<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

(Mark one)
(X)  Annual report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934 (Fee Required) for the fiscal year ended April 30, 2001 or
(_)  Transition report pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934 (No    Fee Required) for the transition period from __
     to __

Commission file number 1-10711
                       -------

                          SIZZLER INTERNATIONAL, INC.
            (Exact name of registrant as specified in its charter)

                 Delaware                              95-4307254
     ---------------------------------     ----------------------------------
      (State or Other Jurisdiction of       (I.R.S. Employer Identification
       Incorporation or Organization)                     No.)

           6101 West Centinela Avenue, Culver City, California 90230
           ---------------------------------------------------------
          (Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (310) 568-0135

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

                                                NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS                  ON WHICH REGISTERED
         --------------------------          ---------------------------
        Common Stock, $.01 Par Value           New York Stock Exchange

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

                                     NONE
                                     ----
                               (TITLE OF CLASS)

Indicate by check mark whether the registrant (1) has filed all reports 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.  [X]YES [_]NO

The aggregate market value of the voting stock held by non-affiliates of the
registrant on June 30, 2001, computed by reference to the closing sale price of
such shares on such date was $33,620,054.

The number of shares outstanding of common stock, $0.01 par value, as of June
30, 2001, was 27,680,485.

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

Portions of the registrant's proxy statement for its 2001 annual meeting of
stockholders are incorporated by reference into Part III of this Form 10-K.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item                                                                                        Page
<S>                                                                                         <C>
                                              PART I
1.   Business                                                                                  3
2.   Properties                                                                                7
3.   Legal Proceedings                                                                         8
4.   Submission of Matters to a Vote of Security Holders                                       9
     Executive Officers of the Registrant                                                      9

                                              PART II

5.   Market for the Registrant's Common Stock and Related Stockholder Matters                 11
6.   Selected Financial Data                                                                  12
7.   Management's Discussion and Analysis of Financial Condition and Results of Operations    13
7A.  Quantitative and Qualitative Disclosures about Market Risk                               22
8.   Financial Statements and Supplementary Data                                             F-1
9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosures    23

                                              PART III

10.  Directors and Executive Officers of the Registrant                                       24
11.  Executive Compensation                                                                   24
12.  Security Ownership of Certain Beneficial Owners and Management                           24
13.  Certain Relationships and Related Transactions                                           24

                                              PART IV

14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K                          25
</TABLE>

                                       2
<PAGE>

                                    PART I

Item 1: Business
================================================================================

General
-------

Sizzler International, Inc. and its subsidiaries (hereinafter collectively
referred to as "Sizzler" or the "Company") are principally engaged in the
operation, development and franchising of the Sizzler(R) family steak house
concept, the operation and development of the Pat & Oscar's(SM) concept, and the
operation of Kentucky Fried Chicken ("KFC(R)") franchises.

Sizzler International, Inc. was incorporated on January 18, 1991 in connection
with a reorganization of its parent company, Collins Foods International, Inc.
("CFI") undertaken in contemplation of CFI's merger with PepsiCo, Inc. As part
of the reorganization, the Company's common stock was distributed to
stockholders of CFI. In addition, as part of the transaction, the Company
acquired the remaining outstanding shares of common stock of its 66 percent-
owned subsidiary Sizzler Restaurants International, Inc. ("SRI"), which became
the Company's wholly-owned subsidiary.

Restaurant Concepts
-------------------

Sizzler(R) Restaurants
----------------------

The Company operates and franchises 347 Sizzler(R) restaurants worldwide.
Sizzler(R) restaurants operate in the mid-scale dining market featuring a
selection of grilled steak, chicken, seafood entrees, sandwiches, specialty
platters, as well as a fresh fruit and salad bar in a family dining environment.
Sizzler(R) restaurants provide guests with a service system in which guests
place orders and pay upon entering the restaurant and are then seated and
assisted by a server who delivers entrees and follows up on guest service. This
system combines the benefits of convenience with the experience of a full
service restaurant.

Sizzler(R) restaurants are typically free-standing buildings that are 5,000 to
6,000 square feet providing seating for 150 to 200 guests. Sizzler(R)
restaurants are generally open for lunch and dinner seven days a week.  During
fiscal year 2001, lunch and dinner sales were approximately 40 percent and 60
percent, respectively, in the United States.  In Australia, lunch and dinner
sales were approximately 33 percent and 67 percent, respectively.  The average
restaurant check was approximately $9.46 in the United States and $13.13
Australian dollars in Australia.

Individual franchise agreements for a Sizzler(R) restaurant provide a franchise
term of 20 years.  Payment of the initial franchise fee entitles the franchisee
to assistance with planning and construction of the restaurant and initial
management training. Additionally, franchisees pay royalties based on a
percentage of gross sales. Multi-unit franchise development agreements may offer
reduced initial franchise fees and royalties. Franchisees are required to
contribute a percentage of gross sales to a national advertising fund and may
contribute to regional cooperative advertising funds.

Operating segment information for fiscal year 2001, 2000 and 1999 is included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations and in Note 11 - Information by Industry Segment and Geographic Area,
to Consolidated Financial Statements.

Pat & Oscar's(SM)
----------------

On August 30, 2000, the Company completed the acquisition of 82 percent of the
outstanding membership interests of FFPE, LLC, a newly organized entity that
owns the assets used in the operation of restaurants formerly doing business
under the name "Oscar's."  On April 18, 2001 the Company changed the name of the
concept to Pat & Oscar's(SM). The terms of the acquisition include the Company's
payment of approximately $16.0 million in cash and issuance of warrants to
purchase up to 1,250,000 shares of Sizzler common stock at $4.00 per share. The
Company has agreed to pay an earn-out amount as of February 28, 2003, which may
amount to as much as $8.1 million if certain targets are achieved. The terms of
the agreement include put and call options for the purchase of the 18 percent
minority interest

                                       3
<PAGE>

(see Note 16 - Pat & Oscar's(SM) to Consolidated Financial Statements). The
Company has accounted for the acquisition under the purchase method; accordingly
the statements of operations include the results of Pat & Oscar's(SM) since the
date of acquisition. The acquisition resulted in goodwill of approximately $18.6
million before potential earn-outs.

The Pat & Oscar's(SM) concept operates 11 restaurants in Southern California and
Arizona. Similar to the Sizzler(R) concept, Pat & Oscar's(SM) provide guests
with a service system in which guests place orders and pay upon entering the
restaurant and are then seated and assisted by a server who delivers entrees and
follows up on guest service. This system combines the benefits of convenience
with the experience of a full service restaurant.

Pat & Oscar's(SM) restaurants are typically free-standing buildings or end-cap
sites in a strip mall that are 5,500 to 6,500 square feet including patios
ranging from 500 to 2,000 square feet. Approximately 200 to 250 seats are
available. During fiscal year 2001, lunch and dinner sales were approximately 40
percent and 60 percent, respectively. Pat & Oscar's(SM) also provides catering
services, which represents approximately 20 percent of revenues.

Operating segment information for fiscal year 2001, 2000 and 1999 is included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations and in Note 11 - Information by Industry Segment and Geographic Area,
to Consolidated Financial Statements.

KFC(R) (Kentucky Fried Chicken Restaurants)
-------------------------------------------

The Company operates 107 KFC(R) restaurants in Queensland, Australia under
franchise agreements with Tricon Global Restaurants, Inc. ("Franchisor"). KFC(R)
restaurants in Australia operate in the quick service dining market and feature
fried chicken, sandwiches and various side orders such as biscuits and mashed
potatoes.  During fiscal year 2001, lunch and dinner sales were approximately 39
percent and 61 percent, respectively.  The average check was approximately $8.40
in Australian dollars.  KFC(R) restaurants are typically free-standing buildings
that are 1,875 to 2,500 square feet providing seating for 20 to 65 guests.
Approximately 65 percent of the restaurants offer drive-through windows and
approximately 15 percent are located in shopping mall food courts. The term of
the Company's franchise agreements vary from 8 to 22 years and require payment
of royalties based on a percentage of sales. As a franchisee, the Company is
required to contribute a percentage of revenues to a national Australian
cooperative advertising fund administered by the Franchisor and contribute to
local advertising initiatives.

Operating segment information for fiscal year 2001, 2000 and 1999 is included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations and in Note 11 - Information by Industry Segment and Geographic Area,
to Consolidated Financial Statements.

Suppliers
---------

The Company has entered into distribution arrangements with a number of
suppliers of food and other products used in its restaurants. From time to time
the Company makes advance purchases of selected commodity items to minimize cost
fluctuations. Although wholesale commodity prices are subject to change due to
various economic conditions, the Company has in the past been able to obtain
sufficient supplies to carry on its businesses and the Company believes that it
will be able to do so in the future.

Trademarks and Service Marks
----------------------------

The Company owns certain registered trademarks, trade names and service marks
domestically and internationally which are of material importance to the Sizzler
business.  The Company owns Sizzler(R) and certain other registered trademarks,
trade names and service marks that it licenses to its franchisees. The Company
owns the Pat & Oscar's(SM) service mark and has been granted a license to use
certain trademarks, trade names and service marks, which relate to the operation
of KFC(R) restaurants in Australia pursuant to the franchise agreements with the
Franchisor. The Company also has a first right of refusal to open Taco Bell(R)
restaurants in Queensland, Australia subject to certain conditions in the event
its Franchisor commences development of this market.

                                       4
<PAGE>

Research and Development
------------------------

The Company continuously evaluates its menus and restaurant concepts. The
Company's research staff, in conjunction with outside consultants and food
suppliers, develops new products. Before introduction, new menu items are tested
and evaluated for guest satisfaction, quality and profitability.

The Company intends to maintain its existing research programs to develop new
food products and evaluate marketing activities. The costs associated with these
activities are not material to the Company.

Seasonality
-----------

The Company's operations are subject to some seasonal fluctuation with the
summer months being slightly stronger followed by the spring months. The fall
and winter seasons are weaker due to the weather and other conditions, however
Pat & Oscar's(SM) catering sales are typically higher during the winter
holidays. The overall effect of seasonality is moderated to a limited extent
because the Australian seasons fall in reverse of the seasons in the United
States.

Working Capital Requirements
----------------------------

The Company's working capital requirements generally do not fluctuate
significantly during the year because revenues consist primarily of cash sales
and there is a rapid turnover of inventory. The Company does not carry
significant inventories of beef, poultry, seafood, produce or other food
products. Food products are ordered and delivered two or more times per week.
Individual restaurants maintain supplies adequate to support their needs for two
to five days.

Competition
-----------

The restaurant business is highly competitive and is impacted by changes in
consumer eating habits and preferences, demographic and socio-cultural patterns,
and local and national economic conditions that may affect spending habits. The
Company's restaurants compete directly and indirectly with a large number of
national and regional restaurant establishments, as well as with locally owned
restaurants and numerous other eating places that offer moderately priced steak,
chicken, salads and other menu items to the public. The Company relies on
innovative concept development, marketing techniques and promotions and competes
in terms of perceived value, the variety and quality of menu items, service, and
price. There are other companies engaged in restaurant operations and
franchising programs similar to the Company's that have greater financial
resources and a higher volume of sales than the Company.

Environmental Matters
---------------------

Federal and state environmental regulations have not had a material effect on
the Company, but more stringent and varied requirements of local government
bodies with respect to zoning, land use and environmental factors sometimes
impact construction of new restaurants or remodels of existing restaurants.

Employees
---------

At June 30, 2001, the Company had approximately 3,410 employees in the United
States and approximately 4,960 employees in Australia. The majority of the
Company's employees in Australia are covered by union contracts that are
negotiated between national and state governments and applicable unions on
behalf of all hourly restaurant employees. Labor relations with employees have
traditionally been good.  The majority of the Company's employees work part-time
and are paid on an hourly basis.

                                       5
<PAGE>

Government Regulation
---------------------

Each of the Company's restaurants is subject to federal, state, local and
Australian laws and regulations governing health, sanitation, environmental
matters, safety, the sale of alcoholic beverages and regulations regarding
wages, hiring and employment practices. The Company believes it has all material
licenses and approvals required to operate its business, and that its operations
are in material compliance with applicable laws and regulations.

Inflation
---------

Increases in interest rates and the costs of labor, food, utilities and
construction can significantly affect the Company's operations.  Management
believes that the current practices of maintaining adequate operating margins
through a combination of menu price increases and cost controls, careful
management of working capital and evaluation of property and equipment needs are
its most effective tools for coping with inflation.

Other
-----

The Company is aware of industry concerns regarding the potential impact of
possible further increases in the minimum wage, increases in utility costs, the
increased marketing of prepared foods by grocery and convenience stores,
customer resistance to increases in menu prices, the growth of home delivery of
prepared foods, increased concerns over the nutritional value of foods and
compliance with existing or proposed health and safety legislation and other
similar contingencies. The Company is unable to predict the possible impact of
such factors on its business. In the past, the Company has been able to address
similar types of changes in the business climate and been able to pass any
associated higher costs along to its customers, because the changes have
generally impacted all restaurant companies.

The 1996 Restructuring
----------------------

In June 1996, the Company and four subsidiaries filed for protection from
creditors under Chapter 11 of the federal Bankruptcy Code. A trust established
for the benefit of creditors maintains sufficient cash to pay all remaining
claims.  Accordingly, on July 11, 2000 the Bankruptcy Court entered an order
directing the creditor trust to release the liens on the stock of the Company's
U.S. subsidiaries and their operating assets.

Risks Associated With Foreign Operations
------------------------------------------

The Company operates Sizzler(R) restaurants in Australia, as well as KFC(R)
restaurants in Queensland, Australia. The Company also licenses the right to
operate Sizzler(R) restaurants to franchisees in a number of countries and U.S.
territories. Possible risks associated with such operations include fluctuations
in currency exchange rates, higher rates of inflation, possible changes in tax
rates and tax structures, and possible foreign political and economic
conditions.

Effective July 1, 2000, Australia implemented a 10 percent goods and services
tax ("GST") that is applied to consumer purchases from restaurants.  In
connection with this initiative, there was a reduction in personal and corporate
income tax rates.  Effective July 1, 2000 the Company's corporate income tax
rate in Australia was reduced from 36 percent to 34 percent and on July 1, 2001,
the rate was further reduced to 30 percent.  The Australian government is
supervising price increases over the next two years to avoid price gouging or
profiteering as a result of the goods and services tax. The Company is not able
to predict the impact of the future changes on sales and profits.

                                       6
<PAGE>

Item 2: Properties
================================================================================

At April 30, 2001 the Company operated and franchised 465 locations in 17 states
and 12 countries and territories (including USA) as illustrated below:

<TABLE>
<CAPTION>
                                                                Owned             Franchised            Total
                                                                -----             ----------            -----
<S>                                                             <C>               <C>                   <C>
     USA Sizzler(R) Restaurants
     --------------------------
     State
     -----
     Arizona                                                       -                   7                  7
     California                                                   53                 103                156
     Delaware                                                      1                   -                  1
     Florida                                                       -                   6                  6
     Hawaii                                                        -                   6                  6
     Idaho                                                         -                   5                  5
     Missouri                                                      -                   1                  1
     Montana                                                       -                   2                  2
     Nebraska                                                      -                   4                  4
     Nevada                                                        3                   2                  5
     New Jersey                                                    4                   2                  6
     New Mexico                                                    -                   2                  2
     New York                                                      7                   7                 14
     Oregon                                                        -                  11                 11
     Texas                                                         -                   1                  1
     Utah                                                          -                  12                 12
     Washington                                                    -                   5                  5
          Total USA                                               68                 176                244
                                                                  --                 ---                ---
<CAPTION>
                                                                Owned             Franchised            Total
                                                                -----             ----------            -----
<S>                                                             <C>               <C>                   <C>
     Latin American Sizzler(R) Restaurants
     -------------------------------------
     Countries and Territories
     -------------------------
     Guatemala                                                    -                     4                 4
     Puerto Rico                                                  -                     8                 8
     Guam                                                         -                     1                 1
          Total Latin America                                     -                    13                13
                                                                                      ---               ---
                 Total USA & Latin America                       68                   189               257
                                                                 --                   ---               ---
</TABLE>

                                       7
<PAGE>

<TABLE>
<CAPTION>
     International Sizzler(R) Restaurants
     ------------------------------------
     Countries and Territories                                  Owned             Franchised            Total
     -------------------------                                  -----             ----------            -----
     <S>                                                        <C>               <C>                   <C>
     Australia                                                    30                    -                 30
     Indonesia                                                     -                    6                  6
     Japan                                                         -                   23                 23
     Korea                                                         -                    3                  3
     New Zealand                                                   1                    -                  1
     Taiwan                                                        -                    5                  5
     Thailand                                                      -                   19                 19
     Singapore                                                     -                    3                  3
       Total International                                        31                   59                 90
                                                                  --                   --                 --

             Total Sizzler(R)                                     99                  248                347
                                                                  --                  ---                ---
     KFC(R) restaurants
     ------------------
     Australia                                                   107                    -                107
       Total KFC(R)                                              107                    -                107
                                                                 ---                    -                ---

     Pat & Oscar's(SM) restaurants
     -----------------------------
     Arizona                                                       1                    -                  1
     California                                                   10                    -                 10
       Total Pat & Oscar's(SM)                                    11                    -                 11
                                                                  --                    -                 --
             Total Sizzler(R), KFC(R), Pat & Oscar's(SM)         217                  248                465
                                                                 ---                  ===                ===
</TABLE>

The Company owns or leases the real property on which its restaurants are
operated. A small number of franchised restaurants are also located on property
owned or leased by the Company.  Periodically the Company reviews the
appropriateness of owning versus leasing restaurant locations.

Approximately 85 percent of the restaurant locations operated by the Company are
leased. The leases generally are for primary terms of 5 to 20 years, with two or
three five-year renewal options and expire on various dates up to the year 2017.
The Company has the right to extend many of these leases.

In addition to the restaurant locations set forth above, the Company leases
approximately 36,000 square feet of office space in Culver City, California that
serves as its corporate headquarters.

Item 3: Legal Proceedings
================================================================================

The Company is subject to various lawsuits, claims and other legal matters in
the ordinary course of conducting its business.

Two subsidiaries of the Company are named defendants in nine of thirteen
lawsuits arising out of the E. coli incident at two franchised locations in
Milwaukee, Wisconsin in July 2000. The Company's meat supplier, Excel
Corporation and the Company's franchisee, E&B Management Company and its
principals are named defendants in some or all of the cases. The plaintiffs seek
monetary damages in amounts to be determined for sickness or injuries arising
out of the consumption of food allegedly contaminated with E. coli.

As of the date of this report, and with exception of the items noted above,
management believes that there are no legal proceedings pending, the adverse
resolution of which may be expected to have a material

                                       8
<PAGE>

adverse impact on either the Company's consolidated financial position, results
of operations or cash flows.

