Benihana Inc. Reports Higher First Quarter Operating Results.

Business Editors

MIAMI, Fla.--(BUSINESS WIRE)--August 8, 2000

Benihana Inc. (NASDAQ:NMS:BNHN AND BNHNA), operator of the nation's largest chain of Asian restaurants, today reported increased operating results for the fiscal first quarter ended July 16, 2000.

For the first quarter, revenues increased 18.6%, to $47.1 million, from $39.7 million in the corresponding period a year ago. Restaurant operating profit amounted to $6.4 million, compared to $5.5 million, in the corresponding year-ago period. EBIDTA (earnings before interest, taxes on income and depreciation and amortization) amounted to $5.5 million, compared with $5.2 million in the similar period of fiscal 2000. Net income totaled $2.4 million or $0.37 per share diluted, compared with $2.3 million, or $0.36 per share diluted, a year-earlier.

In addition to increased volume at existing restaurants, revenues benefited from operations of two 80%-owned Haru restaurants, acquired in December 1999. Results in the first quarter were impacted by higher store opening costs and by increased acquisition related charges. Store opening expenses totaled $595,000, or approximately 5 cents per share, compared to opening expenses of $35,000 a year ago. Store opening costs are mostly rents paid during the construction period and investing in employee training prior to a restaurant unit being opened. Acquisition related charges (principally amortization of goodwill) amounted to $276,000, or 4 cents per share, up from $158,000, or 2 cents per share, in the prior year's period. Benihana in the first quarter opened a traditional teppanyaki restaurant in June at Monterey, California, and a Sushi Doraku by Benihana in Miami Beach, Florida. Under development are new teppanyaki restaurants in Santa Monica, California, Irving, Texas, Westbury, New York and Wheeling, Illinois, a Sushi Doraku by Benihana in Chicago, and three Haru restaurants in New York City.

"Despite substantially higher investment spending on new restaurants, which reflects a year in which Benihana is engaged in its largest expansion program ever, we are pleased that profitability improved and revenue growth, reflecting continued customer count increases, was very strong", said Joel A. Schwartz, President. "We will continue to incur opening costs as new units are brought on stream, however, our Company should also benefit from increased revenues from the new stores, especially as they become more seasoned. Cash flow remains strong and return on equity is one of the highest in the industry, and I anticipate a favorable fiscal 2001".

Mr. Schwartz also noted that the Company has signed franchise agreements for seven new teppanyaki units. Revenues from franchised operations rose 36% last year and were up 21.5% in the first fiscal quarter compared with the corresponding year-ago period.

Benihana currently operates 55 restaurant units: 51 teppanyaki style restaurants, two Sushi Doraku by Benihana restaurants and two Haru Sushi restaurants, and has eight additional restaurants under development. The company licenses 13 other teppanyaki restaurants.

Statements in this press release concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items, together with other statements that are not historical facts, are "forward-looking statements" as that term is defined under Federal Securities Laws. "Forward-looking statements" are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, changes in customers' tastes and preferences, acceptance of the Company's concepts in new locations, obtaining qualified personnel, industry cyclically, fluctuations in customer demand, the seasonal nature of the business, fluctuations of commodities costs, the ability to complete construction of new units in a timely manner, obtaining governmental permits on a reasonably timely basis, and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission.

BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share information)

                          Four Periods Ended
            ----------------------------------------------
                                 July 16,              July 18,
                                  2000                   1999
                            -----------------      ----------------

Restaurant sales                 $  46,718           $  39,392

Franchise fees and licensing           351                 289


Total revenues                      47,069              39,681

Gross profit                        33,656              28,730


Restaurant operating profit          6,416               5,477


Store opening expenses                 595                  35


Acquisition costs, principally
 amortization Of goodwill and
  other related intangibles            276                 158


Interest expense                       462                 319


Minority interest                       26                   -


Income before taxes                  3,529               3,542


Net income                           2,435               2,338


Per share
    Basic earnings                     .39                 .38
    Diluted earnings                   .37                 .36
    Diluted earnings before
     acquisition costs                 .41                 .38

Average shares outstanding       6,645,000           6,567,000

Other Data:
    EBITDA                           5,462               5,178

    Restaurants open                    55                  51

    Restaurants under development        8                   4