SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

ý ANNUAL REPORT VOLUNTARILY FILED PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2004

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 333-62775

BERTUCCI’S CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		06-1311266
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

155 Otis Street, Northborough, MA		01532
(Address of principal executive offices)		(Zip Code)

(508) 351-2500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
None

Securities registered pursuant to Section 12(g) of the Act:

None

Title of class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o No ý

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

Documents Incorporated By Reference

None

EXPLANATORY NOTE

This Annual Report on Form 10-K/A (this “Form 10-K/A”) is being filed to amend Items 6, 7, 8, 9A and 15 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2004, which was originally filed with the Securities and Exchange Commission (the “SEC”) on April 13, 2005 (the “Original 2004 10-K”).

Initial Restatement

As previously disclosed in the Original 2004 10-K, subsequent to the issuance of its financial statements for the year ended December 31, 2003, as a result of views expressed in a letter issued February 7, 2005 by the office of the Chief Accountant of the SEC to the AICPA regarding certain operating lease-related accounting issues, the Company reviewed its lease accounting, including leased liquor licenses and leasehold depreciation practices. As a result, in the Original 2004 10-K the Company corrected its accounting for leases and restated its historical financial statements and certain financial information for corrected periods to correct errors in lease accounting policies (the “Initial Restatement”). The Company historically accounted for tenant improvement allowances as reductions to the related leasehold improvement asset on the consolidated balance sheets and capital expenditures in investing activities on the consolidated statements of cash flows. Also, the Company historically recognized rent on a straight-line basis over a lease term commencing with the initial occupancy date, or Company-operated restaurant opening date. In addition, the depreciable lives of certain leasehold improvements and other long-lived assets on those properties were not aligned with the non-cancelable lease term.

Following a review of its lease accounting treatment and relevant accounting literature, the Company determined it should: (a) report tenant improvement allowances as deferred liabilities in the consolidated balance sheets and initiate the amortization of those liabilities at the relevant initial occupancy date; (b) classify the change in the deferred liability related to the tenant allowances in the operating activities on the Consolidated Statements of Cash Flows; (c) conform the depreciable lives for buildings on leased land and other leasehold improvements to the shorter of the economic life of the asset or the lease term used for determining the capital versus operating lease classification and calculating straight-line rent; and (d) include option periods in the depreciable lives assigned to leased buildings and leasehold improvements and in the calculation of straight-line rent expense only in instances in the which the exercise of the option period can be reasonably assured and failure to exercise such options would result in an economic penalty.

The restatement for leaseholds also resulted in restatements of amounts previously reported for asset impairments.

The Initial Restatement did not have any impact on the Company’s previously reported net sales or compliance with any covenant under its debt instruments. The cumulative effect of the accounting correction reported in the April 2005 Initial Restatement resulted in a decrease in accumulated deficit of $285,000 as of the beginning of fiscal 2002.

Current Restatement

In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2005, the Company discovered errors in its detailed property and equipment records adjusted during the Initial Restatement. Management then conducted an investigation into the extent and magnitude of these errors, which involved the calculation of depreciation expense on multiple property records and the related impact on income taxes for the fiscal years 1998 through 2004, inclusive, and the first two fiscal quarters of 2005 (the “Current Restatement Relevant Periods”), to determine if a restatement of its financial statements was necessary. Based upon this investigation, in January 2006 the Company determined additional aggregate depreciation expense of approximately $3.5 million was required for the Current Restatement Relevant Periods and income tax expense was not properly adjusted in the Initial Restatement. As a result, the Company further determined a restatement of its financial statements, including those contained in its: (1) Original 2004 10-K; (2) Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2005, which the Company filed with the SEC on May 11, 2005 (the “Original 2005 First Quarter 10-Q”); and (3) Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2005, which was filed with the SEC on August 12, 2005 (the “Original 2005 Second Quarter 10-Q”), and together with the Original 2004 10-K and the Original 2005 First Quarter 10-Q, (the “Subject Filings”), was necessary. Accordingly, the Company determined it should amend the Subject Filings to reflect the proper recording of depreciation and income tax expense and its impact on the consolidated Balance Sheets, Statements of Operations, Stockholders’ Deficit, and Cash Flows for the periods reported therein.

For further discussion of these matters, see Note 3 of Notes to the Consolidated Financial Statements in Part IV of this Annual Report.

BERTUCCI’S CORPORATION

2004 FORM 10-K/A ANNUAL REPORT

TABLE OF CONTENTS

Item 6.	Selected Financial Data
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 8.	Financial Statements and Supplementary Data
Item 9A.	Controls and Procedures.
Item 15.	Exhibits and Financial Statement Schedules

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The data for fiscal years ended 2002 through 2004 are derived from audited financial statements of the Company. Selected consolidated financial data should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and the Notes thereto included elsewhere in this Form 10-K/A, particularly Note 3 — Restatement of Financial Statements. Historical results are not necessarily indicative of results to be expected in the future. The Brinker Sale (b) and the 53^rd week of fiscal 2000 affect the comparability of results on a year-to-year basis.

	Statement of Operations Data (in thousands except share and per share amounts)
	Fiscal Year Ended
	December 29, 2004 (d)			December 31, 2003 (d)			January 1, 2003 (d)			January 2, 2002 (d)			January 3, 2001 (a)(d)

Net sales	$	200,408		$	186,172		$	162,319		$	186,638		$	284,933
Cost of sales and expenses
Cost of sales	49,231			43,544			35,667			44,855			74,266
Operating expenses	122,056			113,036			96,413			111,795			162,098
General and administrative expenses	13,065			11,320			12,124			12,548			16,392
Deferred rent, depreciation, amortization and preopening expenses	12,657			14,123			12,413			14,378			18,347
Closed restaurants charge	—			—			236			3,654			479
Asset impairment charge	6,749			3,580			—			1,986			—
Loss on abandonment of Sal & Vinnie’s	—			—			—			—			2,031
Cost of sales and expenses	203,758			185,603			156,853			189,216			273,613
(Loss) income from operations	(3,350		)	569			5,466			(2,578		)	11,320
Other income (expense)
Gain on Brinker Sale (b)	—			650			—			36,932			—
Gain on retirement of Senior Notes	—			—			—			2,290			—
Interest expense, net	(10,613		)	(10,133		)	(9,587		)	(11,365		)	(15,838		)
Other (expense) income	(10,613		)	(9,483		)	(9,587		)	27,857			(15,838		)

(Loss) income before income tax provision (benefit)	(13,963		)	(8,914		)	(4,121		)	25,279			(4,518		)
Income tax provision (benefit)	—			—			4,145			10,854			(510		)
Net (loss) income	$	(13,963	)	$	(8,914	)	$	(8,266	)	$	14,425		$	(4,008	)

Basic (loss) income per share	$	(4.74	)	$	(3.00	)	$	(2.77	)	$	4.84		$	(1.34	)

Weighted average shares outstanding - basic	2,943,841			2,970,403			2,978,955			2,978,955			2,981,414

Diluted (loss) income per share	$	(4.74	)	$	(3.00	)	$	(2.77	)	$	4.43		$	(1.34	)

Weighted average shares outstanding - diluted	2,943,841			2,970,403			2,978,955			3,252,605			2,981,414

Comparable restaurant sales (c)	1.4		%	4.1		%	5.8		%	2.2		%	4.8		%

	Balance Sheet Data (in thousands)
	December 29, 2004			December 31, 2003 (d)			January 1, 2003 (d)		January 2, 2002 (d)		January 3, 2001 (a)(d)

Total assets	$	112,221		$	124,416		$	123,121	$	131,961	$	183,219
Long term obligations	$	92,367		$	92,981		$	87,167	$	87,995	$	100,000
Total stockholders’ (deficit) equity	$	(14,732	)	$	(490	)	$	8,495	$	16,761	$	2,335

	Cash Flow Data (in thousands)
	December 29, 2004			December 31, 2003 (d)			January 1, 2003 (d)			January 2, 2002 (d)			January 3, 2001 (a)(d)

Cash flows from operating activities	$	7,881		$	9,071		$	9,169		$	4,326		$	10,371
Cash flows from investing activities	(7,872		)	(9,358		)	(19,271		)	23,251			(12,190		)
Cash flows from financing activities	(365		)	(199		)	—			(11,944		)	1,842
	$	(356	)	$	(486	)	$	(10,102	)	$	15,633		$	23

(a) Fiscal 2000 was comprised of 53 weeks. All other years presented were comprised of 52 weeks.

(b) In April 2001, the Company completed the sale of 40 Chili’s Grill and Bar (“Chili’s”) and seven On The Border Mexican Cantina (“OTB”) restaurants to Brinker (the “Brinker Sale”) for a total consideration of $93.5 million. Brinker acquired the inventory, facilities, equipment and management teams associated with these restaurants, as well as the four Chili’s restaurants under development by the Company. Further, Brinker assumed the mortgage debt on the Company’s Chili’s and OTB restaurants. The Company recorded a gain in 2001 on the Brinker Sale of $36.9 million before income taxes. During fiscal 2003 the Company concluded certain liabilities recorded in connection with the Brinker Sale were no longer

required and accordingly reversed $650,000 of accrued liabilities as an additional gain on the Brinker Sale.

(c) The Company defines comparable restaurant sales as net sales from restaurants that have been open for at least one full fiscal year at the beginning of the year. The comparable sales in 2004, 2003, 2002 and 2001 relate to Bertucci’s only and 2000 relates to all the restaurants operated by the Company (Bertucci’s, Chili’s and OTB).

(d) Statement of Operations Data and Cash Flow Data for Fiscal Years 2004, 2003 and 2002 and Balance Sheet Data for 2004 and 2003 have been restated as discussed in Note 3 of Notes to the Consolidated Financial Statements included in Item 15 of this report. Earlier periods have been restated to give effect to: (i) corrections related to lease accounting and depreciation and income tax expense and (ii) a reclassification of changes in restricted cash balances.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with “Item 1. Business,” “Item 6. Selected Financial Data,” the Company’s Consolidated Financial Statements and Notes thereto and the information described under the caption “Risk Factors” below.

General

Bertucci’s Corporation, a Delaware corporation (the “Company”), is the owner and operator of a chain of full-service casual dining, Italian-style restaurants under the names Bertucci’s Brick Oven Pizzeria® and Bertucci’s Brick Oven Ristorante®. The Company was incorporated in 1994 as NE Restaurant Company, Inc. and formally changed its name to Bertucci’s Corporation on August 16, 2001. As of December 29, 2004, the Company operated 91 restaurants located primarily in the northeastern United States.

In July 1998, the Company completed its acquisition of Bertucci’s Restaurant Corp.’s parent entity, Bertucci’s, Inc., for a purchase price, net of cash received, of approximately $89.4 million (the “Acquisition”). The Company financed the Acquisition primarily through the issuance of $100 million of 10 3/4% senior notes due 2008 (the “Senior Notes”). The Senior Notes are still outstanding as to $85.3 million in principal.

Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatements of the Consolidated Financial Statements discussed in Note 3 of the Notes to Consolidated Financial Statements.

Results of Operations

For all the Company’s restaurants, net sales consist of food, beverage and alcohol sales. Cost of sales consists of food, beverage and alcohol costs as well as supplies used in carry-out and delivery sales. Total operating expenses consist of five primary categories: (i) labor expenses; (ii) restaurant operations; (iii) facility costs; (iv) office expenses; and (v) non-controllable expenses, which include such items as Company advertising expenses, rent and insurance. General and administrative expenses include costs associated with those departments of the Company that assist in restaurant operations and management of the business, including multi-unit supervision, accounting, management information systems, training, executive management, purchasing and construction.

