# UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-Q

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

For the quarterly period ended December 15, 2004

Commission file number: 333-116897

# BUFFETS HOLDINGS, INC.

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|(State or other jurisdiction of |  | (IRS Employer      
|incorporation or organization)  |  | Identification No.)





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|(Address of principal executive offices) | (Zip Code)

Registrants telephone number, including area code: (651) 994-8608

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 [X] NO [   ]

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).YES [   ] NO [X]

The number of shares of Buffets Holdings, Inc.s common stock outstanding as of January 12, 2005 was 3,175,135.

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# BUFFETS HOLDINGS, INC.TABLE OF CONTENTS

|                                 |  | 
|-------------------------------- |  | 
|Part I.    Financial Information |  | 
|                                 |  | 
|Item 1.                          |  | 
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|Item 2.                          |  | 
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|Item 3.                          |  | 
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|Item 4.                          |  | 
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|Part II.  Other Information      |  | 
|                                 |  | 
|Item 1.                          |  | 
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|Item 2.                          |  | 
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|Item 6.                          |  | 

2

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# PART I. FINANCIAL
INFORMATION

# ITEM 1. FINANCIAL STATEMENTS

# BUFFETS HOLDINGS, INC.
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                                     | June 30, | December 15,
|-------------------------------------------------------------------- | -------- | ------------
|
|
|
|
|CURRENT ASSETS:                                                      |          |             
|Cash and cash equivalents                                            |          |             
|Restricted cash and cash equivalents                                 |          |             
|Receivables                                                          |          |             
|Inventories                                                          |          |             
|Prepaid expenses and other current assets                            |          |             
|Deferred income taxes                                                |          |             
|                                                                     |          |             
|Total current assets                                                 |          |             
|PROPERTY AND EQUIPMENT, net                                          |          |             
|GOODWILL                                                             |          |             
|DEFERRED INCOME TAXES                                                |          |             
|OTHER ASSETS, net                                                    |          |             
|                                                                     |          |             
|Total assets                                                         |          |             
|                                                                     |          |             
|LIABILITIES AND SHAREHOLDERS' DEFICIT                                |          |             
|CURRENT LIABILITIES:                                                 |          |             
|Accounts payable                                                     |          |             
|Accrued liabilities                                                  |          |             
|Income taxes payable                                                 |          |             
|Current maturities of long-term debt                                 |          |             
|                                                                     |          |             
|Total current liabilities                                            |          |             
|LONG-TERM DEBT, net of current maturities                            |          |             
|DEFERRED LEASE OBLIGATIONS                                           |          |             
|OTHER LONG-TERM LIABILITIES                                          |          |             
|                                                                     |          |             
|Total liabilities                                                    |          |             
|SHAREHOLDERS' DEFICIT:                                               |          |             
|Preferred stock; $.01 par value, 1,100,000 shares authorized; none   |          |             
|issued and outstanding as of June 30, 2004 and December 15, 2004     |          |             
|Common stock; $.01 par value, 3,600,000 shares authorized; 3,185,672 |          |             
|shares issued and outstanding as of June 30, 2004 and 3,152,135 as   |          |             
|of December 15, 2004                                                 |          |             
|Additional paid in capital                                           |          |             
|Accumulated deficit                                                  |          |             
|                                                                     |          |             
|Total shareholders' deficit                                          |          |             
|                                                                     |          |             
|Total liabilities and shareholders' deficit                          |          |             
|                                                                     |          |             

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

3

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# BUFFETS HOLDINGS, INC.
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS

|                                     | Twelve Weeks Ended | Twenty Four Weeks Ended
|------------------------------------ | ------------------ | -----------------------
|
|
|
|
|
|RESTAURANT SALES                     |                    |                        
|RESTAURANT COSTS:                    |                    |                        
|Food                                 |                    |                        
|Labor                                |                    |                        
|Direct and occupancy                 |                    |                        
|                                     |                    |                        
|Total restaurant costs               |                    |                        
|ADVERTISING EXPENSES                 |                    |                        
|GENERAL AND ADMINISTRATIVE EXPENSES  |                    |                        
|                                     |                    |                        
|OPERATING INCOME                     |                    |                        
|INTEREST EXPENSE                     |                    |                        
|INTEREST INCOME                      |                    |                        
|LOSS RELATED TO REFINANCING          |                    |                        
|LOSS RELATED TO EARLY EXTINGUISHMENT |                    |                        
|OF DEBT                              |                    |                        
|OTHER INCOME                         |                    |                        
|                                     |                    |                        
|INCOME (LOSS) BEFORE INCOME TAXES    |                    |                        
|INCOME TAX EXPENSE (BENEFIT)         |                    |                        
|                                     |                    |                        
|Net income (loss)                    |                    |                        
|                                     |                    |                        

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

4

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# BUFFETS HOLDINGS, INC.
AND SUBSIDIARIES

# CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS

|                                                         | Twenty Four Weeks Ended
|-------------------------------------------------------- | -----------------------
|
|
|
|
|OPERATING ACTIVITIES:                                    |                        
|Net income (loss)                                        |                        
|Adjustments to reconcile net income (loss) to net cash   |                        
|provided by operating activities:                        |                        
|Depreciation and amortization                            |                        
|Amortization of debt issuance cost                       |                        
|Accretion of original issue discount                     |                        
|Loss related to early extinguishment of debt             |                        
|Deferred income taxes                                    |                        
|Loss (gain) on disposal of assets                        |                        
|Changes in assets and liabilities:                       |                        
|Receivables                                              |                        
|Inventories                                              |                        
|Prepaid expenses and other current assets                |                        
|Accounts payable                                         |                        
|Accrued and other liabilities                            |                        
|Income taxes payable                                     |                        
|                                                         |                        
|Net cash provided by operating activities                |                        
|                                                         |                        
|INVESTING ACTIVITIES:                                    |                        
|Purchase of fixed assets                                 |                        
|Acquisition of 20% minority interest in Tahoe Joe's Inc. |                        
|Proceeds from sale of other assets                       |                        
|                                                         |                        
|Net cash used in investing activities                    |                        
|                                                         |                        
|FINANCING ACTIVITIES:                                    |                        
|Repayment of debt                                        |                        
|Issuance of stock                                        |                        
|Repurchase of stock                                      |                        
|Reduction of restricted cash available for early         |                        
|extinguishment of debt                                   |                        
|Use of restricted cash for early extinguishment of debt  |                        
|Debt issuance costs                                      |                        
|                                                         |                        
|Net cash used in financing activities                    |                        
|                                                         |                        
|NET CHANGE IN CASH AND CASH EQUIVALENTS                  |                        
|CASH AND CASH EQUIVALENTS, beginning of period           |                        
|                                                         |                        
|CASH AND CASH EQUIVALENTS, end of period                 |                        
|                                                         |                        
|SUPPLEMENTAL CASH FLOW INFORMATION:                      |                        
|Cash paid during the period for                         |                        
|Interest (net of capitalized interest of $108 and $139)  |                        
|                                                         |                        
|Income taxes                                             |                        
|                                                         |                        

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

5

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# BUFFETS HOLDINGS, INC.
AND SUBSIDIARIES

# NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

# 1. Nature of Organization

Description of Business

Buffets
Holdings, Inc. (Buffets Holdings), a Delaware corporation, was formed to acquire 100
percent of the common stock of Buffets, Inc. and its subsidiaries in a buyout from public
shareholders on October 2, 2000. Buffets Holdings, Inc. and Buffets,
Inc. are collectively referred to as the Company.

The
Company owns and operates a chain of restaurants under the names of Old Country Buffet,
Country Buffet, HomeTown Buffet, Grannys Buffet, Tahoe Joes Famous Steakhouse
and Soup N Salad Unlimited in the United States. The Company, operating principally
in the mid-scale family dining industry segment, owned and operated 353 restaurants (344
family buffet restaurants and nine Tahoe Joes Famous Steakhouse Restaurants) and
franchised 19 restaurants operating as of December 15, 2004.

Interim Financial
Information

In
the opinion of management, the accompanying unaudited condensed consolidated financial
statements contain all necessary adjustments, which are of a normal recurring nature, to
present fairly the Companys financial position and the results of its operations and
cash flows for the periods presented, in conformity with accounting principles generally
accepted in the United States of America and with the regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures,
normally included in accordance with accounting principles generally accepted in the
United States of America, have been condensed or omitted pursuant to such SEC rules and
regulations. Operating results for the twenty four weeks ended December 15, 2004 are not
necessarily indicative of results that may be expected for the year ending June 29, 2005.

The
balance sheet as of June 30, 2004 has been derived from the audited financial statements
at that date but does not include all of the information and footnotes required by
accounting principles generally accepted in the United States of America for complete
financial statements.

These
unaudited condensed consolidated financial statements should be read in conjunction with
the financial statements and the related notes contained in the Companys Form 10-K
filed with the Securities and Exchange Commission on September 28, 2004 and with
Managements Discussion and Analysis of Financial Condition and Results of Operations
appearing on pages 17 through 23 of this report.