Item 4: Submission of Matters to a Vote of Security Holders
================================================================================

None.

Executive Officers of the Registrant as of June 30, 2001
================================================================================

The following are the Executive Officers of the Company as of June 30, 2001:

Charles L. Boppell     59      President and Chief Executive Officer of the
                               Company since 1999. Director of the Company since
                               April 1999. President and Chief Executive Officer
                               of La Salsa Holding Company (1993-1999).

Kevin W. Perkins       49      Executive Vice President of the Company and
                               President and Chief Executive Officer of the
                               Company's International Operations since 1997.
                               Director of the Company (1994 to present).
                               President and Chief Executive Officer of the
                               Company (1994-1997).

Kenneth Cole           47      President and Chief Executive Officer of Sizzler
                               USA, Inc. since May 2001. President and Chief
                               Executive Officer of Blue Chalk Cafe (d/b/a Left
                               at Albuquerque) (1999-2001). President and Chief
                               Executive Officer Damon's International, Inc.
                               (1988-1999).

John Sarkisian         43      Chief Executive Officer of FFPE, LLC d/b/a Pat &
                               Oscar's(SM) since August 30, 2000. Chief
                               Executive Officer of S&C Corporation d/b/a
                               Oscar's(SM) from 1991 through August 30, 2000.
                               Managing Member Del Mar Heritage LLC since 1996.

A. Keith Wall          48      Vice President and Chief Financial Officer of the
                               Company since March 2001. Vice President and
                               Chief Financial Officer of Central Financial
                               Acceptance Corporation (1998-2001). Vice
                               President and Chief Financial Officer of Central
                               Rents, Inc. (1996-1998).

Diane Hardesty         50      Chief Administrative Officer of the Company since
                               2000. Vice President of the Company since 1999.
                               Vice President of La Salsa Holding Company (1995-
                               1999). Vice President Adray's (1994-1996).

Michael B. Green       55      Vice President, General Counsel and Secretary of
                               the Company since 1999. Vice President, General
                               Counsel and Secretary of Sizzler USA, Inc. (1997-
                               present). Assistant General Counsel of the
                               Company (1995-1997).

                                       9
<PAGE>

Kimberley Forster      35      Vice President of Strategic Planning of the
                               Company since 1999. Director of Financial
                               Analysis, Times Mirror Company (1996-1999). Vice
                               President and Manager of Financial Analysis
                               Group, First Interstate Bank of California (1993-
                               1996).

Mary E. Arnold         42      Vice President and Controller of the Company
                               since 2000. Controller of the Company (1999-
                               2000). Vice President Finance, The Intergroup
                               Corporation (1999). Vice President Finance, Koo
                               Koo Roo, Inc. (1996-1998). Controller, Koo Koo
                               Roo, Inc. (1994-1995).

John Burns             59      Vice President of Purchasing of the Company since
                               2001. Vice President of Purchasing of Sizzler USA
                               since 1997. Vice President of Purchasing and
                               Distribution, Family Restaurants, Inc. (1994-
                               1997).

                                       10
<PAGE>

                                    PART II


Item 5: Market For Registrant's Common Stock and Related Stockholder Matters
===============================================================================

Market Information
------------------

The Company's common stock is listed on the New York Stock Exchange ("NYSE")
under the symbol "SZ". As of June 30, 2001, the number of record holders of the
Company's common stock was 2,523. The high and low sales prices for a share of
the Company's common stock as reported on the NYSE, by quarter, for the past two
fiscal years are as follows:

<TABLE>
<CAPTION>
                                            2001                 2000
                                     ------------------  -------------------
                                       High        Low      High        Low
                                       ----        ---      ----        ---
 <S>                                  <C>       <C>        <C>       <C>
          First Quarter               $3.000    $2.250     $2.625    $1.750
          Second Quarter               2.380     1.250      3.188     2.000
          Third Quarter                2.130     1.440      3.000     1.938
          Fourth Quarter               1.910     0.990      3.625     2.250
</TABLE>

Common Stock Dividends
----------------------

The Company has not declared any cash dividends during the four most recent
fiscal years.  Future dividends will depend on a number of factors, including
earnings, financial position, capital requirements and other relevant factors.

                                       11
<PAGE>

Item 6: Selected Financial Data
================================================================================

The following table sets forth consolidated financial data with respect to the
Company and should be read in conjunction with the consolidated financial
statements, including the notes thereto, and Item 7: "Management's Discussion
and Analysis of Financial Condition and Results of Operations" presented
elsewhere herein.

<TABLE>
<CAPTION>
For the Years Ended April 30,            2001        2000         1999         1998         1997
-------------------------------------------------------------------------------------------------------
(In millions, except per share data
  and exchange rates)
<S>                                      <C>         <C>          <C>          <C>          <C>
System-wide sales                        $ 575.0     $ 568.8      $ 532.7      $ 557.9      $ 677.9


Revenues                                   245.3       239.5        226.3        242.3        299.9

Net income                                   2.7         2.4 (a)      7.4          5.4          0.6

Basic and diluted earnings
 per share                                  0.10        0.08 (a)     0.26         0.19         0.02

Average Australian dollar
 exchange rate                            0.5494      0.6409       0.6208       0.7063       0.7880

Total assets                               122.6       115.9        114.7        120.5        168.1

Long-term debt                              24.1        21.2         26.9         35.5          0.3 (b)

Liabilities subject to compromise              -           -            -            -         83.9 (b)

Total stockholders' investment              54.5        50.6         52.7         43.8         44.4

Cash dividends declared per share              -           -            -            -            -
-------------------------------------------------------------------------------------------------------
</TABLE>


(a)  Includes a pre-tax charge of $12.1 million or $0.42 per share, of which
     $5.5 million is related to the sale and leaseback of certain properties in
     Australia and $6.6 million is the final reorganization charge. See Note 14
     - Sale - Leaseback and Restructuring Charge, to Consolidated Financial
     Statements. In addition to these charges, the Company recorded an income
     tax benefit of $5.9 million or $0.20 per share.

(b)  Substantially all pre-petition debt has been reclassified as "Liabilities
     subject to compromise under reorganization proceedings."

                                       12
<PAGE>

Item 7: Management's Discussion and Analysis of Financial Condition and Results
of Operations
================================================================================
________________________________________________________________________________

RESULTS OF OPERATIONS
________________________________________________________________________________

INTRODUCTION
------------

The following discussion should be read in conjunction with Item 6: "Selected
Financial Data," the Consolidated Financial Statements, including the notes
thereto, and other financial information appearing elsewhere herein.

During fiscal year 2001, the Company continued the process of enhancing the U.S.
Sizzler(R) restaurant experience.  The Company accomplished a significant step
in this process with the completion of all 57 originally scheduled restaurant
remodels.  In addition to remodeling the restaurant with a steakhouse appearance
that is darker, softer and more subdued, the Company has improved the quality of
menu items and upgraded the salad bar by offering fresher, higher quality
produce and toppings. Restaurants that had undergone remodel and had been re-
introduced experienced sales increases in the 10 percent to 12 percent range.
However, an unfortunate E. coli incident at two of its franchise locations in
July, 2000 had negative consequences on the Company's U.S. operations. (See Note
3 - E. coli Incident, to Consolidated Financial Statements). The remaining 11
restaurants are in outlying markets and the Company expects to complete these
remodels during fiscal year 2002.

In addition to the Company store remodels, the Company has launched the second
phase of the Sizzler(R) enhancement program, the franchise reinvestment program.
At the end of fiscal year 2001, 34 franchise locations have been fully
remodeled, 17 have been partially remodeled and 20 locations are in various
stages of the remodel process. The Company expects the franchise remodel process
to be completed by the end of fiscal year 2003.

In fiscal year 2001, the Company's international division focused on testing the
Sizzler(R) remodel design. The remodel design incorporates features from the
U.S. Sizzler(R) remodel as well as local initiatives. There are currently two
units being tested with the U.S. remodel format. Based on preliminary results,
certain modifications are being implemented. Once completed, the results will be
evaluated and if positive, the Company plans to implement the remodel program
beginning in fiscal year 2002.

The Company also continued its discussion with Tricon Global Restaurants
regarding co-branding KFC(R) locations with Pizza Hut(R). However, testing is
currently on hold until the evaluation of co-branding Taco Bell(R) with the
Company's KFCs(R) is completed. During the year, the Company opened six new KFCs
(R) in Queensland, Australia.

During fiscal year 2001, the Company completed the acquisition of 82 percent of
the outstanding membership interests of FFPE, LLC, a newly organized entity that
owns the assets used in the operations of restaurants doing business under the
name Pat & Oscar's(SM) (f/d/b/a Oscar's). The Company opened 3 new Pat &
Oscar's(SM) in addition to the 8 acquired with the acquisition. Management
expects to add 4 to 5 new Pat & Oscar's(SM) during fiscal year 2002.

The Company's revenues are generated from four primary sources: (1) domestic
Company-operated Sizzler(R) restaurant sales and franchise revenues (including
franchise fees, royalties and rental income), (2) international Company-operated
Sizzler(R) restaurant sales and franchise revenues, (3) revenues from
international KFC(R) franchises operated by the Company and (4) domestic
Company-operated Pat & Oscar's(SM) restaurants.

As discussed in more detail in Note 2 - Bankruptcy Reorganization, to
Consolidated Financial Statements, Sizzler International, Inc. and four
subsidiaries emerged from bankruptcy on September 23, 1997.

                                       13
<PAGE>

RESULTS OF OPERATIONS FOR THE FIFTY-TWO WEEKS ENDED APRIL 30, 2001 vs. FIFTY-TWO
--------------------------------------------------------------------------------
WEEKS ENDED APRIL 30, 2000
--------------------------

Consolidated revenues were $245.3 million in fiscal year 2001 compared to $239.5
million in fiscal year 2000, an increase of $5.8 million or 2.4 percent. The
increase is primarily attributable to the addition of Pat & Oscar's(SM), same
store sales increases from KFC(R) and sales from six KFCs(R) added during the
year. These increases are partially offset by a 14.3 percent decline in the
Australian dollar exchange rate that represents $19.9 million in revenues and a
same store sales decline in Sizzler(R) Australia.

Domestic revenues increased $20.8 million or 19.8 percent in fiscal year 2001
compared to fiscal year 2000 primarily due to the addition of Pat & Oscar's(SM).
Sales increases from remodeled Sizzler(R) locations early in fiscal year 2001
and the addition of a net of three locations were offset by the impact of the E.
coli incident (See Note 3 - E. coli Incident, to Consolidated Financial
Statements). Similarly, sales increases experienced by franchised Sizzler(R)
restaurants were offset by the impact of the E. coli incident and by the closing
of eight locations and the sale of four locations to the Company. International
revenues decreased $14.9 million or 11.1 percent primarily due the exchange rate
partially offset by higher KFC(R) net sales generated by higher check averages
and increased customer traffic and 6 additional locations.

Consolidated operating expenses, were $238.3 million in fiscal year 2001
compared to $227.5 million in fiscal year 2000 (excluding the loss on sale -
leaseback and restructuring charge), an increase of $10.8 million or 4.7
percent. The increase is due to the addition of Pat & Oscar's(SM) partially
offset by the decrease in the Australian dollar exchange rate. Total Pat &
Oscar's(SM) operating expenses in fiscal year 2001 were $22.6 million and the
decrease in the Australian dollar exchange rate decreased operating expenses by
$19.0 million. The remaining $7.2 million increase is primarily due to an
increase in sales volumes, higher labor associated with training and additional
rent expense from the sale and leaseback. The higher rent expense from the sale
and leaseback is partially offset by a reduction in depreciation.

Interest expense was $3.8 million in fiscal year 2001 compared to $3.6 million
in fiscal year 2000, an increase of $0.2 million or 5.6 percent.  Interest
expense is primarily related to the Company's debt with Westpac, new financing
from Heller Financial Services and the Company's supplemental executive
retirement plan covering ten former and one active employee.  Investment income
was $1.6 million in fiscal year 2001 compared to $1.4 million in fiscal year
2000, an increase of $0.2 million or 14.3 percent which was due to higher cash
balances preceding the acquisition of Pat & Oscar's(SM).

Other income was $0.3 million in fiscal year 2001 compared to $1.4 million in
fiscal year 2000, a decrease of $1.1 million due to the sale of one domestic
location in fiscal year 2001 compared with three in fiscal year 2000.  From time
to time the Company may sell properties or locations.

The provision for income tax was $2.4 million in fiscal year 2001 compared to a
benefit of $3.3 million in fiscal year 2000.  Current year tax expense relates
to the tax provision on Australian income.  The benefit in prior year was a
result of net operating losses utilized as a result of the sale and leaseback
transaction and management's evaluation of the future reliability of the
Company's deferred tax assets.  (See Note 4 - Income Taxes, to Consolidated
Financial Statements.)

U.S. Sizzler(R) Operations
--------------------------

Total revenues for fiscal year 2001 were $104.7 million compared to $104.7
million in fiscal year 2000.  Restaurant sales were $97.7 million compared to
$97.6 million in fiscal year 2000, an increase of $0.1 million or 0.1 percent.
On a comparative restaurant basis, Sizzler(R) restaurants open more than one
year experienced a 0.2 percent increase in average sales per restaurant. This
increase was driven by a higher average guest check partially offset by lower
customer counts due to the E. coli incident (See Note 3 - E. coli Incident, to
Consolidated Financial Statements). There were 68 Company-operated Sizzler(R)
restaurants as of April 30, 2001 and 64 as of April 30, 2000.  During fiscal
year 2001, the Company sold one location to a franchisee, acquired four units
from a franchisee and opened one new store. From time to time the Company may
sell locations, open new locations or acquire locations from its franchisees.
Franchise revenues were $7.0 million in fiscal year 2001 compared to $7.1
million in fiscal year 2000, a decrease of $0.1 million or 1.4 percent. The
decrease in fiscal year 2001 reflects ten fewer units. This includes four
locations acquired by the Company, two closures due to E. coli and four closures
due to lost

                                       14
<PAGE>

leases. As of April 30, 2001 there were 189 Sizzler(R) franchise locations
compared to 198 as of April 30, 2000.

Prime costs, which include food, paper and labor, were $63.7 million in fiscal
year 2001 compared to $63.7 million in fiscal year 2000.  Prime costs were 65.2
percent of sales in fiscal year 2001 and 65.3 percent in fiscal year 2000. Prime
costs remained relatively flat due to lower food costs associated with lower
commodity prices and better cost controls offset by higher labor costs
associated with the remodels and new managers added to improve guest service.
Other operating expenses were $22.6 million in fiscal year 2001 compared to
$21.7 million in fiscal year 2000, an increase of $0.9 million or 4.1 percent
due to higher utilities and restaurant supplies incurred in connection with the
remodels.

Other income represents the gain on the disposition of one excess property.

Management is continuing its plan to re-image the Sizzler(R) concept as an
affordable, mid-scale family steakhouse and grill by offering quality steak,
chicken and fish entrees as well as its fresh salad bar in facilities with
updated and comfortable decor.  The Company has substantially completed this
process with its Company-operated locations and will focus on re-imaging its
franchise locations during the next two years.  In addition, the Company will
continue to focus on quality service by training its restaurant employees with
new training programs.  These initiatives will be supported with appropriate
marketing programs.

Pat & Oscar's(SM)
-----------------

The Pat & Oscar's(SM) acquisition resulted in 35 weeks of operations in fiscal
year 2001. Total revenues for the 35 weeks of operations were $20.8 million.
Sales were generated by 11 locations, including three that opened subsequent to
the acquisition.

Prime costs, which included food and labor, were $13.1 million or 63.1 percent
of sales. This is slightly higher than historical levels due to labor costs
associated with restaurant openings partially offset by lower food cost due to
new vendor contracts and cost controls.

As a result of expansion activities, the Company experienced operating losses
from Pat and Oscar's(SM) during fiscal year 2001. The Company expects to open
four to five new locations during fiscal year 2002 and anticipates the
acquisition will become accretive to earnings during fiscal year 2002.

International Sizzler(R) Operations
-----------------------------------

Revenues from Company-operated international Sizzler(R) restaurants were $34.4
million in fiscal year 2001 compared to $40.8 million in fiscal year 2000, a
decrease of $6.4 million or 15.7 percent. This decrease includes $5.7 million
related to the decrease in the Australian dollar exchange rate.  On a
comparative restaurant basis in Australian dollars, Sizzler(R) restaurants open
more than one year experienced a 1.4 percent decrease in average sales per
restaurant. This decrease is due to the GST, which added a 10.0 percent tax on
restaurant meals in July 2000 and to a slowing Australian economy late in fiscal
year 2001. This decrease was partially offset by a higher average guest check.
There were 31 Company-operated Sizzler(R) restaurants as of both April 30, 2001
and 2000. International franchise revenues were $1.7 million in fiscal year 2001
compared to $1.5 million in fiscal year 2000, an increase of $0.2 million or
13.3 percent. The increase is due to four more units than in the prior year, net
of a $0.3 million royalty revenue decline due to declining exchange rates. As of
April 30, 2001 there were 56 international franchised restaurants and 3 joint
venture restaurants in 6 countries compared to 52 international franchise
restaurants and 3 joint venture restaurants as of April 30, 2000.  During fiscal
year 2001, 5 franchised restaurants were opened in Thailand, 2 in Japan, and 1
in Korea. Three restaurants were closed, 2 in Taiwan and 1 in Japan.

Prime costs were $23.1 million in fiscal year 2001 compared to $27.5 million in
fiscal year 2000.  Prime costs, which include food, paper and labor, decreased
to 67.2 percent of sales compared to 67.4 percent in the prior year.  This
decrease is due to lower food costs associated with lower commodity prices
partially offset by higher labor costs associated with wage increases and
training.

                                       15
<PAGE>

Other operating expenses amounted to $7.8 million in fiscal year 2001 compared
to $7.9 million in fiscal year 2000. These costs were flat due to a decrease in
the exchange rate offset with higher rent expense from the sale and leaseback,
partially offset by lower depreciation and income tax expense.

Management is continuing its plan to reposition the Sizzler(R) concept in
Australia by implementing the upgraded food quality and cooking methods
currently used in the Company's domestic operations.  Additionally, more
emphasis will be placed on providing customers with better service by increasing
the number of restaurant personnel.  There are currently four locations being
tested with two remodel designs.  If the results are positive, the Company plans
to implement a remodel program in Australia during fiscal year 2002.