The following table sets forth the percentage-relationship to net sales, unless otherwise indicated, of certain items included in the Company’s consolidated statements of operation, and the pro forma consolidated statement of operations above (see reconciliation above), for the periods indicated:

STATEMENT OF OPERATIONS DATA

(Percentage of Net Sales for Fiscal Years Presented)

	December 29, 2004		December 31, 2003		January 1, 2003

Net sales	100.0		100.0		100.0

Cost of sales and expenses:
Cost of sales	24.6		23.4		22.0
Operating expenses	60.9		60.7		59.4
General and administrative expenses	6.5		6.1		7.5
Deferred rent, depreciation, amortization and preopening expenses	6.3		7.6		7.6
Asset impairment charge	3.4		1.9		—
Closed restaurants charge	—		—		0.1
Total cost of sales and expenses	101.7		99.7		96.6

(Loss) income from operations	(1.7	)	0.3		3.4

Other (expense) income:
Adjustment of Gain on Brinker Sale	—		0.3		—
Interest expense, net	(5.3	)	(5.4	)	(5.9	)
Other expense	(5.3	)	(5.1	)	(5.9	)

Loss before income tax provision	(7.0	)	(4.8	)	(2.5	)

Income tax provision	—		—		2.6
Net loss	(7.0	)	(4.8	)	(5.1	)

Year Ended December 29, 2004 Compared to Year Ended December 31, 2003

Net Sales. Total net sales increased by $14.2 million, or 7.6%, to $200.4 million during fiscal 2004 from $186.2 million during fiscal 2003. The increase was due to a 1.4% increase in the 79 comparable Bertucci’s restaurants, the incremental 264.7 restaurant weeks resulting from full year operations of ten new restaurants built during 2003 and the addition of two new restaurant openings in 2004 that contributed an incremental 54.9 restaurant weeks. Bertucci’s comparable restaurant dine-in sales increased 1.7% while comparable Bertucci’s restaurant carry-out and delivery sales increased 0.6% for fiscal 2004. The comparable guest counts, measured on dine-in business only, decreased by 4.3% in 2004 versus 2003. The Company believes that the majority of the comparable sales increases have been a result of a shift in menu mix and an approximate 3.6% price increase in January 2004. The aforementioned combined price increase and shift in menu mix combined to drive a 6.5% increase in dine-in revenue per person in 2004 versus 2003. The 79 comparable restaurants’ sales average during 2004 was $2.2 million while the sales average for the ten restaurants that opened during 2003 and were opened a full year of 2004 was also $2.2 million. The average weekly sales for the two restaurants opened during 2004 were $36,500.

Cost of Sales. Cost of sales as a percentage of net sales increased to 24.6% during fiscal 2004 from 23.4% during fiscal 2003. The increase was primarily attributable to an increase in certain ingredient costs, primarily cheese and oil, as well as a menu mix shift to higher cost items introduced in 2004.

Operating Expenses. Operating expenses increased by $9.0 million, or 8.0%, to $122.0 million during fiscal 2004 from $113.0 million during fiscal 2003. The key components of operating expenses are payroll (including related employer taxes), utilities, restaurant facilities maintenance, rent and advertising. The dollar increase in these expenses is primarily attributable to the additional restaurants being operated and a $1.0 million increase in advertising expense which totaled $6.6 million in 2004. The increase as a percentage of net sales to 60.8% in fiscal 2004 from 60.7% in fiscal 2003 resulted primarily from the advertising expense increase.

General and Administrative Expenses. General and administrative expenses increased by $1.8 million, or 15.9%, to $13.1 million during fiscal 2004 from $11.3 million during fiscal 2003. Expressed as a percentage of net sales, general and administrative expenses increased to 6.5% in fiscal 2004 from 6.1% during fiscal 2003. The dollar and percentage increases were primarily due to higher benefit expenses and higher professional fees.

Deferred Rent, Depreciation, Amortization and Preopening Expenses. Deferred rent, depreciation, amortization and preopening expenses decreased by approximately $1.4 million, or 9.9%, to $12.7 million during fiscal 2004 from $14.1 million during fiscal 2003. Due to only two restaurant openings in 2004, pre-opening expenses totaled $519,000, a $1.6 million decrease over 2003 during which there were ten restaurant openings. Deferred rent decreased by approximately $300,000. The additional restaurant

openings in both fiscal 2004 and 2003 resulted in an incremental $800,000 of depreciation expense in fiscal 2004.

Asset Impairment Charge. The Company assessed certain non-performing restaurants for recoverability of recorded amounts. The Company determined an impairment of fixed assets existed at twelve restaurant locations during 2004. An estimate of the fair value of these assets based on the net present value of the expected cash flows of the restaurants was made and the carrying amount of the assets was found to exceed the fair value of the assets by approximately $6.7 million. An impairment charge in that amount was recorded to reflect the write down of the affected assets to fair value.

Interest Expense, net. Interest expense, net of amounts capitalized for new construction, increased by approximately $500,000 to $10.6 million during fiscal 2004 from $10.1 million during fiscal 2003. Interest expense is primarily comprised of $9.2 million paid in semi-annual installments on the 10 3/4% Senior Notes. In fiscal 2004, $539,000 of interest was incurred on capital lease obligations, $229,000 higher than last year (when the underlying sale leaseback transactions were recorded). Interest capitalized to construction decreased $161,000 due to fewer restaurant openings. Additionally, interest income decreased by $41,000 primarily due to lower interest rates. Lastly, deferred finance costs amortization increased approximately $40,000 in conjunction with the 2003 sale leaseback transactions (See Note 7 of Notes to Consolidated Financial Statements).

Income Taxes. The Company has an historical trend of recurring pre-tax losses. During the fourth quarter of 2002 the Company recorded a full valuation allowance for its net deferred tax asset. The Company also provided a full valuation allowance relating to the tax benefits generated during 2004 and 2003 (primarily from its operating losses). For the year ended December 29, 2004, the Company has net operating loss and tax credit carryforwards totaling $7.8 million.

Year Ended December 31, 2003 Compared to Year Ended January 1, 2003

Net Sales. Total net sales increased by $23.9 million, or 14.7%, to $186.2 million during fiscal 2003 from $162.3 million during fiscal 2002. The increase was due to a 4.1% increase in the 73 comparable Bertucci’s restaurants, the incremental 232 restaurant weeks resulting from full year operations of seven new restaurants built during 2002 (including the closing of one of those restaurants) and the addition of 10 new restaurant openings in 2003 that contributed an incremental 207 restaurant weeks partially offset by the closing of one restaurant in mid-2002. Bertucci’s comparable restaurant dine-in sales increased 4.8% while comparable Bertucci’s restaurant carry-out and delivery sales increased 1.6% for fiscal 2003. The comparable guest counts, measured on dine-in business only, decreased by 1.3% in 2003 versus 2002. The Company believes that the majority of the comparable sales increases have been a result of a shift in menu mix and an approximate 2.1% price increase in March 2003. The aforementioned combined price increase and shift in menu mix combined to drive a 6.4% increase in dine-in revenue per person in 2003 versus 2002. The 73 comparable restaurants’ sales average during 2003 was $2.2 million while the sales average for the six restaurants that opened during 2002 and were opened a full year of 2003 was $1.9 million. The average weekly sales for the 10 restaurants opened during 2003 was $41,200.

Cost of Sales. Cost of sales as a percentage of net sales increased to 23.4% during fiscal 2003 from 22.0% during fiscal 2002. The increase was primarily attributable to a cost increase in certain ingredients, primarily seafood, oil, flour, selected dairy products, as well as a shift to new menu items introduced in 2003 which have higher ingredient costs (expressed as a percent of selling prices).

Operating Expenses. Operating expenses increased by $16.6 million, or 17.2%, to $113.0 million during fiscal 2003 from $96.4 million during fiscal 2002. The key components of operating expenses are payroll (including related employer taxes), utilities, restaurant facilities maintenance, rent and advertising. The dollar increase in these expenses is primarily attributable to the additional restaurants. The percentage increase to 60.7% in fiscal 2003 from 59.4% in fiscal 2002 resulted primarily from cost increases in payroll taxes, benefits, and utilities and negative leverage of restaurant manager payroll and occupancy over the lower new restaurant sales.

General and Administrative Expenses. General and administrative expenses decreased by $800,000, or 6.6%, to $11.3 million during fiscal 2003 from $12.1 million during fiscal 2002. Expressed as a percentage of net sales, general and administrative expenses decreased to 6.1% in fiscal 2003 from 7.5% during fiscal 2002. The dollar and percentage decreases were primarily due to a $1.1 million decrease in incentive payments to corporate management as the Company did not meet its internal earnings target in fiscal 2003, lower restaurant management recruiting and training costs partially offset by higher travel and real estate selection costs.

Deferred Rent, Depreciation, Amortization and Preopening Expenses. Deferred rent, depreciation, amortization and preopening expenses increased by approximately $1.7 million, or 13.7%, to $14.1 million during fiscal 2003 from $12.4 million during fiscal 2002. Due to ten restaurant openings in 2003, the Company incurred $2.1 million in preopening expenses, a $600,000 increase over 2002 during which there were seven restaurant openings. The additional restaurants from both fiscal 2003 and 2002 resulted in an incremental $1.1 million of depreciation expense in fiscal 2003.

Asset Impairment Charge. The Company assessed certain non-performing restaurants for recoverability as required. The Company determined an impairment of fixed assets existed at four restaurant locations. An estimate of the fair value of these assets based on the net present value of the expected cash flows of the restaurants was made and the carrying amount of the assets was found to exceed the fair value of the assets by approximately $3.6 million. An impairment charge in that amount was made to reflect the write down of the affected assets to fair value.

Adjustment of Gain on Brinker Sale. The Company recorded a gain in 2001 on the Brinker Sale of $36.9 million before income taxes. During 2003 the Company concluded certain liabilities recorded in connection with the Brinker Sale were no longer required as part of the final settlement and accordingly reversed $650,000 of accrued liabilities as an additional gain on the Brinker Sale.

Interest Expense, net. Interest expense, net, increased by approximately $500,000 to $10.1 million during fiscal 2003 from $9.6 million during fiscal 2002. Interest expense is primarily comprised of $9.2 million paid in semi annual installments on the 10 3/4% Senior Notes. In fiscal 2003, $309,000 of interest was incurred on capital lease obligations recorded in conjunction with two sale leaseback transactions. Additionally, interest income decreased by $166,000 primarily due to lower interest rates. Lastly, deferred finance costs amortization increased approximately $70,000 as approximately $530,000 was capitalized in fiscal 2003 in conjunction with the sale leaseback transactions (See Note 7 of Notes to Consolidated Financial Statements).

Income Taxes. The Company has an historical trend of recurring pre-tax losses since 1998 excluding the Brinker Sale. During the fourth quarter of 2002 the Company recorded a full valuation allowance for its net deferred tax asset. The Company also provided a full valuation allowance relating to the tax benefits generated during 2003 (primarily from its operating losses).

Liquidity and Capital Resources

	2004			2003			2002

Cash Flows from Operating Activities	$	7,881		$	9,071		$	9,169
Cash Flows from Investing Activities	(7,872		)	(9,358		)	(19,271		)
Cash Flows from Financing Activities	(365		)	(199		)	—
Net decrease in cash	$	(356	)	$	(486	)	$	(10,102	)

The Company has historically met its capital expenditures and working capital needs through a combination of operating cash flow, bank and mortgage borrowings, the sale of the Senior Notes, the sale of Common Stock, and, in fiscal 2003, two sale leaseback transactions. Future capital and working capital needs are expected to be funded from operating cash flow and cash on hand.

Net cash flows from operating activities were $7.9 million for fiscal 2004 as compared to $9.1 million for fiscal 2003. While the fiscal 2004 net loss increased $5.6 million over that of fiscal 2003, included in the net loss was a $6.7 million non-cash asset impairment charge. The $12.6 million of cash on hand at the beginning of fiscal 2004 allowed the Company to fund capital expenditures totaling $8.6 million. As of December 29, 2004, the Company had $12.3 million in cash and cash equivalents.