Principles of
Consolidation

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

Fiscal Year

The
Companys fiscal year is comprised of fifty two, or fifty three, weeks divided into
four fiscal quarters of twelve, twelve, sixteen, and twelve or thirteen weeks.

# 2. Recent Accounting
Pronouncements

In
December 2004, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 123(R), Share-Based Payment. This
statement requires all entities to recognize compensation expense in an amount equal to
the fair value of share-based payments granted to employees. SFAS No. 123(R) is effective
the first reporting period beginning after June 15, 2005. The Company does not believe
that the adoption of SFAS No. 123(R) will have a material impact on its results of
operations or financial position.

6

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# 3. Stock-Based
Compensation

The
Company accounts for activity under its stock-based employee compensation plans under the
recognition and measurement principles of Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees. Accordingly, the Company does
not recognize compensation expense in connection with employee stock option grants because
stock options are granted at exercise prices not less than the fair value of the common
stock on the date of grant.

The
following table shows the effect on net income had the Company applied the fair value
expense recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation (in thousands):

|                                               | Twelve Weeks Ended | Twenty Four Weeks Ended
|---------------------------------------------- | ------------------ | -----------------------
|
|
|Net income (loss) as reported                  |                    |                        
|Compensation expense recorded in the financial |                    |                        
|statements, net of tax effect                  |                    |                        
|Pro forma compensation expense under the       |                    |                        
|provisions of SFAS No. 123, net of tax effect  |                    |                        
|                                               |                    |                        
|Pro forma                                      |                    |                        
|                                               |                    |                        

# 4. Other Assets

Other
assets consist principally of debt issuance costs, notes receivable and other intangibles
net of accumulated amortization of $1.1 million as of June 30, 2004 and $1.8 million as of
December 15, 2004. Debt issuance costs are the capitalized costs incurred in conjunction
with amending the senior credit agreement, issuing senior subordinated notes and issuing
senior discount notes. The debt issuance costs are being amortized over the terms of the
financing arrangements using the effective interest method. Other intangibles include
trademarks, franchise fees and liquor licenses. Trademarks and franchise fees are being
amortized on a straight-line basis over 10 years. Liquor licenses are not amortized, as
they have indefinite lives. Notes receivable principally arose from the sale of certain
restaurant facilities. Long-term and short-term notes receivable collectively totaled $2.7
million as of June 30, 2004 and $2.3 million as of December 15, 2004. The notes receivable
have due dates between 2006 and 2008.

The
gross carrying amount and accumulated amortization of each major class of other intangible
assets were as follows (in thousands):

|                           | Franchise fees | Trademarks | Liquor licenses | Total |  |   |     |  
|-------------------------- | -------------- | ---------- | --------------- | ----- |  | - | --- | -
|
|
|
|BALANCE, June 30, 2004     |                |            | $               | 69    |  | $ | (56 | )
|FY 2005 Activity:          |                |           
|Amortization               |                |            |                 |      |  |   | (5  | )
|                           |                |            |                 |       |  |   |     |  
|BALANCE, December 15, 2004 |                |            | $               | 69    |  | $ | (61 | )
|                           |                |            |                 |       |  |   |     |  

7

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# 5. Long-Term Debt

As
of December 15, 2004, long-term debt outstanding was as follows (in thousands):

|Buffets, Inc.                                          | 
|------------------------------------------------------ | 
|Credit Facility:                                       | 
|Revolving credit facility                              | 
|Term loan, interest at LIBOR plus 3.50%, due quarterly | 
|through June 28, 2009 (interest rate at 5.5%)          | 
|                                                       | 
|Total Credit Facility                                  | 
|Senior subordinated notes, interest at 11.25%, due     | 
|July 15, 2010, net of discount of $5,381               | 
|                                                       | 
|Total long-term debt at Buffets, Inc.                  | 





|Buffets Holdings, Inc.                          | 
|----------------------------------------------- | 
|Senior discount notes, interest at 13.875%, due | 
|December 15, 2010, net of discount of $50,559   | 
|                                                | 
|Grand total long-term debt                      | 
|Less - Current maturities                       | 
|                                                | 
|                                                | 
|                                                | 

Credit Facility

On
February 20, 2004, Buffets, Inc. amended and restated its senior credit facility (the
Credit Facility). The amended and restated Credit Facility provides for total borrowings
of up to $310,000,000, including (i) a $230,000,000 term loan, (ii) a $30,000,000
revolving credit facility, (iii) a $20,000,000 letter of credit facility, and (iv) a
$30,000,000 synthetic letter of credit facility. The terms of the Credit Facility permit
Buffets, Inc. to borrow, subject to availability and certain conditions, incremental term
loans or to issue additional notes in an aggregate amount up to $25,000,000. The
borrowings under the term loan facility bear interest, at Buffets, Inc.s option, at
either adjusted LIBOR plus 3.50% or at an alternate base rate plus 2.50%, subject to a
leverage-based pricing grid. The term loan and the synthetic letter of credit facility
mature on June 28, 2009, while the revolving facility and the letter of credit facilities
mature on June 28, 2007. The borrowings due under the term loan are payable in equal
quarterly installments in an annual amount equal to 1% of the term loan during each of the
first four and a half years of the loan, with the remaining balance payable due in equal
quarterly installments during the last year of the loan. The Credit Facility is fully and
unconditionally guaranteed by Buffets Holdings, which has no independent assets or
operations, and is secured by substantially all of the Companys assets. Availability
under the Credit Facility depends upon Buffets, Inc.s continued compliance with
certain covenants and financial ratios including leverage, interest coverage and fixed
charge coverage as specifically defined in the Credit Facility. Buffets, Inc. was in
compliance with all financial ratio covenants of the Credit Facility as of December 15,
2004. The financial ratio covenant requirements increase over time, however, as set forth
in the senior credit agreement.

The
proceeds from the amended and restated Credit Facility were used to refinance existing
debt and to make a distribution to Buffets Holdings. Buffets, Inc. used $230.0 million in
proceeds from term loan borrowings under the amended Credit Facility to refinance $166.8
million in outstanding term loan indebtedness under the predecessor Credit Facility,
establish a $34.7 million restricted cash collateral account to repurchase outstanding
111⁄4% senior subordinated notes, make a $19.7 million distribution to Buffets
Holdings, pay $2.7 million in transaction fees related to the refinancing transaction, pay
$1.1 million in accrued term loan interest and use $5.0 million for general corporate
purposes. The Company recorded a $4.2 million write-off of debt issuance cost associated
with the amendment of the Credit Facility and $0.6 million of transaction fees associated
with an uncompleted bond offering as a loss related to refinancing.

The
amended Credit Facility allowed Buffets, Inc. to use up to $50.0 million in cash,
comprised of the restricted cash collateral proceeds and unrestricted cash on hand, toward
the repurchase of outstanding 111⁄4% senior subordinated notes. Buffets, Inc.
completed its partial bond repurchase program in August 2004. Buffets, Inc. cumulatively
expended $49.5 million to redeem $43.9 million of 111⁄4% senior subordinated notes
due in 2010 at an average price of 109.2%, of which $15.7 million was expended during the
first quarter of fiscal 2005 to redeem $14.3 million of the notes at an average price of
106.7%. The remaining $0.5 million in restricted cash was used to pay down the amended
Credit Facility in August 2004. In connection with the bond repurchase program, Buffets,
Inc. recorded a loss related to early extinguishment of debt of $1.9 million in fiscal
2005.

As
of December 15, 2004, Buffets, Inc. had $35.1 million in outstanding letters of credit
which expire through November 13, 2005. As of December 15, 2004, the Company had $44.9
million of total borrowing availability comprised of $30.0 million under the revolving
credit facility and $14.9 million of collective borrowing capacity under the letter of
credit facilities.

8

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111⁄4% Senior
Subordinated Notes

On
June 28, 2002, Buffets, Inc. issued 111⁄4% senior subordinated notes in the principal
amount of $230 million due July 15, 2010 in a Rule 144A offering. Such notes were issued
at an offering price of 96.181% of principal amount at maturity, resulting in an effective yield of 12% to the initial principal
amount. Interest is payable semi-annually on January 15 and July 15 of each year through
July 15, 2010. Accretion of the original issue discount was approximately $0.4 million
during 2004 and 2005 and is included in interest expense in the accompanying condensed
consolidated statements of operations. Except in the event of an initial public offering,
Buffets, Inc. is not entitled to redeem the notes at its option prior to July 15, 2006.
The redemption price during the first twelve-month period following July 15, 2006 is
105.625%. The redemption price declines by 1.875% per year until July 15, 2009, at which
point there is no redemption price premium. In the event of an initial public offering
prior to July 15, 2006, Buffets, Inc. may redeem up to 35% of the aggregate principal
amount of the notes at a redemption price of 111.25%. Furthermore, in the event of a
change in control, as defined in the indenture governing those notes, the holders of the
notes may require the Company to repurchase the notes at a purchase price of 101% of the
outstanding principal amount plus accrued and unpaid interest.

