Buffets Holdings, Inc. Total revenues up 74.0% in the third quarter

HIGHLIGHTS:

• Total revenues up 74.0% in the third quarter

• Buffets' units same store sales were down 2.1% for the quarter

• Ryan's units same store sales were down 8.7% for the quarter

• Cost savings initiatives in connection with the merger progressing on schedule

Buffets Holdings, Inc. ('Buffets Holdings'), the parent company of Buffets, Inc. ('Buffets'), today reported operating results for its 16-week, third quarter period ended April 4, 2007.

Buffets Holdings reported a 74.0% increase in total sales for the third quarter ended April 4, 2007, as sales increased to $509.2 million compared to $292.6 million for the comparable prior year period, primarily due to the merger with Ryan's Restaurant Group on November 1, 2006. Average weekly sales for the third quarter of fiscal 2007 for the Buffets brand restaurants, which include the Old Country Buffet(R) and HomeTown Buffet(R) brands, decreased approximately 0.7% to $52,097, as compared to the comparable prior year period. Same-store sales for the third quarter of fiscal 2007 decreased by 2.1% for the Buffets brand restaurants as compared to the prior year. This decrease was primarily attributable to a 4.7% decline in guest traffic, partially offset by a 2.6% increase in average check. Average weekly sales for the third quarter of fiscal 2007 for the Ryan's brand restaurants, which include the Ryan's(R) and Fire Mountain(R) brands, decreased by 7.2% to $44,406 as compared to the comparable prior year period. Same-store sales for the third quarter of fiscal 2007 decreased by 8.7% for the Ryan's brand units as compared to the prior year. This decrease was primarily attributable to a 9.6% decline in guest traffic, partially offset by a 0.9% increase in average check. Same-stores sales calculations reflect those restaurants that have been in operation for at least eighteen operating periods.

Net loss for the third quarter of fiscal 2007 was $14.4 million, as compared to a net loss of $1.3 million for the third quarter of fiscal 2006. The increase in net loss was primarily attributable to an increase in interest expense of approximately $12.1 million, a $6.0 million litigation settlement charge related to the estimated settlement of a class action lawsuit, $3.5 million of merger integration costs related to the merger with Ryan's and higher food and labor costs, which were offset in part by the increase in income tax benefit of $5.5 million. The increase in interest cost of approximately $12.1 million was primarily due to the significant increase in our long-term debt balances resulting from the debt we incurred in connection with the Ryan's merger on November 1, 2006.

Buffets Holdings reported a 39.4% increase in total sales for the 40 weeks ended April 4, 2007, as sales increased to $1,028.4 million compared to $737.6 million for the comparable prior year period, primarily due to the merger with Ryan's on November 1, 2006.

Average weekly sales for the first 40 weeks of fiscal 2007 for the Buffets brand restaurants increased approximately 1.2% to $52,761 as compared to the comparable prior year period. Same-store sales for the Buffets brand restaurants for the first 40 weeks of fiscal 2007 decreased by 0.7% as compared to those reported for the prior year period. This decrease was primarily attributable to a 3.5% decline in guest traffic, partially offset by a 2.8% increase in average check. Average weekly sales on a pro forma basis for the first 40 weeks of fiscal 2007 for the Ryan's brand restaurants, which include the Ryan's brand units for the full 40 week period, decreased by 5.3% to $44,144 as compared to the comparable prior year period. Same-store sales on a pro forma basis for the first 40 weeks of fiscal 2007 for the Ryan's brand units, which includes the Ryan's brand units for the entire 40 week period, decreased by 6.1% as compared to same store sales for the prior year. This decrease was primarily attributable to a 7.2% decline in guest traffic, partially offset by a 1.1% increase in average check.

Net loss for the first 40 weeks of fiscal 2007 was $50.5 million, as compared to a net loss of $2.1 million for the first 40 weeks of fiscal 2006. The increase in net loss was primarily attributable to a $41.1 million loss related to refinancing, a $2.5 million loss on the sale leaseback transactions, an increase in interest expense of approximately $18.9 million, a $6.0 million litigation settlement charge related to the estimated settlement of a class action lawsuit, approximately $7.0 million of merger integration costs related to the merger with Ryan's and higher food and labor costs, offset in part by the increase in income tax benefit of $28.7 million. The interest expense increase was primarily due to the significant increase in our long-term debt balances in connection with the financing of the merger with Ryan's on November 1, 2006.

Continued Focus on Key Initiatives

We have received favorable guest response to our 'Steak & Ribs' promotion and related advertising campaign, which was launched in April. We have continued the testing and installation of our display grill cooking stations in our Old Country Buffet(R) and HomeTown Buffet(R) branded restaurants and now have thirty-two units with this retrofit. In addition, our Ryan's(R) and Fire Mountain(R) branded units have more than 200 display grills in operation.

We continue to direct significant attention to our cost savings initiatives related to the Ryan's integration effort and have made substantial progress. We are on schedule with these cost savings initiatives and are extremely pleased with the progress made to date.

The company also announced today that its wholly owned subsidiary, Buffets Franchise Holdings, LLC, in accordance with Federal Trade Commission rules and regulations and various state franchise laws, has completed its Uniform Franchise Offering Circular ('UFOC') and submitted the UFOC for review to those states in which registration is required.

Buffets Franchise Holdings, LLC is currently pursuing franchising of its HomeTown Buffet brand in non registration states and will begin pursuing franchising in the remaining states as and when they are approved.

Buffets Holdings will be conducting a conference call to discuss operating results for the quarter ended April 4, 2007, on Monday, May 21, 2007 at 11:00 a.m. (Eastern). You may dial into this call starting at 10:45 a.m. (Eastern). The conference phone number is (888) 228-7864 and the conference ID number is 8599386. Chief Executive Officer Mike Andrews and Chief Financial Officer Keith Wall will host the call. In consideration of your fellow participants, the Company requests that cellular phones not be used. The conference call will be recorded and available for playback through Friday, June 1, 2007 at 6:00 p.m. (Eastern). Playback can be accessed by dialing (800) 642-1687 and requesting conference ID number 8599386. Information regarding non-GAAP financial measures discussed in the conference call can be found at www.buffet.com on the financial information page.

About Buffet Holdings

Buffets, Inc. currently operates 644 restaurants in 39 states comprised of 635 buffet restaurants and nine Tahoe Joe's Famous Steakhouse(R) restaurants. The buffet restaurants are principally operated under the Old Country Buffet(R), HomeTown Buffet(R), Ryan's(R) and Fire Mountain(R) brands. Buffets also franchises 18 buffet restaurants in seven states.



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