The Company’s capital expenditures were $8.6 million, $17.4 million, and $18.2 million, for fiscal 2004, 2003, and 2002, respectively. In fiscal 2004, $4.7 million of the capital spending was for new restaurant development. The remaining $3.9 million was primarily for remodeling and upgrading facilities in the existing restaurants. The Company anticipates fiscal 2005 capital expenditures will be approximately $5.0 million.

As of December 29, 2004, the Company had $92.2 million in consolidated indebtedness, $85.3 million pursuant to the Senior Notes, $6.1 million of capital lease obligations, and $0.8 million of promissory notes. The Senior Notes contain no financial covenants and the Company is in compliance with all non-financial covenants as of April 12, 2005. The Senior Notes bear interest at the rate of 10 ¾% per annum, payable semi-annually on January 15 and July 15. The Senior Notes are due in full on July 15, 2008. Through July 15, 2006, the Company may, at its option, redeem any or all of the Senior Notes at face value, plus a declining premium, which is 3.58% through July 14, 2005 and 1.79% from July 15, 2005 through July 15, 2006. After July 15, 2006, the Senior Notes may be redeemed at face value. Additionally, under certain circumstances, including a change of control or following certain asset sales, the holders of the Senior Notes may require the Company to repurchase the Senior Notes, at a redemption price of 101% of face value. See Note 6 of Notes to Consolidated Financial Statements.

The Company is operating without a line of credit and is funding all of its growth, debt reductions and operating needs out of

cash flows from operations and cash on hand.

The Company has established a $4.0 million (maximum) letter of credit (expiring in December 2005) as collateral with third party administrators for self insurance reserves. As of December 29, 2004, this facility is collateralized with $2.4 million of cash restricted from general use. Letters of Credit totaling $2.2 million were outstanding on December 29, 2004, a $900,000 decrease from the fiscal 2003 ending balance.

The Company’s future operating performance and ability to service or refinance the Senior Notes will be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company’s control. Significant liquidity demands will arise from debt service on the Senior Notes.

The table below depicts the Company’s future contractual obligations committed as of December 29, 2004:

	Payments Due by Fiscal Year (Dollars in Thousands)
Contractual Obligations:	Total		2005		2006 - 2007		2008 - 2009		After 2009
Operating Leases (a)	$	119,993	$	15,655	$	29,856	$	23,777	$	50,705
Capital Leases (a)	13,428		679		1,397		1,439		9,913
Senior Notes (b)	121,994		9,171		18,342		94,481		—
Promissory Notes (c)	905		98		196		275		336
Closed restaurants reserve, net of sublease income	659		484		175		—		—
Total Contractual Obligations	$	256,979	$	26,087	$	49,966	$	119,972	$	60,954

(a) - See Note 7 of Notes to Consolidated Financial Statements

(b) - including interest at 10 ¾% per annum to maturity in July 2008.

The Company believes the cash flow generated from its operations and cash on hand should be sufficient to fund its debt service requirements, lease obligations, expected capital expenditures and other operating expenses through 2005. Beyond 2005 and up to 2008 maturity of its Senior Notes, the Company expects to be able to service its debt, but the lack of short term borrowing availability may impede growth. The Company is evaluating various refinancing alternatives for its Senior Notes upon their maturity in 2008.

Impact of Inflation

Inflationary factors such as increases in labor, food or other operating costs could adversely affect the Company’s operations. The Company does not believe that inflation has had a material impact on its financial position or results of operations for the periods discussed above. Management believes that through the proper leveraging of purchasing size, labor scheduling, and restaurant development analysis, inflation will not have a material adverse effect on income during the foreseeable future. There can be no assurance that inflation will not materially adversely affect the Company.

Seasonality

The Company’s quarterly results of operations have fluctuated and are expected to continue to fluctuate depending on a variety of factors, including the timing of new restaurant openings and related preopening and other startup expenses, net sales contributed by new restaurants, increases or decreases in comparable restaurant sales, competition and overall economic conditions. The Company’s business is also subject to seasonal influences of consumer spending, dining out patterns and weather. As is the case with many restaurant companies, the Company typically experiences lower net sales and net income during the first and fourth fiscal quarters. Because of these fluctuations in net sales and net loss, the results of operations of any quarter are not necessarily indicative of the results that may be achieved for a full year or any future quarter.

Critical Accounting Policies and Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, estimates are evaluated, including those related to the impairment of long-lived assets, self-insurance, and closed

restaurants reserve. Estimates are based on historical experience and on various other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of its consolidated financial statements.

Impairment of Long-Lived Assets

The Company evaluates property and equipment held and used in the business for impairment whenever events or changes in circumstances indicate the carrying amount of a restaurant’s assets may not be recoverable. An impairment is determined by comparing estimated undiscounted future operating cash flows (which the Company estimates using historical cash flows and other relevant facts and circumstances) for a restaurant to the carrying amount of its assets. If an impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated discounted future operating cash flows of the asset and the expected proceeds upon sale of the asset. The estimates and assumptions used during this process are subject to a high degree of judgment.

During 2004, the Company assessed certain non-performing restaurants for recoverability and determined an impairment of fixed assets existed at twelve restaurant locations. The Company estimated the fair value of these assets based on the net present value of the expected cash flows of the restaurants. The carrying amount of the assets exceeded the fair value of the assets by approximately $6.7 million. In 2004, the Company recorded an impairment charge to reflect the write down of the affected assets to fair value.

A similar analysis in 2003 determined the carrying amount of the assets in four restaurants exceeded the fair value of the assets by approximately $3.6 million. Accordingly, the Company recorded an impairment charge to reflect the write down of the affected assets to fair value in 2003.

In addition, at least annually, the Company assesses the recoverability of goodwill and other intangible assets related to its restaurant concepts. These impairment tests require the Company to estimate fair values of its restaurant concepts by making assumptions regarding future cash flows and other factors. If these assumptions change in the future, the Company may be required to record impairment charges for these assets. To date, such analysis has indicated no impairment of goodwill and other intangible assets has occurred.

Income Tax Valuation Allowances

The future tax benefits which give rise to the deferred tax asset remain statutorily available to the Company. The Company considers both negative and positive evidence in determining if a valuation allowance is appropriate. The Company had net operating losses and tax credit carry forwards of $7.8 million as of December 29, 2004 which expire at various dates through 2019. The Company has an historical trend of recurring pre-tax losses. Based on the recent losses and the historical trend of losses, the Company concluded a valuation allowance for the net deferred tax asset remains appropriate. Actual amounts realized will be dependent on generating future taxable income.

Self-Insurance

The Company is self-insured for certain losses related to general liability, group health insurance, and workers’ compensation. The Company maintains stop loss coverage with third party insurers to limit its total exposure. The self-insurance liability represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated liability is not discounted and is established based upon analysis of historical data and estimates of the ultimate costs of claims incurred, and is reviewed by the Company on a quarterly basis to ensure that the liability is appropriate. If actual trends, including the severity or frequency of claims, differ from the Company’s estimates, the Company’s financial results could be impacted. To date the Company is not aware of any activity requiring significant adjustments to these reserves.

Closed Restaurants Reserve

The Company remains primarily liable on leases for 13 closed locations. Management reviews the specifics of each site on a quarterly basis to estimate the Company’s net remaining liability over the remaining lease term. Certain locations have subtenants in place while others remain vacant. Estimates must be made of future sublease income or lease assignment possibilities. If subtenants default on their subleases or projected future subtenants are not obtained, actual results could differ from the Company’s estimates, thereby impacting the Company’s financial results. Such a review resulted in a charge of $236,000 in 2002 when an additional restaurant was closed prior to its lease termination. All other activity in fiscal 2002 through 2004 has been consistent with reserves and no additional increases in the reserve were necessary.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, Share-Based Payment (“SFAS No. 123R”). This Statement is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. The Statement requires entities to recognize stock compensation expense for awards of equity instruments to employees based on the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective for the first annual reporting period that begins after December 15, 2005. The Company is evaluating the two methods of adoption allowed by SFAS No. 123R; the modified-prospective transition method and the modified-retrospective transition method.

Risk Factors

This Report contains forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions. The cautionary statements made in this Report should be read as being applicable to all forward looking statements wherever they appear in this Report. The Company’s actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include those discussed below, as well as those discussed elsewhere in this Report.

Substantial Leverage; Potential Inability to Service Indebtedness. The Company is highly leveraged. At the end of fiscal 2004, the Company’s aggregate outstanding indebtedness was $92.2 million, the Company’s had an accumulated deficit of $14.7 million and a working capital deficit of $6.4 million.

The Company’s high degree of leverage could have important consequences, including but not limited to the following: (i) the Company’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired in the future; (ii) a substantial portion of the Company’s cash flow from operations must be dedicated to the payment of principal and interest on its indebtedness, thereby reducing the funds available to the Company for its operations and other purposes, including investments in development and capital spending; (iii) the Company may be substantially more leveraged than certain of its competitors, which may place the Company at a competitive disadvantage; and (iv) the Company’s substantial degree of leverage may limit its flexibility to adjust to changing market conditions, reduce its ability to withstand competitive pressures and make it more vulnerable to a downturn in general economic conditions or in its business. The Company’s ability to repay or to refinance its obligations with respect to its indebtedness will depend on its future financial and operating performance, which, in turn, will be subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors, many of which are beyond the Company’s control. These factors could include operating difficulties, increased operating costs, product pricing pressures, the response of competitors, regulatory developments, and delays in implementing strategic projects. The Company’s ability to meet its debt service and other obligations may depend in significant part on the extent to which the Company can implement successfully its business strategy. There can be no assurance that the Company will be able to implement its strategy fully or that the anticipated results of its strategy will be realized.

If the Company’s cash flow and capital resources are insufficient to fund its debt service obligations, the Company may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital, or to refinance or restructure its debt. There can be no assurance the Company’s cash flow and capital resources will be sufficient for payment of principal of, and premium, if any, and interest on, its indebtedness in the future, or any such alternative measures would be successful or would permit the Company to meet its scheduled debt service obligations.

Restrictive Debt Covenants. The Indenture for the Senior Notes imposes significant operating and financial restrictions on the Company and its subsidiaries. Such restrictions will affect, and in many respects significantly limit or prohibit, among other things, the ability of the Company to incur additional indebtedness, pay dividends or make other distributions, make certain investments, create certain liens, sell certain assets, enter into certain transactions with affiliates, or engage in certain mergers or consolidations involving the Company. A failure by the Company to comply with the restrictions could lead to a default under the terms of the Indenture. In the event of a default, the indenture trustee could elect to declare all amounts borrowed pursuant thereto, and all amounts due may be, immediately due and payable, together with a premium and accrued and unpaid interest. In such event, there can be no assurance that the Company would be able to make such payments or borrow sufficient funds from alternative sources to make any such payment. Even if additional financing could be obtained, there can be no assurance that it would be on terms that are favorable or acceptable to the Company.

Potential Inability to Manage Expansion. The Company’s future operating results will depend largely upon its ability to open and operate new restaurants successfully and to manage a growing business profitably. This will depend on a number of factors (some of which are beyond the control of the Company), including (i) selection and availability of suitable restaurant locations,

(ii) negotiation of acceptable lease or financing terms, (iii) securing of required governmental permits and approvals, (iv) timely completion of necessary construction or remodeling of restaurants, (v) hiring and training of skilled management and personnel, (vi) successful integration of new or newly acquired restaurants into the Company’s existing operations and (vii) recognition and response to regional differences in guest menu and concept preferences.

There can be no assurance the Company’s expansion plans can be achieved on a timely and profitable basis, if at all, or that it will be able to achieve results similar to those achieved in existing locations in prior periods or such expansion will not result in reduced sales at existing restaurants. Any failure to successfully and profitably execute its expansion plans could have a material adverse effect on the Company.