In
December 2002, Buffets, Inc. exchanged outstanding 111⁄4% senior subordinated notes
which were issued in June 2002 for registered 111⁄4% senior subordinated notes.

13 7/8% Senior
Discount Notes

On
May 18, 2004, Buffets Holdings issued 13 7/8% senior discount notes due December
15, 2010 in a Rule 144A offering with a stated aggregate principal amount at maturity
(including accreted amounts) of $132.0 million. The 13 7/8% senior discount
notes were issued at a discount to their aggregate principal amount at maturity. Prior to
July 31, 2008, interest will accrue on the 13 7/8% senior discount notes in the
form of an increase in the accreted value of those notes. The accreted value of each note
will increase until July 31, 2008 at a rate of 13.875% per annum. After this date, cash
interest on the notes will accrue and be payable on January 31 and July 31 of each year at
a rate of 13.875% per annum. Accretion of the discount was approximately $5.1 million
during 2005 and is included in interest expense in the accompanying consolidated
statements of operations. If Buffets Holdings fails to meet certain leverage ratio tests
on or about July 31, 2006 or July 31, 2008, additional interest will accrue on the notes
from that date at a rate of 1% per annum, up to a maximum of 2% per annum.

Buffets
Holdings used $75.1 million in gross proceeds from the senior discount note offering and
$0.1 million of cash on hand to redeem series B junior subordinated notes due 2011 plus
accrued and unpaid interest ($9.2 million), make a distribution to stockholders ($60.9
million) and pay transaction fees and expenses related to the offering ($5.1 million). As
part of the transaction fees and expenses related to the offering, Buffets Holdings
recognized approximately $2.2 million of bonus payments to certain restaurant and
corporate employees as financing-related compensation expenses.

In
July 2004, Buffets Holdings exchanged outstanding 13 7/8% senior discount notes
which were issued in May 2004 for registered 13 7/8% senior discount notes.

# 6. Purchase of Minority
Interest in Joint Venture

During
August 2003, the Company acquired the remaining 20% interest in Tahoe Joes Inc. from
the minority holder for $370,000. The Company concurrently eliminated its remaining excess
minority interest liability recorded in the condensed consolidated balance sheets in other
long-term liabilities resulting in approximately $345,000 of income that was recorded in
other income in the condensed consolidated income statements during the first quarter of
fiscal 2004. As a consequence of the transaction, Tahoe Joes, Inc. became a
co-guarantor with the other wholly owned subsidiaries of Buffets, Inc. with respect to
both the Credit Facility and the 111⁄4% senior subordinated notes.

# 7. Significant Events

During
the second quarter ended December 15, 2004, the Company incurred $1.3 million in severance
charges related to the headcount reduction of 25 headquarters associates and the
replacement of the Chief Executive Officer, as recognized in general and
administrative expenses in the condensed consolidated statements of operations.

9

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On
November 12, 2004, Buffets Holdings filed an application with the Securities and Exchange
Commission to withdraw its registration statement for an initial public offering of Income
Deposit Securities that it had filed on August 27, 2004, due to market conditions. The
registration statement had not yet been declared effective by the Securities and Exchange
Commission and no securities had been offered or sold under the registration statement. In
connection with this withdrawal, the Company incurred a charge of $0.8 million as
reflected as a loss related to refinancing in the condensed consolidated statements of
operations.

# 8. Litigation

On
November 12, 2004, two former managers of our wholly-owned subsidiary, HomeTown Buffet, Inc., individually
and on behalf of all others similarly situated, filed a class action lawsuit against HomeTown Buffet in
California Superior Court in San Francisco County. On January 4, 2005, we removed the case to the U.S. federal
court in San Francisco.  The lawsuit alleges that HomeTown Buffet violated California wage and hour
laws by failing to pay all of its California managers and assistant managers overtime, and for making
deductions from bonus compensation based on the companys workers compensation
costs. The plaintiffs seek compensatory damages, penalties, restitution of unpaid overtime and deductions,
pre-judgement interest, costs of suit and reasonable attorneys fees.  The complaint does not make a specific
monetary demand.  This action is in a preliminary stage, and we are currently not able to predict the outcome
of this action or reasonably estimate a range of possible loss.  We intend to defend this action vigorously.

# 9. Condensed
Consolidating Financial Statements

Operations
are conducted through Buffets Holdings subsidiaries and its ability to make payments
on the senior discount notes is dependent on the earnings and the distribution of funds
from its subsidiaries through loans, dividends or otherwise. However, none of its
subsidiaries are obligated to make funds available to it for payment on the senior
discount notes. The terms of Buffets, Inc.s credit facility place restrictions on
its ability to pay dividends and otherwise transfer assets to Buffets Holdings. Further,
the terms of the indenture governing Buffets, Inc.s senior subordinated notes place
restrictions on the ability of Buffets, Inc. and Buffets Holdings other subsidiaries
to pay dividends and otherwise transfer assets to Buffets Holdings.

The
following condensed consolidating financial statements are presented pursuant to Rule 3-10
of Regulation S-X. Buffets, Inc. is a subsidiary issuer of 111⁄4% senior subordinated
notes that are fully and unconditionally guaranteed by its parent, Buffets Holdings, as
well as each of its subsidiaries including HomeTown Buffets, Inc., OCB Restaurant Co., OCB
Purchasing Co., Restaurant Innovations, Inc., Distinctive Dining, Inc., Tahoe Joes,
Inc., Buffets Leasing Company, LLC, HomeTown Leasing Company, LLC, OCB Leasing Company,
LLC, and Tahoe Joes Leasing Company, LLC. All guarantees are joint and several and
the subsidiary issuer and the subsidiary guarantors are 100% owned by the parent company.

10

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# Condensed
Consolidating Balance Sheet
As of June 30, 2004

|                                        |  | Subsidiary | Subsidiary |         |  
|--------------------------------------- |  | ---------- | ---------- | ------- | -
|
|
|ASSETS                                  |  |            |            |         |  
|CURRENT ASSETS:                         |  |           
|Cash and cash equivalents               |  |            | $          | 96      |  
|Restricted cash and cash equivalents    |  |            |            |        |  
|Receivables                             |  |            |            |        |  
|Inventories                             |  |            |            |        |  
|Income taxes receivable                 |  |            |            | 1,619   |  
|Prepaid expenses and other current      |  |           
|assets                                  |  |            |            |        |  
|Deferred income taxes                   |  |            |            |        |  
|                                        |  |            |            |         |  
|Total current assets                    |  |            |            | 1,715   |  
|PROPERTY AND EQUIPMENT, net             |  |            |            |        |  
|GOODWILL, net                           |  |            |            |        |  
|DEFERRED INCOME TAXES                   |  |            |            |        |  
|OTHER ASSETS, net                       |  |            |            | 2,847   |  
|                                        |  |            |            |         |  
|Total assets                            |  |            | $          | 4,562   |  
|                                        |  |            |            |         |  
|LIABILITIES AND SHAREHOLDERS'           |  |           
|EQUITY (DEFICIT)                        |  |           
|CURRENT LIABILITIES:                    |  |           
|Accounts payable                        |  |            |            | 180     |  
|Accrued liabilities                     |  |            |            |        |  
|Income taxes payable                    |  |            |            |        |  
|Current maturities of long-term debt    |  |            |            |        |  
|                                        |  |            |            |         |  
|Total current liabilities               |  |            |            | 180     |  
|LONG-TERM DEBT, net of current          |  |           
|maturities                              |  |            |            | 76,300  |  
|DEFERRED LEASE OBLIGATIONS              |  |            |            |        |  
|OTHER LONG-TERM LIABILITIES             |  |            |            |        |  
|                                        |  |            |            |         |  
|Total liabilities                       |  |            |            | 76,480  |  
|                                        |  |            |            |         |  
|COMMITMENTS AND CONTINGENCIES           |  |           
|SHAREHOLDERS' EQUITY (DEFICIT)          |  |           
|Common stock                            |  |            |            | 32      |  
|Additional paid in capital              |  |            |            |        |  
|Retained earnings (accumulated deficit) |  |            |            | (71,950 | )
|                                        |  |            |            |         |  
|Total shareholders' equity (deficit)    |  |            |            | (71,918 | )
|                                        |  |            |            |         |  
|Total liabilities and                   |  |           
|shareholders' equity (deficit)          |  |            | $          | 4,562   |  
|                                        |  |            |            |         |  

