Bugaboo Creek reports first quarter sales up 97 percent.

EAST PROVIDENCE, R.I.--(BUSINESS WIRE)--Oct. 12, 1995--Bugaboo Creek Steak House Inc. (NASDAQ:RARE) today reported net income of $421,600 and earnings per share of $.08 for the first quarter ended Sept. 17, 1995, versus prior year net income of $501,139 and earnings per share of $.10.

Net restaurant sales for the quarter of $9,977,530 increased by 97 percent from $5,071,283 during the same period a year ago. Restaurant operating profit of 1,322,787 for the quarter increased by 31 percent over the $1,011,800 reported last year.

Comparable store sales increased by 5.6 percent in the first quarter. During the quarter, one Bugaboo Creek unit was opened in Franklin Mills, Pa. on July 10, bringing total units in operation as of quarter end to 12; nine Bugaboo Creek Steak Houses and three Capital Grilles.

"We are very pleased with the sales performance of both concepts for the first quarter," commented Edward P. "Ned" Grace III. "Our newer Bugaboo Creek units are meeting our sales expectations and the Capital Grilles continue to record strong year-to-year sales gains. Beef costs remained high for the first half of the quarter and have now returned to normal levels. Our general and administrative expenses as a percentage of sales declined to 7.0 percent, versus 9.2 percent last year, as we leveraged those expenses against the increased sales."

Cost of sales was 37.4 percent for the quarter versus 35.8 percent in the comparable quarter last year and 37.8 percent in the previous quarter. Restaurant operating expenses increased to 42.9 percent from 39.5 percent in the comparable period last year, due primarily to higher marketing, labor and occupancy expenses. Depreciation and amortization of 6.4 percent, versus 4.7 percent last year, reflects principally the impact of increased new unit pre-opening expense amortization.

Grace continued, "Expansion for the rest of fiscal 1996 is on track for both the Bugaboo Creek and Capital Grille concepts. A second Bugaboo Creek unit was opened in Henrietta (Rochester), N.Y. on Sept. 18; two more are under construction in Portland, Maine and Framingham, Mass.; and we will also open units in Poughkeepsie, N.Y. and Braintree, Mass. in the second half of the fiscal year. Current plans are to open Capital Grilles in Philadelphia, Pa. and Chestnut Hill, Mass. before fiscal year-end. At this time, we expect to achieve our target of opening eight new units in fiscal 1996. Looking out to the remainder of calendar 1996, we are finalizing negotiations on Capital Grille sites in Troy, Mich., Baltimore, Md. and Miami, Fla., and on Bugaboo Creek sites in Springfield, Mass. and Christiana, Del. Presently, we are planning to open at least five Capital Grille and five Bugaboo Creek units in fiscal 1997."

Bugaboo Creek Steak House, Inc. operates two restaurant concepts: Bugaboo Creek Steak House, a casual dining restaurant with a Canadian mountain lodge theme; and The Capital Grille, a fine dining restaurant emphasizing dry aged steaks. There are currently 13 restaurants, ten Bugaboo Creek units and three Capital Grille units, open in the states of Connecticut, Maryland, Massachusetts, New York, Pennsylvania, Rhode Island, Virginia and in the District of Columbia.

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                          BUGABOO CREEK STEAK HOUSE INC.
                        Consolidated Statements of Income
                                    (Unaudited)

                             12 weeks ended        12 weeks ended
                           9/17/95    9/18/94     9/17/95     9/18/94

Net restaurant sales    $9,977,530 $5,071,283      100.0%      100.0%

Restaurant costs and
 operating expenses:
 Food and beverage
  costs                  3,739,737  1,816,640       37.4%       35.8%
 Restaurant operating
  expenses               4,280,424  2,006,663       42.9%       39.5%
 Depreciation and
  amortization             634,582    236,180        6.4%        4.7%

 Total restaurant costs
  and operating expenses 8,654,743  4,059,483       86.7%       80.0%

Earnings from restaurant
 operations              1,322,787  1,011,800       13.3%       20.0%

Other (income) expenses:
 General and
 administrative expense    699,623    466,446        7.0%        9.2%
 Other (income) expense,
  net                       (6,709)  (16,575)       (0.1%)      (0.3%)
 Interest and dividend
  income                   (18,743)  (202,894)      (0.1%)      (4.0%)

Earnings before taxes      648,616    764,823        6.5%       15.1%

Provision for income taxes 227,016    263,684        2.3%        5.2%

Net income                $421,600   $501,139        4.2%        9.9%

Weighted average shares
 outstanding             5,225,000  5,225,000

Earnings per share           $0.08      $0.10

CONTACT: Bugaboo Creek Steak House Inc.

Edward P. (Ned) Grace III, 401/433-5500 x. 120

or

Mark A. Peterson, 401/433-5500 x. 123