Changes in Food Costs and Supplies; Key Supplier. The Company’s profitability is dependent on, among other things, its continuing ability to offer fresh, high quality food at moderate prices. Various factors beyond the Company’s control, such as adverse weather, labor disputes, increased pricing or other unforeseen circumstances, may affect its food costs and supplies. While management has been able to anticipate and react to changing food costs and supplies to date through its purchasing practices and menu price adjustments, there can be no assurance that it will be able to do so in the future.

The Company obtains approximately 75% to 80% of its supplies through a single vendor pursuant to a contract for delivery and distribution, with the vendor charging fixed mark-ups over prevailing wholesale prices. The Company has a six-year contract with this vendor which expires in 2011. The Company believes it would be able to replace any vendor if it were required to do so, however, any disruption in supply from vendors or the Company’s inability to replace vendors, when required, may have a material adverse effect on the Company.

Possible Adverse Impact of Economic, Regional and Other Business Conditions on the Company. The Company’s business is sensitive to guests’ spending patterns, which in turn are subject to prevailing regional and national economic conditions such as unemployment, interest rates, taxation and consumer confidence. Most of the restaurants owned by the Company are located in the northeastern United States, with a large concentration in New England. In addition, the Company anticipates substantially all restaurants to be opened in the future will be in states where the Company presently has operations or in contiguous states. As a result, if the New England or Mid-Atlantic regions of the country suffer prolonged adverse economic conditions, this may have a material adverse effect on the Company.

Competition. The restaurant industry is intensely competitive with respect to, among other things, price, service, location and food quality. The Company competes with many well-established national, regional and locally-owned foodservice companies with substantially greater financial and other resources and longer operating histories than the Company, which, among other things, may better enable them to react to changes in the restaurant industry. With respect to quality and cost of food, size of food portions, decor and quality service, the Company competes with casual dining, family-style restaurants offering eat-in and take-out menus, including, but not limited to, Olive Garden, Romano’s Macaroni Grill, Carrabba’s, Applebee’s, TGI Friday’s, Ruby Tuesday, and Pizzeria Uno Restaurants. As a result of the Brinker Sale (as defined in footnote (b) in Item 6), the Company also competes with Chili’s and, to a lesser extent, OTB. Many of the Company’s restaurants are located in areas of high concentration of such restaurants. The Company also vies with all competitors in attracting guests, in obtaining premium locations for restaurants (including shopping malls and strip shopping centers) and in attracting and retaining employees.

Possible Adverse Impact of Government Regulation on the Company. The restaurant business is subject to extensive federal, state and local laws and regulations relating to the development and operation of restaurants, including those concerning alcoholic beverage sales, preparation and sale of food, relationships with employees (including minimum wage requirements, overtime and working conditions and citizenship requirements), land use, zoning and building codes, as well as other health, sanitation, safety and environmental matters. Compliance with such laws and regulations can impede the operations of existing Company restaurants and may delay or preclude construction and completion of new Company restaurants. The Company is subject in certain states to ‘‘dram-shop’’ statutes, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. The Company carries liquor liability coverage as part of its existing comprehensive general liability insurance. In addition, the Company may also, in certain jurisdictions, be required to comply with regulations limiting smoking in restaurants.

Reliance on Information Systems. The Company relies on various information systems to manage its operations and regularly makes investments to upgrade, enhance or replace such systems. Any disruption affecting the Company’s information systems could have a material adverse effect on the Company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data are listed under Part IV, Item 15 in this report.

ITEM 9A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the Company’s are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Despite these controls and procedures: (1) in the Original 2004 10-K and in connection with the Initial Restatement, the Company restated certain of its previously issued financial statements to reflect corrections in its lease accounting and leasehold depreciation practices; and (2) the Company is restating in this Form 10-K/A and in its Form 10-Q/A’s relating to the first and second quarters of fiscal 2005 (which the Company is filing with the SEC immediately after the filing of this Form 10-K/A) certain of its previously issued financial statements to reflect corrections in the recording of depreciation and income tax expense. See the Explanatory Note in this Form 10-K/A and Note 3 of Notes to the Consolidated Financial Statements.

Prior Review

Disclosure Controls and Procedures. In connection with the preparation of the Original 2004 10-K, an evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 29, 2004. In performing the evaluation, management reviewed the Company’s lease accounting and leasehold depreciation practices partially in light of the then recent attention and focus on such practices by restaurant and retail companies.

On March 14, 2005, the Audit Committee met with management to discuss the results of the evaluation. At this meeting, the Audit Committee and management concluded that the Company’s previously established lease accounting and leasehold depreciation practices were not appropriate and determined to restate certain of its previously issued financial statements to reflect the correction in the Company’s lease accounting and leasehold depreciation practices. The restatement applied to the financial statements for all fiscal years prior to January 1, 2004 and each of the first three quarters of fiscal 2004 (collectively, the “Initial Restatement Subject Financial Statements”). See Note 3 of Notes to the Consolidated Financial Statements.

Based on the determination that the Company’s lease accounting and lease depreciation practices were not appropriate as of December 29, 2004, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of that date.

Internal Control Over Financial Reporting. Based on the definition of “material weakness” in the Public Company Accounting Oversight Board’s Auditing Standard No. 2, (An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements), restatement of the Initial Restatement Subject Financial Statements was a strong indicator of the existence of a “material weakness” in the design or operation of internal control over financial reporting. Based on the evaluation of the Company’s controls and procedures, management concluded a material weakness existed in the Company’s internal control over financial reporting as it related to its lease accounting and lease depreciation practices, and disclosed this to the Audit Committee and to the Company’s independent registered public accountants.

Remediation Steps to Address Material Weakness. To remediate this material weakness in the Company’s internal control over financial reporting, in the first quarter of 2005 the Company implemented additional review procedures over the selection and monitoring of appropriate assumptions and factors affecting lease accounting and leasehold depreciation accounting practices and corrected its method of accounting for tenant improvement allowances and rent holidays.

Change in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter of 2004 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. During the first quarter of 2005, however, the Company did make changes to its internal control over financial reporting in connection with its lease accounting and lease depreciation practices as set forth above.

Current Review

Disclosure Controls and Procedures. In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2005, the Company performed an evaluation under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). In performing this evaluation, management became aware of errors in its detailed property and equipment records adjusted during the Initial Restatement. These errors involved the calculation of depreciation expense on multiple property records and the related impact on income taxes for the fiscal years 1998 through 2004, inclusive, and the first two fiscal quarters of 2005 (the “Current Restatement Subject Periods”).

Subsequent to the discovery of these errors, management conducted an investigation concerning the extent and magnitude of these errors. As a result of this inquiry, on January 12, 2006 the Audit Committee and management concluded that: (1) the Company’s depreciation expense accounting practices were not appropriate as of December 29, 2004; (2) aggregate additional depreciation and income tax expense of approximately $3.5 million needed to be recorded in its financial statements for the Current Restatement Subject Periods, and income tax expense was not properly adjusted in the Initial Restatement, and therefore, its financial statements relating to the Current Restatement Subject Periods were required to be restated; and (3) the Company needed to amend the Original 2004 10-K, the Original 2005 First Quarter 10-Q and the Original 2005 Second Quarter 10-Q to restate the financial statements contained therein and reflect the proper recording of depreciation and income tax expense for the periods reported therein (collectively, the “Current Restatement Subject Financial Statements”). See Note 3 of Notes to the Consolidated Financial Statements. Based on the determination that the Company’s depreciation and income tax expense accounting practices were not appropriate as of December 29, 2004, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of that date.

Internal Control Over Financial Reporting. Based on the definition of “material weakness” in the Public Company Accounting Oversight Board’s Auditing Standard No. 2, (An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of Financial Statements), restatement of the Current Restatement Subject Financial Statements is a strong indicator of the existence of a “material weakness” in the design or operation of internal control over financial reporting. Based on the evaluation of the Company’s controls and procedures, management concluded a material weakness existed in the Company’s internal control over financial reporting as it related to its depreciation expense accounting practices, and disclosed this to the Audit Committee and to the Company’s independent registered public accounting firm.

Remediation Steps to Address Material Weakness. To remediate the material weakness in the Company’s internal control over financial reporting, the Company has re-performed all of the necessary calculations and added sufficient review and approval procedures to assure management the material weakness has been corrected.

Change in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter of 2004 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company did, however, make changes to its internal control over financial reporting during the first fiscal quarter of 2006, by making the changes to its depreciation and income tax expense accounting practices set forth above.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K

(a)	The following documents are filed as part of this report:

	(1)	Financial Statements:

		Report of Independent Registered Public Accounting Firm.

		Consolidated Balance Sheets as of December 29, 2004 (as Restated) and December 31, 2003 (as Restated)

		Consolidated Statements of Operations for each of the years ended December 29, 2004 (as Restated), December 31, 2003(as Restated), and January 1, 2003 (as Restated).

		Consolidated Statements of Stockholders’ Equity for each of the years ended December 29, 2004 (as Restated), December 31, 2003 (as Restated), and January 1, 2003 (as Restated).

		Consolidated Statements of Cash Flows for each of the years ended December 29, 2004 (as Restated), December 31, 2003 (as Restated), and January 1, 2003 (as Restated).

		Notes to Consolidated Financial Statements.

	(2)	Exhibit Index

(b)	Reports on Form 8-K:

	The Company did not file any reports on Form 8-K during the last quarter of the period covered by this Annual Report on Form 10-K. The Company did, however, file a Current Report on Form 8-K with the SEC on January 18, 2006 advising of the impending restatement of its financial statements for the Current Restatement Subject Periods, as discussed more fully in Note 3 of Notes to Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BERTUCCI’S CORPORATION


	By:	/s/ Stephen V. Clark
		Stephen V. Clark, Chief Executive Officer

	Date: January 19, 2006

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Bertucci’s Corporation

Northborough, MA

We have audited the accompanying consolidated balance sheets of Bertucci’s Corporation and subsidiaries (the “Company”) as of December 29, 2004 and December 31, 2003, and the related consolidated statements of operations, stockholders’ deficit and cash flows for each of the years ended December 29, 2004, December 31, 2003, and January 1, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 29, 2004 and December 31, 2003, and the results of its operations and its cash flows for each of the years ended December 29, 2004, December 31, 2003, and January 1, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 3, the accompanying consolidated financial statements have been restated.

/s/ DELOITTE & TOUCHE LLP
Boston, MA
April 12, 2005 (January 18, 2006 as to the effects of the restatement discussed in Note 3)

BERTUCCI’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands except share data)

	December 29, 2004			December 31, 2003
	(As Restated - See Note 3)
ASSETS
Current Assets:
Cash and cash equivalents	$	12,291		$	12,647
Restricted cash	2,403			3,129
Accounts receivable	1,334			753
Inventories	1,388			1,268
Prepaid expenses and other current assets	534			1,758
Total current assets	17,950			19,555

Property and Equipment, at cost:
Land	259			259
Buildings	697			697
Capital leases - land and buildings	5,764			5,764
Leasehold improvements	66,632			67,999
Furniture and equipment	44,537			42,072
	117,889			116,791
Less - accumulated depreciation and amortization	(57,101		)	(45,234		)
	60,788			71,557
Construction work in process	1,567			301
Net property and equipment	62,355			71,858

Goodwill	26,127			26,127
Deferred finance costs, net	2,862			3,559
Liquor licenses, net	2,414			2,838
Other assets	513			479
TOTAL ASSETS	$	112,221		$	124,416

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Promissory notes - current portion	$	40		$	39
Capital lease obligations - current portion	74			31
Accounts payable	7,819			8,426
Accrued expenses	16,457			14,026
Total current liabilities	24,390			22,522
Promissory notes, net of current portion	781			821
Captial lease obligations, net of current portion	6,102			6,017
Senior Notes	85,310			85,310
Deferred gain on sale leaseback transaction	2,002			2,112
Other long-term liabilities	8,368			8,124
Total liabilities	126,953			124,906
Commitments and Contingencies
Stockholders’ Deficit:
Common stock, $.01 par value Authorized - 8,000,000 shares Issued - 3,667,495 and 3,666,370 shares, respectively; Outstanding - 2,915,482 and 2,961,552 shares, respectively	37			37
Less treasury shares of 752,013 and 704,818, respectively, at cost	(8,480		)	(8,190		)
Additional paid-in capital	29,046			29,035
Accumulated deficit	(35,335		)	(21,372		)
Total stockholders’ deficit	(14,732		)	(490		)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	112,221		$	124,416

The accompanying notes are an integral part of these consolidated financial statements.

