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KETTLE RESTAURANTS ANNOUNCES FINANCIAL RESULTS

 KETTLE RESTAURANTS ANNOUNCES FINANCIAL RESULTS
 HOUSTON, Sept. 16 /PRNewswire/ -- Kettle Restaurants, Inc. today


announced that the net profit for the quarter ended July 30, 1992 was $253,000 or $.22 per share compared with net profit for the quarter ended Aug. 1, 1991 of $425,000 or $.37 per share. The net profit for the three quarters ended July 30, 1992 was $236,000 or $.21 per share compared with a net profit for the three quarters ended Aug. 1, 1991 of $1,596,000 or $1.39 per share.
 In fiscal 1990, the company received notice of a workers' compensation rate modification in the state of Texas resulting in billings of additional premiums of approximately $1,004,000 for the period ending November 1, 1990. Accordingly, that amount was charged to earnings for the year ended November 1, 1990. Subsequent to issuance of the company's 1990 annual report, the company successfully appealed the rate modification resulting in the rescission of additional premiums due and additionally, the net refund of premiums paid during fiscal 1989 of $442,000. The rescission of the rate modification charged to earnings in fiscal 1990 and the refund of premiums paid in fiscal 1989 were reflected as credits to earnings in the three quarters ended Aug. 1, 1991 of $1,446,000, which substantially enhanced net income for the respective period.
 Total revenues increased 9.6 percent to $13,007,000 for the quarter ended July 30, 1992 and increased 11.1 percent to $35,871,000 for the three quarters ended July 30, 1992 compared to the same periods the prior year, primarily due to increases in restaurant sales. Restaurant revenues increased 18.6 percent to $10,358,000 for the quarter and increased 18.6 percent to $27,877,000 for the three quarters ended July 30, 1992 compared to the same periods the prior year due, in part, to the acquisition of 14 franchise stores from franchisees during fiscal 1991 and the first three quarters of fiscal 1992. The reacquired franchise stores also contributed to the increases of 5.7 percent and 6.0 percent in weighted average sales per restaurant for the quarter and three quarters ended July 30, 1992, respectively, compared to the prior year.
 Franchise fees decreased 4.8 percent to $1,087,000 in the quarter ended July 30, 1992 compared to the same period in 1991 and decreased 4.3 percent to $2,999,000 in the three quarters ended July 30, 1992 compared to the same period in 1991 reflecting, in part, a net reduction of 14 franchised stores in the system during fiscal 1991 and the three quarters ended July 30, 1992, partially offset by an increase in weighted average sales per store of .6 percent and 3.6 percent for the quarter and three quarters ended July 30, 1992, respectively.
 The company, aided by the advertising firm of Black Gillock & Langberg, and its public relations division, Black/Rives Public Relations, has created a marketing program which focuses on creating an identifiable image for the company. The advertising/public relations campaign is designed to broaden the existing customer base and utilizes radio spots featuring Peg Phillips, who plays "Ruth Ann" on the popular CBS series "Northern Exposure." The spots have a warm, neighborly feeling and talk about Kettle founders Harry and Danny Chambers. The advertising campaign is currently implemented in selected markets and management believes that it has contributed to the increase in weighted average sales reflected in fiscal 1991 and 1992.
 Two franchised stores were opened during the first three quarters of 1992 and it is anticipated that one franchised store and one company operated store will be added during the fourth quarter of 1992. Additionally, a franchisee has entered an agreement with the company to renew the franchise agreement on two currently franchised stores within the next three years and to open two new franchise stores within the next five years.
 Kettle Restaurants, Inc. is principally engaged in the operation and franchising of 24-hour full-service, family-oriented restaurants. The restaurants offer a wide selection of moderately priced menu items for all meal periods. Kettle and its franchisees operate 164 restaurants in 16 states, primarily in the Sunbelt region.
 KETTLE RESTAURANTS, INC.
 Earnings Release
 Quarter Ended July 30, 1992 and August 1, 1991
 Three Quarters Ended July 30, 1992 and August 1, 1991
 (Dollars and shares in thousands, except per share data)
 Three Quarters
 Quarter Ended Ended Fiscal Year
 July 30, Aug. 1, July 30, Aug. 1, Oct. 31,
 1992 1991 1992 1991 1991
 Operating Data:
 Restaurant sales $10,358 $ 8,734 $27,877 $23,500 $32,040
 Franchise fees 1,087 1,142 2,999 3,134 4,160
 Lease income 1,331 1,514 4,167 4,616 6,083
 Operating income 383 724 273 2,453 2,880
 Net income 253 425 236 1,596 1,875
 Earnings per share .22 .37 .21 1.39 1.63
 Weighted average
 common and common
 equivalent shares
 outstanding 1,148 1,148 1,148 1,148 1,148
 Number of restaurants
 at end of period:
 Company operated 67 66 64
 Franchised 97 106 99
 Total 164 172 163
 -0- 9/16/92
 /CONTACT: Calvin Doyle Smith, vice president-finance of Kettle Restaurants, 713-524-3464/ CO: Kettle Restaurants, Inc. ST: Texas IN: LEI SU: ERN


TM -- NY065 -- 0314 09/16/92 16:49 EDT
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