 28,945,000


SIZZLER INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)

Fifty-Two Weeks Ended
April 30, April 30,
2000 1999

Revenues
Restaurants $ 230,869 $ 218,561
Franchise operations 8,625 7,765
Total revenues 239,494 226,326
Costs and Expenses
Cost of sales 84,599 80,695
Labor and related expenses 63,081 59,179
Other operating expenses 49,436 47,889
Depreciation and amortization 8,628 9,927
Non-recurring items 12,087 --
General and administrative expenses 20,346 16,874
Total operating costs 238,177 214,564
Interest expense 3,631 3,284
Investment income (1,423) (724)
Total costs and expenses 240,385 217,124
Income (loss) before income taxes (891) 9,202
Provision (benefit) for income taxes (3,313) 1,810
Net income $ 2,422 $ 7,392

Earnings per share
Basic $ 0.08 $ 0.26
Diluted $ 0.08 $ 0.26

Weighted average common
shares outstanding
Basic 28,559,050 28,815,000
Diluted 28,876,620 28,878,000


SIZZLER INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

April 30, April 30,
ASSETS 2000 1999

Current Assets:
Cash and cash equivalents $ 38,789 $ 14,691
Receivables, net of reserves of $847 at
April 30, 2000 and $1,726 at April 30, 1999 4,173 3,546
Inventories 4,333 4,346
Prepaid expenses and other current assets 1,132 1,669

Total current assets 48,427 24,252

Property and equipment, net 46,316 77,836
Property held for sale 8,931 711
Long-term notes receivable, net of reserves of
$72 at April 30, 2000 and $508 at April 30, 1999 1,224 1,553
Deferred income taxes 5,949 795
Intangible assets, net of accumulated
amortization of $889 at April 30, 2000
and $887 at April 30, 1999 1,876 2,104
Other assets, net of accumulated amortization
and reserves of $16 at April 30, 2000 and
$6 at April 30, 1999 1,497 1,418

Total assets $114,220 $108,669


SIZZLER INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

April 30, April 30,
LIABILITIES AND STOCKHOLDERS' INVESTMENT 2000 1999

Current Liabilities:
Current portion of long-term debt $ 5,206 $ 5,898
Accounts payable 8,196 7,892
Other current liabilities 10,209 8,853
Income taxes payable 2,530 2,449

Total current liabilities 26,141 25,092

Long-term Liabilities:
Long-term debt, net of current portion 21,198 26,918
Deferred gain on sale and leaseback 8,269 --
Other liabilities 7,977 3,916

Total long-term liabilities 37,444 30,834

Stockholders' Investment:
Capital stock --
Preferred, authorized 1,000,000 shares,
$5 par value; no shares issued -- --
Common, authorized 50,000,000 shares,
$0.01 par value; 28,774,239 shares issued
and 28,067,539 shares outstanding at April 30,
2000 and 28,797,828 shares issued and
outstanding at April 30, 1999 288 288
Additional paid-in capital 278,408 278,365
Accumulated deficit (219,769) (222,191)
Treasury stock, 706,700 shares at cost at
April 30, 2000 and none at April 30, 1999 (1,948) --
Accumulated other comprehensive income (6,344) (3,719)

Total stockholders' investment 50,635 52,743

Total liabilities and stockholders'
investment $114,220 $108,669