<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, 2000 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, 2000, computed by reference to the closing sale price of
such shares on such date was $59,412,838.

The number of shares outstanding of common stock, $0.01 par value, as of June
30, 2000, was 27,981,286.

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. [X]

Portions of the registrant's proxy statement for its 2000 annual meeting of
stockholders are incorporated by reference into Part III of this Form 10-K.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
Item
                                    PART I

1.   Business                                                                 3
2.   Properties                                                               8
3.   Legal Proceedings                                                       10
4.   Submission of Matters to a Vote of Security Holders                     10
     Executive Officers of the Registrant                                    11

                                    PART II

5.   Market for the Registrant's Common Stock and Related
     Stockholder Matters                                                     13
6.   Selected Financial Data                                                 14
7.   Management's Discussion and Analysis of Financial
     Condition and Results Of Operations                                     15
7A.  Quantitative and Qualitative Disclosures About Market Risks             26
8.   Financial Statements and Supplementary Data                            F-1
9.   Changes in and Disagreements with Accountants on
     Accounting and Financial Disclosure                                     27

                                   PART III

10.  Directors and Executive Officers of the Registrant                      28
11.  Executive Compensation                                                  28
12.  Security Ownership of Certain Beneficial Owners and Management          28
13.  Certain Relationships and Related Transactions                          28

                                    PART IV

14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K        29
</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 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 approximately 348 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 2000, 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 $9.00 in the United States and $12.89 (in
Australian dollars) in Australia.

                                       3
<PAGE>

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
employee 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 2000, 1999 and 1998 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.

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

The Company operates 101 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 2000 lunch and dinner sales were approximately 40
percent and 60 percent, respectively.  The average ticket was approximately
$8.39 (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 2000, 1999 and 1998 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
fluctuation of costs. 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.

                                       4
<PAGE>

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
business conducted by Sizzler.  The Company owns Sizzler(R) and certain other
registered trademarks, trade names and service marks which it licenses to its
franchisees. The Company 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.

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

The Company continuously evaluates its menus and restaurant concepts. New
products are developed by the Company's research staff in conjunction with
outside consultants and food suppliers. 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. 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.

                                       5
<PAGE>

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, 2000, the Company had approximately 2,400 employees in the United
States and approximately 4,900 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.

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

Each of the Company's restaurants is subject to federal, state and local, as
well as 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 licenses and approvals required to operate its business, and that its
operations are in compliance with applicable laws and regulations.

                                       6
<PAGE>

Inflation
---------

Increases in interest rates and the costs of labor, food 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, 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
----------------------

As a result of continued domestic operating losses in the early 1990's, the
Company's management enacted a restructuring strategy designed to return its
U.S. operations to profitability. In June 1996, the Company and four
subsidiaries filed for protection from creditors under Chapter 11 of the federal
Bankruptcy Code. The plans of reorganization were confirmed by the Bankruptcy
Court and all became effective by September 23, 1997.  All unsecured claims,
except for 4 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.

                                       7
<PAGE>

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

Effective July 1, 2000, Australia implemented a 10 percent goods and services
tax that is applied to consumer purchases from restaurants.  In addition, there
was a reduction in personal and corporate income tax rates.  Effective July 1,
2000 the Company's corporate income tax rate in Australia will be reduced from
36 percent to 34 percent and on July 1, 2001, the rate will further be 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.

A significant portion of the Company's revenues and income is derived from
foreign operations and, therefore, the Company is subject to the risks
associated with fluctuations in local currencies.  The Company cannot predict
the degree of future changes in exchange rates.