KFC(R) Operations
-----------------

Revenues from the Company's KFC(R) restaurants were $83.8 million in fiscal year
2001 compared to $92.5 million in fiscal year 2000, a decrease of $8.7 million
or 9.4 percent. This decrease includes $14.0 million related to the decrease in
the Australian dollar exchange rate partially offset by higher unit sales and
six additional locations.  On a comparative restaurant basis in Australian
dollars, KFC(R) restaurants open more than one year experienced a 2.5 percent
increase in average sales per restaurant driven by successful marketing programs
that resulted in higher customer traffic and an increase in the average guest
check. It should be noted that KFC(R) sales were impacted by GST and towards the
end of fiscal year 2001, a slowing economy. As of April 30, 2001 there were 107
KFC(R) restaurants compared to 101 as of April 30, 2000. The Company expects to
open 2 to 4 new KFC(R) restaurants in fiscal year 2002.

Prime costs were $50.4 million in fiscal year 2001 compared to $55.7 million in
fiscal year 2000.  Prime costs, which include food, paper and labor, decreased
to 60.1 percent of sales compared to 60.2 percent in the prior year due to lower
poultry prices partially offset with higher labor costs associated with training
and wage increases.

Other operating expenses amounted to $19.1 million compared to $19.9 million
primarily due to higher rent expense associated with the sale and leaseback
offset by lower depreciation.

Management has continued to have discussions with Tricon Global Restaurants,
Inc. regarding the possibility of co-branding certain KFC(R) locations with
Pizza Hut(R) and Taco Bell(R) and is presently awaiting the evaluation of the
results from Tricon.

RESULTS OF OPERATIONS FOR THE FIFTY-TWO WEEKS ENDED APRIL 30, 2000 vs. FIFTY-TWO
--------------------------------------------------------------------------------
WEEKS ENDED APRIL 30, 1999
--------------------------

Consolidated revenues were $239.5 million in fiscal year 2000 compared to $226.3
million in fiscal year 1999, an increase of $13.2 million or 5.8 percent.  The
increase includes $4.2 million due to a 3.2 percent increase in the Australian
dollar exchange rate along with higher average unit sales and franchise revenues
from both domestic and international operations. Domestic revenues increased
$2.8 million or 2.8 percent in fiscal year 2000 compared to fiscal year 1999
primarily due to higher average sales generated by the newly remodeled
restaurants and higher check averages. International revenues increased $10.3
million or 8.3 percent primarily due the exchange rate and to higher KFC(R) and
Sizzler(R) sales generated by higher check averages from both concepts and
increased customer traffic from KFC(R).

Consolidated operating expenses, excluding $12.1 million in non-recurring items
(See Note 14 - Sale - Leaseback and Restructuring Charge, to Consolidated
Financial Statements), were $227.5 million in fiscal year 2000 compared to
$214.6 million in fiscal year 1999, an increase of $12.9 million or 6.0 percent.
Approximately $4.0 million of the increase was due to a 3.2 percent increase in
the Australian dollar exchange rate. The remaining increase is primarily due to
an increase in sales volumes, higher labor associated with training and
additional rent expense from the sale and leaseback. In addition, general and
administrative expenses are higher than in the prior year due, in part, to $1.4
million in one time expenses and transition costs incurred during fiscal year
2000.

Interest expense was $3.6 million in fiscal year 2000 compared to $3.3 million
in fiscal year 1999, an increase of $0.3 million or 10.6 percent.  Interest
expense is primarily related to the Company's debt with

                                       16
<PAGE>

Westpac and to a lesser extent, the Company's supplemental executive retirement
plan covering ten former and one active employee. Investment income was $1.4
million in fiscal year 2000 compared to $0.7 million in fiscal year 1999, an
increase of $0.7 million or 96.6 percent which was due to higher cash balances
primarily associated with the sale and leaseback transaction.

Other income represents the gain on the disposition of two Sizzler(R) locations
in the U.S. and one excess property.

The provision for income taxes was a $3.3 million benefit in fiscal year 2000
compared to a  $1.8 million provision in fiscal year 1999. (See Note 4 - Income
Taxes, to Consolidated Financial Statements).

U.S. Sizzler(R) Operations
--------------------------

Total revenues for fiscal year 2000 were $104.7 million compared to $101.9
million in fiscal year 1999, an increase of $2.8 million or 2.7 percent.  This
increase was primarily the result of higher restaurant sales. Restaurant sales
were $97.6 million compared to $95.3 million in fiscal year 1999, an increase of
$2.3 million or 2.4 percent. On a comparative restaurant basis, Sizzler(R)
restaurants open more than one year experienced a 2.7 percent increase in
average sales per restaurant, a 0.4 percent decrease in the average number of
customers per restaurant and a 3.2 percent increase in average customer check
total. The trend in the number of customers per restaurant improved during
fiscal year 2000 with positive customer counts of 0.9 percent and 2.5 percent in
the third and fourth quarter, respectively. There were 64 Company-operated
Sizzler(R) restaurants as of April 30, 2000 and 66 as of April 30, 1999.  During
fiscal year 2000 the Company sold one location due to city redevelopment and
sold another location to a franchisee.  From time to time the Company may sell
locations or acquire locations from its franchisees.  Franchise revenues were
$7.1 million in fiscal year 2000 compared to $6.6 million in fiscal year 1999,
an increase of $0.6 million or 9.2 percent. The increase in fiscal year 2000
reflects higher franchise sales and franchise fees. As of April 30, 2000 there
were 198 Sizzler(R) franchise locations compared to 197 as of April 30, 1999.

Prime costs, which include food, paper and labor, were $63.7 million in fiscal
year 2000 compared to $61.9 million in fiscal year 1999, an increase of $1.8
million or 2.9 percent.  Prime costs were 65.3 percent of sales in fiscal year
2000 and 65.0 percent in fiscal year 1999. The increase is due to higher labor
associated with training restaurant employees in remodeled locations and higher
manager wages partially offset by lower food cost associated with lower
commodity prices and improvements in food cost controls.  These reductions in
food cost are partially offset by higher product costs associated with upgrades
to certain products such as steaks.  Other operating expenses amounted to $21.7
million in fiscal year 2000 and $21.2 million in fiscal year 1999, an increase
of $0.5 million or 2.4 percent.  This increase is due to the write-down of
certain assets partially offset with lower insurance expense.

Other income represents the gain on the disposition of two Sizzler(R) locations
in the U.S. and one excess property.

As of April 30, 2000 the Company had completed 23 remodels with sales increases
averaging 12 to 14 percent.  The average cost, per restaurant, of the remodel is
approximately $225,000.

International Sizzler(R) Operations
-----------------------------------

Revenues from Company-operated international Sizzler(R) restaurants were $40.8
million in fiscal year 2000 compared to $39.0 million in fiscal year 1999, an
increase of $1.8 million or 4.7 percent. This increase includes $1.3 million
related to the increase in the Australian dollar exchange rate. On a comparative
restaurant basis in Australian dollars, Sizzler(R) restaurants open more than
one year experienced a 1.4 percent increase in average sales per restaurant, a
1.5 percent decrease in the average number of customers per restaurant and a 2.9
percent increase in the average customer check total.  There were 31 Company-
operated Sizzler(R) restaurants as of both April 30, 2000 and 1999.
International franchise revenues were $1.5 million in fiscal year 2000 compared
to $1.2 million in fiscal year 1999, an increase of $0.3 million or 21.2
percent. The increase is due to the increase in the Australian dollar exchange
rate and an increase in the number of franchise locations. As of April 30, 2000
there were 52 international franchised restaurants and 3 joint venture
restaurants in 6 countries compared to 48 international franchise restaurants
and 3 joint venture restaurants as of April 30, 1999.  During fiscal year 2000,
4 franchised

                                       17
<PAGE>

restaurants were opened in Thailand, 1 in Japan, and 1 in Indonesia. Three
restaurants were closed, 1 in Indonesia and 2 in Japan.

Prime costs were $27.5 million in fiscal year 2000 compared to $26.3 million in
fiscal year 1999.  Prime costs, which include food, paper and labor, decreased
to 67.3 percent of sales compared to 67.5 percent in the prior year.  This
decrease is due to a temporary reduction in management level staffing positions
partially offset by higher commodity prices and upgraded menu offerings.

Other operating expenses amounted to $7.9 million compared to $6.5 million
primarily due to higher rent expense associated with the sale and leaseback and
to a gain recognized from the final accounting of a terminated contract in
fiscal year 1999. The higher rent expense from the sale and leaseback is
partially offset by lower depreciation and income tax expense.

Management continued its plan to reposition the Sizzler(R) concept in Australia
by implementing the upgraded food quality and cooking methods that have
contributed to positive sales growth in the Company's domestic operations.
Additionally, more emphasis was placed on providing customers with better
service by increasing the number of restaurant personnel.

KFC(R) Operations
-----------------

Revenues from the Company's KFC(R) restaurants were $92.5 million in fiscal year
2000 compared to $84.3 million in fiscal year 1999, an increase of $8.2 million
or 9.7 percent. This increase includes $2.9 million related to the increase in
the Australian dollar exchange rate along with higher unit sales.  During the
fourth quarter of fiscal year 2000 the Australian dollar exchange rate fell.  On
a comparative restaurant basis in Australian dollars, KFC(R) restaurants open
more than one year experienced a 5.0 percent increase in average sales per
restaurant, a 1.2 percent increase in the average number of customers per
restaurant and a 3.1 percent increase in the average customer check total. As of
both April 30, 2000 and 1999 there were 101 KFC(R) restaurants.

Prime costs were $55.7 million in fiscal year 2000 compared to $50.7 million in
fiscal year 1999.  Prime costs, which include food, paper and labor, increased
to 60.3 percent of sales compared to 60.2 percent in the prior year.  This
increase is due to higher hourly wages and benefits partially offset by lower
commodity prices.

Other operating expenses amounted to $19.9 million compared to $17.9 million
primarily due to higher rent expense associated with the sale and leaseback.
The higher rent expense from the sale and leaseback is partially offset by lower
depreciation and income tax expense.

                                       18
<PAGE>

--------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
--------------------------------------------------------------------------------

Working Capital
---------------

The Company's primary source of liquidity is cash flows from operations, which
were $9.6 million in fiscal year 2001 compared to $19.0 million in fiscal year
2000. This decrease is primarily due to a decrease in operating profit. The
current ratio was 1.2 at April 30, 2001 and 2.0 at April 30, 2000. At April 30,
2001, working capital was $4.2 million compared to $24.8 million at the end of
the prior year. The decrease in the current ratio and working capital is
primarily due to cash used to acquire and operate Pat & Oscar's(SM) and funds
used in the remodel process.

Total Assets/Capital Expenditures
---------------------------------

Total assets increased $6.7 million or 5.8 percent in fiscal year 2001 due to
the acquisition of Pat & Oscar's(SM) partially offset by a decrease in the
Australian dollar exchange rate. Net property and equipment represented 49.0
percent of total assets at the end of fiscal year 2001 and 40.0 percent at the
end of fiscal year 2000.  This increase is due to the acquisition of Pat &
Oscar's(SM) and the remodels of the domestic Sizzler restaurants.

Capital expenditures were $18.9 million in fiscal year 2001, which included
Sizzler(R) new restaurant construction of $0.5 million, Sizzler(R) U.S. remodels
of $11.8 million, new Pat & Oscar's(SM) restaurant construction of $2.7 million,
and international expenditures of $3.9 million primarily associated with six new
KFC(R) restaurants.

Debt
----

The Company's debt includes a credit facility with Westpac Banking Corporation
in Australia ("Westpac"). The credit facility is collateralized by the
Australian division's assets and intellectual property.  The loan provides for a
three-year term at an interest rate equal to the Australian inter-bank borrowing
rate, plus a 2.25 percent margin. The agreement is subject to certain financial
covenants and restrictions which management believes are customary for a loan of
this type.  At the end of the fiscal year, the Company's unpaid principal
balance on the Westpac facility was approximately $38.5 million Australian
dollars, or  $19.6 million which includes $8.0 million Australian dollars or
$5.0 million of additional borrowings during fiscal year 2001.

In addition, on December 20, 2000 the Company entered into a $10.0 million,
seven year term loan with Heller Financial Services that is amortized based on
15 years, with an interest rate of 9.65 percent. Under the terms of the
agreement, the Company has borrowed $5.0 million to date and has the right to
borrow the remaining balance under certain conditions, on or before November 15,
2001. A portion of the Company's real estate and personal property in the U.S
are collateral for the loan. The agreement is subject to certain financial
covenants and restrictions which management believes are customary for a loan of
this type.

In connection with the acquisition of Pat & Oscar's(SM) the Company assumed a
revolving credit facility with Southwest Community Bank that matures in fiscal
years 2004 and 2005. The agreement is subject to certain financial covenants and
restrictions which management believes are customary for a loan of this type.
The loans carry variable interest rates that ranged from 7.5 percent to 10.0
percent during 2001. The unpaid principal and interest related to these notes
was $2.2 million. There is also a $0.3 million, 9.0 percent term loan with Bank
of America that matures in fiscal year 2007.

Based on current operations and anticipated sales growth, management believes
that cash flow from operations will be sufficient to meet all of its debt
service requirements and working capital needs.

                                       19
<PAGE>

New Accounting Standards
------------------------

In June 2001, the Financial Accounting Standard Boards ("FASB") issued SFAS No.
141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires all business combinations initiated after June
30, 2001, to be accounted for using the purchase method. With the adoption of
SFAS No. 142, goodwill is no longer subject to amortization over its estimated
useful life and will be subject to at least an annual assessment for impairment
by applying a fair-value based test. The Company has early adopted SFAS No. 142
beginning with the first quarter of fiscal 2002. The effect of the adoption of
SFAS No. 142 is that the Company is no longer amortizing goodwill and will at
least annually assess goodwill for impairment by applying a fair-value based
test. The Company will adopt SFAS No. 141 beginning in the first quarter of
fiscal 2003.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133").  This statement established
accounting and reporting standards for derivative financial instruments and for
hedging activities.  It requires that entities recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value.  The accounting for changes in fair value of the derivative
(i.e., gains and losses) depends on the intended use of the derivative and the
resulting designation.  In June 2000, the FASB issued Statement of Financial
Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an amendment of FASB Statement No. 133" ("FAS
138"), which amends certain provisions of SFAS 133 to clarify areas causing
difficulties in implementation, including expanding the normal purchase and sale
exemption for supply contracts.  The Company adopted SFAS 133 and the
corresponding amendments under SFAS 138 at the beginning of fiscal year 2002 in
accordance with Statement of Financial Accounting Standards No. 137, "Accounting
for Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133."  SFAS 133, as amended by SFAS 138, is not
expected to have a material impact on the Company's consolidated results of
operations, financial position or cash flows.

Forward-Looking Statements
--------------------------

With the exception of any historical information contained in this report, the
matters described herein contain forward-looking statements that are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Act of 1995.  These statements may include but are not limited to, statements
regarding: (1) the expected continuation of the Company's growth in revenues and
earnings; (2) the anticipated completion of the remodeling of U.S. company-owned
and franchised Sizzler(R) locations; (3) any expected decrease in currency
exchange rates; (4) the Company's plans to open new KFC(R)  units in fiscal year
2002; (5) the Company's plans for remodeling its Australian Sizzler(R)  and
KFC(R) restaurants; (6) the planned expansion of Sizzler(R) franchise locations
in Asia in fiscal year 2002; (7) the Company's expectation that it will have
adequate cash from operations to meet all debt service, capital expenditures and
working capital requirements in fiscal year 2002; (8) the opening of new Pat &
Oscar's(SM) locations during fiscal year 2002; (9) whether higher rent expense
from the sale/leaseback will continue to be partially offset by a reduction in
depreciation expense; and (10) the sufficiency of the supply of  commodities and
labor pool to carry on the Company's business.

Sizzler cautions that these statements are qualified by important factors that
could cause actual results to differ materially from those reflected in the
forward looking statements contained herein. Such factors include, but are not
limited to: (1) the Company's ability to continue achieving growth in revenues
and earnings and overcome any significant impact from increased food, labor and
utility costs in the U.S. and GST tax in Australia; (2) the Company's ability to
complete the franchisee remodel program on schedule; (3) the possible negative
impact of the fluctuations in the foreign currency exchange rate between the
Australian dollar and the U.S. dollar;  (4) the Company's ability to open new
Australian KFC(R) locations due to available sites and approvals from its
franchisor; (5) the Company's ability to complete the remodeling of its existing
Australian Sizzler(R) and KFC(R) locations; (6) the ability of the Company and
its franchisees to meet all necessary conditions required to open additional
Sizzler(R) franchise locations in the U.S. and in Asia; (7) the on-going success
of the Company's operations to generate the necessary cash to invest in its U.S.
and international businesses; (8) the Company's ability to generate sufficient
cash to meet all debt service, working capital and capital expenditure
requirements; (9) the ability of Pat & Oscar's(SM) to achieve

                                       20
<PAGE>

the opening of the projected number of new restaurants in fiscal year 2002; (10)
the Company's ability to reduce depreciation expense to offset its increased
rent expense; and (11) that there will not be any shortages in critical supplies
for the Company to continue its business operations; (12) when the Company can
recover the sales and profits lost due to the E. coli incident; and (13) other
risks as detailed from time to time in the Company's SEC reports, including
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and Annual Reports
on Form 10-K.

                                       21
<PAGE>

Item 7A - Quantitative and Qualitative Disclosures about Market Risk
================================================================================

The Company is exposed to the following market risks: foreign currency rate
risk, and commodity price risk.

Interest Rate Risk
------------------

The Company's primary financial instrument subject to market risk is a bank loan
with an outstanding principal balance at April 30, 2001 of  $19.6 million or
$38.5 million Australian dollars.  The loan is payable in Australian dollars and
is collateralized by the principal operating assets of the Company's
International Division.  The loan bears variable interest at a rate equal to the
Australian inter-bank borrowing rate (7.7 percent at April 30, 2001), plus a
margin of 2.25 percent. The primary exposures relating to this financial
instrument result from changes in the interest rates.

To limit the Company's exposure to interest rate increases, the Company entered
into two interest rate cap contracts, which prevent the Company's interest rate
from exceeding a weighted average of approximately 7.60 percent, in which case
the Company would receive the difference between the contract rate and the
actual interest rate.  The interest rate caps in place cover approximately 35.4
percent of the loan principal outstanding and expire September 30, 2002 and
August 31, 2003, respectively.

In addition, the Company has entered into two interest rate swap contracts to
convert part of its variable interest exposure to a fixed rate of a weighted
average of approximately 7.60 percent.  The interest rate swap contracts in
place as of the end of the fiscal year covered approximately 35.4 percent of the
loan principal outstanding and expire September 30, 2002 and August 31, 2003,
respectively.

The Company also has a revolving credit facility with variable interest as a
result of the acquisition of Pat & Oscar's(SM). The interest rate ranged from
7.5 to 10.0 percent during 2001. The Company had a $2.2 million balance
comprising of unpaid principal and interest. The risk involves changes in the
interest rate.

