Spencer's Restaurants, Inc

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International Guild of Hospitality & Restaurant Managers

Business Summary
OTC: SPST

Spencer's Restaurants, Inc. was formed to develop, build and operate a chain of casual dining southwestern restaurants under the name Rattlesnake Southwestern Grill. As of June 26, 2000, the Company operated one restaurant in South Norwalk, Connecticut. Additionally, the Company owned a site in Danbury, Connecticut at which it operates the Company's new concept restaurant named Spencer's, featuring a casual steakhouse theme

Extended Business Summary

Financial Summary

SPST operates restaurants in NY, NJ and CT under the names Rattlesnake Southwestern Grill and Ottomanelli's Cafe. For the nine months ended 3/26/01, net revenues rose 57% to $2.7 million. Net loss before extraordinary item and applicable to Common decreased 31% to $1.1 million. Revenues reflect the opening of the new Spencer's Danbury restaurant. Lower loss was partially offset by an increase in cost of food due to the addition of the Danbury location

Extended Business Summary

Spencer's Restaurants, Inc. was formed in 1993 to develop, build and operate a chain of casual dining southwestern restaurants under the name Rattlesnake Southwestern Grill. As of June 26, 2000, the Company operated one restaurant in South Norwalk, Connecticut featuring a casual dining concept with a southwestern theme named Rattlesnake Southwestern Grill. Additionally, the Company owned a site in Danbury, Connecticut at which it operates the Company's new concept restaurant named Spencer's, featuring a casual steakhouse theme, which began operations in November 1999.

The Company developed a concept for a multi-regional chain of mid-priced steakhouses, to feature price/value steak and distinctive shrimp (and other) dishes, named Spencer's. Spencer's is a price/value oriented restaurant concept that is designed to provide fresh, high quality food at moderate prices in a relaxed atmosphere. The Spencer's concept include a casual, back to basics, large portions, mid-priced steakhouse; designed to offer exceptional service, specializing in two areas, steaks and shrimp offerings.

The Spencer's menu features house cut and aged steaks and steak burgers (intended to be comparable quality to high priced steakhouse offerings), as well as bulk offerings of shrimp that are served in distinctive "house" sauces on pasta or rice with dunking bread. To compliment the steak and shrimp offerings, menu items in Spencer's also include appetizers, unique salads; chicken, fish, rib, and pasta entrees; mainstay sandwiches; a separate Kid's list of choices that are inclusive of fries and beverage; and desserts. Standard alcoholic beverages as well as selection of blended specialty drinks are offered.

A typical Spencer's should range in size from 6,000 to 8,000 square feet with 150 to 250 seats with a 175-seat average. It is intended that the Spencer's will be built according to a retrofit construction strategy. As a result, each Spencer's is expected to have a somewhat different layout. The interior image and trade dress, however, is intended to be consistent. The first Spencer's, located in Danbury, Connecticut, has a size of 7,200 square feet. The Spencer's menu and unit economics are intended to facilitate replication in multi-regional area development hubs through Company-owned and ultimately franchised operations.

The Company presently is also the licensee of Rattlesnake. Rattlesnake is licensed from a non-affiliated person under an agreement expiring in or about the year 2000, with a right of renewal, and requiring minimum royalty payments of $5,000 per year. The Company continues to operate a self-sustaining Rattlesnake Southwestern Grill in South Norwalk, Connecticut. The Company has not determined whether to continue operations under the Rattlesnake name.

The Company previously was also the licensee of Ottomanelli's Cafe, which license was terminated in April 2000. Ottomanelli's Cafe was licensed from a corporation, the capital stock of which is owned by Nicolo and Joseph Ottomanelli, with a term co-extensive with the licensor's rights and for no separate consideration, entered into as part of its merger transaction with such persons.

The restaurant industry is intensely competitive with respect to price, service, location and food quality, and there are many well-established competitors with substantially greater financial and other resources than the Company. Such competitors include a large number of national and regional restaurant chains. Although the Company believes that its concept will distinguish it from competitors, steakhouse chains with which the Company will compete include Outback, Longhorn, Lone Star and Bugaboo Creek restaurants.

Disclaimer:
The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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