Buffets buyout of Ryan's increases loss; company to sell Tahoe Joe's

Nation's Restaurant News,  Nov 19, 2007  

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EAGAN, MINN. -- Buffets Holdings Inc., operator or franchisor of 651 Old Country Buffet, HomeTown Buffet, Ryan's, Fire Mountain and Tahoe Joe's Famous Steakhouse restaurants, reported a nearly five-times-larger net loss for the fiscal first quarter ended Sept. 29 on expenses from its year-ago acquisition of Ryan's Restaurant Group and higher interest and operating costs.

Buffets Holdings' net loss was $5.3 million, compared with a year-earlier quarterly loss of $1.1 million. Revenues increased 76 percent to $376.5 million, mainly because of the Ryan's acquisition, which closed Nov. 1, 2006. Buffets currently is trying to sell 11-unit Tahoe Joe's and said it expects a deal to be struck within its current fiscal 2008. Buffets also said it had hired investment bank Houlihan, Lokey, Howard & Zukin Capital to advise the company on its capital structure and business plan.

In the latest quarter, the company logged a $7.5 million increase in interest expense from the year before and $1.6 million of merger integration costs.

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