The Company calculated that a hypothetical 10.0 percent change in the interest
rates, as defined above, in the near-term would result approximately in a $0.1
million change in interest expense for the Company's variable rate debt noted
above.

Foreign Currency Exchange Rate Risk
-----------------------------------

The Company's foreign currency exchange risk primarily relates to its investment
in its Australian operations whereby changes in the exchange rate impact the
Company's net investment. The Company has mitigated the risk with a bank loan
payable in Australian dollars, which reduced the Company's exposure by
decreasing its net investment. As of April 30, 2001, the Company's net
investment in its Australia subsidiaries was $9.7 million. The Company does not
enter into contracts designed to hedge the residual foreign currency exchange
risk.

The Company calculated that a hypothetical 10.0 percent change in the exchange
rate in the near-term would result in approximately a $1.0 million change in the
net investment in the Australia subsidiaries.

Commodity Price Risk
--------------------

The Company's commodity price risk is attributable to fluctuation in the price
of selected food products (i.e. meat) used in the normal course of business. The
Company contracts for certain amounts of these food products in the future at a
predetermined or fixed price in order to hedge the risk of changes in the market
price. The Company does not purchase future contracts for trading purposes.

                                       22
<PAGE>

Item 8 - Financial Statements and Supplementary Data
================================================================================


             INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        ----
<S>                                                                                     <C>
Selected Quarterly Financial Data (Unaudited)                                            F-2

Report of Independent Public Accountants                                                 F-3

Consolidated Financial Statements:

       Consolidated Balance Sheets as of April 30, 2001 and April 30, 2000               F-4

       Consolidated Statements of Operations and Comprehensive Income
       for the Years Ended April 30, 2001, 2000 and 1999                                 F-6

       Consolidated Statements of Stockholders' Investment for the
       Years Ended April 30, 2001, 2000 and 1999                                         F-7

       Consolidated Statements of Cash Flows for the Years Ended April 30,
         2001, 2000 and 1999                                                             F-8

       Notes to Consolidated Financial Statements                                        F-9

Schedule I - Condensed Financial Information of the Registrant:

       Balance Sheets as of April 30, 2001 and April 30, 2000                            F-27

       Statements of Operations for the Years Ended April 30, 2001,
       2000 and 1999                                                                     F-29

       Statements of Cash Flows for the Years Ended April 30, 2001,
       2000 and 1999                                                                     F-30

       Notes to Financial Statements                                                     F-31

Schedule II - Valuation and Qualifying Accounts                                          F-32
</TABLE>

                                      F-1
<PAGE>

                 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands of dollars, except per share data)

The following tables show comparative quarterly financial results during the
past two fiscal years. The first, second and fourth fiscal quarters normally
include twelve weeks of operations whereas the third fiscal quarter includes
sixteen weeks of operations.

<TABLE>
<CAPTION>
      --------------------------------------------------------------------------------------------------------
                                                                  First      Second      Third       Fourth
      Fiscal Year 2001                                           Quarter     Quarter    Quarter     Quarter

      --------------------------------------------------------------------------------------------------------
      <S>                                                        <C>        <C>         <C>         <C>
      Restaurants                                                $ 52,312   $ 52,454    $ 74,937    $ 56,962
      Franchise revenues                                            2,346      2,183       1,986       2,161
                                                                 --------   --------    --------    --------
      Revenues                                                     54,658     54,637      76,923      59,123

      Cost of sales                                                18,943     18,733      26,053      19,593
      Labor and related costs                                      14,234     15,029      21,692      16,152
      Other operating expenses                                     11,930     12,761      18,603      13,007
      General and administrative expenses                           4,312      4,917       7,754       5,310
                                                                 --------   --------    --------    --------
      Earnings before interest, taxes, depreciation and
      amortization and other income                                 5,239      3,197       2,821       5,061
      Depreciation and amortization                                 1,805      2,109       3,131       2,201
                                                                 --------    -------    --------    --------
      Earnings (loss) before interest, taxes, and other income      3,434      1,088        (310)      2,860
                                                                 ========    =======    ========    ========
      Net income (loss)                                          $  2,865   $    310    $ (1,376)   $    924
                                                                 ========   ========    ========    ========

      Basic and diluted earnings (loss) per share                $   0.10   $   0.01    $  (0.05)   $   0.03
      ========================================================================================================

<CAPTION>
      --------------------------------------------------------------------------------------------------------
                                                                  First      Second      Third       Fourth
      Fiscal Year 2000                                           Quarter     Quarter    Quarter     Quarter

      --------------------------------------------------------------------------------------------------------
      <S>                                                        <C>        <C>        <C>         <C>
      Restaurants                                                $ 54,841   $ 53,209    $ 69,828    $ 52,991
      Franchise revenues                                            2,164      2,054       2,077       2,330
                                                                 --------   --------    --------    --------
      Revenues                                                     57,005     55,263      71,905      55,321

      Cost of sales                                                20,207     19,503      25,666      19,223
      Labor and related costs                                      14,845     14,532      19,177      14,527
      Other operating expenses                                     11,551     11,721      15,574      12,001

      Sale - leaseback and restructuring charge                         -          -      12,087           -
      General and administrative expenses                           4,658      4,094       6,713       4,881
                                                                 --------   --------    --------    --------
      Earnings (loss) before interest, taxes, depreciation
      and amortization and other income                             5,744      5,413      (7,312)      4,689
      Depreciation and amortization                                 2,078      2,154       2,652       1,744
                                                                 --------   --------    --------    --------
      Earnings (loss) before interest, taxes, and other income      3,666      3,259      (9,964)      2,945
                                                                 ========   ========    ========    ========
      Net income (loss)                                          $  2,506   $  2,063    $ (4,851)   $  2,704
                                                                 ========   ========    ========    ========
      Basic and diluted earnings (loss) per share                $   0.09   $   0.07    $  (0.17)   $   0.09
      ========================================================================================================
</TABLE>

                                       F-2
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of Sizzler International, Inc.:

We have audited the accompanying consolidated balance sheets of Sizzler
International, Inc. (the "Company") (a Delaware corporation) and subsidiaries as
of April 30, 2001 and 2000, and the related consolidated statements of
operations and comprehensive income, stockholders' investment and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sizzler International, Inc. and
subsidiaries as of April 30, 2001 and 2000, and the results of their operations
and their cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedules listed in the index of financial
statements are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, fairly state in
all material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.



ARTHUR ANDERSEN LLP

Los Angeles, California
June 14, 2001

                                       F-3
<PAGE>

SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)

<TABLE>
<CAPTION>
As of April 30,                                                              2001               2000
-------------------------------------------------------------------   -----------------   -----------------
ASSETS
<S>                                                                           <C>                <C>
Current assets
 Cash and cash equivalents                                                    $ 9,997            $ 12,422
 Restricted cash                                                                7,852              26,367
 Receivables, net of reserves of $965
  in 2001 and $847 in 2000                                                      2,464               4,173
 Inventories                                                                    4,211               4,333
 Current deferred tax asset                                                     3,324               2,544
 Prepaid expenses and other current assets                                      2,554               1,132
-------------------------------------------------------------------   -----------------   -----------------
 Total current assets                                                          30,402              50,971
-------------------------------------------------------------------   -----------------   -----------------

Property and equipment, at cost
 Land                                                                           5,663               6,804
 Buildings and leasehold improvements                                          71,488              58,628
 Equipment                                                                     65,477              61,801
 Capital leases                                                                 2,616               2,616
 Construction in progress                                                       1,873               4,168
-------------------------------------------------------------------   -----------------   -----------------
                                                                              147,117             134,017
 Less - accumulated depreciation and amortization                             (87,106)            (87,701)
-------------------------------------------------------------------   -----------------   -----------------
 Total property and equipment, net                                             60,011              46,316
-------------------------------------------------------------------   -----------------   -----------------

Property held for sale, net                                                     3,996               8,931

Long-term notes receivable, net of reserves
 of $17 in 2001 and $73 in 2000                                                   994               1,224

Deferred income taxes                                                           2,425               3,405

Intangible assets, net of accumulated amortization
 of $1,536 in 2001 and $889 in 2000                                            21,176               1,876

Other assets, net of accumulated amortization
 and reserves of $16 in 2001 and $16 in 2000                                    3,558               3,157
-------------------------------------------------------------------   -----------------   -----------------
Total assets                                                                $ 122,562           $ 115,880
===================================================================   =================   =================
</TABLE>

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

                                       F-4
<PAGE>

SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)

<TABLE>
<CAPTION>
As of April 30,                                                               2001              2000
--------------------------------------------------------------------  -----------------  -----------------
<S>                                                                          <C>                <C>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
 Current portion of long-term debt                                           $  5,597           $  5,206
 Accounts payable                                                               9,078              8,196
 Other current liabilities                                                      9,626             10,209
 Income taxes payable                                                           1,870              2,530
--------------------------------------------------------------------  -----------------  -----------------
 Total current liabilities                                                     26,171             26,141
--------------------------------------------------------------------  -----------------  -----------------

Long-term debt, net of current portion                                         24,085             21,198

Deferred gains and revenues                                                     8,307              8,269

Pension liability                                                               9,482              9,637

Stockholders' investment
 Preferred stock, authorized 1,000,000 shares,
  $5 par value; no shares issued and outstanding                                    -                  -
 Common stock, authorized 50,000,000 shares at $.01
  par value; issued and outstanding 27,744,799 shares in 2001
  and 28,067,539 shares in 2000                                                   291                288
 Additional paid-in capital                                                   279,846            278,408
 Accumulated deficit                                                         (217,046)          (219,769)
 Treasury stock, 1,363,800 shares at cost at April 30, 2001
  and 706,700 shares at April 30, 2000                                         (3,189)            (1,948)
 Accumulated other comprehensive income                                        (5,385)            (6,344)
--------------------------------------------------------------------  -----------------  -----------------
 Total stockholders' investment                                                54,517             50,635
--------------------------------------------------------------------  -----------------  -----------------
Total liabilities and stockholders' investment                               $122,562           $115,880
====================================================================  =================  =================
</TABLE>

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

                                       F-5
<PAGE>

 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
 Consolidated Statements of Operations and Comprehensive Income
 (In thousands, except per share data)

<TABLE>
<CAPTION>
 For the Years Ended April 30,                                          2001            2000            1999
 ----------------------------------------------------------- ---------------- --------------- ---------------
 <S>                                                               <C>              <C>             <C>
 Revenues
   Restaurant sales                                                $ 236,665        $ 230,869       $ 218,561
   Franchise revenues                                                  8,676            8,625           7,765
 ----------------------------------------------------------- ---------------- ---------------- ---------------
   Total revenues                                                    245,341          239,494         226,326
 ----------------------------------------------------------- ---------------- ---------------- ---------------
 Costs and Expenses
   Cost of sales                                                      83,322           84,599          80,695
   Labor and related costs                                            67,107           63,081          59,179
   Other operating expenses (asset write downs of $453                56,301           50,847          47,889
         for 2001, $800 for 2000 and $609 for 1999),
   Depreciation and amortization                                       9,246            8,628           9,927
   Loss on sale and leaseback and restructuring charges                    -           12,087               -
   General and administrative expenses                                22,293           20,346          16,874
 ----------------------------------------------------------- ---------------- ---------------- ---------------
   Total operating costs and expenses                                238,269          239,588         214,564
 ----------------------------------------------------------- ---------------- ---------------- ---------------
   Interest expense                                                    3,844            3,631           3,284
   Investment income, net                                             (1,560)          (1,423)           (724)
   Other income                                                         (347)          (1,411)              -
 ----------------------------------------------------------- ---------------- ---------------- ---------------
   Total costs and expenses                                          240,206          240,385         217,124
 ----------------------------------------------------------- ---------------- ---------------- ---------------
 Income (loss) before income taxes                                     5,135             (891)          9,202
 Provision (benefit) for income taxes                                  2,412           (3,313)          1,810
 ----------------------------------------------------------- ---------------- ---------------- ---------------
 Net income                                                         $  2,723         $  2,422        $  7,392
 =========================================================== ================ ================ ===============
 Basic and diluted earnings per share                               $   0.10         $   0.08        $   0.26
 =========================================================== ================ ================ ===============
 Weighted average common shares outstanding:
   Basic                                                              27,777           28,559          28,815
   Diluted                                                            27,954           28,877          28,878
 =========================================================== ================ ================ ===============
 Comprehensive Income:
   Net Income                                                       $  2,723         $  2,422        $  7,392
   Foreign currency translation adjustments (no tax effect)              959           (2,625)            579
 ----------------------------------------------------------- ---------------- ---------------- ---------------
 Total comprehensive income (loss)                                  $  3,682        $    (203)       $  7,971
 =========================================================== ================ ================ ===============
</TABLE>

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

                                      F-6
<PAGE>

SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Investment
(In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                           Accumu-
                                                                                                         lated Other
                                         Common                  Additional       Accumu-                  Compre-         Total
                                         Shares       Common       Paid-In         lated      Treasury     hensive     Stockholders'
                                       Outstanding     Stock       Capital        Deficit      Stock       Income       Investment
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>            <C>        <C>              <C>         <C>        <C>           <C>
Balance at April 30, 1998                 28,840,908       $288       $277,353     $(229,583)    $    -     $  (4,298)    $ 43,760
 Restricted stock repurchased                (37,080)                     (103)                                               (103)
 Restricted stock canceled                    (6,000)                                                                            -
 Net income                                                                            7,392                                 7,392
 Amortization of restricted stock                                        1,115                                               1,115
 Foreign currency translation
 adjustment                                                                                                       579          579
------------------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 1999                 28,797,828        288        278,365      (222,191)         -        (3,719)      52,743
 Treasury stock purchased                   (706,700)                                            (1,948)                    (1,948)
 Restricted stock repurchased                (24,422)                      (50)                                                (50)
 Stock options exercised                         833                         2                                                   2
 Net income                                                                            2,422                                 2,422
 Stock option compensation                                                  91                                                  91
 Foreign currency translation
 adjustment                                                                                                    (2,625)      (2,625)
------------------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 2000                 28,067,539        288        278,408      (219,769)    (1,948)       (6,344)      50,635
 Treasury stock purchased                   (657,100)                                            (1,241)                    (1,241)
 Restricted stock                            332,013          3            352                                                 355
 Stock warrants                                                          1,020                                               1,020
 Stock options exercised                      10,000                         5                                                   5
 Other                                        (7,653)                                                                            -
 Net income                                                                            2,723                                 2,723
 Stock option compensation                                                  61                                                  61
 Foreign currency translation
 adjustment                                                                                                       959          959
------------------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 2001                 27,744,799      $ 291       $279,846    $ (217,046)   $(3,189)    $  (5,385)    $ 54,517
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-7
<PAGE>

SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)

<TABLE>
<CAPTION>
For the Years Ended April 30,                                         2001             2000              1999
---------------------------------------------------------------- ---------------- ---------------- -----------------
<S>                                                                     <C>              <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                              $  2,723         $  2,422          $  7,392
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                                           9,246            8,628             9,927
   Deferred income tax provision (benefit)                                    46           (6,294)            3,377
   Provision for bad debts                                                    62             (137)              446
   Sale - leaseback and restructuring charge                                   -           12,087                 -
   Net gain on sale of assets                                               (347)               -                 -
   Asset write down                                                          453              800               609
   Other                                                                    (108)             508               385
Changes in operating assets and liabilities:
   Receivables                                                               262             (410)           (1,394)
   Inventories                                                               (16)            (304)              (13)
   Prepaid expenses and other current assets                              (1,030)           3,285            (5,410)
   Accounts payable                                                         (558)             785               139
   Accrued liabilities                                                      (775)          (2,705)            3,415
   Income taxes payable                                                     (371)           1,149            (1,703)
Changes due to reorganization activities:
  Payments of reorganization costs                                             -             (779)           (2,016)
---------------------------------------------------------------- ---------------- ---------------- -----------------
Net cash provided by operating activities                                  9,587           19,035            15,154
---------------------------------------------------------------- ---------------- ---------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Additions to property and equipment                                   (19,376)         (10,983)           (7,684)
   Acquisition of Pat & Oscar's, net of cash acquired                    (16,481)               -                 -
   Proceeds from sale of assets                                            6,487           26,781             1,754
   Other assets                                                                8             (856)           (1,137)
---------------------------------------------------------------- ---------------- ---------------- -----------------
Net cash provided by (used in) investing activities                      (29,362)          14,942            (7,067)
---------------------------------------------------------------- ---------------- ---------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Long-term borrowings                                                    9,395                -                 -
   Reduction of long-term debt                                            (8,491)          (2,922)           (8,580)
   Payment of allowed claims pursuant to
     the reorganization plan                                                   -           (4,047)           (6,000)
   Repurchase of common stock                                             (1,241)          (1,948)                -
   Sale of restricted shares                                                 355                -                 -
   Other, net                                                              1,597              730              (103)
---------------------------------------------------------------- ---------------- ---------------- -----------------
   Net cash provided by (used in) financing activities                     1,615           (8,187)          (14,683)
---------------------------------------------------------------- ---------------- ---------------- -----------------
   Effect of exchange rate changes on cash, cash
   equivalents and restricted cash                                        (2,780)          (1,692)              120
---------------------------------------------------------------- ---------------- ---------------- -----------------
   Net increase (decrease) in cash and cash equivalents                  (20,940)          24,098            (6,476)
---------------------------------------------------------------- ---------------- ---------------- -----------------
   Cash and cash equivalents and restricted cash
   at beginning of year                                                   38,789           14,691            21,167
---------------------------------------------------------------- ---------------- ---------------- -----------------
   Cash and cash equivalents and restricted cash                        $ 17,849         $ 38,789          $ 14,691
   at end of year
Supplemental Cash Flow Disclosures
   Cash paid during the year for:
   Interest                                                             $  3,684         $  3,635          $  3,290
   Income taxes                                                         $  2,760         $  1,720          $     72
</TABLE>

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

                                      F-8
<PAGE>

                  SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Summary of Significant Accounting Policies
--------------------------------------------------------------------------------

Line of Business: Sizzler International, Inc. and subsidiaries ("Sizzler" or the
"Company") is principally engaged in the operation, development and franchising
of the Sizzler(R) family steak house concept, the development and operation of
the Pat & Oscar's(SM) concept, and the operation of Kentucky Fried Chicken
("KFC(R)") franchises in Australia.

As discussed in Note 2 - Bankruptcy Reorganization, the Company operated as a
debtor-in-possession under the provisions of Chapter 11 of the federal
bankruptcy laws from June 2, 1996 to September 23, 1997, when the reorganization
plans became effective.

Principles of Consolidation: The consolidated financial statements include the
accounts of Sizzler International, Inc. and all majority-owned subsidiaries.
Intercompany accounts and transactions have been eliminated.

Reclassification: Certain financial statements, notes and supplementary data for
the prior years have been reclassified to conform to the 2001 presentation.