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

At April 30, 2000 the Company operated and franchised 449 locations in 18 states
and 11 countries as illustrated below:

<TABLE>
<CAPTION>
                                         Owned      Franchised        Total
                                         -----      ----------        -----
     <S>                                 <C>        <C>               <C>
     USA Sizzler(R) Restaurants
     --------------------------
     State
     -----
     Arizona                                -             7               7
     California                            48            107             155
     Delaware                               1             -               1
     Florida                                -             8               8
     Hawaii                                 -             7               7
     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                               8             8              16
     Oregon                                 -            11              11
     Texas                                  -             1               1
     Utah                                   -            12              12
     Washington                             -             5               5
     Wisconsin                              -             2               2
                                           --            ---             ---
          Total USA                        64            186             250
                                           --            ---             ---
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>

                                                 Owned     Franchised    Total
                                                 =====     ==========    =====
     <S>                                         <C>       <C>           <C>
     Latin American Sizzler(R) Restaurants
     --------------------------------------
     Countries and Territories
     =========================
     Guatemala                                      -          4            4
     Puerto Rico                                    -          8            8
                                                 ----        ---          ---
          Total Latin America                       -         12           12
                                                 ----        ---          ---

                     Total America                 64        198          262
                                                 ----        ---          ---

     International Sizzler(R) Restaurants
     ------------------------------------
     Countries and Territories
     =========================
     Guam                                           -         1            1
     Australia                                     30         -           30
     Indonesia                                      -         6            6
     Japan                                          -        22           22
     Korea                                          -         2            2
     New Zealand                                    1         -            1
     Taiwan                                         -         7            7
     Thailand                                       -        14           14
     Singapore                                      -         3            3
                                                 ----       ---          ---

          Total International                      31        55           86
                                                 ----       ---          ---

                     Total Sizzler(R)              95       253          348
                                                 ----       ---          ---

     KFC(R) restaurants
     ------------------
     Australia                                    101         -          101
                                                 ----       ---          ---

                     Total Sizzler(R) and KFC(R)  196       253          449
                                                 ----       ---          ---
</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.  As of April 30,
2000, the Company has closed sale and leaseback transactions for 11 Sizzler(R)
and 37 KFC(R) restaurants in Australia.  The proceeds from the sale and
leaseback transaction will be used to accomplish strategic objectives.

At the conclusion of the sale and leaseback transaction the Company owned a
total of 18 operating Sizzler(R) restaurant properties in the United States,
Australia and New Zealand and 11 KFC(R) properties in Australia.

                                       9
<PAGE>

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 2013.
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
which 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. As of the date of this Report,
management believes that there are no legal proceedings pending, the adverse
resolution of which is expected to have a material adverse financial 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

                                       10
<PAGE>

Executive Officers of the Registrant as of June 30, 2000
--------------------------------------------------------

The following are the Executive Officers of the Company as of June 30, 2000:

Charles L. Boppell       58   President and Chief Executive Officer of the
                              Company since February 8, 1999.  Director of the
                              Company since April 1999.  President  and Chief
                              Executive Officer of La Salsa Holding Co. (1993-
                              1999).

Kevin W. Perkins         48   Executive Vice President of the Company and
                              President and Chief Executive Officer of
                              International Operations since 1997. Director of
                              the Company (1994 to present). President and
                              Chief Executive Officer of the Company (1994-
                              1997).

Thomas E. Metzger        38   President and Chief Executive Officer of
                              Sizzler USA, Inc. since 1999.  Founder, President
                              and Chief Executive Officer of Wrapsters Inc.
                              (1997-1999).  President and Chief Executive
                              Officer of Roasters Corp International, Inc., the
                              owner of Kenny Rogers Roasters Worldwide of Ft.
                              Lauderdale, FL (1995- 1997).

Steven R. Selcer         40   Vice President and Chief Financial Officer
                              of the Company since 1999.  Chief Operating
                              Officer of La Salsa Holding Company (1999). Chief
                              Financial Officer of La Salsa Holding Company
                              (1994-1998).

Diane Hardesty           49   Vice President of the Company since April 1999.
                              Vice President of La Salsa Holding Company (1995-
                              1999). Vice President Adray's (1994-1996).