BERTUCCI’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except share and per share data)

	December 29, 2004			December 31, 2003			January 1, 2003
	(As Restated - See Note 3)
Net sales	$	200,408		$	186,172		$	162,319

Cost of sales and expenses:
Cost of sales	49,231			43,544			35,667
Operating expenses	122,056			113,036			96,413
General and administrative expenses	13,065			11,320			12,124
Deferred rent, depreciation, amortization and preopening expenses	12,657			14,123			12,413
Asset impairment charge	6,749			3,580			—
Closed restaurants charge	—			—			236
Total cost of sales and expenses	203,758			185,603			156,853

(Loss) income from operations	(3,350		)	569			5,466

Other expense
Adjustment of gain on Brinker Sale	—			650			—
Interest expense, net	(10,613		)	(10,133		)	(9,587		)
Other expense	(10,613		)	(9,483		)	(9,587		)

Loss before income tax provision	(13,963		)	(8,914		)	(4,121		)

Income tax provision	—			—			4,145

Net loss	$	(13,963	)	$	(8,914	)	$	(8,266	)

Basic and diluted loss per share	$	(4.74	)	$	(3.00	)	$	(2.77	)

Weighted average shares outstanding - basic and diluted	2,943,841			2,970,403			2,978,955

The accompanying notes are an integral part of these consolidated financial statements.

BERTUCCI’S CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands except share data)

	Common Stock			Treasury Stock										Total
	Number of Shares	Amount		Number of Shares		Amount			Additional Paid In Capital		Accumulated Deficit			Stockholders’ Equity (Deficit)

Balance January 2, 2002 (As Previously Restated)	3,666,370	$	37	(687,415	)	$	(8,088	)	$	29,004	$	(1,642	)	$	19,311
Prior period adjustment (see Note 3)	—	—		—		—			—		(2,550		)	(2,550		)
Balance January 2, 2002 (As Restated - See Note 3)	3,666,370	$	37	(687,415	)	$	(8,088	)	$	29,004	$	(4,192	)	$	16,761
Net loss (As Restated - See Note 3)	—	—		—		—			—		(8,266		)	(8,266		)
Balance January 1, 2003 (As Restated - See Note 3)	3,666,370	$	37	(687,415	)	(8,088		)	$	29,004	$	(12,458	)	$	8,495
Net loss (As Restated - See Note 3)	—	—		—		—			—		(8,914		)	(8,914		)
Compensation expense associated with option grants	—	—		—		—			31		—			31
Purchase of common stock for treasury	—	—		(17,403	)	(102		)	—		—			(102		)
Balance December 31, 2003 (As Restated - See Note 3)	3,666,370	$	37	(704,818	)	(8,190		)	$	29,035	$	(21,372	)	$	(490	)
Net loss (As Restated - See Note 3)	—	—		—		—			—		(13,963		)	(13,963		)
Sale of common stock from exercise of options	1,125	—		—		—			11		—			11
Purchase of common stock for treasury	—	—		(47,195	)	(290		)	—		—			(290		)
Balance December 29, 2004 (As Restated - See Note 3)	3,667,495	$	37	(752,013	)	$	(8,480	)	$	29,046	$	(35,335	)	$	(14,732	)

The accompanying notes are an integral part of these consolidated financial statements.

BERTUCCI’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands)

	December 29, 2004			December 31, 2003			January 1, 2003
	(As Restated - See Note 3)
Cash flows from operating activities
Net loss	$	(13,963	)	$	(8,914	)	$	(8,266	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustment of gain on Brinker Sale	—			(650		)	—
Gain on sale of property	—			—			(235		)
Loss on sale leaseback transaction	—			59			—
Stock compensation expense	—			31			—
Closed restaurant charge	—			—			236
Asset impairment charge	6,749			3,580			—
Deferred rent, depreciation, and amortization	12,863			12,658			11,540
Deferred income taxes	—			—			9,145
Changes in operating assets and liabilities
Inventories	(120		)	(368		)	(95		)
Prepaid expenses and receivables	643			1,217			(1,126		)
Other accrued expenses	2,186			106			(1,131		)
Income taxes payable	(413		)	409			(1,149		)
Accounts payable	(607		)	457			(822		)
Tenant allowances received	577			658			997
Other operating assets and liabilities	(34		)	(172		)	75

Total adjustments	21,844			17,985			17,435

Net cash provided by operating activities	7,881			9,071			9,169

Cash flows from investing activities
Additions to property and equipment	(8,598		)	(17,396		)	(18,212		)
Net proceeds from sale leaseback transactions	—			8,977			—
Decrease (increase) in restricted cash	726			(661		)	(1,455		)
Proceeds from sale of restaurants	—			—			413
Acquisition of liquor licenses	—			(278		)	(17		)

Net cash used in investing activities	(7,872		)	(9,358		)	(19,271		)

Cash flows from financing activities
Sale of common stock from exercise of options	11			—			—
Purchase of treasury shares	(290		)	(102		)	—
Payment on promissory note	(39		)	(81		)	—
Principal payments under capital lease obligations	(47		)	(16		)	—

Net cash used in financing activities	(365		)	(199		)	—

Net decrease in cash and cash equivalents	(356		)	(486		)	(10,102		)
Cash and cash equivalents, beginning of year	12,647			13,133			23,235
Cash and cash equivalents, end of year	$	12,291		$	12,647		$	13,133

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	10,090		$	9,804		$	9,750
Cash paid (refunded) for income taxes	$	377		$	(408	)	$	(3,863	)
Capital leases entered into during period	$	175		$	6,066		$	—
Promissory note issued in exchange for liquor license rights	$	—		$	555		$	—

Promissory note issued in exchange for settlement of lease liability	$	—		$	386		$	—

The accompanying notes are an integral part of these consolidated financial statements.

BERTUCCI’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 29, 2004

(1) ORGANIZATION AND OPERATIONS

Fiscal Year End

The Company’s fiscal year is the 52 or 53-week period ended on the Wednesday closest to December 31st. All years presented consist of 52 weeks.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

The Company records revenue from the sale of food, beverage and alcohol when sales occur. Proceeds from the sale of gift cards are recorded as deferred revenue and recognized as income when redeemed by the holder.

Cash and Cash Equivalents

Cash and equivalents are comprised of demand and interest bearing accounts with original maturities of no more than sixty days. The Company utilizes zero balance disbursement accounts for cash management purposes and maintains a cash balance sufficient to cover disbursements from these accounts when the check is presented for payment. Outstanding checks written against the disbursement accounts of $1.4 million and $4.0 million at December 29, 2004 and December 31, 2003, respectively, are included in accounts payable in the accompanying consolidated balance sheets.

Restricted Cash

The Company is required to maintain cash as collateral for outstanding letters of credit under its letter of credit facility.

Inventories

Inventories are carried at the lower of cost (first-in, first-out) or market value, and consist of the following (dollars in thousands):

	2004		2003

Food	$	750	$	705
Liquor	542		471
Supplies	96		92
Total inventory	$	1,388	$	1,268

Property and Equipment

Property and equipment are carried at cost. The Company provides for depreciation and amortization using the straight-line method to charge the cost of property and equipment to expense over the estimated useful lives of the assets. The lives used are as follows:

Asset Classification		Estimated Useful Life

Buildings		20 years
Leasehold improvements		Shorter of term of the lease (ranging between 10-20 years, or life of asset)
Furniture and equipment		3-7 years

The Company evaluates property and equipment held and used in the business for impairment whenever events or changes in circumstances indicate that the carrying amount of a restaurant’s assets may not be recoverable. An impairment is determined by comparing estimated undiscounted future operating cash flows for a restaurant to the carrying amount of its assets. If an impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated discounted future operating cash flows of the asset and the expected proceeds upon sale of the asset.

The Company regularly assesses restaurants’ performance for recoverability to determine if an impairment of fixed assets exists at any location. The Company estimates the fair value of assets based on the net present value of the expected cash flows for each restaurant. If the carrying amount of the assets (including any nontransferable liquor licenses) exceeds the fair value of the assets, the Company records an impairment charge to reflect the write down of the affected assets to fair value. Any impairment is charged to earnings and included in the accompanying consolidated statements of operations. For fiscal 2004 and 2003, impairment charges of $6.7 million and $3.6 million, respectively, were recorded.

Capitalized Interest

The Company capitalizes interest costs (in leasehold improvements) based on new restaurant capital expenditures. Total interest costs incurred and amounts capitalized are as follows (dollars in thousands):

	2004		2003		2002

Total interest expense	$	10,690	$	10,371	$	9,713
Less - Amount capitalized	77		238		126
Interest expense, net	$	10,613	$	10,133	$	9,587

Self-Insurance

Accrued Expenses

Accrued expenses consisted of the following as of December 29, 2004 and December 31, 2003 (dollars in thousands):

	2004		2003

Accrued payroll and related benefits	$	4,810	$	3,679
Accrued interest	4,254		4,279
Unredeemed gift certificates	3,857		2,973
Other accrued liabilities	1,904		1,466
Accrued occupancy costs	1,034		522
Store closing reserves, current portion	484		615
Accrued advertising	72		36
Income taxes payable	42		456

TOTAL	$	16,457	$	14,026

Goodwill

The Company tests goodwill for impairment annually on the first day after the fiscal year end. This same impairment test is performed at other times during the course of the year should an event occur that indicates goodwill may be impaired. There was no impairment of goodwill at December 29, 2004 and December 31, 2003.

Deferred Finance Costs

Underwriting, legal and other direct costs incurred in connection with the issuance of the Senior Notes and the completion of the sale-leaseback transactions discussed in Note 7 have been capitalized and are being amortized into interest expense over the life of the related borrowings and underlying leases, respectively.

Liquor Licenses

Transferable liquor licenses are accounted for at the lower of cost or market and are not amortized. Annual renewal fees are expensed as incurred. Non-transferable liquor licenses are amortized on a straight-line basis over the contractual life of the license. The carrying value of transferable liquor licenses was $2.0 million at each of December 29, 2004 and December 31, 2003. Amortization expense for non-transferable liquor licenses was $82,000 in fiscal 2004, $58,000 in fiscal 2003, and for existing licenses is expected to be $56,000 per year for each of the next five fiscal years.

Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and long-term debt. The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s long term debt, consisting of the Senior Notes, is based on the present value of remaining principal and interest payments discounted at a comparable borrowing rate each fiscal year (see Note 6 of Notes to Consolidated Financial Statements).

Comprehensive Income

Comprehensive income is equal to net income as reported for all three fiscal years reported herein.

Preopening Expenses

Preopening costs are expensed as incurred. These costs include the training of new restaurant management teams; travel and lodging for both the training and opening unit management teams; and the food, beverage and supplies costs incurred to perform the training and testing of all equipment, concept systems and recipes.

Advertising

Advertising costs are expensed as incurred. Advertising costs were $6.6 million, $5.5 million and $5.5 million in fiscal 2004, 2003, and 2002, respectively, and are included in operating expenses in the consolidated statements of operations.