Accounting Period: The Company utilizes a fifty-two, fifty-three week fiscal
year ending on the Sunday nearest to April 30. Fiscal year 2001, 2000 and 1999
were fifty-two week years ending on April 29, 2001, April 30, 2000, and May 2,
1999, respectively. For clarity of presentation, the Company has described all
periods presented as if the year ended April 30.

Use of Estimates in Preparation of Financial Statements: The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Franchise Operations: The Company recognizes initial franchise fees as income
when the franchised restaurant commences operation, at which time the Company
has fulfilled its obligations relating to such fees, which include assistance
with planning and construction of the restaurant and initial management
training. Royalties that are based upon a percentage of sales are recognized as
income when earned. On a limited basis, franchisees have also entered into
leases of restaurant properties leased or owned by the Company. Royalty
revenues, franchise fees and rent payments from franchisees are included in
"Franchise Revenues" in the Consolidated Statements of Operations and
Comprehensive Income.

Marketing Costs: Marketing costs are reported in Other Operating Expenses and
include costs of advertising, marketing and promotional programs. Revenues are
reported net of promotional discounts.

Stock-Based Compensation: In accordance with SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company uses the intrinsic value-based method of
measuring stock-based compensation cost. This method measures compensation
cost as the excess, if any, of the quoted market price of the Company's capital
stock at the grant date over the amount the employee must pay for the stock. The
Company's policy generally is to grant stock options at fair market value at the
date of grant.

Earnings per Share: Basic earnings per share are computed as net income divided
by the weighted average number of common shares outstanding for the period.
Diluted earnings per share includes the dilutive effects of options and warrants
using the treasury stock method.

                                       F-9
<PAGE>

Cash and Cash Equivalents: At April 30, 2001 and 2000 cash and cash equivalents
consists of cash and short-term investments, carried at cost, with an original
maturity of less than ninety days.

Fair Value of Financial Instruments: Carrying amounts of certain of the
Company's financial instruments, including cash and equivalents, accrued
liabilities, approximates fair value because of their short maturities.

Restricted Cash: The Company maintains certain cash account balances that are
restricted. The restrictions are primarily the result of covenants placed upon
the credit facility with Westpac Banking Corporation until certain debt
repayments are made. In addition to the restricted cash balances in connection
with the credit facility with Westpac Banking Corporation, the Company has
restricted cash balances in the amount of $1.9 million and $1.2 million as of
April 30, 2001 and 2000 respectively, which are restricted for use in paying
employee benefits.

Inventories: Inventories are valued at the lower of cost (first-in, first-out
method) or market, and primarily consist of food products and restaurant
supplies.

Property and Equipment: Property and equipment are stated at cost, which
includes interest capitalized during construction and costs relating to the
selection of sites for new restaurant locations, except for assets that have
been impaired, for which the carrying amount is reduced to the estimated fair
value.

Maintenance and repairs are charged to expense as incurred. Replacements and
betterments that extend the life on an asset are capitalized. The cost and
accumulated depreciation applicable to assets sold or retired are removed from
the related accounts and the gain or loss on disposition is recognized in other
income or loss.

The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset or a
group of assets may not be recoverable. The Company considers a history of
operating losses 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 that are largely independent of the cash flows of other
groups of assets. The Company deems an asset to be impaired if a forecast of
undiscounted projected future operating cash flows directly related to the
asset, including disposal value, if any, is less than its carrying amount. If an
asset is determined to be impaired, the loss is measured as the amount by which
the carrying amount of the asset exceeds fair value. The Company generally
measures fair value by discounting projected future cash flows. Considerable
management judgment is necessary to estimate discounted future cash flows.
Accordingly, actual results could vary from such estimates.

Depreciation and Amortization: Depreciation and amortization are calculated over
the estimated useful lives of the assets using the straight-line method.
Estimated useful lives range from 10 to 30 years for buildings and 2 to 8 years
for equipment. Leasehold improvements are amortized primarily over the remaining
lives of the leases, generally 15 to 20 years.

Intangible Assets: Intangible assets are amortized on a straight-line basis over
appropriate periods ranging from 12 to 22 years. The Company continually
evaluates the recoverability of these intangible assets by assessing whether the
recorded value of the intangible assets will be recovered through future
expected operating results. The methodology used to assess the recoverability of
intangible and other long-lived assets is to determine their expected net
realizable value based upon the historical trend and expected future operating
cash flows.

Cash Surrender Value: The Company has several life insurance policies covering
certain employees with an aggregate cash surrender value of $24.5 million. The
Company has borrowings against the cash surrender value totaling $24.4 million
as of April 30, 2001. The net amount is recorded in other assets of the
consolidated balance sheets.

                                      F-10
<PAGE>

Other Current Liabilities: Other current liabilities include amounts accrued
primarily for compensation and benefits, insurance, advertising, legal fees,
rent and taxes and other incidental expenses.

Translation of Foreign Currencies: The consolidated financial statements of the
Company's foreign operations are translated in accordance with the SFAS No. 52
"Foreign Currency Translation." As a result, translation adjustments are
included in stockholders' investment as the primary component of accumulated
other comprehensive income. Transaction gains and losses are included in income.
The functional currency used in the Company's foreign operations is primarily
the Australian dollar.

Income Taxes: Income taxes are accounted for using the asset and liability
method pursuant to SFAS No. 109, "Accounting for Income Taxes." Deferred taxes
are recognized for the tax consequences of temporary differences by applying
enacted statutory tax rates applicable to future years for the differences
between the financial statement carrying amounts and the tax bases of existing
assets and liabilities. The effect on deferred taxes of a change in tax rates is
recognized in income in the period of enactment.

The Company reviews its deferred tax assets on an annual basis to determine the
realizability of the deferred tax assets based on the weight of available
information. If realization of the deferred asset is not determined to be more
likely than not a valuation allowance is recorded.

New Accounting Standards: In June 2001, the Financial Accounting Standard Boards
("FASB") issued SFAS No. 141, "Business Combinations", and SFAS No. 142,
"Goodwill and Other Intangible Assets". SFAS No. 141 requires all business
combinations initiated after June 30, 2001, to be accounted for using the
purchase method. With the adoption of SFAS No. 142, goodwill is no longer
subject to amortization over its estimated useful life and will be subject to at
least an annual assessment for impairment by applying a fair-value based test.
The Company has early adopted SFAS No. 142 beginning with the first quarter of
fiscal 2002. The effect of the adoption of SFAS No. 142 is that the Company is
no longer amortizing goodwill and will at least annually assess goodwill for
impairment by applying a fair-value based test. The Company will adopt SFAS No.
141 beginning in the first quarter of fiscal 2003.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). This statement established
accounting and reporting standards for derivative financial instruments and for
hedging activities. It requires that entities recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in fair value of the derivative (i.e.,
gains and losses) depends on the intended use of the derivative and the
resulting designation. In June 2000, the FASB issued Statement of Financial
Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an amendment of FASB Statement No. 133" ("FAS
138"), which amends certain provisions of SFAS 133 to clarify areas causing
difficulties in implementation, including expanding the normal purchase and sale
exemption for supply contracts. The Company adopted SFAS 133 and the
corresponding amendments under SFAS 138 at the beginning of fiscal year 2002 in
accordance with Statement of Financial Accounting Standards No. 137, "Accounting
for Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133." SFAS 133, as amended by SFAS 138, is not
expected to have a material impact on the Company's consolidated results of
operations, financial position or cash flows.

                                      F-11
<PAGE>

Note 2 - Bankruptcy Reorganization
--------------------------------------------------------------------------------

Bankruptcy Proceedings

On June 2, 1996, in response to continued domestic operating losses, the Company
enacted a comprehensive restructuring strategy designed to return the U.S.
operations to profitability. This strategy included the closure of
under-performing restaurants in the U.S. and filing for bankruptcy protection.
The Company and four subsidiaries (Sizzler Restaurants International, Inc.
("SRI"), Buffalo Ranch Steakhouses, Inc. ("BRSH"), Tenly Enterprises, Inc.
("Tenly"), and Collins Properties, Inc. ("CPI")) became debtors-in-possession
subject to the supervision of the U.S. Bankruptcy Court. The debtor subsidiaries
collectively owned and operated substantially all of the Company's U.S.
restaurant businesses and assets. The Company's international division
businesses and assets were owned and operated by separate subsidiaries and were
not subject to the U.S. Chapter 11 bankruptcy provisions.

On June 2, 1997, the Bankruptcy Court entered an order confirming the Chapter 11
plans of reorganization of the Company, SRI and CPI. The plans of reorganization
for Tenly and BRSH were confirmed on February 24, 1997. On September 23, 1997,
the reorganization plans became effective and the Company and its subsidiaries
emerged from bankruptcy.

The Company's plan of reorganization provided for full payment of allowed
creditor claims, including interest, from the Company's international
operations. In September 1997, the Company obtained financing sufficient to pay
its allowed creditor claims from Westpac Banking Corporation. SRI's plan
provided for full payment of allowed unsecured creditors' claims through the
formation of a creditor trust. Installment payments to the trust were evidenced
by a four-year note with interest at the floating annual rate of prime plus one
percent through the first year, prime plus two percent for the next two years,
and prime plus three percent for the fourth year. SRI collateralized the note
with a pledge of the stock of its subsidiaries and with substantially all of the
domestic division's operating assets. All unsecured claims, except for four
claims totaling approximately $879,000, have been paid in full, and a trust
established for the benefit of creditors maintains sufficient cash to pay these
remaining 4 claims. Accordingly, on July 11, 2000 the Bankruptcy Court entered
an order directing the creditor trust to release the liens on the stock of the
Company's U.S. subsidiaries and their operating assets.

Note 3 - E. coli Incident
-------------------------

In July 2000, the Company was informed of an incident of E. coli (food
contamination) at two of its franchised Sizzler(R) restaurants in Milwaukee,
Wisconsin. The Company worked closely with Milwaukee health officials in the
investigation of the origin and cause of the E. coli incident. It has been
determined that the E. coli bacteria originated in meat supplied by Excel
Corporation, one of the Company's suppliers. The two Milwaukee, Wisconsin
Sizzler(R) restaurants closed shortly after the incident and will not reopen.

Several years ago, the Company adopted a very stringent set of procedures to
protect and assure the quality of the food served to guests. In light of the
recent incident, the Company completed the re-certification and retraining of
personnel at both Company and franchise locations to ensure strict compliance
with safety procedures.

To date, there have been thirteen lawsuits filed (See Item 3: Legal
Proceedings), nine of which name one or more subsidiaries of the Company as a
defendant.

Both the Company and its franchisees have insurance policies to cover this type
of event. At this time, the Company believes it has adequate insurance coverage
to address any liability or business interruption costs that the Company is
likely to experience. The franchisee involved in the E. coli incident has ceased
operations. At present, the Company is unable to determine if there will be a
more material or prolonged impact on its financial position or results of
operations as a result of the incident.

                                      F-12
<PAGE>

Expenses incurred to date that are related to investigating and minimizing the
impact of the E. coli incident are reflected in the Company's Statement of
Operations. The Company filed a preliminary insurance claim with its carrier
during fiscal year 2001 and is evaluating its alternatives related to this
claim.

Note 4 - Income Taxes
---------------------

The Company files a consolidated United States income tax return, which includes
all domestic subsidiaries in which it owns 80 percent or more of the voting
stock and 80 percent or more of the value of the outstanding stock. Foreign
withholding taxes have not been provided on the unremitted earnings totaling
$6.7 million of the Company's foreign operations at April 30, 2001. It is the
Company's intention to reinvest such earnings in its foreign operations. The
Company files a separate return in Australia including the results of its
Australian entities.

The components of the provision (benefit) for income taxes attributable to
income (loss) from operations consists of the following (in thousands):

                                               For the years ended April 30,
                                               -----------------------------
                                                 2001        2000       1999
                                                 ----        ----       ----
       Current
          Federal                             $     -      $   236     $    -
          State                                     -           88          -
          Foreign                               2,202        3,623      1,435
                                              -------      -------     ------
                                                2,202        3,947      1,435
                                              -------      -------     ------
       Deferred
          Federal                               1,318         (255)         -
          State                                   330          (95)         -
          Foreign                                 200         (745)       375
                                              -------      -------     ------
                                                1,848       (1,095)       375
                                              -------      -------     ------
       Change in valuation allowance           (1,638)      (6,165)         -
                                              -------      -------     ------
       Provision (benefit) for income taxes   $ 2,412      $(3,313)    $1,810
                                              =======      =======     ======


A reconciliation of the statutory United States Federal income tax rate to the
Company's consolidated effective income tax rate follows:

                                                  For the years ended April 30,
                                                  ----------------------------
                                                  2001        2000       1999
                                                  ----        ----       ----
       Federal statutory tax rate                35.0%       (35.0)%     35.0%
       State and local income taxes, net of
          federal benefit                         5.7         (5.8)       6.1
       Australian taxes, net of federal
          benefit                                30.8        205.0       12.8
       Permanent differences                      7.3         37.9        4.0
       Change in valuation allowance            (31.9)      (691.9)     (38.2)
       Change in effective tax rate                 -        118.0          -
                                                -----       ------      -----
          Effective tax rate                     46.9%      (371.8)%     19.7%
                                                =====       ======      =====

                                      F-13
<PAGE>

U.S. Pre-tax income (loss) for domestic and foreign operations is as follows (in
thousands):

                                        For the years ended April 30,
                                        -----------------------------
                                     2001            2000             1999
                                     ----            ----             ----

           Domestic             $   1,582         $  (405)        $  3,741
           Foreign                  3,553            (486)           5,461
                                ---------         -------         --------
                                $   5,135         $  (891)        $  9,202
                                =========         =======         ========

The tax effects of temporary differences and carryforwards that give rise to
significant amounts of deferred tax assets and deferred liabilities are as
follows (in thousands):


                                                      As of April 30,
                                                      ---------------
                                                      2001          2000
                                                 -------------------------
          Current tax assets:
             Operating reserves and accruals       $  2,930       $  2,129
             Creditor trust liability                   394            415
                                                 ----------       --------
             Gross current tax assets                 3,324          2,544
                                                 ----------       --------
             Current tax assets                    $  3,324       $  2,544
                                                 ==========       ========

          Non-current tax assets:
             Other                                 $ (3,237)      $ (2,600)
             Property and equipment                   1,866          2,294
             Other credits                            4,967          4,925
             Australia, net                           1,030          1,230
             Deferred gain                            1,184          3,090

             Foreign tax credits                     10,920         10,920
             Net operating loss                      45,729         45,218
                                                 ----------       --------
             Gross deferred income taxes             62,459         65,077
             Valuation allowance                    (60,034)       (61,672)
                                                 ----------       --------
             Non-current tax assets                $  2,425       $  3,405
                                                 ==========       ========

Under SFAS No. 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods. A
valuation allowance is recorded if, based on the weight of available evidence,
it is more likely than not, that some portion or all of the deferred asset will
not be realized. Realization of the net deferred tax asset is dependent on
generating sufficient taxable income in the periods in which temporary
differences will reverse. The amount of the net deferred tax asset that is
considered realizable, however, could be adjusted in the near term if estimates
of future taxable income are adjusted.

                                      F-14
<PAGE>

The following is a summary of the net operating loss carry-forward and the
credit carry-forward (in thousands) and related expiration dates at April 30,
2001.

                                                     Gross
                                                     Amount         Expiration
                                                     ------         ----------
       Federal net operating loss                  $ 125,587       2012 - 2020
       California net operating loss               $  20,066       2002 - 2005
       Foreign tax credit                          $  10,920       2001 - 2003
       Minimum tax credit                          $   2,127        Indefinite
       General business credit                     $   2,840       2005 - 2010

Note 5 - Leases
------------------------------------------------------------------------------

The Company is a party to a number of noncancelable lease agreements involving
land, buildings and equipment. The leases are generally for terms ranging from 5
to 20 years and expire on varying dates through 2017. The Company has the right
to extend many of these leases. Certain leases require contingent rent,
determined as a percentage of sales, when annual sales exceed specified levels.
The Company is also a lessor and a sublessor of land, buildings and equipment
including certain properties, which are leased to franchisees, which are not
significant in amount.

Following is a schedule by year of future minimum lease commitments and sublease
rental income under all noncancelable leases included in other liabilities (in
thousands). Future minimum lease payments include amounts resulting from sale
and leaseback transactions that occurred during fiscal year 2000.

<TABLE>
<CAPTION>
                                                                            Commitments               Sublease
                                                                            -----------               --------
                                                                      Capital       Operating          Rental
 Years ended April 30,                                                 Leases         Leases           Income
 ---------------------                                                 ------         ------           ------
<S>                                                                   <C>         <C>               <C>
 2002                                                                  $  44       $ 14,500           $  941
 2003                                                                     50         13,523              730
 2004                                                                     56         12,672              707
 2005                                                                     63         11,334              584
 2006                                                                     71          9,272              494
 Thereafter                                                              212         28,380              437
                                                                   ---------       --------           ------
 Total minimum lease
   commitments/receivables                                               496       $ 89,681           $3,893
                                                                   =========       ========           ======

 Less amount representing interest                                      (257)
                                                                   ---------
 Present value of minimum lease payments                                 239
 Less current portion of capital lease obligations                       (44)
                                                                   ---------
 Long-term capital lease obligations                                   $ 195
                                                                   =========
</TABLE>

                                      F-15
<PAGE>

Rent expense consists of (in thousands):

                                              Years ended April 30,
                                              ----------------------
                                       2001            2000            1999
                                       ----            ----            ----
        Minimum rentals             $ 13,120        $ 11,249         $ 8,564
        Contingent rentals               559             547             475
        Less sublease rentals           (905)         (1,053)         (1,018)
                                   ------------------------------------------
        Net rent expense            $ 12,774        $ 10,743         $ 8,021
                                   ==========================================

Note 6 - Debt
--------------------------------------------------------------------------------

A summary of debt outstanding as of April 30, 2001 and 2000 is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                          2001            2000
                                                                       -------------------------
<S>                                                                    <C>            <C>
Non-collateralized borrowings, at variable interest rates,
   due through 2012                                                      $1,831          $1,874
Collateralized borrowings, at variable interest rates,
   due through 2004                                                       2,196               -
Heller collateralized borrowings, with an interest rates of 9.65%
   due through 2008                                                       5,000               -
Mortgage notes payable, with an interest rate of 10.0%
   collateralized by land and building with an original
   cost of approximately $600 due through 2039                              562             563
Westpac note, with a variable interest rate, due
   through 2003                                                          19,597          23,356
Capital lease obligations                                                   496             611
                                                                     ---------------------------
                                                                         29,682          26,404
Less - current portion                                                   (5,597)         (5,206)
                                                                     ---------------------------
                 Long-term debt                                         $24,085         $21,198
                                                                     ===========================
</TABLE>

Payments of $5.6 million on long-term debt, including capital lease obligations
is due in fiscal year 2002, $5.5 million in 2003, $12.6 million in 2004, $0.5
million in 2005, $0.4 million in 2006 and $5.1 million thereafter.