Michael B. Green         54   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).

                                       11
<PAGE>

Kimberley Forster        34   Vice President of Strategic Planning of the
                              Company since March 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           41   Vice President and Controller of the Company since
                              April 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).

                                       12
<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 (the "NYSE")
under the symbol "SZ". As of June 30, 2000, the number of record holders of the
Company's common stock was 2,616. 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>
                                         2000                    1999
                                 ---------------------   ---------------------
                                      High      Low          High       Low
                                    --------  --------     ---------  --------
<S>                              <C>          <C>        <C>          <C>
          First Quarter              $2.625    $1.750        $3.188    $2.375
          Second Quarter              3.188     2.000         2.563     1.500
          Third Quarter               3.000     1.938         3.000     2.063
          Fourth Quarter              3.625     2.250         2.375     1.689
</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.

                                       13
<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 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" presented elsewhere
herein.

<TABLE>
<S>                                         <C>                <C>              <C>              <C>               <C>
For the Years Ended April 30...            2000                1999              1998             1997              1996
--------------------------------------------------------------------------------------------------------------------------------
 (In millions, except per share data
  and exchange rates)

System-wide sales                           $ 568.8            $ 532.7          $ 557.9          $ 677.9           $ 875.7

Revenues                                      239.5              226.3            242.3            299.9             436.2

Net income (loss)                               2.4  (d)           7.4              5.4              0.6            (138.5) (a)

Basic and diluted earnings
   (loss) per share                            0.08  (d)          0.26             0.19             0.02             (4.99) (a)

Average Australian dollar
   exchange rate                             0.6409             0.6208           0.7063           0.7880            0.7471

Total assets                                  115.9              114.7            120.5            168.1             178.5

Long-term debt                                 21.2               26.9             35.5              0.3   (c)         7.0  (b)

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

Total stockholders' investment                 50.6               52.7             43.8             44.4              43.5

Cash dividends paid per share                     -                  -                -                -              0.08
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(a)  Includes an after-tax charge of $108.9 million or $3.92 per share,
     primarily related to the costs and asset write downs associated with
     restaurant closings and reorganization. In addition to the restructuring
     charge, the Company recorded a charge of $12.8 million or $0.46 per share
     related to the adoption of Statement of Financial Accounting Standards
     ("SFAS") No. 121,"Accounting for the Impairment of Long-Lived Assets and
     for Long-Lived Assets to be Disposed of," during fiscal year 1996.

(b)  This total does not include line of credit borrowings totaling $27.0
     million which, as a result of acceleration of maturity, are presented as
     current liabilities in the consolidated financial statements.

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

(d)  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 Notes to
     Consolidated Financial Statements, Note 3 - Nonrecurring Items.  In
     addition to these charges, the Company recorded an income tax benefit of
     $5.9 million or $0.20 per share.

                                       14
<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 2000, the Company began a process of enhancing the U.S.
Sizzler(R) restaurant experience, including improving the quality of the steaks,
upgrading the salad bar by offering fresher, higher quality produce and toppings
and remodeling the restaurants with a steakhouse appearance that is darker,
softer and more subdued.  This enhancement follows a two-year period from 1998
to 1999 during which the Company's domestic operations were repositioned back to
a mid-scale family steakhouse featuring high quality and high value entrees and
a salad bar designed to be either a light lunch entree or an addition to grilled
entrees at dinner.

In fiscal year 2000, the Company's international division focused on testing
remodel concepts.  The remodel design incorporates features from the U.S.
Sizzler(R) remodel as well as local initiatives.  The Company also continued its
discussions with Tricon Global Restaurants, Inc. regarding co-branding of its
KFC(R) restaurants.  During fiscal year 2000 promotional programs featuring menu
variations continued to drive sales growth.