Earnings Per Share

Basic earnings per share is computed by dividing net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock. For the fiscal years ended December 29, 2004, December 31, 2003, and January 1, 2003 options representing 548,171, 594,396, and 652,549 shares of common stock, respectively, were excluded from the calculation of diluted loss per share because of their anti-dilutive effect.

Stock-Based Compensation

As allowed by SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”), the Company has elected to account for stock-based compensation under the intrinsic value method with disclosure of the effects of fair value accounting on net income and earnings per share on a pro forma basis. The Company’s stock-based compensation plan is described more fully in Note 10. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. With the exception of one modification to a grant during 2003, no stock-based employee compensation cost related to stock options is reflected in net loss, as all options granted had an exercise price equal to, or in excess of, the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123 (in thousands, except per share data):

	2004			2003			2002

Net loss, as reported	$	(13,963	)	$	(8,914	)	$	(8,266	)
Add: Stock-based employee compensation expense included in reported net loss.	—			31			—
Deduct: Net stock-based employee compensation expense/income determined under fair value based method for all awards.	(77		)	(580		)	(144		)
Pro forma net loss	$	(14,040	)	$	(9,463	)	$	(8,410	)

Basic and diluted loss per share
As reported	$	(4.74	)	$	(3.00	)	$	(2.77	)
Pro forma	$	(4.77	)	$	(3.19	)	$	(2.82	)

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, Share-Based Payment (“SFAS No. 123R”). This Statement is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. The Statement requires entities to recognize stock compensation expense for awards of equity instruments to employees based on the grant-date fair value of those awards (with limited exceptions). SFAS No. 123R is effective for the first annual reporting period that begins after June 15, 2005. The Company is evaluating the two methods of adoption allowed by SFAS No. 123R; the modified-prospective transition method and the modified-retrospective transition method.

Use of Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

revenues and expenses during the reporting period. Significant estimates include the reserve for closed restaurant locations, impairment analysis on closed locations, and insurance reserves. Actual results could differ from those estimates.

(3) RESTATEMENT OF FINANCIAL STATEMENTS

Initial Restatement

Subsequent to the issuance of its financial statements for the year ended December 31, 2003, as a result of views expressed in a letter issued February 7, 2005 by the office of the Chief Accountant of the Securities and Exchange Commission (“SEC”) to the AICPA regarding certain operating lease-related accounting issues, the Company reviewed its lease accounting, including leased liquor licenses and leasehold depreciation practices. As a result, in its Annual Report on Form 10-K for the fiscal year ended December 29, 2004, which was originally filed with the SEC on April 13, 2005 (the “Original 2004 10-K”), the Company corrected its accounting for leases and restated its historical financial statements and certain financial information for all periods prior to September 29, 2004 to correct errors in lease accounting policies (the “Initial Restatement”). The Company historically accounted for tenant improvement allowances as reductions to the related leasehold improvement asset on the consolidated balance sheets and capital expenditures in investing activities on the consolidated statements of cash flows. Also, the Company historically recognized rent on a straight-line basis over a lease term commencing with the initial occupancy date, or Company-operated retail store opening date. In addition, the depreciable lives of certain leasehold improvements and other long-lived assets on those properties were not aligned with the non-cancelable lease term.

Following a review of its lease accounting treatment and relevant accounting literature, the Company determined it should: (a) report tenant improvement allowances as deferred liabilities in the consolidated balance sheets and initiate the amortization of those liabilities at the relevant initial occupancy date; (b) classify the change in the deferred liability related to the tenant allowances in the operating activities in the Consolidated Statements of Cash Flows; (c) conform the depreciable lives for buildings on leased land and other leasehold improvements to the shorter of the economic life of the asset or the lease term used for determining the capital versus operating lease classification and calculating straight-line rent; and (d) include option periods in the depreciable lives assigned to leased buildings and leasehold improvements and in the calculation of straight-line rent expense only in instances in which the exercise of the option period can be reasonably assured and failure to exercise such options would result in an economic penalty.

The restatement for leaseholds also resulted in restatements of amounts previously reported for asset impairments.

Current Restatement

In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2005, the Company discovered errors in its detailed property and equipment records adjusted during the Initial Restatement. Management then conducted an investigation into the extent and magnitude of these errors, which involved the calculation of depreciation expense on multiple property records and the related impact on income taxes for the fiscal years 1998 through 2004, inclusive, and the first two fiscal quarters of 2005 (the “Current Restatement Subject Periods”), to determine if a restatement of its financial statements was necessary. Based upon this investigation, in January 2006 the Company determined aggregate additional depreciation expense of approximately $3.5 million needed to be recorded in its financial statements for the Current Restatement Subject Periods and income tax expense was not properly adjusted in the Initial Restatement. As a result, the Company further determined (1) a restatement of its financial statements in the Current Restatement Subject Periods was required (the “Current Restatement”) and together with the Initial Restatement, the “Restatements”); and (2) the Company needed to amend its: (a) Original 2004 10-K; (b) Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2005, which the Company filed with the SEC on May 11, 2005 (the “Original 2005 First Quarter 10-Q”); and (c) Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2005, which was filed with the SEC on August 12, 2005 (the “Original 2005 Second Quarter 10-Q”), to restate the financial statements contained therein and reflect the proper recording of depreciation and income tax expense for the periods reported therein.

In addition to the restatement in the Initial Restatement to classify the change in the deferred liability related to tenant allowances in operating activities, the cash flow activity below reflects changes in restricted cash balances as an investing

activity (such changes were previously presented as a financing activity), and the proceeds from sale leaseback transactions in 2003 as an investing activity (the proceeds were previously presented as a financing activity).

The following is a summary of the significant effects of the Restatements on the Company’s consolidated financial statements (in thousands, except per share data):

	As of December 29, 2004
	As Previously Reported			As Restated
Net property and equipment	$	66,055		$	62,355
Total assets	115,921			112,221

Accumulated deficit	(31,635		)	(35,335		)
Total liabilities and stockholders’ deficit	115,921			112,221

	As of December 31, 2003
	As Previously Reported			As Originally Restated			As Restated
Net property and equipment	$	73,611		$	76,117		$	71,858
Liquor licenses, net	2,555			2,838			2,838
Total assets	125,886			128,675			124,416

Total current liabilities	22,539			22,522			22,522
Capital lease obligations, net of current portion	5,724			6,017			6,017
Other long-term liabilities	4,164			8,124			8,124
Accumulated deficit	(15,666		)	(17,113		)	(21,372		)
Total liabilities and stockholders’ deficit	125,886			128,675			124,416

	For the year ended December 29, 2004
	As Previously Reported			As Restated
Deferred rent, depreciation, amortization and preopening expenses	$	13,216		$	12,657
Loss from operations	(3,909		)	(3,350		)
Net loss	(14,522		)	(13,963		)

Basic and diluted loss per share	(4.93		)	(4.74		)

	For the year ended December 31, 2003
	As Previously Reported			As Originally Restated			As Restated
Operating expenses	$	113,076		$	113,036		$	113,036
Deferred rent, depreciation, amortization and preopening expenses	12,700			14,115			14,123
Asset impairment charge	4,682			3,580			3,580
Income from operations	850			577			569
Interest expense, net	(10,101		)	(10,133		)	(10,133		)
Net loss	(8,601		)	(8,906		)	(8,914		)

Basic and diluted loss per share	(2.90		)	(3.00		)	(3.00		)

	For the year ended January 1, 2003
	As Previously Reported			As Originally Restated			As Restated
Deferred rent, depreciation, amortization and preopening expenses	$	10,733		$	12,160		$	12,413
Income from operations	7,146			5,719			5,466
Loss before income tax provision	(2,441		)	(3,868		)	(4,121		)
Income tax provision	2,697			2,697			4,145
Net loss	(5,138		)	(6,565		)	(8,266		)

Basic and diluted loss per share	(1.72		)	(2.20		)	(2.77		)

	For the year ended December 29, 2004
	As Previously Reported			As Restated
Cash flows used in investing activities	$	(8,598	)	$	(7,872	)
Cash flows from (used in) financing activities	361			(365		)

	For the year ended December 31, 2003
	As Previously Reported			As Originally Restated			As Restated
Cash flows from operating activities	$	8,408		$	9,071		$	9,071
Cash flows used in investing activities	(17,016		)	(17,674		)	(9,358		)
Cash flows from (used in) financing activities	8,122			8,117			(199		)

	For the year ended January 1, 2003
	As Previously Reported			As Originally Restated			As Restated
Cash flows from operating activities	$	8,172		$	9,169		$	9,169
Cash flows used in investing activities	(16,819		)	(17,816		)	(19,271		)
Cash flows used in financing activities	(1,455		)	(1,455		)	—

(4) RESTAURANT SALES AND CLOSURES

Brinker Sale

In April 2001, the Company completed the sale of a number of non-Bertucci’s brand restaurants (the “Brinker Sale”) and recorded a gain of $36.9 million before income taxes. During 2003 the Company concluded certain liabilities recorded in connection with the Brinker Sale were no longer required as part of the final settlement and accordingly reversed $650,000 of accrued liabilities as an additional gain on the Brinker Sale.

Closed Restaurants Reserve

Prior to fiscal 2002, the Company had recorded reserves relating to lease commitments at certain closed locations, including other exit costs for which the Company was still primarily liable. It was originally expected the Company would be able to exit these locations, sublease the locations or otherwise be released from the related leases. However, due to market conditions, the Company was unable to sell, sublease or exit certain of these leases as originally anticipated. Additionally, in 2002, the Company closed one restaurant and recorded a charge of $236,000 primarily related to estimated lease termination costs.

During 2003, the Company terminated a lease for one of its closed locations in exchange for issuing a promissory note of $0.4 million, payable in varying installments through 2010. The note does not bear interest, and accordingly the Company has recorded imputed interest on the note. The obligation was reclassified from the closed restaurants reserve to other long-term obligations in the accompanying balance sheet.

Activity within the Company’s closed restaurants reserve was as follows (dollars in thousands):

	2004			2003			2002
Balance, beginning of year	$	1,449		$	2,499		$	3,352
Additonal reserves charged to operations	—			—			236
Promissory note issued	—			(386		)	—
Lease and related costs charged to reserve	(790		)	(664		)	(1,089		)
Balance, end of year	$	659		$	1,449		$	2,499

Current portion	$	484		$	615		$	642
Noncurrent portion	175			834			1,857
	$	659		$	1,449		$	2,499

The closed restaurant reserve was calculated net of sublease income at 11 locations that are partially or fully subleased as of December 29, 2004. The Company remains primarily liable for the remaining lease obligations should the sublessor default. Total sublease income excluded from the reserve is approximately $7.2 million for subleases expiring at various dates through 2017. There have been no defaults by sublessors to date.