In August 2000, the Company completed the refinancing of its existing credit
facility with Westpac Banking Corporation. In connection with the refinancing,
the Company increased its existing Westpac credit facility by $8.0 million
Australian dollars to $46.0 million Australian dollars. The credit facility is
collateralized by the Australian division's assets and intellectual property.
The loan provides for a three-year term at an interest rate equal to the
Australian interbank borrowing rate, plus a 2.25 percent margin. The Westpac
loan is subject to a number of financial covenants and other restrictions. The
Company is in compliance with all covenants and restrictions. As of April 30,
2001, the Company's unpaid principal balance on the Westpac facility was
approximately $38.5 million Australian dollars or US $19.6 million.

On December 20, 2000 the Company entered into a $10.0 million, seven year term
loan with Heller Financial Services that is amortized based on 15 years, with an
interest rate of 9.65 percent. Under the terms of the agreement, the Company has
borrowed $5.0 million to date and has the right to borrow the remaining balance
under certain conditions, on or before November 15, 2001. Portions of the
Company's real estate and personal property in the U.S. are pledged as
collateral for the loan. As of April 30, 2001, the Company's unpaid principal
balance on the Heller facility was approximately $5.0 million.

                                      F-16
<PAGE>

Note 7 - Employee Benefit Plans
--------------------------------------------------------------------------------

The Company maintains a supplemental executive retirement plan that covers 10
former employees and 1 active employee. The Company discontinued adding new
participants to the plan in fiscal 1992. The components of net cost of the
pension plan for the years ended April 30, 2001, 2000, and 1999 determined under
APB Opinion No. 12 as amended by SFAS No. 106 "Employer's Accounting for Post
Retirement Benefits Other than Pensions" are as follows:

                                                   Fiscal Year Ended
                                          ---------------------------------
                                           April 30,   April 30,  April 30,
                                              2001       2000       1999
                                          ----------   ---------  ---------
      (in thousands)
      Pension Plan:
      Service cost                            $   13    $    5     $    51
      Interest cost                              916       885         962
      Expected return on plan assets               -         -           -
      Amortization of prior service cost           -         -           -
      Recognized net actuarial loss                -        86          81
                                              ------    ------     -------
      Net periodic benefit cost               $  929    $  976     $ 1,094
                                              ======    ======     =======

The following table sets forth the funded status and amounts recognized in the
Company's Consolidated Balance Sheets for the plan:

                                                       Fiscal Year Ended
                                                     ---------------------
                                                     April 30,   April 30,
                                                       2001        2000
                                                     ---------   ---------
     (in thousands)
     Change in Benefit Obligation
     Benefit obligation at beginning of year         $ 9,637      $ 9,938
     Service cost                                         13            5
     Interest cost                                       916          885
     Actuarial gain (loss)                                98           (9)
     Benefits paid                                    (1,182)      (1,182)
                                                     -------      -------
     Benefit obligation at end of year               $ 9,482      $ 9,637
                                                     =======      =======
     Change in Plan Assets
     Fair value of plan assets at beginning of year        -            -
     Actual return on plan assets                          -            -
     Employer contributions                                -            -
     Benefits paid                                         -            -
                                                     -------      -------
     Net periodic benefit cost                       $     -      $     -
                                                     =======      =======
     Reconciliation of Funded Status
     Funded Status                                         -            -
     Unrecognized actuarial (gain)/loss                    -            -
     Unrecognized transition amount                        -            -
     Unrecognized prior service cost                       -            -
                                                     -------      -------
     Net amount recognized                           $     -      $     -
                                                     =======      =======

                                      F-17
<PAGE>

                                                        Fiscal Year Ended
                                                   ----------------------------
                                                   April 30,          April 30,
                                                     2001               2000
                                                   ---------          ---------
     Balance Sheets Consist of:
     Accrued benefit liability                     $  9,482         $  9,637
     Accumulated other comprehensive income               -                -
                                                   --------         --------
     Net amount recognized                         $  9,482         $  9,637
                                                   ========         ========

Significant assumptions used in determining the net cost and funded status
information for all the periods shown above are as follows:

                                            2001    2000     1999
                                            ----    ----     ----
             Discount rate                  9.5%    9.5%     9.5%
             Rates of salary progression    5.0%    5.0%     5.0%

In addition, the Company has a contributory employee profit sharing, savings and
retirement plan whereby eligible employees can elect to contribute from 1
percent to 15 percent of their salary to the plan. Under the plan the Company
can elect to make matching contributions, with certain limitations. Amounts
charged to income under these plans were, approximately, $50,000, $130,000 and
$78,000 for the years ended April 30, 2001, 2000 and 1999, respectively.


Note 8 - Commitments and Contingencies
--------------------------------------------------------------------------------

The Company is in various stages of completing certain capital projects, none of
which is material.

The Company is a party to certain litigation arising in the ordinary course of
business which, in the opinion of management, should not have a material adverse
effect upon either the Company's consolidated financial position, results of
operations or its cash flows.

Two subsidiaries of the Company are named defendants in nine of thirteen
lawsuits arising out of the E. coli incident at two franchised locations in
Milwaukee, Wisconsin in July 2000. The Company's meat supplier, Excel
Corporation and the Company's franchisee, E&B Management Company and its
principals are named defendants in some or all of the cases. The plaintiffs seek
monetary damages in amounts to be determined for sickness or injuries arising
out of the consumption of food allegedly contaminated with E. coli.

As of the date of this report, and with exception of the items noted above,
management believes that there are no legal proceedings pending, the adverse
resolution of which may be expected to have a material adverse financial impact
on either the Company's consolidated financial position, results of operations
or cash flows.


Note 9 - Stock Repurchase
--------------------------------------------------------------------------------

On May 10, 2001, the Board of Directors authorized a plan to repurchase up to an
additional 500,000 shares of Sizzler common stock. During fiscal year 2001, the
Company repurchased 657,100 shares for a total of $1.2 million.

                                      F-18
<PAGE>

Note 10 - Stock Options and Restricted Stock and Shareholder Rights Plan
--------------------------------------------------------------------------------

The Company has an Employee Stock Incentive Plan for certain officers and key
employees, and a stock option plan for non-employee directors. The maximum
number of shares that may be issued under these plans is 2,800,000 and 400,000
shares, respectively. Grants of options to employees and the periods during
which such options can be exercised are at the discretion of the Board of
Directors.

The Company has adopted SFAS No. 123, "Accounting for Stock Based Compensation."
As allowed by SFAS No. 123, the Company has elected to continue to measure
compensation cost under Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and comply with the pro forma disclosure
requirements of the standard. The fair value of option grants is estimated on
the date of grant utilizing the Black-Scholes option-pricing model with the
following assumptions:

                                                For the year ended April 30,
                                                ----------------------------
                                                    2001       2000     1999
                                                    ----       ----     ----
               Expected Life (years)                   5          5        5
               Volatility (percent)                   64         64       61
               Risk-free Interest Rate (percent)    6.16       5.55     5.30
               Dividend Yield (percent)                0          0        0

Had compensation cost for these plans been determined consistent with SFAS No.
123, the Company's net income and earnings per share would have been reduced to
the following pro-forma amounts.

                                                    For the year ended April 30,
                                                    ----------------------------
                                                            2001    2000    1999
                                                            ----    ----    ----
  Net Income:                            As Reported      $2,723  $2,422  $7,392
                                         Pro Forma        $1,767  $1,382  $6,501
  Basic and Diluted Earnings Per Share:  As Reported      $ 0.10  $ 0.08  $ 0.26
                                         Pro Forma        $ 0.06  $ 0.05  $ 0.23

Stock Options:
--------------

The outstanding options become exercisable in varying amounts through 2011. A
summary of stock option transactions follow:

<TABLE>
<CAPTION>
                                                            For The Years Ended April 30
                                 ---------------------------------------------------------------------------------------------
                                         2001                             2000                                1999
                                 ------------------------         ------------------------         ---------------------------
                                               Average                         Average                             Average
                                 Options    Exercise Price        Options    Exercise Price         Options      Exercise Price
                                 -------    --------------        -------    --------------         -------      --------------
<S>                              <C>        <C>                   <C>        <C>                    <C>          <C>
Options outstanding
  beginning of the year          2,426,944         $  2.35        2,331,154         $  2.43           229,523           $  3.92
Options granted                    544,032            1.98          284,240            2.33         2,182,752              2.31
Options exercised                  (10,000)           0.46             (833)           2.69                 -                 -
Options canceled                  (469,581)           2.72         (187,617)           3.39           (81,121)             3.27
                                 ---------                        ---------                         ---------           -------
Options outstanding
end of year                      2,491,395         $  2.20        2,426,944         $  2.35         2,331,154           $  2.43
                                 =========         =======        =========         =======         =========           =======
Options exercisable at
end of year                      1,126,880         $  2.22          648,889         $  2.24           217,381           $  2.89
                                 =========         =======        =========         =======         =========           =======
Weighted average fair
  value of options granted
  during the year.                                 $  1.98                          $  1.50                             $  1.35
                                                   =======                          =======                             =======
</TABLE>

                                      F-19
<PAGE>

The following table summarizes information about stock options outstanding at
April 30, 2001.

                                                Weighted Average
                 Exercise          Number         Remaining         Number
                  Prices         Outstanding    Contractual Life   Exercisable
                  ------         -----------    ----------------   -----------

              $0.00 - $ 1.25        241,216         7.6 years           158,284
              $1.26 - $ 2.50      1,333,748         7.9 years           556,415
              $2.51 - $ 5.00        893,500         6.6 years           389,250
              $5.01 - $ 7.50         20,831         3.5 years            20,831
              $7.51 - $12.50          2,100         1.6 years             2,100
                                  ---------                           ---------
                                  2,491,395                           1,126,880
                                  =========                           =========

Restricted Stock Plan:
----------------------

Stock issued under the Company's stock incentive plan is delivered subject to
various conditions relating to Company performance. There was no compensation
expense related to these shares in fiscal year 2001 or 2000, and approximately
$1.1 million in 1999. A summary of restricted stock transactions follows:

                                                For the years ended April 30,
                                               -------------------------------

  Shares Outstanding                             2001       2000        1999
  ------------------                             ----       ----        ----

  Shares restricted at beginning of the year     8,000     286,162     526,336
  Shares granted                               332,013           -           -
  Shares released                               (8,000)   (278,162)   (234,174)
  Shares canceled                                    -           -      (6,000)
                                               -------     -------     -------
  Shares restricted at end of the year         332,013       8,000     286,162
                                               =======     =======     =======

See Note 15 - Australia Management Transaction for further discussion regarding
the restricted stock sale in fiscal year 2001.

Shareholder Rights Plan
-----------------------

The rights plan provides one preferred share purchase right for each share of
common stock distributed to shareholders of record at the close of business on
January 22, 2001. The rights plan is intended to give the Board of Directors and
management sufficient time to evaluate and respond to any transaction or
proposed change in control. The plan is intended to prevent an acquirer from
gaining control of the Company without offering a fair price to all
shareholders. The threshold for triggering the plan is any party acquiring 14
percent of the outstanding stock of the company. The exercise price is $10 per
share and the rights expire in January of 2006.


Note 11- Information by Industry Segment and Geographic Area
--------------------------------------------------------------------------------

Substantially all of the Company's revenue result from the sale of menu items at
restaurants operated by the Company or generated from franchise activity. The
Company's reportable segments are based on geographic area and product type.
Sizzler Domestic consists of all USA and Latin America Sizzler(R) restaurant and
franchise operations. Sizzler International consists of all other Sizzler(R)
restaurant and franchise operations. KFC(R) consists of KFC(R) franchise
restaurants in Australia. Pat & Oscar's(SM) consists of operations of the Pat &
Oscar's(SM) restaurant and related catering functions. Corporate and other
includes any items not included in the reportable segments listed above. The
effects of all intercompany transactions are eliminated when computing revenues,
earnings before interest, taxes, and corporate overhead, and identifiable
assets.

                                      F-20
<PAGE>

Earnings before interest and taxes include segment-operating results before
investment income, interest expense, income taxes, sale - leaseback and
restructuring charge, and allocated corporate overhead. The corporate and other
component of earnings before interest, taxes, and corporate overhead represents
corporate selling, and general and administrative expenses prior to being
allocated to the operating segments.

Identifiable assets are those assets used in the operations of each segment.
Corporate and other assets include cash, investments, accounts receivable,
deferred taxes, and various other assets.

<TABLE>
<CAPTION>
                                                      For the years ended April 30,
                                                      ----------------------------
                                                       2001       2000       1999
                                                       ----       ----       ----
<S>                                                  <C>        <C>        <C>
   Revenues (in thousands):
   ------------------------
   Sizzler(R)- Domestic                              $104,732   $104,720   $101,872
   Sizzler(R)-  International                          36,073     42,255     40,176
   KFC(R)                                              83,766     92,519     84,278
   Pat & Oscar's(SM)                                   20,770          -          -
   Corporate and other                                      -          -          -
                                                     --------   --------   --------
   Total                                             $245,341   $239,494   $226,326
                                                     --------   --------   --------
   Depreciation and Amortization (in thousands):
   ---------------------------------------------
   Sizzler(R)- Domestic                              $  4,506   $  3,369   $  3,484
   Sizzler(R)-  International                             823      1,877      2,565
   KFC(R)                                               1,551      3,052      3,575
   Pat & Oscar's(SM)                                    1,087          -          -
   Corporate and other                                  1,279        330        303
                                                     --------   --------   --------
   Total                                             $  9,246   $  8,628   $  9,927
                                                     --------   --------   --------

<CAPTION>
                                                 2001         2000        1999
                                                 ----         ----        ----
<S>                                            <C>        <C>         <C>
Earnings Before Interest, Taxes and
-----------------------------------
Sale - Leaseback and Restructuring Charge
-----------------------------------------
(in thousands):
---------------
Sizzler(R)- Domestic                            $ 7,332    $  9,958    $  8,175
Sizzler(R)-  International                          596       2,375       2,161
KFC(R)                                            6,095       9,312       7,679
Pat & Oscar's(SM)                                (1,783)          -           -
Corporate and other                              (4,821)     (8,241)     (6,253)
                                                -------    --------    --------
Total Company                                     7,419      13,404      11,762

Reconciliation to Pre-tax Income:
Interest expense                                 (3,844)     (3,631)     (3,284)
Investment income, net                            1,560       1,423         724
Sale - leaseback and restructuring charge             -     (12,087)          -
                                                -------    --------    --------
Income (loss) before income taxes               $ 5,135    $   (891)   $  9,202
                                                =======    ========    ========
</TABLE>
                                      F-21
<PAGE>

                                                For the years ended April 30,
                                                -----------------------------
                                              2001           2000         1999
                                              ----           ----         ----
    Capital Expenditures (in thousands):
    ------------------------------------
    Sizzler(R)- Domestic                    $  12,293       $   7,471  $   4,501
    Sizzler(R)-  International                    717           1,163        619
    KFC(R)                                      3,020           1,729      2,453
    Pat & Oscar's(SM)                           2,726               -          -
    Corporate and other                            94             620        111
                                            ---------       ---------  ---------
    Total                                   $  18,850       $  10,983  $   7,684
                                            ---------       ---------  ---------

                                                     As of April 30,
                                                     ---------------
                                              2001           2000         1999
                                              ----           ----         ----
    Identifiable Assets (in thousands):
    -----------------------------------
    Sizzler(R)- Domestic                    $  50,153       $ 37,332   $  38,713
    Sizzler(R)-  International                  6,859          8,546       8,127
    KFC(R)                                      7,583          7,596       9,104
    Pat & Oscar's(SM)                          28,307              -           -
    Corporate and other                        29,660         62,406      58,747
                                           ----------      ---------   ---------
    Total                                   $ 122,562       $115,880   $ 114,691
                                           ----------      ---------   ---------

Note 12 - Earnings Per Share
--------------------------------------------------------------------------------

Earnings per share (EPS) has been calculated as follows:

                                                 For the years ended April 30,
                                                 -----------------------------
(In thousands, except EPS)                        2001        2000       1999
                                                  ----        ----       ----
Numerator for both basic and diluted
   EPS - Net income                              $ 2,723     $ 2,422     $ 7,392
                                                 =======     =======     =======
 Denominator for basic EPS - weighted average
  shares of common stock outstanding              27,777      28,559      28,815
 Effect of dilutive stock options                    177         318          63
                                                 -------     -------     -------
 Denominator for diluted EPS - adjusted
  weighted average shares outstanding             27,954      28,877      28,878
                                                 =======     =======     =======

      Basic and diluted earnings per share       $  0.10     $  0.08     $  0.26
                                                 =======     =======     =======

Equity instruments including: stock options, warrants and other common stock
equivalents have been excluded from the computation above because their effect
would have been anti-dilutive. When computing EPS, 3,500,179 shares, 1,063,912
shares, and 2,110,362 shares have been excluded from 2001, 2000 and 1999,
respectively.

                                      F-22
<PAGE>

Note 13- Related Party Transactions
-----------------------------------

The Company entered into an agreement for services dated May 1, 1999 with
director, Charles F. Smith. Under the agreement, Mr. Smith is to provide
consulting services from time to time on a mutually agreed upon basis regarding
corporate business, asset dispositions and financings. The agreement is
terminable by either party upon ten days` written notice. The agreement provides
for compensation to Mr. Smith of $2,000 per day for services rendered and
reimbursement of Mr. Smith's reasonable out-of-pocket expenses incurred at the
Company's request. There were no payments made to Mr. Smith under this agreement
during fiscal year 2001 and $34,000 during fiscal year 2000.

A subsidiary of the Company was a party to a consulting agreement with Barry E.
Krantz, a Director of the Company. Under the agreement, Mr. Krantz provided
marketing consulting services at an hourly rate. The agreement was terminated in
fiscal year 2000. Mr. Krantz received compensation of $103,000 and $124,000 in
fiscal year 2000 and 1999, respectively, under the consulting agreement. These
amounts were recorded in general and administrative expenses in the consolidated
statements of operations and comprehensive income.

The Company leases approximately 36,000 square feet of headquarters office
premises from Pacifica Plaza Office Building, a limited partnership
("Pacifica"). James A. Collins, his spouse and his brother-in-law are among the
partners of Pacifica, which was formed in 1979. Mr. Collins is the Company's
Chairman Emeritus and a Director. Mr. Collins, his spouse and his
brother-in-law, directly or indirectly, own a majority interest in Pacifica.
Under the four-year lease, the Company is responsible for rent payments of
$34,000 a month during the period through December 1999 (except for an initial
four months of abated rent), and $42,000 a month thereafter through October 31,
2001. The Company believes these terms were competitive at the time it entered
into the lease. The expense for rent is included in general and administrative
expenses in the statement of operations and comprehensive income.

