Perkins & Marie Callender's Inc. Reports Results for Fiscal Year Ended December 30, 2007

Highlights for 2007:
- Perkins franchisees opened eight new restaurants during 2007, three franchised Perkins restaurants were converted to Company-operated restaurants and four franchised Perkins restaurants were closed. Seven Company-operated Perkins restaurants opened during 2007, three Company-operated Perkins restaurants were closed. One Marie Callender's franchised restaurant was converted to a Company-operated restaurant during 2007, one Marie Callender's franchised restaurant was closed, and one Company-operated Marie Callender's restaurant was closed.

-- Primarily due to the inclusion of seven additional days of revenues in 2006 (see below), revenue decreased by 1.1% from $594.2 million in 2006 to $587.9 million in 2007. Comparable restaurant sales for 2007 decreased 1.2% for Perkins restaurants and 0.5% for Marie Callender's restaurants. Revenues from the new Perkins restaurants offset the majority of the 2007 sales decline from 2006, which was caused primarily by the $8.7 million in incremental revenues attributable to the seven additional days in 2006 and the decline in comparable restaurant sales in 2007.

J. Trungale, President and Chief Executive Officer of Perkins & Marie Callender's Inc., commented, "Efforts made throughout 2007 to drive sales and control costs helped the Company achieve adjusted EBITDA of approximately $51 million. During a challenging 2007 economic environment, we believe the Company executed well. We realized significant cost savings and synergies from the 2006 merger and our focus on cost controls and process improvements allowed us to sustain margins and open new, profitable locations. Our core business remains solid, and following a restructuring of the Foxtail management team at the end of 2007 and beginning of 2008, we feel optimistic about the Company's prospects for 2008."

2007 Financial Results

Our financial reporting is based on thirteen four-week periods ending on the last Sunday in December. In 2006, as is the case every six years, the fourth quarter included an extra week of operations, and therefore the year included fifty-three weeks of operations compared to fifty-two weeks of operations in 2007 and 2005.

Revenues in 2007 decreased 1.1% to $587.9 million from $594.2 million in 2006. The decrease resulted primarily from an $8.7 million decline in sales due to the inclusion of seven additional days of revenues in 2006, a $3.5 million decline in Foxtail revenues net of the impact of the fifty-third week in 2006 and comparable restaurant sales declines in 2007 of 1.2% and 0.5% for Perkins and Marie Callender's restaurants, respectively. These declines were partially offset by sales from new Perkins restaurants.

Food costs for 2007 totaled 28.5% of food sales, up 0.1 percentage point from 28.4% in 2006. Restaurant segment food cost remained flat at 27.1% of food sales in 2007. In the Foxtail segment, food cost increased 4.0 percentage points to 60.9% of food sales in 2007, primarily due to higher commodity costs and production inefficiencies resulting in part from lower sales.

Labor and benefits costs, as a percentage of total revenues, increased 1.0 percentage point from 31.2% in 2006 to 32.2% in 2007. In 2007, a 0.8 percentage point increase in the restaurant segment resulted from increases in the average wage rates at both Perkins and Marie Callender's restaurants. Additionally, a 0.8 percentage point increase in the Foxtail segment resulted from an increase in the average wage rate in the Cincinnati plants due to competitive pressures in the marketplace, in addition to lower labor productivity resulting from reduced Foxtail sales.

Operating expenses for 2007 were $149.4 million, or 25.4% of total revenues, compared to $150.1 million, or 25.3% of total revenues in 2006. Restaurant segment operating expenses were 27.6% of restaurant sales in both 2007 and 2006. Operating expenses in the Foxtail segment increased by 0.3 percentage points as a result of customer rebate programs and increased utilities expense.

General and administrative expenses were 7.6% of total revenues, a decrease of 0.5 percentage points from 2006. The decrease is due primarily to a $2.8 million (0.5 percentage point) reduction in incentive costs for corporate employees and continuing synergies achieved as a result of the May 2006 combination (see below). These savings were partially offset by three legal settlements totaling approximately $0.8 million.

Transaction costs represent internal and external expenses directly related to the acquisition of The Restaurant Company ("TRC"), the former name of Perkins & Marie Callender's Inc., in September 2005 by an affiliate of Castle Harlan Partners IV, L.P. (the "Acquisition"), and the combination of TRC and Wilshire Restaurant Group, Inc. ("WRG") in May 2006 (the "Combination") and certain non-recurring expenses incurred as a result of the Combination. Transaction costs were $1.0 million in 2007 compared to $5.7 million in 2006.

Depreciation and amortization was 4.2% of revenues in the current year and 4.3% of revenues in 2006. In 2006, depreciation expense was higher due to the step-up in the basis of Perkins' depreciable assets, related to the Acquisition, and the related adjustment to depreciation.

Interest, net was 5.3% of revenues in the current year compared to 6.1% in 2006. The 0.8 percentage point decrease is mainly due to the repayment of WRG's indebtedness with proceeds of the term loan obtained in connection with the Combination. Interest rates on WRG's indebtedness were significantly higher than the interest rates on the term loan.

In conjunction with the Combination, the Company entered into an amended and restated credit agreement (the "Credit Agreement"). As of December 30, 2007, the Company violated the leverage ratio covenant in the Credit Agreement. On March 14, 2008, the Company executed an amendment to the Credit Agreement that waived the December 30, 2007 covenant violation, modified the financial covenants and increased interest rates approximately 2.5% on both the Term Loan and the Revolver.

                                     Year Ended   Year Ended    Year Ended

                                    December 30, December 31,  December 25,

  (in thousands)                        2007         2006          2005



  Net loss                             $(16,335)     $(9,372)     $(15,231)

  Provision for (benefit from)

   income taxes                           1,482          155          (638)

  Interest, net                          31,180       36,197        26,362

  Depreciation and amortization          24,822       25,641        11,594

  Transaction costs                       1,013        5,674           867

  Asset impairments and closed

   store expenses                         2,463        3,089           611

  Gain on extinguishment of debt            -        (12,642)         (565)

  Pre-opening expenses                    1,992          688           545

  Management fees                         3,576        3,592         2,252

  Other non-cash items                      351        2,346         1,286

  Adjusted EBITDA                       $50,544      $55,368       $27,083

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