(5) INCOME TAXES

The components of the provision for income taxes for the years ended December 29, 2004, December 31, 2003 and January 1, 2003 are as follows (dollars in thousands):

	2004			2003			2002

Current:
Federal	$	—		$	—		$	(5,000	)
State	—			—			—
	—			—			(5,000		)
Deferred:
Federal	(5,669		)	(3,752		)	2,115
State	(413		)	(270		)	856
	(6,082		)	(4,022		)	2,971

Valuation allowance	6,082			4,022			6,174

Total provision for income taxes	$	—		$	—		$	4,145

A reconciliation of the amount computed by applying the statutory federal income tax rate of 35% to the loss before income tax provision for the years ended December 29, 2004, December 31, 2003, and January 1, 2003, respectively, is as follows (dollars in thousands):

	2004			2003			2002
Income tax benefit computed at federal statutory rate	$	(4,887	)	$	(3,120	)	$	(1,442	)
State taxes, including expired state benefits, net of federal benefit	(413		)	(270		)	(190		)
FICA tax credit	(782		)	(632		)	(397		)
Valuation allowance	6,082			4,022			6,174
Income tax provision	$	—		$	—		$	4,145

Significant items giving rise to deferred tax assets and deferred tax liabilities at December 29, 2004 and December 31, 2003 are as follows (dollars in thousands):

	2004			2003
Deferred tax assets–

Property and equipment, including impairment charges	$	6,086		$	2,058
Net operating loss and tax credit carryforwards	4,356			2,701
Deferred rent	3,195			2,770
Store closing write downs and liabilities	1,694			2,265
Accrued expenses and other	1,042			550
Deferred and accrued compensation	201			200
	16,574			10,544
Deferred tax liabilities–
Liquor licenses	(296		)	(348		)
	(296		)	(348		)

Total net deferred tax assets	16,278			10,196
Valuation allowance	(16,278		)	(10,196		)

Carrying value of net deferred tax assets	$	—		$	—

The future tax benefits which give rise to the deferred tax asset remain statutorily available to the Company. The Company considers both negative and positive evidence in determining if a valuation allowance is appropriate. The Company had net operating losses and tax credit carryforwards of $7.8 million as of December 29, 2004 which expire at various dates through 2019. The Company has an historical trend of recurring pre-tax losses. Based on the recent losses and the historical trend of losses, the Company concluded a valuation allowance for the net deferred tax asset remains appropriate. Actual amounts realized will be dependent on generating future taxable income.

(6) SENIOR NOTES PAYABLE

The Company has outstanding 10 3/4% Senior Notes with a face value of $85.3 million due 2008 (the “Senior Notes”). Interest on the Senior Notes is payable semi-annually on January 15 and July 15. Through July 15, 2006, the Company may, at its option, redeem any or all of the Senior Notes at face value, plus a declining premium, which is 3.58% through July 14, 2005 and 1.79% from July 15, 2005 through July 15, 2006. After July 15, 2006, the Senior Notes may be redeemed at face value. Under certain circumstances, including a change of control or following certain asset sales, the holders of the Senior Notes may require the Company to repurchase the Senior Notes, at a redemption price of 101%. The Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, on an unsecured senior basis, by all of the Company’s subsidiaries. The Company’s parent company has no independent assets or operations. The Senior Notes contain no financial covenants and the Company is in compliance with all non-financial covenants as of December 29, 2004.

The fair values of the Company’s long-term debt, including current portion at December 29, 2004 and December 31, 2003 were as follows (dollars in thousands):

	2004				2003
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	85,310	$	86,556	$	85,310	$	86,806
Promissory Notes	821		737		860		760
	$	86,131	$	87,293	$	86,170	$	87,566

The fair values of the long term obligations above were determined based on the present value of remaining principal and interest payments discounted at the rate of 10.0%, the Company’s estimate of a comparable borrowing rate as of December 29, 2004 and December 31, 2003, respectively.

(7) COMMITMENTS AND CONTINGENCIES

Letter of Credit Facility

The Company has a $4.0 million (maximum) letter of credit facility. As of December 29, 2004, this facility is collateralized with $2.4 million of cash restricted from general use. Letters of credit totaling $2.2 million were outstanding pursuant to this facility on December 29, 2004 and expire in December 2005. Restricted cash is presented as current based on the December 2005 letter of credit expiration date.

Operating Leases

The Company has entered into numerous lease arrangements, primarily for restaurant land, equipment and buildings, which are non-cancelable and expire on various dates through 2027.

Some operating leases contain rent escalation clauses whereby the rent payments increase over the term of the lease. Rent expense includes base rent amounts, percentage rent payable periodically, as defined in each lease, and rent expense accrued to recognize lease escalation provisions on a straight-line basis over the lease term. Rent expense recognized in operating expenses in the accompanying consolidated statements of income was approximately $14.8 million, $13.4 million and $11.4 million for the years ended December 29, 2004, December 31, 2003 and January 1, 2003 respectively. The annual difference of accrued rent versus amounts paid is classified as deferred rent in the accompanying consolidated statements of operations and the cumulative difference is included in other long-term liabilities in the accompanying consolidated balance sheets. Certain leases require the payment of an additional amount, calculated as a percentage of annual sales, as defined in the lease agreement, which exceeds annual minimum rentals. Such percentage rent expense was $154,600, $264,000 and $260,000, for fiscal 2004, 2003, and 2002, respectively.

Future minimum rental payments due under all non-cancelable operating leases as of December 29, 2004 were as follows (dollars in thousands):

Year-
2005	$	15,655
2006	15,645
2007	14,211
2008	12,474
2009	11,303
Thereafter	50,705
	$	119,993

In addition to the leases summarized above, the Company is primarily liable on 13 locations for approximately $7.8 million in gross lease commitments over the remaining terms of the leases. Eleven of those locations are subleased to tenants under sublease obligations aggregating $7.2 million. The difference of $649,000 represents the Company’s closed restaurant reserve at December 29, 2004.

Capital Leases

During 2003, the Company completed two sale-leaseback transactions on four restaurant properties. In the first transaction, the Company sold three properties for $7.2 million in cash (net of fees of approximately $300,000), resulting in a gain of $2.2 million. The gain has been deferred and will be amortized into income over the lease term. The properties sold included land and buildings at each location which the Company agreed to lease back for a 20-year period. The portion of the contractual obligation relating to the buildings is recorded at its net present value of $3.8 million (at inception) as an obligation under a capital lease. The land portion of the obligation is classified as an operating lease, requiring future payments to be classified as operating expenses. In the second transaction, the Company sold a property consisting of land and a building for $1.8 million in cash (net of fees of approximately $210,000). In connection with this transaction the Company recorded a charge of $59,000 representing the excess of the property’s carrying value over its fair market value. The fair value of the land is less than 25% of the transaction value and therefore the entire contractual obligation is recorded

at its net present value of $1.9 million (at inception) as a capital lease obligation. The Company agreed to lease back the property for a 20-year period. Both leases include two five-year renewal terms, which the Company may exercise at its option. The Company is required to maintain the properties for the term of the leases and to pay all taxes, insurance, utilities and other costs associated with those properties. Under the leases, the Company agreed to customary indemnities and, in the event the Company defaults on any lease, the landlord may terminate the lease, accelerate rental payments and collect liquidated damages.

Payments under capital lease commitments for these restaurants are as follows (dollars in thousands):

Year
2005	$	679
2006	693
2007	704
2008	715
2009	724
Thereafter	9,913
	13,428
Less amount representing interest	7,252
Present value of minimum payments	$	6,176
Current portion	74
Long-term portion	6,102
	$	6,176

Contingencies

The Company is subject to various legal proceedings that arise in the ordinary course of business. Based on consultation with the Company’s legal counsel, management believes that the amount of ultimate liability with respect to these actions will not be material to the financial position, cash flows or results of operations of the Company.

(8) RELATED PARTIES

Under the terms of the Company’s agreements, the stockholders have consented to the payment of an ongoing financial consulting fee to Jacobson Partners, a stockholder of the Company. Fees of $250,000 were paid to Jacobson Partners for each of the fiscal years ended December 29, 2004, December 31, 2003 and January 1, 2003, respectively. Additionally, the Board of Directors approved an additional fee of $175,000 paid in fiscal 2004. All fees are included in general and administrative expenses in the accompanying consolidated statements of operations.

J.P. Acquisition Fund II, L.P., a Delaware limited partnership (“JPAF II”), owns a controlling interest in the Company. JPAF, Limited Partnership, a Delaware limited partnership (“JPAF LP”) is the General Partner of JPAF II. The General Partner of JPAF LP is JPAF, Inc., a Delaware corporation. Benjamin R. Jacobson, Chairman of the Company, is the president and majority shareholder of JPAF, Inc. J.P. Acquisition Fund III, L.P., a Delaware limited partnership (“JPAF III”), owns a controlling interest in Taco Bueno. The General Partner of JPAF III is JPAF III, LLC, a Delaware limited liability company (“JPAF III, LLC”). Jacobson Partners is the sole shareholder of JPAF III, LLC. Mr. Jacobson is the Managing General Partner of Jacobson Partners. Stephen V. Clark, President and Chief Executive Officer of the Company, and David G. Lloyd, Chief Financial Officer of the Company, hold similar positions with Taco Bueno. No agreement exists, however, between the two entities as to the allocation of services by Mr. Clark or Mr. Lloyd. Effective December 30, 2004 compensation arrangements for these individuals will be borne equally by both companies, an arrangement approved by each company’s Board of Directors.

In February 2002, the Company extended loans to 14 members of management (including eight officers). The demand notes accrued interest at 8%, payable quarterly. The demand notes totaled $157,000 at January 1, 2003 and were paid in full with accrued interest as of February 13, 2003.

(9) 401(k) PROFIT SHARING PLAN AND DEFERRED COMPENSATION PLAN

The Company maintains a defined contribution plan known as the Bertucci’s 401(k) Plan. Under the Bertucci’s 401(k) Plan, substantially all salaried employees of the Company may defer a portion of their current salary, on a pretax basis. The Company makes a matching contribution to the Bertucci’s 401(k) Plan that is allocated, based on a formula as defined by

the Bertucci’s 401(k) Plan, to Plan participants. Matching contributions made by the Company for the years ended December 29, 2004, December 31, 2003 and January 1, 2003 were approximately $98,000, $81,000 and $27,000 respectively.

In 1999, the Company established the Bertucci’s Corporation Executive Savings and Investment Plan, a non-qualified compensation plan, to which highly compensated executives of the Company may elect to defer a portion of their salary and/or earned bonus. The Company replaced the original trustee of the Executive Savings and Investment Plan, Scudder, in December 2004 with Reliance pursuant to a new Trust Agreement. The Trust Agreement between the Company and Reliance is for the purpose of paying benefits under Executive Savings and Investment Plan and its terms are substantially similar to the trust agreement that the Company entered into with Scudder in 1999. An irrevocable grantor trust has been established under the Trust Agreement with the Company as grantor.

The trust assets are held separately from other funds of the Company, but remain subject to claims of the Company’s general creditors in the event of the Company’s insolvency. As of December 29, 2004, there were 14 participants in the plan with assets in the trust with an aggregate market value of approximately $378,000. The assets of the trust are included in other assets in the consolidated balance sheet. A corresponding liability is included in other long term liabilities.

(10) COMMON STOCK AND STOCK OPTION PLAN

On September 15, 1997, the Board of Directors of the Company established the 1997 Equity Incentive Plan, which included a nonqualified stock option plan (the “Option Plan”), for certain key employees and directors. The Option Plan is administered by the Board of Directors of the Company and may be modified or amended by the Board of Directors in any respect. As of December 29, 2004 there were 201,829 authorized shares remaining for issuance under the Option Plan.

The options granted under the Option Plan are exercisable as follows:

Two years beyond option grant date	25	%
Three years beyond option grant date	50	%
Four years beyond option grant date	75	%
Five years beyond option grant date	100	%

A summary of the Option Plan activity for the years ended December 29, 2004, December 31, 2003 and January 1, 2003 is presented in the table and narrative below.

	2004					2003					2002
	Shares		Weighted Average Exercise Price			Shares		Weighted Average Exercise Price			Shares		Weighted Average Exercise Price
Outstanding at beginning of year	594,396		$	15.42		652,549		$	15.44		713,973		$	15.19
Granted	111,000		$	17.51		40,079		$	14.48		26,000		$	17.51
Exercised	(1,125	)	$	(9.22	)	—		$	—		—		$	—
Forfeited	(156,100	)	$	(16.80	)	(98,232	)	$	(15.13	)	(87,424	)	$	(13.38	)
Outstanding at end of year	548,171		$	15.47		594,396		$	15.42		652,549		$	15.44

Exercisable at end of year	256,377		$	13.61		294,603		$	14.12		322,714		$	14.28

Range of Exercise Price per share			$9.22 - $17.51					$9.22 - $17.51					$9.22 - $17.51
Weighted average fair value of each option granted			$	—				$	2.83				$	3.53

The 548,171 shares of Common Stock subject to outstanding options at December 29, 2004 have a remaining weighted

average contractual life of approximately 5.8 years. Options granted under the Stock Option Plan to date expire 90 days following either the fifth or the tenth anniversary of the date of the grant.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Weighted average risk-free interest rates of 3.53%, 3.18% and 2.91% were used in 2004, 2003 and 2002, respectively. Weighted average expected lives of five years and an expected volatility of 0% were used in all three years.