11

---



# Condensed Consolidating
Balance Sheet 
As of December 15, 2004

|                                        |  | Subsidiary | Subsidiary |         |  
|--------------------------------------- |  | ---------- | ---------- | ------- | -
|
|
|ASSETS                                  |  |            |            |         |  
|CURRENT ASSETS:                         |  |           
|Cash and cash equivalents               |  |            | $          | 46      |  
|Receivables                             |  |            |            |        |  
|Inventories                             |  |            |            |        |  
|Prepaid expenses and other current      |  |           
|assets                                  |  |            |            |        |  
|Deferred income taxes                   |  |            |            | 56      |  
|                                        |  |            |            |         |  
|Total current assets                    |  |            |            | 102     |  
|PROPERTY AND EQUIPMENT, net             |  |            |            |        |  
|GOODWILL, net                           |  |            |            |        |  
|DEFERRED INCOME TAXES                   |  |            |            | 968     |  
|OTHER ASSETS, net                       |  |            |            | 2,821   |  
|                                        |  |            |            |         |  
|Total assets                            |  |            | $          | 3,891   |  
|                                        |  |            |            |         |  
|LIABILITIES AND SHAREHOLDERS'           |  |           
|EQUITY (DEFICIT)                        |  |           
|CURRENT LIABILITIES:                    |  |           
|Accounts payable                        |  |            |            | 163     |  
|Accrued liabilities                     |  |            |            |        |  
|Income taxes payable                    |  |            |            | (2,810  | )
|Current maturities of long-term debt    |  |            |            |        |  
|                                        |  |            |            |         |  
|Total current liabilities               |  |            |            | (2,647  | )
|LONG-TERM DEBT, net of current          |  |           
|maturities                              |  |            |            | 81,441  |  
|DEFERRED LEASE OBLIGATIONS              |  |            |            |        |  
|OTHER LONG-TERM LIABILITIES             |  |            |            |        |  
|                                        |  |            |            |         |  
|Total liabilities                       |  |            |            | 78,794  |  
|                                        |  |            |            |         |  
|COMMITMENTS AND CONTINGENCIES           |  |           
|SHAREHOLDERS' EQUITY (DEFICIT)          |  |           
|Common stock                            |  |            |            | 32      |  
|Additional paid in capital              |  |            |            | 12      |  
|Retained earnings (accumulated deficit) |  |            |            | (74,947 | )
|                                        |  |            |            |         |  
|Total shareholders' equity (deficit)    |  |            |            | (74,903 | )
|                                        |  |            |            |         |  
|Total liabilities and                   |  |           
|shareholders' equity (deficit)          |  |            | $          | 3,891   |  
|                                        |  |            |            |         |  

12

---



# Condensed
Consolidating Statement of Operations For the Twelve Weeks
Ended December 17, 2003

|                                  |  | Subsidiary | Subsidiary |      |  
|--------------------------------- |  | ---------- | ---------- | ---- | -
|
|
|
|RESTAURANT SALES                  |  |            | $          |     |  
|RESTAURANT COSTS:                 |  |           
|Food                              |  |            |            |     |  
|Labor                             |  |            |            |     |  
|Direct and occupancy              |  |            |            |     |  
|                                  |  |            |            |      |  
|Total restaurant costs            |  |            |            |     |  
|ADVERTISING EXPENSES              |  |            |            |     |  
|GENERAL AND ADMINISTRATIVE        |  |           
|EXPENSES                          |  |            |            |     |  
|                                  |  |            |            |      |  
|OPERATING INCOME (LOSS)           |  |            |            |     |  
|INTEREST EXPENSE                  |  |            |            | 266  |  
|INTEREST INCOME                   |  |            |            |     |  
|OTHER INCOME                      |  |            |            |     |  
|                                  |  |            |            |      |  
|INCOME (LOSS) BEFORE INCOME TAXES |  |            |            | (266 | )
|INCOME TAX EXPENSE (BENEFIT)      |  |            |            | (102 | )
|                                  |  |            |            |      |  
|Net income (loss)                 |  |            | $          | (164 | )
|                                  |  |            |            |      |  

# Condensed
Consolidating Statement of Operations  For the Twenty Four
Weeks Ended December 17, 2003

|                                  |  | Subsidiary | Subsidiary |      |  
|--------------------------------- |  | ---------- | ---------- | ---- | -
|
|
|
|RESTAURANT SALES                  |  |            | $          |     |  
|RESTAURANT COSTS:                 |  |           
|Food                              |  |            |            |     |  
|Labor                             |  |            |            |     |  
|Direct and occupancy              |  |            |            |     |  
|                                  |  |            |            |      |  
|Total restaurant costs            |  |            |            |     |  
|ADVERTISING EXPENSES              |  |            |            |     |  
|GENERAL AND ADMINISTRATIVE        |  |           
|EXPENSES                          |  |            |            |     |  
|                                  |  |            |            |      |  
|OPERATING INCOME (LOSS)           |  |            |            |     |  
|INTEREST EXPENSE                  |  |            |            | 574  |  
|INTEREST INCOME                   |  |            |            |     |  
|OTHER INCOME                      |  |            |            |     |  
|                                  |  |            |            |      |  
|INCOME (LOSS) BEFORE INCOME TAXES |  |            |            | (574 | )
|INCOME TAX EXPENSE (BENEFIT)      |  |            |            | (221 | )
|                                  |  |            |            |      |  
|Net income (loss)                 |  |            | $          | (353 | )
|                                  |  |            |            |      |  

13

---



# Condensed
Consolidating Statement of Operations For the Twelve Weeks
Ended December 15, 2004

|                                  |  | Subsidiary | Subsidiary |        |  
|--------------------------------- |  | ---------- | ---------- | ------ | -
|
|
|
|RESTAURANT SALES                  |  |            | $          |       |  
|RESTAURANT COSTS:                 |  |           
|Food                              |  |            |            |       |  
|Labor                             |  |            |            |       |  
|Direct and occupancy              |  |            |            |       |  
|                                  |  |            |            |        |  
|Total restaurant costs            |  |            |            |       |  
|ADVERTISING EXPENSES              |  |            |            |       |  
|GENERAL AND ADMINISTRATIVE        |  |           
|EXPENSES                          |  |            |            |       |  
|                                  |  |            |            |        |  
|OPERATING INCOME (LOSS)           |  |            |            |       |  
|INTEREST EXPENSE                  |  |            |            | 2,646  |  
|INTEREST INCOME                   |  |            |            |       |  
|LOSS RELATED TO REFINANCING       |  |            |            | 835    |  
|OTHER INCOME                      |  |            |            |       |  
|                                  |  |            |            |        |  
|INCOME (LOSS) BEFORE INCOME TAXES |  |            |            | (3,481 | )
|INCOME TAX EXPENSE (BENEFIT)      |  |            |            | (1,336 | )
|                                  |  |            |            |        |  
|Net income (loss)                 |  |            | $          | (2,145 | )
|                                  |  |            |            |        |  

# Condensed
Consolidating Statement of Operations 
For the Twenty Four
Weeks Ended December 15, 2004

|                                  |  | Subsidiary | Subsidiary |        |  
|--------------------------------- |  | ---------- | ---------- | ------ | -
|
|
|
|RESTAURANT SALES                  |  |            | $          |       |  
|RESTAURANT COSTS:                 |  |           
|Food                              |  |            |            |       |  
|Labor                             |  |            |            |       |  
|Direct and occupancy              |  |            |            |       |  
|                                  |  |            |            |        |  
|Total restaurant costs            |  |            |            |       |  
|ADVERTISING EXPENSES              |  |            |            |       |  
|GENERAL AND ADMINISTRATIVE        |  |           
|EXPENSES                          |  |            |            | 3      |  
|                                  |  |            |            |        |  
|OPERATING INCOME (LOSS)           |  |            |            | (3     | )
|INTEREST EXPENSE                  |  |            |            | 5,292  |  
|INTEREST INCOME                   |  |            |            |       |  
|LOSS RELATED TO REFINANCING       |  |            |            | 835    |  
|LOSS RELATED TO EARLY             |  |           
|EXTINGUISHMENT OF DEBT            |  |            |            |       |  
|OTHER INCOME                      |  |            |            |       |  
|                                  |  |            |            |        |  
|INCOME (LOSS) BEFORE INCOME TAXES |  |            |            | (6,130 | )
|INCOME TAX EXPENSE (BENEFIT)      |  |            |            | (2,215 | )
|                                  |  |            |            |        |  
|Net income (loss)                 |  |            | $          | (3,915 | )
|                                  |  |            |            |        |  

