Granite City Food & Brewery Ltd. Improves Restaurant-Level EBITDA Margin to 15.4% for First Quarter 2009

Highlights for the first quarter of 2009 were as follows:

- Restaurant-level EBITDA improves to 15.4% from 8.5% in prior year first quarter

- Prime cost (food, beverage, labor) decreases 7.9 percentage points from 70.3% in prior year quarter to 62.4% in first quarter 2009

- Same-store-sales down 11.2% from prior year first quarter

- Adjusted company-wide EBITDA improves $1.9 million, from a loss of $650,000 in first quarter 2008 to income of $1.2 million in first quarter 2009

- Corporate charges decrease $600,000 in first quarter 2009 compared to first quarter 2008

- March restaurant-level EBITDA reached 17.7%

First Quarter 2009 Financial Results

Total revenue for the first quarter 2009 decreased by 10.8% to $21.4 million compared to $24.0 million for the first quarter of 2008.

For all the restaurants, the restaurant-level EBITDA margin was 15.4% for the first quarter of 2009 compared to 8.5% in the first quarter of 2008. This represents an increase of 6.9 percentage points in restaurant-level EBITDA

'Given the tough conditions in our industry, we are pleased with our restaurant-level performance,' commented Granite City's CEO, Steve Wagenheim. 'We all know that the economy has been difficult from a revenue perspective and that the polished casual dining sector is facing tougher challenges than most, but our ability to improve margins from 8.5% to 15.4% during comparative quarters is a testament to all the hard work of our management team. We believe that if we can continue to operate at these levels and the economy permits an increase in revenues, we will be able to drop even more restaurant-level profit to the bottom line. We understand the need to move the company into a cash flow positive position and we intend to continue to work on improving our capital structure.'

Total cost of sales was $18.1 million in the first quarter or 84.6% of sales compared to prior year first quarter cost of sales of $22.0 million or 91.5% of sales. The improvement in the first quarter compared to the prior year quarter was due to several factors including our renegotiated food and food distribution costs, sizing and scheduling our staff to standardized sales-per-labor-hour levels, and a continued strong focus in managing strategy.

General and administrative expenses were $2.1 million or 9.6% of sales for the first quarter of 2009 compared to $2.7 million or 11.2% of sales for the first quarter of 2008. Non-cash compensation expense within the general and administrative expense represented 0.2% of sales for the first quarter of 2009.

The net loss for the first quarter of 2009 was $2.7 million or $(0.17) per share compared to a net loss of $4.3 million or $(0.27) per share in the first quarter of 2008.

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