Through FFPE, the Company leases the real property used in connection with the
operation of two Pat & Oscar's(SM) restaurants from entities owned by John
Sarkisian and members or former members of his family. The Pat & Oscar's(SM)
restaurant located in Temecula, California is leased from SRA Ventures, LLC, a
California limited liability company ("SRA Ventures"). John Sarkisian and his
spouse, parents, sister, and former brother-in-law are the partners of SRA
Ventures. Under the 126-month lease, the Company is responsible for rent
payments of approximately $26,250 per month through June 1, 2007. Rent
adjustments will occur at the end of each lease year to reflect any change in
the cost of living. The Company also has the option to extend the lease with two
additional terms of five years each. In connection with the Acquisition, the
Company has acquired the option to purchase the Temecula real property from SRA
Ventures at a purchase price equal to certain indebtedness on the property. The
option is exercisable upon the occurrence of certain conditions.

The Pat & Oscar's(SM) restaurant located in Carlsbad, California is leased from
Oscar's Carlsbad, LLC, a California limited liability company ("Oscar's
Carlsbad"). John Sarkisian and his parents and sister are the members of Oscar's
Carlsbad. Oscar's Carlsbad is managed by an entity co-owned by John Sarkisian,
which is entitled as a management fee to a subordinated 25% of participation in
the appreciation of the Carlsbad property. Under the 10-year lease, the Company
is responsible for rent payments of approximately $17,000 per month through 2007
and $19,600 per month through the end of the term. The Company also has the
option to extend the lease with two additional terms of five years each. The
base rent during any option term shall be based on fair market rental.

John Sarkisian and members of his family are indebted to the Company for
approximately $1,085,000 of post-closing purchase price adjustment relating to
the Pat & Oscar's(SM) acquisition, approximately $800,000 of which consists of
immediately available escrowed funds and the remaining $285,000 to be deducted
from future earn-out payments. These amounts are included as other current
assets in the accompanying balance sheet. For additional related party
information resulting from the acquisition of FFPE see Note 16 - Pat &
Oscar's(SM), to Consolidated Financial Statements.

                                      F-23
<PAGE>

Note 14 - Sale - Leaseback and Restructuring Charge
--------------------------------------------------------------------------------

Results for fiscal year 2000 include two items the Company believes are
non-recurring. During fiscal 2000 the Company completed the sale and leaseback
of 48 of its 67 Australian KFC(R) and Sizzler(R) restaurant properties. During
fiscal year 2000, the Company realized gross proceeds of $25.4 million in cash
from the transactions that closed during the year. In addition, in accordance
with SFAS No. 28, "Accounting for Sales with Leasebacks," the Company has
recognized a $5.5 million loss on the transaction and deferred an $8.8 million
gain. The gain is recognized over the life of the leases which average 8 years.

Also, during fiscal year 2000, the Company completed an evaluation of the
remaining financial matters related to the 1996 restructuring. As a result of
this evaluation, that included an extensive review of the numerous claims filed
during the reorganization and other related costs, the Company determined that
the original $108.9 million estimate was lower than the final expected cost by
$6.6 million. Therefore, an additional $6.6 million charge was recorded. Because
the final payment was made to the creditor trust in January 2000 the Company
does not expect any further cash outlay related to the reorganization.


Note 15 - Australian Management Transaction
--------------------------------------------------------------------------------

During fiscal year 2001, the Company implemented a stock option plan for its
management group in Australia. Under the plan, certain employees have been
granted options to purchase 3.1 million shares of Collins Food Group, at the end
of three years. Exercising the options would allow the management group to
acquire up to a 15 percent equity interest in the Company's subsidiary operating
in Australia (Collins Food Group). The options, issued at fair market value,
expire on August 20, 2003. The participants also purchased over 332,000 shares
of Sizzler International, Inc. common stock that they will be restricted from
selling for a period of up to five years. The Company expects this program to
support retention of the strong international management team that has been
responsible for successful operations for the past several years.


Note 16 - Pat & Oscar's(SM)
--------------------------------------------------------------------------------

With funds generated from operations and the Australia sale - leaseback, on
August 30, 2000, the Company acquired an 82 percent equity position in FFPE,
LLC, a Delaware limited liability company ("FFPE") then owning and operating 8
Oscar's (now named Pat & Oscar's(SM)) restaurants in San Diego, Orange County
and Phoenix areas (the "Acquisition"). The seller, FFPE Holding Company, Inc., a
Delaware corporation ("Holdings") owned, directly or indirectly, entirely by
John Sarkisian and members of his immediate family. In connection with the
Acquisition, Mr. Sarkisian, a principal of Holdings, became an executive officer
of the Company. As such, his primary responsibility is operation of the
Company's Pat & Oscar's(SM) division.

As part of the purchase price, Holdings received cash of $16.0 million and
warrants to purchase 1,250,000 shares of the Company's Common Stock at $4.00 per
share, exercisable over 5 years. In addition, Holdings is entitled to "earn-out"
cash consideration of up to $8.1 million if specified revenues, profitability,
and growth targets are met through February 2003. No earn-out payments have been
made to date.

In connection with the Acquisition, the Company entered into agreements with Mr.
Sarkisian, his sister and his parents under which they have agreed to perform
services for the Company relating to the Pat & Oscar's(SM) division. Pursuant to
a three-year employment agreement, Mr. Sarkisian has agreed to perform services
as Chief Executive Officer of FFPE for a base salary of $200,000 a year, plus a
bonus of up to 20 percent and other benefits. Pursuant to a one-year employment
agreement with Mr. Sarkisian's sister, Tamara Sarkisian-Celmo, Ms. Sarkisan-
Celmo has agreed to perform services as President of FFPE for a base salary of
$150,000 a year, plus a bonus of up to 20 percent and other benefits. Pursuant
to consulting agreements, Mr. Sarkisian's parents perform consulting services
for the Company, for which they received an aggregate of $61,000 in fiscal year
2001.

                                      F-24
<PAGE>

As of June 30, 2001, 82 percent of FFPE was owned by the Company and 18 percent
by Holdings, which the Company believes is owned by Mr. Sarkisian and Ms.
Sarkisian-Celmo. Under the terms of the Acquisition, Holdings acquired options
to sell its 18 percent membership interest in FFPE to the Company. Each of the
two options has a ten-year term and is exercisable for a price determined either
by the agreed-upon fair market value of the interest or a formula based on a
multiple of FFPE's earnings less indebtedness. One of the options, pertaining to
that portion of Holding's 18 percent membership interest in FFPE representing
Ms. Sarkisian-Celmo's ownership interest in Holdings, is exercisable at any
time. The other option, pertaining to that portion of Holdings 18 percent
membership interest in FFPE representing Mr. Sarkisian's ownership interest in
Holdings, is exercisable only after August 30, 2002.

In addition, under the terms of the Acquisition, the Company acquired a ten-year
option to purchase Holdings' 18 percent membership interest in FFPE for a price
determined either by the agreed-upon fair market value of the interest or a
formula based on a multiple of FFPE's earnings less indebtedness. The option to
purchase is exercisable by the Company at any time. All of Holding's membership
interest in FFPE is subject to a security interest in favor of the Company
securing the performance of the selling parties' continuing indemnity obligation
to the Company under the terms of the Acquisition.

The acquisition was accounted for as a purchase in accordance with the
provisions of Accounting Principles Board Opinion ("APB") No. 16. Under the
purchase method of accounting, the purchase price was allocated to the assets
acquired and liabilities assumed based on their estimated fair values at the
date of acquisition. The following table presents the detail of the purchase
price paid by the Company and the value of assets acquired (in thousands):

Purchase price:
      Cash paid                       $14,915
      Fair value of warrants            1,020
      Costs of acquisition              1,609
                                      -------
        Total purchase price          $17,544

Assets acquired:
     Operating assets acquired        $ 1,494
     Property and equipment             7,099
     Purchase price in excess
             of net assets             18,629
     Liabilities assumed               (9,607)
     Written options, net                 (71)
                                      -------
        Total assets acquired         $17,544

During fiscal year 2001, the goodwill acquired was amortized straight-line over
20 years; however, pursuant to SFAS No. 142, starting in fiscal year 2002, the
Company will discontinue such amortization. (See Note 1- Summary of Significant
Accounting Policies, to Consolidated Financial Statements). The assets purchased
in the Oscar's acquisition have been excluded from the statement of cash flows.

Presented below is unaudited selected pro forma financial information, which
includes the results of operations of the Company as if the acquisition had
taken place May 1, 2000 and 1999 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                       April 30, 2001      April 30, 2000
                                                        (unaudited)          (unaudited)
                                                    -----------------------------------------
<S>                                                 <C>                    <C>
Revenues                                                  $ 255,185           $ 265,162
Net Income                                                $   2,522           $   7,232
Basic and Diluted earnings per share                      $    0.09           $    0.25
Shares used in per share calculation - Basic                 27,777              28,559
Shares used in per share calculation - Diluted               27,954              28,877
</TABLE>

                                      F-25
<PAGE>

Operating segment information for the 35 weeks of operations included in the
Company's fiscal year 2001 results is included in the Management's Discussion
and Analysis of Financial Condition and Results of Operations and in Note 11 -
Information by Industry Segment and Geographic Area, to Consolidated Financial
Statements.

                                      F-26
<PAGE>

Schedule I - Condensed Financial Information of Registrant
--------------------------------------------------------------------------------

                   SIZZLER INTERNATIONAL, INC. (Registrant)
                                Balance Sheets
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                  As of April 30,
                                                                                  ---------------
                                                                                2001         2000
                                                                            ------------ -------------
<S>                                                                         <C>          <C>
ASSETS

Current assets
  Cash and cash equivalents                                                  $       423     $   2,167
  Receivables                                                                        261           604
  Inventories                                                                          -            41
  Prepaid expenses and other current assets                                        1,183            76
------------------------------------------------------------------------- -------------- -------------
  Total current assets                                                             1,867         2,888
------------------------------------------------------------------------- -------------- -------------

Property and equipment, at cost
  Buildings and leasehold improvement                                                702           659
  Equipment                                                                        6,894         6,666
  Construction in progress                                                            12           124
------------------------------------------------------------------------- -------------- -------------
                                                                                   7,608         7,449
  Less - accumulated depreciation and amortization                                (6,971)       (6,643)
------------------------------------------------------------------------- -------------- -------------
  Total property and equipment, net                                                  637           806
------------------------------------------------------------------------- -------------- -------------

Investment in subsidiaries                                                        74,679        63,780

Deposits and other assets                                                          2,160         2,851
------------------------------------------------------------------------- -------------- -------------

Total assets                                                                 $    79,343     $  70,325
========================================================================= ============== =============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-27
<PAGE>

                   SIZZLER INTERNATIONAL, INC. (Registrant)
                                Balance Sheets
                       (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                  As of April 30,
                                                                                  ---------------
                                                                                2001         2000
                                                                            ------------ -------------
<S>                                                                         <C>          <C>
LIABILITIES
Current liabilities
  Accounts payable                                                            $       87    $      256
  Other current liabilities                                                          884           435
------------------------------------------------------------------------- -------------- -------------

  Total current liabilities                                                          971           691
------------------------------------------------------------------------- -------------- -------------
Intercompany payable                                                              14,373         9,362

Pension liability                                                                  9,482         9,637

Stockholders' investment
  Common stock, authorized 50,000,000 shares at $.01 par value; issued and
   outstanding 27,774,799 shares in 2001
   and 28,067,539 shares in 2000                                                     291           288
  Additional paid-in capital                                                     279,846       278,408
  Accumulated deficit                                                           (217,046)     (219,769)
  Treasury stock, 1,363,800 shares at cost at April 30, 2001
   and 706,700 shares at April 30, 2000                                           (3,189)       (1,948)
  Accumulated other Comprehensive Income                                          (5,385)       (6,344)
------------------------------------------------------------------------- -------------- -------------
  Total stockholders' investment                                                  54,517        50,635
------------------------------------------------------------------------- -------------- -------------
Total liabilities and stockholders' investment                                $   79,343    $   70,325
========================================================================= ============== =============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-28
<PAGE>

                   SIZZLER INTERNATIONAL, INC. (Registrant)
                           Statements of Operations
                                (in thousands)

<TABLE>
<CAPTION>
                                                                      For the Years Ended April 30,
                                                                      -----------------------------
                                                                      2001          2000        1999
                                                                  ------------ ------------ ------------
<S>                                                               <C>          <C>          <C>
Revenues
  Allocated general and administrative                             $     8,744  $     9,375    $   2,458

Costs and expenses
  Depreciation and amortization                                            339          323          296
  General and administrative                                             8,848       14,947        5,859
----------------------------------------------------------------- ------------ ------------ ------------

  Total operating costs                                                  9,187       15,270        6,155
----------------------------------------------------------------- ------------ ------------ ------------

  Interest expense                                                         808          893          307
  Equity in earnings of subsidiaries                                    (3,830)      (9,090)     (11,160)
  Investment income                                                       (144)        (120)        (236)
----------------------------------------------------------------- ------------ ------------ ------------

  Total costs and expenses                                               6,021        6,953       (4,934)
----------------------------------------------------------------- ------------ ------------ ------------

Net Income                                                         $     2,723  $     2,422    $   7,392
================================================================= ============ ============ ============

Comprehensive Income:
  Net Income                                                       $     2,723  $     2,422    $   7,392
  Foreign currency translation adjustments (no tax
  effect)                                                                  959       (2,625)         579
----------------------------------------------------------------- ------------ ------------ ------------

Total Comprehensive Income (loss)                                  $     3,682  $      (203)   $   7,971
================================================================= ============ ============ ============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-29
<PAGE>

                    SIZZLER INTERNATIONAL, INC. (Registrant)
                            Statements of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                      For the Years Ended April 30,
                                                                      -----------------------------
                                                                      2001          2000        1999
                                                                  ------------ ------------ ------------
<S>                                                               <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net cash provided by (used in) operating activities                $      862  $    (2,889)  $    2,078

CASH FLOWS FROM INVESTING ACTIVITIES
 Acquisition of Pat & Oscar's(SM)                                      (16,524)           -            -
 Purchases of property and equipment                                      (277)        (172)           -

CASH FLOWS FROM FINANCING ACTIVITIES
 Borrowings (repayment) intercompany amounts                             5,177        4,266       (8,106)
 Repurchase of common stock                                             (1,241)      (1,948)           -
 Australia dividend                                                      9,838            -            -
 Sale of restricted shares                                                 352            -            -
 Other                                                                      69            -            -

----------------------------------------------------------------- ------------ ------------ ------------
Net cash provided by (used in) financing activities                     14,195        2,318       (8,106)
----------------------------------------------------------------- ------------ ------------ ------------
Net increase (decrease) in cash and equivalents                         (1,744)        (743)      (6,028)
----------------------------------------------------------------- ------------ ------------ ------------
Beginning balance, cash and cash equivalents                             2,167        2,910        8,938
----------------------------------------------------------------- ------------ ------------ ------------
Ending balance, cash and cash equivalents                           $      423  $     2,167   $    2,910
================================================================= ============ ============ ============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-30
<PAGE>

                   SIZZLER INTERNATIONAL, INC. (Registrant)
                    Notes to Condensed Financial Statements


Note 1 - The Company
--------------------------------------------------------------------------------

Sizzler International, Inc. ("SII") is a holding company that owns and operates
multiple subsidiaries. Asset distributions from Australian subsidiaries, Pat &
Oscar's(SM) and SII are restricted as a result of a loan agreement.

During the year ended April 30, 2000 property and equipment of subsidiaries were
transferred to SII. The transfer occurred as a result of reallocating some
administrative functions from the subsidiaries to SII. The increase in
administrative activities performed by SII, during the year ended April 30,
2000, resulted in an increase in property and equipment and general and
administrative expense for the year.

Note 2 - Summary of Significant Accounting Policies
--------------------------------------------------------------------------------

Principles of Consolidation
The financial statements of SII reflect the investment in wholly owned
subsidiaries using the equity method.

Statement of Cash Flows
For purposes of this statement, cash equivalents include time deposits,
certificates of deposit and all highly liquid instruments with original
maturities of 90 days or less. The Company made cash interest payments of
$808,000, $893,000, and $307,000 for the years ending April 30, 2001, 2000 and
1999, respectively. The Company made cash tax payments of $17,000 during the
year ended April 30, 2001 and made no cash tax payments for the years ended
April 30, 2000 and 1999.

Taxes
SII provides for taxes consistent with FAS 109. All deferred assets and
liabilities are offset by a valuation allowance due to the historical losses
that have been sustained by SII. (See Note 4 - Income Taxes to the Consolidated
Financial Statements for further discussion of the taxes for the consolidated
group.)

Other Policies
SII follows all applicable accounting policies consistent with those of the
consolidated group (See Note 1 - Summary of Significant Accounting Policies to
Consolidated Financial Statements for a discussion of the accounting policies).

Note 3 - Required Disclosures
--------------------------------------------------------------------------------

Notes Payable: SII has no debt at April 30, 2001 (See Note 6 - Debt to
Consolidated Financial Statements for a discussion of the total debt for the
consolidated group).

Contingencies: SII management is not aware of any material contingencies as of
April 30, 2001 (See Note 8 - Commitments and Contingencies to Consolidated
Financial Statements for a discussion of all contingencies for the consolidated
group).

Inter-Company Borrowing: SII borrowed money from consolidated subsidiaries in
the amount of $5.2 and $4.3 million in fiscal year 2001 and 2000, respectively.
SII loaned $8.1 million to consolidated subsidiaries in fiscal year 1999.

Dividends: SII received $9.8 million in dividends during the year ended April
30, 2001. SII did not receive any dividends from subsidiaries during the
two-year period ending April 30, 2000.

                                      F-31
<PAGE>

Schedule II  - Valuation and Qualifying Accounts
--------------------------------------------------------------------------------

The following is a summary of the activity in valuation accounts:

                       VALUATION AND QUALIFYING ACCOUNTS

              FOR THE YEARS ENDED APRIL 30, 2001, 2000, AND 1999
              --------------------------------------------------
                      Reserve for Accounts Receivable and
                      -----------------------------------
                           Notes Receivable Bad Debt
                           -------------------------
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                           Balance at                                   Balance
                                           Beginning                                   at End of
                                           of Period      Additions    Deductions        Period
                                        ---------------  -----------  ------------  ---------------
<S>                                     <C>               <C>         <C>           <C>
  Year ended April 30, 2001                 $       920     $     62      $      -      $       982
                                        ===============  ===========  ============  ===============

  Year ended April 30, 2000                 $     2,234     $      -      $  1,314       $      920
                                        ===============  ===========  ============  ===============

  Year ended April 30, 1999                 $     3,380     $    501      $  1,647       $    2,234
                                        ===============  ===========  ============  ===============
</TABLE>

                                      F-32
<PAGE>

Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures
=======================================================================

None.