14

---



# Condensed
Consolidating Statement of Cash Flows For the Twenty Four
Weeks Ended December 17, 2003

|                                                  |  | Subsidiary | Subsidiary |      |  
|------------------------------------------------- |  | ---------- | ---------- | ---- | -
|
|
|OPERATING ACTIVITIES:                             |  |            |            |      |  
|Net income (loss)                                 |  |            | $          | (353 | )
|Adjustments to reconcile net income (loss) to net |  |           
|cash provided by (used in) operating activities:  |  |           
|Depreciation and amortization                     |  |            |            |     |  
|Amortization of debt issuance costs               |  |            |            |     |  
|Accretion of original issue discount              |  |            |            |     |  
|Deferred income taxes                             |  |            |            |     |  
|Gain on disposal of assets                        |  |            |            |     |  
|Changes in assets and liabilities:                |  |           
|Receivables                                       |  |            |            |     |  
|Inventories                                       |  |            |            |     |  
|Prepaid expenses and other assets                 |  |            |            |     |  
|Accounts payable                                  |  |            |            |     |  
|Accrued and other liabilities                     |  |            |            | 573  |  
|Income taxes payable/refundable                   |  |            |            | (221 | )
|                                                  |  |            |            |      |  
|Net cash provided by (used in)                    |  |           
|operating activities                              |  |            |            | (1   | )
|                                                  |  |            |            |      |  
|INVESTING ACTIVITIES:                             |  |           
|Purchase of fixed assets                          |  |            |            |     |  
|Corporate cash advances (payments)                |  |            |            |     |  
|Acquisition of 20% minority interest in           |  |           
|Tahoe Joe's Inc.                                  |  |            |            |     |  
|Proceeds from sale of other assets                |  |            |            |     |  
|                                                  |  |            |            |      |  
|Net cash provided by (used in)                    |  |           
|investing activities                              |  |            |            |     |  
|                                                  |  |            |            |      |  
|FINANCING ACTIVITIES:                             |  |           
|Repayment of debt                                 |  |            |            |     |  
|Repurchase of common stock                        |  |            |            | (171 | )
|Dividends                                         |  |            |            | 91   |  
|                                                  |  |            |            |      |  
|Net cash used in investing activities             |  |            |            | (80  | )
|                                                  |  |            |            |      |  
|NET CHANGE IN CASH AND CASH EQUIVALENTS           |  |            |            | (81  | )
|CASH AND CASH EQUIVALENTS, beginning of           |  |           
|period                                            |  |            |            | 108  |  
|                                                  |  |            |            |      |  
|CASH AND CASH EQUIVALENTS, end of period          |  |            | $          | 27   |  
|                                                  |  |            |            |      |  

15

---



# Condensed
Consolidating Statement of Cash Flows For the Twenty Four
Weeks Ended December 15, 2004

|                                                  |  | Subsidiary | Subsidiary |        |  
|------------------------------------------------- |  | ---------- | ---------- | ------ | -
|
|
|OPERATING ACTIVITIES:                             |  |            |            |        |  
|Net income (loss)                                 |  |            | $          | (3,915 | )
|Adjustments to reconcile net income (loss) to net |  |           
|cash provided by (used in) operating activities:  |  |           
|Depreciation and amortization                     |  |            |            |       |  
|Amortization of debt issuance costs               |  |            |            | 151    |  
|Loss related to early extinguishment of debt:     |  |           
|Write-off of debt issuance costs                  |  |            |            |       |  
|Premium expensed                                  |  |            |            |       |  
|Original issue discount expensed                  |  |            |            |       |  
|Accretion of original issue discount              |  |            |            | 5,141  |  
|Deferred income taxes                             |  |            |            | (1,024 | )
|Loss on disposal of assets                        |  |            |            |       |  
|Changes in assets and liabilities:                |  |           
|Receivables                                       |  |            |            |       |  
|Inventories                                       |  |            |            |       |  
|Prepaid expenses and other assets                 |  |            |            |       |  
|Accounts payable                                  |  |            |            | (17    | )
|Accrued and other liabilities                     |  |            |            |       |  
|Income taxes payable/refundable                   |  |            |            | (1,191 | )
|                                                  |  |            |            |        |  
|Net cash provided by (used in)                    |  |           
|operating activities                              |  |            |            | (855   | )
|                                                  |  |            |            |        |  
|INVESTING ACTIVITIES:                             |  |           
|Purchase of fixed assets                          |  |            |            |       |  
|Corporate cash advances (payments)                |  |            |            |       |  
|Proceeds from sale of other assets                |  |            |            | (69    | )
|                                                  |  |            |            |        |  
|Net cash provided by (used in)                    |  |           
|investing activities                              |  |            |            | (69    | )
|                                                  |  |            |            |        |  
|FINANCING ACTIVITIES:                             |  |           
|Repayment of debt                                 |  |            |            |       |  
|Repurchase of common stock                        |  |            |            | (284   | )
|Proceeds from issuance of common stock            |  |            |            | 13     |  
|Reduction of restricted cash available            |  |           
|for early extinguishment of debt                  |  |            |            |       |  
|Use of restricted cash for early                  |  |           
|extinguishment of debt                            |  |            |            |       |  
|Dividends                                         |  |            |            | 1,201  |  
|Debt issuance costs                               |  |            |            | (56    | )
|                                                  |  |            |            |        |  
|Net cash provided by (used in)                    |  |           
|investing activities                              |  |            |            | 874    |  
|                                                  |  |            |            |        |  
|NET CHANGE IN CASH AND CASH EQUIVALENTS           |  |            |            | (50    | )
|CASH AND CASH EQUIVALENTS, beginning of           |  |           
|period                                            |  |            |            | 96     |  
|                                                  |  |            |            |        |  
|CASH AND CASH EQUIVALENTS, end of period          |  |            | $          | 46     |  
|                                                  |  |            |            |        |  

16

---



# ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

# MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You
should read the following discussion in conjunction with our condensed consolidated
financial statements and related notes included elsewhere in this report. Unless the
context indicates or requires otherwise, (i) the term Buffets Holdings refers
to Buffets Holdings, Inc.; (ii) the term Buffets refers to Buffets, Inc., our
principal operating subsidiary; (iii) the terms we, our,
ours, and the Company refer to Buffets Holdings, Inc. and its
subsidiaries. Some of the statements in the following discussion are forward-looking
statements. See Forward-Looking Statements and Risk Factors.

# Overview

We
are the largest operator of company-owned stores in the buffet/grill sector (through
Buffets and its subsidiaries), as measured in both sales and number of restaurants. Our
restaurants are principally operated under the names Old Country Buffet and HomeTown
Buffet. As of December 15, 2004, we had 353 company-owned restaurants and 19 franchised
locations in 36 states.

Buffets
was founded in 1983 to develop buffet-style restaurants under the name Old Country Buffet.
In October 1985, Buffets completed its initial public offering and was listed on The
NASDAQ National Market. In September 1996, Buffets merged with HomeTown Buffet, Inc.,
which was developed by one of Buffets co-founders and had 80 company-owned HomeTown
Buffet restaurants in 11 states and 19 franchised restaurants in eight states. In October
2000, Buffets was acquired by Buffets Holdings, a company organized by Caxton-Iseman
Capital, Inc., in a buyout from public shareholders.

Our
financial results are significantly impacted by changes in sales at our company-owned
restaurants. Changes in sales are largely driven by changes in average weekly guest counts
and average guest check. We monitor average weekly guest counts very closely, as they
directly impact our revenues and profits, and focus substantial efforts on growing these
numbers on a same-store basis. Same-store average weekly sales and guest counts are
affected by our ability to consistently deliver a high-quality, value-priced selection of
home-style cooked meals in a clean and pleasant self-service buffet format, the success of
our marketing promotions and other business strategies.

Our
business model is characterized by a relatively fixed cost structure, particularly in the
short term. Accordingly, changes in marginal average weekly sales volume can have a more
significant impact on our profitability than for a business possessing a more variable
cost structure. Over a longer time horizon, by virtue of our diversified food offerings,
we are able to address the semi-fixed element of food cost by modifying our offerings or
by highlighting other foods on the menu in order to reduce consumption on the higher cost
items. In addition, we monitor our labor costs and hourly employee productivity, as
measured by the number of guests served per labor hour, on a weekly basis to ensure that
restaurants are responsive in scheduling and managing our labor to varying levels of guest
traffic.

We
devote significant resources and attention to our marketing efforts which is evident in
the level of our advertising expenditures over the past five years. In the past year, we
adopted a more stringent, return on investment based approach to advertising placement
which has resulted in more efficient and effective returns on our marketing investments.

Since
we acquired Buffets in a buyout from its public shareholders in October 2000, we have
focused on improving asset management and optimizing our capital structure. As a result,
we have had net closures of 51 restaurants either through early termination, or
non-renewal at lease end, since October 2000. We expect the number of closures to abate in
the next couple of years, and reach an equilibrium point at which new openings and select
relocations will approximate the number of restaurants which we close because they do not
meet our profitability goals.

Our
fiscal year comprises 52 or 53 weeks divided into four fiscal quarters of 12, 12, 16 and
12 or 13 weeks. Beginning with the transitional period ended July 3, 2002, we changed our
fiscal year so that it ends on the Wednesday nearest June 30 of each year. The fiscal year
2002 transition period consisted of 26 weeks and was divided into two periods of 16 and 10
weeks. Prior to that, our fiscal year ended on the Wednesday nearest December 31 of each
year and each fiscal year was divided into periods of 16, 12, 12 and 12 or 13 weeks.