The Company’s shareholders are parties to various shareholder agreements which restrict their ability to transfer their shares without the approval of the Company’s Board of Directors. The Shareholder Agreements provide, among other things, that (i) a shareholder may not transfer his or its shares in the Company, whether voluntarily or by operation of law, other than in certain limited circumstances specified therein, including transfers through a right of first refusal procedure, distributions by certain legal entities to the constituents of such entities (i.e. a partnership to its partners), transfers by will or intestate succession, transfers approved by the Board to an affiliate of a shareholder or to another shareholder, transfers to family members or trusts for their benefit, and any transfer unanimously approved by the Board, (ii) the Company has the option to purchase the shares of any shareholder who is an employee of the Company following the termination of such shareholder’s employment with the Company for any reason at a purchase price equal to the fair market value or original purchase price (plus accrued interest in certain circumstances) depending upon the reason for such termination, (iii) the Company has the option to purchase the shares of any shareholder who is an employee of the Company following certain transfer events, including such shareholders’ bankruptcy or a court-ordered transfer of such shareholder’s stock, (iv) if the Company fails to exercise its option to purchase as described in the immediately preceding clause (iii), the remaining shareholders have the option to purchase the applicable shares, (v) in the event an employee shareholder leaves the Company due to death, disability or hardship or, with respect to certain shares, is terminated by the Company without cause, such shareholder has a one-time option to require the Company to purchase such shareholder’s shares at the greater of fair value or the original purchase price, subject to certain approval by the Board of Directors, excluding effected employees, (vi) no transfer of shares may occur unless the transferee thereof agrees to be bound by the terms of the Shareholders Agreement and (vii) all share certificates must bear customary legends and all share transfers must be in compliance with applicable securities laws.

Additionally, the Company has the option to purchase shares held by employee stockholders (approximately 70,629 shares at December 29, 2004) upon their termination at a purchase price equal to either fair market value or the original purchase price (plus accrued interest in certain circumstances), depending on the reason for termination. Employee shareholders, or their estate, may require the Company to purchase their shares upon their death or disability and with respect to certain shares if they are terminated without cause, at the greater of fair value or the original purchase price, subject to certain approval by the Board of Directors.

(11) QUARTERLY RESULTS

The quarterly information depicted below details results of operations for each of the fiscal quarters of 2004 and 2003. For each year, amounts detailed are:

1) “As Previously Reported” – amounts as initially reported in financial statements filed on Form 10-Q and Form 10-K prior to the adjustment in the Initial Restatement;

2) “As Originally Restated” – amounts as adjusted in the Initial Restatement as reported in the Original 2004 10-K, the Original 2005 First Quarter 10-Q, or the Original 2005 Second Quarter 10-Q; and

3) “As Restated” – amounts as adjusted in the Current Restatement.

QUARTERLY STATEMENTS OF OPERATIONS (UNAUDITED)

BERTUCCI’S CORPORATION

(In thousands except share and per share data)

	Fiscal 2004
	Quarter 1 March 31, 2004			Quarter 2 June 30, 2004			Quarter 3 September 29, 2004			Quarter 4 December 29, 2004			Year December 29, 2004
	(As Previously Reported)			(As Previously Reported)			(As Previously Reported)			(As Previously Reported)
Net sales	$	49,426		$	51,754		$	49,260		$	49,968		$	200,408

Cost of sales and expenses:
Cost of sales	11,556			12,883			12,256			12,536			49,231
Operating expenses	29,639			33,480			29,521			29,451			122,091
General and administrative expenses	3,093			3,478			2,655			3,839			13,065
Deferred rent, depreciation, amortization and preopening expenses	3,232			3,112			3,111			3,267			12,722
Asset impairment charge	—			3,338			—			2,855			6,193
Total cost of sales and expenses	47,520			56,291			47,543			51,948			203,302

Income (loss) from operations	1,906			(4,537		)	1,717			(1,980		)	(2,894		)
Other expense:
Interest expense, net	(2,629		)	(2,652		)	(2,654		)	(2,650		)	(10,585		)
Other expense	(2,629		)	(2,652		)	(2,654		)	(2,650		)	(10,585		)

Net loss	$	(723	)	$	(7,189	)	$	(937	)	$	(4,630	)	$	(13,479	)

Basic and diluted loss per share	$	(0.24	)	$	(2.44	)	$	(0.32	)	$	(1.58	)	$	(4.58	)

Weighted average shares outstanding - basic and diluted	2,958,436			2,945,040			2,944,337			2,928,740			2,943,841

	Quarter 1 March 31, 2004			Quarter 2 June 30, 2004			Quarter 3 September 29, 2004			Quarter 4 December 29, 2004			Year December 29, 2004
	(As Originally Restated *)			(As Originally Restated *)			(As Originally Restated *)			(As Previously Reported)
Net sales	$	49,426		$	51,754		$	49,260		$	49,968		$	200,408

Cost of sales and expenses:
Cost of sales	11,556			12,883			12,256			12,536			49,231
Operating expenses	29,627			33,469			29,509			29,451			122,056
General and administrative expenses	3,093			3,478			2,655			3,839			13,065
Deferred rent, depreciation, amortization and preopening expenses	3,309			3,261			3,379			3,267			13,216
Asset impairment charge	—			3,894			—			2,855			6,749
Total cost of sales and expenses	47,585			56,985			47,799			51,948			204,317

Income (loss) from operations	1,841			(5,231		)	1,461			(1,980		)	(3,909		)
Other expense:
Interest expense, net	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)
Other expense	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)

Net loss	$	(797	)	$	(7,892	)	$	(1,203	)	$	(4,630	)	$	(14,522	)

Basic and diluted loss per share	$	(0.27	)	$	(2.68	)	$	(0.41	)	$	(1.58	)	$	(4.93	)

Weighted average shares outstanding - basic and diluted	2,958,436			2,945,040			2,944,337			2,928,740			2,943,841

	Quarter 1 March 31, 2004			Quarter 2 June 30, 2004			Quarter 3 September 29, 2004			Quarter 4 December 29, 2004			Year December 29, 2004
	*(As Restated )**			*(As Restated )**			*(As Restated )**			*(As Restated )**			*(As Restated )**
Net sales	$	49,426		$	51,754		$	49,260		$	49,968		$	200,408

Cost of sales and expenses:
Cost of sales	11,556			12,883			12,256			12,536			49,231
Operating expenses	29,627			33,469			29,509			29,451			122,056
General and administrative expenses	3,093			3,478			2,655			3,839			13,065
Deferred rent, depreciation, amortization and preopening expenses	3,166			3,108			3,244			3,139			12,657
Asset impairment charge	—			3,894			—			2,855			6,749
Total cost of sales and expenses	47,442			56,832			47,664			51,820			203,758

Income (loss) from operations	1,984			(5,078		)	1,596			(1,852		)	(3,350		)
Other expense:
Interest expense, net	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)
Other expense	(2,638		)	(2,661		)	(2,664		)	(2,650		)	(10,613		)

Net loss	$	(654	)	$	(7,739	)	$	(1,068	)	$	(4,502	)	$	(13,963	)

Basic and diluted loss per share	$	(0.22	)	$	(2.63	)	$	(0.36	)	$	(1.54	)	$	(4.74	)

Weighted average shares outstanding - basic and diluted	2,958,436			2,945,040			2,944,337			2,928,740			2,943,841

* Quarterly financial information has been restated to reflect the correction of errors related to lease accounting and depreciation expense, as discussed in Note 3.

	Fiscal 2003
	Quarter 1 April 2, 2003			Quarter 2 July 2, 2003			Quarter 3 October 1, 2003			Quarter 4 December 31, 2003			Year December 31, 2003
	(As Previously Reported)			(As Previously Reported)			(As Previously Reported)			(As Previously Reported)			(As Previously Reported)
Net sales	$	42,674		$	47,587		$	47,381		$	48,530		$	186,172

Cost of sales and expenses:
Cost of sales	9,461			11,019			11,402			11,662			43,544
Operating expenses	26,475			28,418			28,833			29,350			113,076
General and administrative expenses	3,179			2,856			2,554			2,731			11,320
Deferred rent, depreciation, amortization and preopening expenses	2,964			3,272			3,184			3,280			12,700
Asset impairment charge	—			—			4,682			—			4,682
Total cost of sales and expenses	42,079			45,565			50,655			47,023			185,322

Income (loss) from operations	595			2,022			(3,274		)	1,507			850
Other (expense) income:
Adjustment of gain on Brinker Sale	—			—			—			650			650
Interest expense, net	(2,398		)	(2,498		)	(2,615		)	(2,590		)	(10,101		)
Other expense	(2,398		)	(2,498		)	(2,615		)	(1,940		)	(9,451		)

Net loss	$	(1,803	)	$	(476	)	$	(5,889	)	$	(433	)	$	(8,601	)

Basic and diluted loss per share	$	(0.61	)	$	(0.16	)	$	(1.99	)	$	(0.15	)	$	(2.90	)

Weighted average shares outstanding - basic and diluted	2,978,855			2,976,166			2,963,674			2,963,371			2,970,403

	Quarter 1 April 2, 2003			Quarter 2 July 2, 2003			Quarter 3 October 1, 2003			Quarter 4 December 31, 2003			Year December 31, 2003
	(As Originally Restated *)			(As Originally Restated *)			(As Originally Restated *)			(As Originally Restated *)			(As Originally Restated *)
Net sales	$	42,674		$	47,587		$	47,381		$	48,530		$	186,172

Cost of sales and expenses:
Cost of sales	9,461			11,019			11,402			11,662			43,544
Operating expenses	26,471			28,407			28,821			29,337			113,036
General and administrative expenses	3,179			2,856			2,554			2,731			11,320
Deferred rent, depreciation, amortization and preopening expenses	3,340			3,774			3,707			3,294			14,115
Asset impairment charge	—			—			3,580			—			3,580
Total cost of sales and expenses	42,451			46,056			50,064			47,024			185,595

Income (loss) from operations	223			1,531			(2,683		)	1,506			577
Other (expense) income:
Adjustment of gain on Brinker Sale	—			—			—			650			650
Interest expense, net	(2,401		)	(2,508		)	(2,625		)	(2,599		)	(10,133		)
Other expense	(2,401		)	(2,508		)	(2,625		)	(1,949		)	(9,483		)

Net loss	$	(2,178	)	$	(977	)	$	(5,308	)	$	(443	)	$	(8,906	)

Basic and diluted loss per share	$	(0.73	)	$	(0.33	)	$	(1.79	)	$	(0.15	)	$	(3.00	)

Weighted average shares outstanding - basic and diluted	2,978,855			2,976,166			2,963,674			2,963,371			2,970,403

	Quarter 1 April 2, 2003		Quarter 2 July 2, 2003		Quarter 3 October 1, 2003		Quarter 4 December 31, 2003		Year December 31, 2003
	*(As Restated )**		*(As Restated )**		*(As Restated )**		*(As Restated )**		*(As Restated )**
Net sales	$	42,674	$	47,587	$	47,381	$	48,530	$	186,172

Cost of sales and expenses:
Cost of sales	9,461		11,019		11,402		11,662		43,544
Operating expenses	26,471		28,407		28,821		29,337		113,036
General and administrative expenses	3,179		2,856

BERTUCCIS CORP 10-K/A