During the year, the Company completed a sale and leaseback of 37 of its KFC(R)
and 11 of its Sizzler(R) properties with gross proceeds of approximately $25.4
million.  There are 18 additional properties that the Company is presently
marketing for sale.  The Company also benefited from less volatility in the
Asian currency markets and a higher average Australian dollar exchange rate
during the first three quarters of fiscal year 2000 compared to the same period
in fiscal year 1999.  Due to recent fluctuations in the Australian dollar
exchange rate, the Company anticipates the exchange rates in fiscal year 2001
may continue to be lower than the rates in fiscal year 2000.

The Company's revenues are generated from three primary sources: domestic
Company-operated restaurant sales and franchise revenues (including franchise
fees, royalties and rental income), international Company-operated Sizzler(R)
restaurant sales and franchise revenues, and revenues from international KFC(R)
franchises operated by the Company.

As discussed in more detail in "Part I - The 1996 Restructuring" and in Note 2 -
Bankruptcy Reorganization, to the Consolidated Financial Statements, Sizzler

                                       15
<PAGE>

International, Inc. and four subsidiaries emerged from bankruptcy on September
23, 1997.


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 2000 compared to $226.3
million in fiscal 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.  During the fourth quarter of
fiscal 2000, the Australian dollar exchange rate fell and the average exchange
rate for the year is expected to be lower in fiscal 2001 than in fiscal 2000.
Domestic revenues increased $2.8 million or 2.8 percent in fiscal 2000 compared
to fiscal 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).  Effective July 1, 2000
Australia implemented a goods and services tax that will add 8 to 10 percent to
the price of meals sold in restaurants.  A corresponding decrease was made to
Australian personal income tax rate and the Company cannot predict the impact
these changes will have on its international revenues.

Consolidated operating expenses, excluding $12.1 million in non-recurring items
(See Note 3 - Non-Recurring Items, 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.  The higher rent expense from the sale and leaseback will
continue in fiscal year 2001 but will be partially offset by a reduction in
depreciation and income tax expense.  In addition, general and administrative
expenses are higher than in the prior year due, in part, to $1.4 million in
severance 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 Westpac and to a lesser
extent, the Company's executive supplemental 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 locations in
the U.S. and one excess property.

                                       16
<PAGE>

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).

The Company operates Sizzler(R) restaurants in Australia and New Zealand, as
well as KFC(R) restaurants in Queensland, Australia. The Company also licenses
the right to operate Sizzler(R) restaurants to others 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 structures, and possible foreign political and economic
conditions.


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

Total revenues for fiscal year 2000 were $104.7 million compared to $101.9
million in fiscal 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 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 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
$7.2 million in fiscal 2000 compared to $6.6 million in fiscal 1999, an increase
of $0.6 million or 9.2 percent. The increase in fiscal 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
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 2000 and 65.0
percent in fiscal 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 that may or may not continue.

                                       17
<PAGE>

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

Management is continuing its plan to re-image the Sizzler(R) concept back to a
mid-scale family steakhouse by upgrading the quality of the food and improving
cooking methods and equipment and by recertifying all restaurant employees with
updated training programs. The quality of the Sizzler(R) customer experience is
also being improved by remodeling existing restaurants with a new design that is
currently being rolled-out and supporting these initiatives with appropriate
marketing programs.  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 2000 compared to $39.0 million in fiscal 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.  During the fourth quarter of
fiscal 2000, the Australian dollar exchange rate fell and the average exchange
rate for fiscal year 2001 is expected to be lower than in fiscal 2000.  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 2000
compared to $1.2 million in fiscal 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 2000, 4
franchised 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 2000 compared to $26.3 million in
fiscal 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 1999. The higher rent expense from the sale and leaseback is partially
offset by lower depreciation and income tax expense.

                                       18
<PAGE>

Management is continuing its plan to reposition the Sizzler(R) concept in
Australia by implementing the upgraded food quality and cooking methods that are
contributing to positive sales growth 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
consistent with the domestic sales, the Company plans to implement a remodel
program in Australia during fiscal year 2001.  In addition, management expects
to take steps designed to expand the Company's Asia franchise business during
fiscal year 2001.