17

---



The
following is a description of the line items from our condensed consolidated statements of
operations:

| |  |  | We recognize as restaurant sales the proceeds from the sale of food and beverages at our
company owned restaurants at the time of such sale. We recognize the proceeds from the
sale of gift certificates/cards when the gift certificates/cards are redeemed at our
restaurants. Until redemption, the unearned revenue from the sale of gift
certificates/cards is included in accrued liabilities on our consolidated balance sheets.
Our franchise income includes royalty fees and initial franchise fees received from our
franchisees. We recognize royalty fees as other income based on the sales reported at the
franchise restaurants.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Restaurant costs reflect only direct restaurant operating costs, including food, labor and
direct and occupancy costs. Labor costs include compensation and benefits for both hourly
and restaurant management employees. Direct and occupancy costs consist primarily of costs
of supplies, maintenance, utilities, rent, real estate taxes, insurance, depreciation and
amortization.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Advertising expenses reflect all
advertising and promotional costs.
| | - |  | -------------------------------------------------------------------

| |  |  | General and administrative expenses reflect all costs, other than advertising expenses,
not directly related to the operation of restaurants. These expenses consist primarily of
corporate administrative compensation and overhead, district and regional management
compensation and related management expenses and the costs of recruiting, training and
supervising restaurant management personnel.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Interest expense reflects interest costs associated with our debt, amortization of debt
issuance cost and accretion of original issuance discount on our subordinated notes and
bonds.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Interest income reflects interest
earned on our short-term investments.
| | - |  | -----------------------------------------------------------------------

| |  |  | Loss related to refinancing reflects costs associated with an initial public offering of
Income Deposit Securities that was withdrawn due to unfavorable market conditions.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Loss related to the early extinguishment of debt reflects the costs associated with
redeeming a portion of Buffets 111⁄4% senior subordinated notes prior to their
maturity.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Other income primarily reflects franchise fees earned, less minority interest associated
with our Tahoe Joes subsidiary. During August 2003, we exercised our call option to
acquire the remaining 20% interest in Tahoe Joes, Inc. from the minority holder.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Income tax expense reflects the current and deferred tax provision (benefit) determined in
accordance with the provisions of Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Critical Accounting
Policies

Our
condensed consolidated financial statements have been prepared in accordance with
accounting policies generally accepted in the United States of America. The preparation of
our financial statements requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities, the 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. On an ongoing basis, management evaluates its
estimates and assumptions, including those related to recoverability of long-lived assets,
revenue recognition and goodwill. We base our estimates and assumptions on historical
experience and on various other factors that are believed to be reasonable at the time the
estimates and assumptions are made. Actual results may differ from these estimates and
assumptions under different circumstances or conditions.

We
believe the following critical accounting policies affect managements significant
estimates and assumptions used in the preparation of our condensed consolidated financial
statements.

18

---



Recoverability of
Long-Lived Assets

We
periodically evaluate long-lived assets and goodwill related to those assets for
impairment whenever events or changes in circumstances indicate the carrying value amount
of an asset or group of assets may not be recoverable. We consider a history of operating
losses and the other factors described to be its primary indicator of potential
impairment. Assets are grouped and evaluated for impairment at the lowest level for which
there are identifiable cash flows, namely individual restaurants. A restaurant is deemed
to be impaired if a forecast of undiscounted future operating cash flows directly related
to the restaurant, including disposal value, if any, are less than its carrying amount. If
a restaurant is determined to be impaired, the loss is measured as the amount by which the
carrying amount of the restaurant exceeds its fair value. Fair value is based on quoted
market prices in active markets, if available. If quoted market prices are not available,
an estimate of fair value is based on the best information available, including prices for
similar assets or the results of valuation techniques such as discounted estimated future
cash flows as if the decision to continue to use the impaired restaurant was a new
investment decision. We generally measure fair value by discounting estimated future cash
flows. Considerable management judgment is necessary to estimate discounted future cash
flows. Accordingly, actual results could vary significantly from such estimates. There
were no impairment charges during the first half of fiscal 2005 or fiscal 2004.

# Results of Operations

The
following discussion reflects our historical results for the 12-week and 24-week periods
ended December 15, 2004 and December 17, 2003.

Our
future results may not be consistent with our historical results due to factors discussed
in Forward-Looking Statements and Risk Factors and other factors. The
following discussion should be read in conjunction with our condensed consolidated
financial statements and related notes included elsewhere in this report.

For the 12 Weeks Ended December
15, 2004 Compared to the 12 Weeks Ended December 17, 2003

The
following table sets forth our results of operations based on the percentage relationship
of the items listed to our restaurant sales during the periods shown:

|                                    | 12 Weeks | 12 Weeks
|----------------------------------- | -------- | --------
|
|
|
|
|Restaurant sales                    |          |         
|Restaurant costs                    |          |         
|Advertising expenses                |          |         
|General and administrative expenses |          |         
|                                    |          |         
|Operating income                    |          |         
|Interest expense                    |          |         
|Interest income                     |          |         
|Loss related to refinancing         |          |         
|Other income                        |          |         
|                                    |          |         
|Income (loss) before income taxes   |          |         
|Income tax expense (benefit)        |          |         
|                                    |          |         
|Net income (loss)                   |          |         
|                                    |          |         

Restaurant
Sales. Restaurant sales for the 12 weeks ended December 15, 2004 decreased $6.1
million, or 2.9%, compared with the 12 weeks ended December 17, 2003. The decline in sales
for the quarter ended December 15, 2004 versus the prior year period was primarily
attributable to the closure of 13 buffet restaurants, partially offset by the opening of
four units over the past year. Average weekly sales for the second quarter of fiscal 2005
of $48,141 were 0.6% lower than the comparable prior year periods average weekly
sales of $48,435. Same-store sales for the second quarter of fiscal 2005 decreased by 2.3%
compared to the comparable prior year period, reflecting a 4.1% decline in guest traffic
partially offset by a 1.8% increase in average check. We currently expect same-store sales
for the third quarter of fiscal 2005 (the 16-week period ending April 6, 2005) to range
between flat and a two percent decline versus the comparable period in fiscal 2004.

Restaurant
Costs. Restaurant costs for the second quarter of fiscal 2005 increased by 1.0% as a
percentage of sales compared with the comparable prior year period. Food costs increased
0.2% as a percentage of sales primarily due to non-recurring food rebates recognized in
the comparable quarter of the prior year. Gross food costs before rebates declined by 0.2%
as a percentage of sales during the second quarter in fiscal 2005 as compared to the prior
year period. Labor costs were 0.3% lower as a percentage of sales than those experienced
in the comparable quarter in the prior year primarily due to a reduction in our average
restaurant management complement. Direct and occupancy costs increased by 1.1% measured as
a percentage of sales versus the comparable quarter in the prior year. The increase was
largely attributable to a $0.7 million loss on disposal primarily associated with the
closure of three restaurants, as well as higher utility costs. We currently expect that
restaurant costs will range between 86.5% and 86.7% as a percentage of sales during the
third quarter of fiscal 2005.

Advertising
Expenses. Advertising costs decreased 0.5% as a percentage of sales during the second
quarter of fiscal 2005 versus the comparable quarter in the prior year as we significantly
reduced television advertising during the last two weeks of the current quarter. We expect
that advertising costs will range between 2.3% and 2.5% as a percentage of sales during
the third quarter of this year.

19

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General
and Administrative Expenses. General and administrative expenses increased 0.8% as a
percentage of sales during the second quarter of fiscal 2005 as compared to the 12 weeks
ended December 17, 2003. This increase was largely due to approximately $1.3 million in
severance expense recognized in conjunction with a headcount reduction of 25 headquarters
associates and the replacement of the Chief Executive Officer. We currently expect that
general and administrative expenses will range between 4.4% and 4.6% as a percentage of
sales for the third quarter of fiscal 2005.

Interest
Expense. Interest expense increased 1.3% as a percentage of sales during the second
quarter of fiscal 2005 versus the comparable prior year period primarily due to the
issuance of the 137/8% senior discount notes issued in May 2004. We currently
expect that interest expense will range between 5.3% and 5.5% as a percentage of sales for
the third quarter of fiscal 2005.

Loss
Related to Refinancing.We incurred approximately $0.8 million in costs associated
with an initial public offering of Income Deposit Securities that was withdrawn due to
unfavorable market conditions during the second quarter of fiscal 2005.

Income
Taxes. Income taxes decreased 1.0% as a percentage of sales for the 12 weeks ended
December 15, 2004 compared to the 12 weeks ended December 17, 2003 principally due to a
decrease in income before income taxes. The increase in the effective tax rate was largely
attributable to the non-deductibility of a portion of our 137/8% senior
discount notes.

For the 24 Weeks Ended December
15, 2004 Compared to the 24 Weeks Ended December 17, 2003

The
following table sets forth our results of operations based on the percentage relationship
of the items listed to our restaurant sales during the periods shown:

|                                             | 24 Weeks | 24 Weeks
|-------------------------------------------- | -------- | --------
|
|
|
|
|Restaurant sales                             |          |         
|Restaurant costs                             |          |         
|Advertising expenses                         |          |         
|General and administrative expenses          |          |         
|                                             |          |         
|Operating income                             |          |         
|Interest expense                             |          |         
|Interest income                              |          |         
|Loss related to refinancing                  |          |         
|Loss related to early extinguishment of debt |          |         
|                                             |          |         
|Other income                                 |          |         
|                                             |          |         
|Income (loss) before income taxes            |          |         
|Income tax expense (benefit)                 |          |         
|                                             |          |         
|Net income (loss)                            |          |         
|                                             |          |         

Certain percentage amounts do not sum to total due to rounding.