                                       23
<PAGE>

                                   PART III


Item 10: Directors and Executive Officers of the Registrant
================================================================================

Information required by this item with respect to the Company's directors is set
forth under the captions "Election of Directors" and "Stock Ownership of
Management" in the Company's Proxy Statement for its 2001 Annual Meeting of the
Stockholders. Such information is incorporated herein by reference.

Information required by this item with respect to the Company's executive
officers is set forth in Part I of this Annual Report under the caption
"Executive Officers of the Registrant" as of June 30, 2001.

Item 11: Executive Compensation
================================================================================

Information required by this item is set forth under the caption "Executive
Compensation" and "Election of Directors" in the Company's Proxy Statement for
its 2001 Annual Meeting of the Stockholders. Such information is incorporated
herein by reference.

Item 12: Security Ownership of Certain Beneficial Owners and Management
================================================================================

Information required by this item is set forth under the caption "Stock
Ownership of Management" in the Company's Proxy Statement for its 2001 Annual
Meeting of the Stockholders. Such information is incorporated herein by
reference.

Item 13: Certain Relationships and Related Transactions
================================================================================

Information required by this item is set forth under the caption "Transactions
with Directors and Management" in the Company's Proxy Statement for its 2001
Annual Meeting of the Stockholders. Such information is incorporated herein by
reference.

                                       24
<PAGE>

                                    PART IV

Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K
================================================================================

(a)  List of documents filed as part of the report:

     (1)    Financial Statements:

         Selected Quarterly Financial Data

         Report of Independent Public Accountants

         Consolidated Balance Sheets of Sizzler International, Inc. and
         Subsidiaries as of April 30, 2001 and 2000

         Consolidated Statements of Operations and Comprehensive Income of
         Sizzler International, Inc. and Subsidiaries for each of the three
         years in the period ended April 30, 2001

         Consolidated Statements of Stockholders' Investment of Sizzler
         International, Inc. and Subsidiaries for each of the three years in
         the period ended April 30, 2001

         Consolidated Statements of Cash Flows of Sizzler International, Inc.
         and Subsidiaries for each of the three years in the period ended April
         30, 2001

         Notes to Consolidated Financial Statements

     (2) Financial Statement Schedules:

         i.          Condensed Financial Information of Registrant

         ii.         Valuation and Qualifying Accounts

     (3) Exhibits:

     Number       Description
     ------       -----------

         3.1      Certificate of Incorporation of Registrant, incorporated
                  herein by reference to Exhibit 3.1 to Amendment No. 1 to
                  Registrant's Form S-4 Registration Statement Number 33-38412.

         3.2      Bylaws of Registrant, as amended June 16, 1999, incorporated
                  herein by reference to Exhibit 3.2 to the Registrant's Form
                  10-K report for the fiscal year ended April 30, 1999.


         4.0      Rights Agreement dated January 22, 2001 between the Registrant
                  and The Bank of New York, as Rights Agent, incorporated herein
                  by reference to Exhibit 4 to the Registrant's Form 8-K Report
                  filed January 22, 2001.

         10.1     Employee Savings Plan of Registrant, restated as of January 1,
                  1992, incorporated herein by reference to Exhibit 10.2 to the
                  Registrant's Form 10-K report for the fiscal year ended April
                  30, 1995.

         10.2     Amendment to Employee Savings Plan of Registrant, incorporated
                  herein by reference to Exhibit 2.2 to the Registrant's Form
                  10-K report for the fiscal year ended April 30, 1997.

                                       25
<PAGE>

         10.3     Registrant's Executive Supplemental Retirement Plan (effective
                  May 1, 1985, and including amendments through May 1, 1993),
                  incorporated herein by reference to Exhibit 10.3 to the
                  Registrant's Form 10-K report for the fiscal year ended April
                  30, 1996.

         10.4     Employment Agreement dated February 8, 1999 between Registrant
                  and Charles L. Boppell, incorporated herein by reference to
                  Exhibit 10.4 to the Registrant's Form 10-K report for the
                  fiscal year ended April 30, 1999.

         10.5     Consulting Agreement dated December 17, 1996 between Barry
                  Krantz and Collins Foods International Pty Ltd., incorporated
                  herein by reference to Exhibit 10.14 to the Registrant's Form
                  10-K report for the fiscal year ended April 30, 1997.

         10.6     Amended and Restated Services Agreement dated May 5, 1999
                  between Registrant and Charles F. Smith, incorporated herein
                  by reference to Exhibit 10.13 to the Registrant's Form 10-K
                  report for the fiscal year ended April 30, 1999.

         10.7     Paid Leave Plan and Trust and Summary Plan Description of
                  Registrant, as amended as of June 30, 1994, incorporated
                  herein by reference to Exhibit 10.5 to the Registrant's Form
                  10-K report for the fiscal year ended April 30, 1995.

         10.8     1997 Employee Stock Incentive Plan of Registrant, incorporated
                  herein by reference to Exhibit 99.1 to the Registrant's Form
                  S-8 Registration Statement Number 333-476661 filed March 10,
                  1998.

         10.9     1997 Non-Employee Directors Stock Incentive Plan of
                  Registrant, incorporated herein by reference to Exhibit 99.1
                  to the Registrant's Form S-8 Registration Statement No. 333-
                  47659 filed March 10, 1998.

         10.10    Form of Franchise Agreement between Sizzler USA Franchise,
                  Inc. and Franchisee, incorporated herein by reference to
                  Exhibit 10.26 to the Registrant's Form 10-Q report for the
                  quarterly period ended February 1, 1998.

         10.11    Development Agreement dated October 4, 1996 between Kentucky
                  Fried Chicken Pty. Limited and Collins Foods International Pty
                  Ltd., incorporated herein by reference to Exhibit 10.20 to the
                  Registrant's Form 10-K report for the fiscal year ended April
                  30, 1997.

         10.12    Master Franchise Agreement dated October 4, 1996 between
                  Kentucky Fried Chicken Pty Limited and Collins Foods
                  International Pty Ltd., incorporated herein by reference to
                  Exhibit 10.21 to the Registrant's Form 10-K report for the
                  fiscal year ended April 30, 1997.

         10.13    Form of Franchise Agreement between Kentucky Fried Chicken Pty
                  Limited and Collins Foods International Pty Ltd. relating to
                  KFC(R) restaurant franchise, incorporated herein by reference
                  to Exhibit 10.22 to the Registrant's Form 10-K report for the
                  fiscal year ended April 30, 1997.

         10.20    Standard Office Lease - Gross American Industrial Real Estate
                  Association corporate headquarters lease agreement between
                  Pacifica Plaza Office Building and Sizzler USA Real Property,
                  Inc., incorporated herein by reference to Exhibit 10.25 to the
                  Registrant's Form 10-K report for the fiscal year ended April
                  30, 1998.

         10.21    Amended and restated LLC Membership Interest Purchase
                  Agreement dated August 21, 2000 among the Registrant, as
                  purchaser, and FFPE Holding Company, Inc., JBS Investments,
                  Ltd., OMS Investments, Ltd., TDM Enterprises, Ltd., Oscar
                  Sarkisian and Martha Patricia Sarkisian (individually and as
                  Co-Trustees of Sarkisian Family Trust UTD July 19, 1995), John
                  Sarkisian, Bernadette Sarkisian, and Tamara Sarkisian-Celmo
                  (individually and as Trustee of the Tamara Sarkisian-Celmo
                  Family Trust UTD October 16, 1997), FFPE, LLC, and S & C
                  Company, Inc., as the selling parties, incorporated herein by
                  reference to Exhibit 10.1 to the Registrant's Form 8-K report
                  filed September 14, 2000.

                                       26
<PAGE>

         10.22    Credit Agreement dated May 23, 2000 between the Registrant, as
                  lender, S & C Company, Inc., and FFPE, LLC, as borrowers,
                  incorporated herein by reference to Exhibit 10.2 to the
                  Registrant's Form 8-K report filed June 5, 2000.

         10.23    Membership Interest Pledge Agreement, dated August 30, 2000,
                  among the Registrant, as secured party, and FFPE Holding
                  Company, Inc., as debtor, incorporated herein by reference to
                  Exhibit 10.3 to the Registrant's Form 8-K report filed
                  September 14, 2000.

         10.24    Call Option Agreement dated August 30, 2000 between FFPE
                  Holding Company, Inc., as optionor, and the Registrant, as
                  optionee, incorporated herein by reference to Exhibit 10.4 to
                  the Registrant's Form 8-K report filed September 14, 2000.

         10.25    Put Option Agreement (John Sarkisian) dated August 30, 2000
                  between the Registrant, as optionor, and FFPE Holding Company,
                  Inc., as optionee, incorporated herein by reference to Exhibit
                  10.5 to the Registrant's Form 8-K report filed September 14,
                  2000.

         10.26    Put Option Agreement (Tammy-Sarkisian-Celmo) dated August
                  30, 2000 between the Registrant, as optionor, and FFPE Holding
                  Company, Inc., as optionee, incorporated herein by reference
                  to Exhibit 10.6 to the Registrant's Form 8-K report filed
                  September 14, 2000.

         10.27    Warrant dated August 30, 2000 issued by the Registrant to
                  FFPE Holding Company, Inc., incorporated herein by reference
                  to Exhibit 10.7 to the Registrant's Form 8-K report filed
                  September 14, 2000.

         10.28    Warrant dated August 30, 2000 Registration Rights Agreement
                  between the Registrant and FFPE Holding Company, Inc.,
                  incorporated herein by reference to Exhibit 10.8 to the
                  Registrant's Form 8-K report filed September 14, 2000.

         10.29    Employment Agreement dated August 30, 2000 between the
                  Registrant and John Sarkisian, incorporated herein by
                  reference to Exhibit 10.9 to the Registrant's Form 8-K report
                  filed September 14, 2000.

         10.30    Employment Agreement dated August 30, 2000 between the
                  Registrant and Tamara Sarkisian-Celmo, incorporated herein by
                  reference to Exhibit 10.10 to the Registrant's Form 8-K report
                  filed September 14, 2000.

         10.31    AUD$46.0 million Bill Acceptance and Discount Facility dated
                  August 21, 2000 between Collins Restaurants Management Pty
                  Ltd. and Westpac Banking Corporation, incorporated herein by
                  reference to Exhibit 10.1 to the Registrant's Form 8-K report
                  filed September 1, 2000.

         10.32    Unlimited Cross Guarantee and Indemnity and Negative Pledge
                  with Financial Ratio Covenants dated August 21, 2000 between
                  various subsidiaries of the Registrant and Westpac Banking
                  Corporation, incorporated herein by reference to Exhibit 10.2
                  to the Registrant's Form 8-K report filed September 1, 2000.

         10.33    Guaranty and Indemnity dated August 21, 2000 between the
                  Registrant as Guarantor and Westpac Banking Corporation as
                  Financier, incorporated herein by reference to Exhibit 10.3 to
                  the Registrant's Form 8-K report filed September 1, 2000.

         10.34    Stock Pledge dated August 21, 2000 between Sizzler Asia
                  Holdings, Inc. as Chargor and Westpac Banking Corporation as
                  Financier, incorporated herein by reference to Exhibit 10.4 to
                  the Registrant's Form 8-K report filed September 1, 2000.

         10.35    Fixed and Floating Charge dated August 21, 2000 between
                  Collins Restaurants Management Pty Ltd. as Chargor and Westpac
                  Banking Corporation as Financier, incorporated herein by
                  reference to Exhibit 10.5 to the Registrant's Form 8-K report
                  filed September 1, 2000.

                                       27
<PAGE>

         10.36    Fixed and Floating Charge dated August 21, 2000 between
                  Sizzler Asia Holdings, Inc. as Chargor and Westpac Banking
                  Corporation as Financier, incorporated herein by reference to
                  Exhibit 10.6 to the Registrant's Form 8-K report filed
                  September 1, 2000.

         10.37    Subordination Deed dated August 21, 2000 between the
                  Registrant and various of its subsidiaries as Junior Creditor
                  and Westpac Banking Corporation as Senior Creditor,
                  incorporated herein by reference to Exhibit 10.7 to the
                  Registrant's Form 8-K report filed September 1, 2000.

         10.38    Loan and Security Agreement dated December 20, 2000 by and
                  between Heller Financial Leasing, Inc., and Sizzler USA, Inc.,
                  Sizzler USA Restaurants, Inc., Sizzler USA Real Property,
                  Inc., incorporated herein by reference to Exhibit 10.1 to the
                  Registrant's Form 8-K report filed January 11, 2001.

         10.39    Promissory Note in the amount of $5.0 million, dated December
                  20, 2000, by Sizzler USA, Inc., Sizzler USA Restaurants, Inc.,
                  Sizzler USA Real Property, Inc. (Borrower) to Heller Financial
                  Leasing, Inc. (Lender), incorporated herein by reference to
                  Exhibit 10.2 to the Registrant's Form 8-K report filed January
                  11, 2001.

         10.40    Future Advance Promissory Note in the amount of $5.0 million,
                  dated December 20, 2000, by Sizzler USA, Inc., Sizzler USA
                  Restaurants, Inc., Sizzler USA Real Property, Inc. (Borrower)
                  to Heller Financial Leasing, Inc. (Lender), incorporated
                  herein by reference to Exhibit 10.3 to the Registrant's Form
                  8-K report filed January 11, 2001.

         10.41    Guaranty dated December 20, 2000, of Registrant (Guarantor)
                  for the benefit of Heller Financial Leasing, Inc. (Lender),
                  incorporated herein by reference to Exhibit 10.4 to the
                  Registrant's Form 8-K report filed January 11, 2001.

         10.42    Environmental Indemnity Agreement dated December 20, 2000, by
                  and between Sizzler USA, Inc., Sizzler USA Restaurants, Inc.,
                  Sizzler USA Real Property, Inc., and Registrant (Indemnitor)
                  for the benefit of Heller Financial Leasing, Inc. (Lender),
                  incorporated herein by reference to Exhibit 10.5 to the
                  Registrant's Form 8-K report filed January 11, 2001.

         10.43    Certificate Regarding Management dated December 20, 2000, of
                  Sizzler USA, Inc., Sizzler USA Restaurants, Inc., Sizzler USA
                  Real Property, Inc., incorporated herein by reference to
                  Exhibit 10.6 to the Registrant's Form 8-K report filed January
                  11, 2001.

         10.44    Stay Bonus Plan of Collins Foods Group Pty Ltd. dated as of
                  March 1, 2001.

         10.45    Collins Foods Share Option Plan of Collins Foods Group Pty
                  Ltd. dated as of March 1, 2001.

         10.46    Productivity Bonus Option Plan of Collins Foods Group Pty Ltd.
                  dated as of March 1, 2001.

         10.47    Shareholders Agreement dated March 1, 2001 between Collins
                  Foods Group Pty Ltd., Registrant, Restaurant Concepts
                  International, Inc., and members of the Australian Management
                  Group.

         10.48    Registrant's 2001 AMG Restricted Stock Plan dated March 1,
                  2001, incorporated herein by reference to Exhibit 4.3 of
                  Registrant's Form S-8 Registration Statement filed May 25,
                  2001.

         10.49    Form of Restricted Share Agreement between Registration
                  entered into between Registrant and members of the Australian
                  Management Group pursuant to Registrant's 2001 Restricted
                  Stock Plan dated March 1, 2001.

         21.00    Subsidiaries of Registrant

                                       28
<PAGE>

         23.00    Consent of Arthur Andersen LLP

(b) Reports on Form 8-K

     The Company filed a report on Form 8-K on February 16, 2000 relating to a
     press release dated February 7, 2000, announcing the number of shares of
     the Company's common stock acquired under the Company's share repurchase
     program.

     The Company filed a report on Form 8-K dated November 22, 2000 reporting
     the following press releases.

          On November 10, 2000, the Company issued a press release announcing
          the date of its quarterly analyst call.

          On November 16, 2000, the Company issued a press release announcing
          earnings for the second quarter.

     The Company filed a report on Form 8-K dated December 7, 2000 reporting
     that on November 30, 2000, Sizzler International, Inc. issued press
     releases announcing the opening of a new Company store in Cathedral City,
     California. The new Cathedral City store, that holds a capacity of 250
     people and integrates Sizzler's new menu, is a continuation of Sizzler's
     repositioning program.

     The Company filed a report on Form 8-K dated January 11, 2001 reporting
     that on January 5, 2001 Sizzler International, Inc. issued a press release
     to announce that the Company has entered into a new seven year, $10 million
     term loan with Heller Financial, Inc. The facility is arranged to fund the
     completion of the Sizzler USA remodel program and the expansion of Oscar's.

     The Company filed a report on Form 8-K dated January 22, 2001 reporting
     that on January 10, 2001 Sizzler International, Inc. issued a press release
     to announce that the Board of Directors renewed the Company's shareholder
     rights' plan similar to its initial rights' plan, which expired on January
     22, 2001 after a term of 10 years.

                                       29
<PAGE>

                                  SIGNATURES

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

Dated: July 23, 2001                                SIZZLER INTERNATIONAL, INC.

                                                     By: /s/ Charles L. Boppell
                                                     --------------------------
                                                       Charles L. Boppell
                                                       Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE                                         TITLE                                     DATE
---------                                         -----                                     ----
<S>                                         <C>                                         <C>
/s/ Charles L. Boppell                      President, Chief                            July 23, 2001
--------------------------------            Executive Officer and
Charles L. Boppell                          Director

/s/ James A. Collins                        Chairman Emeritus                           July 23, 2001
--------------------------------            and Director
James A. Collins

/s/ Barry E. Krantz                         Director                                    July 23, 2001
--------------------------------
Barry E. Krantz

/s/ Phillip D. Matthews                     Chairman of the Board
--------------------------------            and Director                                July 23, 2001
Phillip D. Matthews

/s/ Robert A. Muh                           Director                                    July 23, 2001
--------------------------------
Robert A. Muh

/s/ Charles F. Smith                        Director                                    July 23, 2001
--------------------------------
Charles F. Smith

/s/ Kevin W. Perkins                        Executive Vice President                    July 23, 2001
--------------------------------            and Director
Kevin W. Perkins

/s/ A. Keith Wall                           Vice President and                          July 23, 2001
--------------------------------            Chief Financial Officer
A. Keith Wall                               (principal financial and
                                            accounting officer)

/s/ Mary E. Arnold                          Vice President and Controller               July 23, 2001
--------------------------------
Mary E. Arnold
</TABLE>

                                       30