Restaurant
Sales. Restaurant sales for the 24 weeks ended December 15, 2004 decreased $8.5
million, or 2.0%, compared with the 24 weeks ended December 17, 2003. The decline in sales
for the first half of fiscal 2005 versus the prior year period was primarily attributable
to the closure of 13 buffet restaurants, partially offset by the opening of four units
over the past year. Average weekly sales for the first half of fiscal 2005 of $49,384 were
0.3% higher than the comparable prior year periods average weekly sales of $49,221.
Same-store sales for the first half of fiscal 2005 decreased by 1.0% compared to the
comparable prior year period, reflecting a 3.2% decline in guest traffic partially offset
by a 2.2% increase in average check.

Restaurant
Costs. Restaurant costs for the first half of fiscal 2005 increased by 0.1% as a
percentage of sales compared with the comparable prior year period. Food costs increased
0.2% as a percentage of sales primarily due to commodity pricing pressures principally in
our chicken and dairy product categories, partially offset by a more stabilized and
standardized menu relative to the comparable prior year period that had included multiple
protein-related tests. Labor costs were 1.0% lower as a percentage of sales than those
experienced in the comparable 24 weeks in the prior year primarily due to improved
productivity of our non-exempt employees and a rationalization of our restaurant
management complement. Direct and occupancy costs increased by 0.9% measured as a
percentage of sales versus the comparable period in the prior year. The increase was
largely attributable to approximately $1.7 million in losses on disposal primarily
associated with the closure of nine restaurants and the cancellation of two new store
openings.

Advertising
Expenses. Advertising costs decreased 0.2% as a percentage of sales during the first
half of fiscal 2005 versus the comparable period in the prior year as we significantly
reduced television advertising during the last two weeks of the second quarter.

20

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General
and Administrative Expenses. General and administrative expenses increased 0.6% as a
percentage of sales during the first half of fiscal 2005 as compared to the 24 weeks ended
December 17, 2003. This increase was largely due to severance expense recognized in
conjunction with a reduction of headquarter staff and the replacement of the Chief
Executive Officer and an increase in professional fees.

Interest
Expense. Interest expense increased 1.1% as a percentage of sales during the first
half of fiscal 2005 versus the comparable prior year period primarily due to the
issuance of the 13 7/8% senior discount notes issued in May 2004.

Loss
Related to Refinancing.We incurred approximately $0.8 million in costs associated
with an initial public offering of Income Deposit Securities that was withdrawn due to
unfavorable market conditions during the second quarter of fiscal 2005.

Loss
Related to the Early Extinguishment of Debt.We spent approximately $15.7 million
during the first quarter of 2005 to redeem approximately $14.3 million of Buffets
111⁄4% senior subordinated notes at an average price of 106.7%. We recognized the
difference between the premium purchase price and the discounted carrying value of
Buffets 111⁄4% senior subordinated notes, as well as an associated write-off of
debt issuance cost, as a loss related to the early extinguishment of debt.

Other
Income. Other income decreased 0.1% as a percentage of sales during the first half of
2005 compared with the comparable prior year period. The prior year total included an
adjustment to our excess minority interest liability of approximately $345,000 concurrent
with our acquisition of the remaining 20% interest in Tahoe Joes Inc. from the
minority holder.

Income
Taxes. Income taxes decreased 0.8% as a percentage of sales for the 24 weeks ended
December 15, 2004 compared to the 24 weeks ended December 17, 2003 principally due to a
decrease in income before income taxes. The increase in the effective tax rate was largely
attributable to the non-deductibility of a portion of our 13 7/8% senior
discount notes.

# Liquidity and Capital
Resources

We
are a holding company with no operations or assets of our own other than the capital stock
of our subsidiaries. Operations are conducted through our subsidiaries and our ability to
make payments on the senior discount notes is dependent on the earnings and the
distribution of funds from our subsidiaries through loans, dividends or otherwise.
However, none of our subsidiaries is obligated to make funds available to us for payment
on the senior discount notes. The terms of our credit facility place restrictions on
Buffets ability to pay dividends and otherwise transfer assets to us. Further, the
terms of the indenture governing Buffets senior subordinated notes place
restrictions on the ability of Buffets and our other subsidiaries to pay dividends and
otherwise transfer assets to us.

Cash
flows generated from Buffets operating activities provide us with a significant
source of liquidity. Because most of our sales are for cash or credit with settlement
within a few days and most vendors are paid on terms ranging from 14 to 35 days, we
operate on a significant working capital deficit. In addition to cash flows from
operations, revolving credit loans and swingline loans are available to us under our
credit facility. Letters of credit issued under the letter of credit facility are also
available to us to support payment obligations incurred for our general corporate
purposes.

Historically,
our capital requirements have been for the development and construction of new
restaurants, restaurant refurbishment and the installation of new information systems. We
expect these requirements to continue in the foreseeable future.

Operating
Activities. Net cash provided by operating activities was $23.8 million for the 24
weeks ended December 15, 2004 and $26.5 million for the 24 weeks ended December 17, 2003.
Net cash provided by operating activities exceeded the net loss for the first half of
fiscal 2005 principally due to the effect of depreciation and amortization, accretion of
original issue discount, an increase in accrued and other liabilities and the loss related
to the early extinguishment of debt, partially offset by a decrease in accounts payable.
Net cash provided by operating activities exceeded net income for the first half of fiscal
2004 primarily due to the effect of depreciation and amortization, a decrease in prepaid
expenses and an increase in accrued and other liabilities, partially offset by a decrease
in accounts payable.

Investing
Activities. Net cash used in investment activities was $9.4 million for the 24 weeks
ended December 15, 2004 and $16.0 million for the 24 weeks ended December 17, 2003.
Investment activities were largely comprised of capital expenditures for both periods.
During fiscal 2005, new restaurant construction accounted for approximately $4.5 million
of our capital expenditures. The bulk of the remainder of our capital expenditures during
fiscal 2005 were comprised of remodeling and improvement costs on our existing
restaurants. During fiscal 2004, our capital expenditures were primarily comprised of
$13.4 million in re-image expenditures, with the majority of the remaining expenditures
representing remodeling and improvement outlays on our existing restaurants.

21

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Financing
Activities. Net cash used in financing activities totaled $8.5 million for the first
half of fiscal 2005 and $2.0 million for the first half of fiscal 2004. Financing
activities consisted primarily of accelerated repayments of debt in both fiscal 2005 and
2004. In addition, Buffets, Inc. completed its partial bond repurchase program in August
2004, cumulatively expending $49.5 million to redeem $43.9 million of senior subordinated
notes at an average price of 109.2% over a period of approximately six months. Buffets,
Inc. spent $15.7 million during the first quarter of fiscal 2005 to redeem $14.3 million
of senior subordinated notes at an average price of 106.7%.

Future
Capital Expenditures.During the remainder of fiscal 2005, we plan to:

| |  |  | Spend approximately $10 million on three more new restaurant openings this fiscal year,
followed by two more openings early next fiscal year.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Spend approximately $9 million on remodeling and improvement costs that will be
capitalized. Remodels incorporate design elements to update the decor of our existing
facilities including a lighter, more contemporary interior design and expanded dessert
displays. Other improvement costs include a variety of outlays such as new carpet,
equipment and minor leasehold improvements.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Spend approximately $1 million on
miscellaneous corporate and system investments.
| | - |  | ---------------------------------------------------------------------------------

We
are not aware of any other event or trend that would potentially affect our capital
requirements or liquidity. For the next twelve months, we believe that cash flow from
operations, landlord contributions, credits received from trade suppliers and available
borrowing capacity will be adequate to finance our development plans, on-going operations
and debt service obligations.

# Credit Facilities and
Other Long Term Debt

On
February 20, 2004, Buffets amended and restated its Credit Facility. The amended and
restated Credit Facility provides for total borrowings of up to $310,000,000, including
(i) a $230,000,000 term loan, (ii) a $30,000,000 revolving credit facility, (iii) a
$20,000,000 letter of credit facility, and (iv) a $30,000,000 synthetic letter of credit
facility. The terms of the Credit Facility permit Buffets to borrow, subject to
availability and certain conditions, incremental term loans or to issue additional notes
in an aggregate amount up to $25,000,000. The borrowings under the term loan facility bear
interest, at Buffets option, at either adjusted LIBOR plus 3.50% or at an alternate
base rate plus 2.50%, subject to a leverage-based pricing grid. The term loan and the
synthetic letter of credit facility mature on June 28, 2009, while the revolving facility
and the letter of credit facilities mature on June 28, 2007. Buffets has the option of
tying its borrowings to LIBOR or a base rate when calculating the interest rate for the
term loan. The base rate is the greater of Credit Suisse First Bostons prime rate,
or the federal funds effective rate plus one-half of 1 percent. The borrowings due under
the term loan are payable in equal quarterly installments in an annual amount equal to 1%
of the term loan during each of the first four and a half years of the loan, with the
remaining balance payable due in equal quarterly installments during the last year of the
loan. The Credit Facility is fully and unconditionally guaranteed by Buffets Holdings,
which has no independent assets or operations, and is secured by substantially all of our
assets. Availability under the Credit Facility depends upon Buffets continued
compliance with certain covenants and financial ratios including leverage, interest
coverage and fixed charge coverage as specifically defined in the Credit Facility. Buffets
was in compliance with all financial ratio covenants of the Credit Facility as of December
15, 2004. The financial ratio covenant requirements increase over time, however, as set
forth in the senior credit agreement.

As
of December 15, 2004, we had $35.1 million in outstanding letters of credit, which
expire through November 13, 2005. As of December 15, 2004, we had $44.9 million of total
borrowing availability comprised of $30.0 million under the revolving credit facility and
$14.9 million of collective borrowing capacity under the letter of credit facilities.

On
June 28, 2002, Buffets issued $230.0 million aggregate principal amount of
its 111⁄4% senior subordinated notes due July 15, 2010 at an offering price of
96.181% of principal amount at maturity. Interest is payable semi-annually on
January 15 and July 15 of each year. Except in the event of an initial public
offering, we are not entitled to redeem Buffets 111⁄4% senior subordinated
notes prior to July 15, 2006, after which we can choose to redeem some or all of
Buffets 111⁄4% senior subordinated notes at specified redemption prices.

22

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On
May 18, 2004, we issued $132 million aggregate principal amount at maturity of
our 13 7/8% senior discount notes due December 15, 2010. Our 13 7/8%
senior discount notes were issued at a discount to their aggregate principal amount at
maturity. Prior to July 31, 2008, interest will accrue on our 13 7/8% senior
discount notes in the form of an increase in the accreted value of those notes. The
accreted value of each 13 7/8% senior discount notes will increase until July
31, 2008 at a rate of 13.875% per annum. After this date, cash interest on the
13 7/8% senior discount notes will accrue and be payable on January 31 and July
31 of each year at a rate of 13.875% per annum. If we fail to meet certain leverage ratio
tests on or about July 31, 2006 or July 31, 2008, additional interest will accrue on our
13 7/8% senior discount notes from that date at a rate of 1% per annum, up to a
maximum of 2% per annum.

# Seasonality and
Quarterly Fluctuations

Our
sales are seasonal, with a lower percentage of annual sales occurring in most of our
current market areas during the winter months. Our restaurant sales may also be affected
by unusual weather patterns, particularly during the winter months, major world events or
matters of public interest that compete for customers attention. Generally,
restaurant sales per unit are lower in the winter months, our third fiscal quarter ending
in April of each year. The impact of these reduced average weekly sales will be mitigated
in our future quarterly data presentations through the inclusion of 16 weeks in the
quarter ending in late April of each year, compared to only 12 or 13 weeks in each of the
other fiscal quarters.

# Forward-Looking
Statements and Risk Factors

The
statements contained in this report which are not historical facts are forward-looking
statements that are subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in, or implied by, forward-looking statements. We
have tried, whenever possible, to identify these forward-looking statements using words
such as projects, anticipates, believes,
estimates, expects, plans, intends, and
similar expressions. Similarly, statements herein that describe our business strategy,
outlook, objectives, plans, intentions or goals are also forward-looking statements. The
risks and uncertainties involving forward-looking statements include, but are not limited
to, general business and economic conditions, negative publicity, the impact of
competition, the seasonality of our business, adverse weather conditions, future commodity
prices, fuel and utility costs, labor costs, employment and environmental laws,
governmental regulations, and inflation. For a detailed discussion of risks and
uncertainties that may cause our future performance to differ from that projected in the
forward-looking statements, please refer to the Risk Factors/Forward-Looking
Statements section contained in our Form 10-K filed with the Securities and Exchange
Commission on September 28, 2004. All forward-looking statements speak only as of the date
of this report. All subsequent written and oral forward-looking statements attributable to
us or any person acting on our behalf are qualified by the cautionary statements in this
section. We undertake no obligation to update or publicly release any revisions to
forward-looking statements to reflect events, circumstances or changes in expectations
after the date of this report.

# ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest
Rate Risks. We have interest rate exposure relating to the variable portion of our
long-term obligations. Our 111⁄4% senior subordinated notes and our 13 7/8%
senior discount notes are fixed rate instruments while the interest rates on the term
loans under our credit facility are variable. A 1% change in interest rates on our
variable rate debt would have resulted in our interest expense fluctuating by
approximately $1.0 million for the 24 weeks ended December 15, 2004.

Food
Commodity Risks. Many of the food products purchased by us are affected by commodity
pricing and are, therefore, subject to price volatility caused by weather, production
problems, delivery difficulties and other factors that are outside our control. To control
this risk in part, we have fixed price purchase commitments with terms of one year or less
for some key food and supplies from vendors who supply our national food distributor. In
addition, we believe that substantially all of our food and supplies are available from
several sources, which helps to control food commodity risks. We believe we have the
ability to increase menu prices, or vary the menu items offered, if needed, in response to
food product price increases within the range that has been experienced historically. To
compensate for a hypothetical price increase of 10% for food and beverages, we would need
to increase menu prices by an average of approximately 3%. Our average price increases
were approximately 2% for the 24 weeks ended December 15, 2004. Accordingly, we believe
that a hypothetical 10% increase in food product costs would not have a material effect on
our operating results.

# ITEM 4. CONTROLS AND
PROCEDURES

Disclosure
Controls and Procedures. We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our Exchange Act reports
is recorded, processed, summarized and reported within the time periods specified in the
Securities and Exchange Commissions rules and regulations, and that the information
is accumulated and communicated to our management, including our chief executive officer
and chief financial officer, as appropriate, to allow timely decisions regarding required
disclosures based closely on the definition of disclosure controls and
procedures in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934.

23

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As
of December 15, 2004, we carried out an evaluation, under the supervision and with the
participation of our management, including our chief executive officer and our chief
financial officer of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, we concluded that our disclosure
controls and procedures were effective.

Changes
in Internal Control. During the 12 weeks ended December 15, 2004, there were no
significant changes in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Securities and Exchange Act of 1934) that have materially
affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

It
should be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the system
will be met. In addition, the design of any control system is based in part upon certain
assumptions about the likelihood of future events. Because of these and other inherent
limitations of control systems, there is only reasonable assurance that our controls will
succeed in achieving the stated goals under all potential future conditions.

# PART II. OTHER
INFORMATION

# ITEM 1. LEGAL PROCEEDINGS

On November 12, 2004, Elaine Tiffany and Shannon Whitehead, two former restaurant managers of our
wholly-owned subsidiary, HomeTown Buffet, Inc., individually and on behalf of all others similary situated,
filed a class action lawsuit against HomeTown Buffet in California Superior Court in San Francisco County.
On January 4, 2005, we removed the case to the U.S. federal court in San Francisco.  The lawsuit alleges
that HomeTown Buffet violated California wage and hour laws by failing to pay all of its California managers
and assistant managers overtime, and for making deductions from bonus compensation based on the company's
workers' compensation costs.  The plaintiffs seek compensatory damages, penalties, restitution of unpaid
overtime and deductions, pre-judgement interest, costs of suit and reasonable attorneys' fees.  The
complaint does not make a specific monetary demand.  This action is in a preliminary stage, and we are currently
not able to predict the outcome of this action or reasonably estimate a range of possible loss.  We
intend to defend this action vigorously.

# ITEM 2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On
December 15, 2004 we issued an aggregate of 121,150 shares of our common stock to certain
of our employees for an aggregate consideration of $13,326.50. The issuances were exempt
from registration in reliance upon Section 4(2) of the Securities Act as transactions
by an issuer not involving a public offering. All recipients were accredited or
sophisticated investors. Appropriate legends were or will be affixed to the share
certificates issued in such transactions. All recipients have received adequate
information about us or had access, through director or employment relationships, to such
information.

# ITEM 6. EXHIBITS

| | 31.1 | Sarbanes-Oxley Act Section 302 Certification of Chief Executive Officer.
| | ---- | ------------------------------------------------------------------------

| | 31.2. | Sarbanes-Oxley Act Section 302
Certification of Chief Operating Officer.
| | ----- | ------------------------------------------------------------------------

| | 32.2. | Sarbanes-Oxley Act Section 906
Certification
of Chief Executive Officer.
| | ----- | ------------------------------------------------------------------------

| | 32.2. | Sarbanes-Oxley Act Section 906
Certification of Chief Operating Officer.
| | ----- | ------------------------------------------------------------------------

24

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# SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                         |                        
|------------------------ | -----------------------
|
|
|
|
|
|                         | BUFFETS HOLDINGS,  INC.
|
|
|Date:   January 13, 2005 | By:                    
|                        
|                         |                        
|                         |                        
|                         |                        
|                         | By:                    
|                        
|                         |                        
|                         |                        
|                         |                        

25

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