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

Revenues from the Company's KFC(R) restaurants were $92.5 million in fiscal 2000
compared to $84.3 million in fiscal 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 2000 the Australian dollar exchange rate fell and the average
exchange rate for fiscal year 2001 is expected to be lower in fiscal 2001 than
in fiscal 2000.  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. The Company expects to open 3 to 5 new KFC(R) restaurants in fiscal
2001.

Prime costs were $55.7 million in fiscal 2000 compared to $50.7 million in
fiscal 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.  The higher rent expense and lower
depreciation and income tax expense associated with the sale and leaseback is
expected to continue in fiscal 2001.

Management has continued to have discussions with Tricon Global Restaurants,
Inc. regarding the possibility of co-branding certain KFC(R) locations.

                                       19
<PAGE>

RESULTS OF OPERATIONS FOR THE FIFTY-TWO WEEKS ENDED APRIL 30, 1999 VS. FIFTY-
----------------------------------------------------------------------------
THREE WEEKS ENDED APRIL 30, 1998
--------------------------------

Consolidated operations revenues totaled $226.3 million in fiscal 1999 compared
to $242.3 million in fiscal 1998, a decrease of $16.0 million or 6.6 percent.
The decrease includes $17.1 million due to a 12.1 percent decrease in the
Australian dollar exchange rate partially offset by higher average unit sales
from international KFC(R) operations and higher average unit sales and franchise
revenues from domestic operations. The impact of the additional week in fiscal
1998 is approximately $4.4 million. Domestic revenues increased $4.7 million or
4.9 percent in fiscal 1999 compared to fiscal 1998 due to the impact of menu
repositioning and a marketing strategy that minimized the use of customer
discounts. International revenues decreased $20.8 million or 14.3 percent due to
a decrease in the Australian dollar exchange rate and to lower Sizzler(R) sales
offset by higher KFC(R) sales.

Consolidated operating expenses were $214.6 million in fiscal 1999 compared to
$230.7 million in fiscal 1998, a decrease of $16.2 million or 7.0 percent.  This
decrease is due to  the additional week in fiscal 1998 and  a 12.1 percent
decrease in the Australian dollar exchange rate partially offset with increases
from higher revenues.

Interest expense was $3.3 million in fiscal 1999 compared to $5.3 million in
fiscal 1998, a decrease of $2.0 million or 37.7 percent.  This decrease is due
to lower interest expense on bankruptcy claims.  Interest income was $0.7
million in fiscal 1999 compared with $1.3 million in fiscal year 1998 due to one
less week in fiscal 1999 and to lower cash balances during fiscal 1999.

The provision for income taxes was $1.8 million in fiscal 1999 compared to $2.2
million in fiscal 1998.  (See Note 4-Income Taxes, to Consolidated Financial
Statements).


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

Restaurant sales were $95.3 million in fiscal 1999 compared to $92.9 million in
fiscal 1998, an increase of $2.4 million or 2.6 percent.  On a comparative
restaurant basis, Sizzler(R) restaurants open more than one year, with fiscal
1998 adjusted to 52 weeks, experienced a 6.1 percent increase in average sales
per restaurant, a 2.0 percent decrease in the average number of customers per
restaurant and an 8.3 percent increase in the average customer check total.
There were 66 Company-operated Sizzler(R) restaurants as of both April 30, 1999
and 1998.   Franchise revenues were $6.6 million in fiscal 1999 compared to $4.2
million in fiscal 1998, an increase of $2.4 million or 57.1 percent.  The
increase in fiscal 1999 reflects higher franchise sales in fiscal 1999 and the
impact of a temporary royalty abatement program that offered lower royalty fees
to franchisees during fiscal 1998.  As of April 30, 1999 there were 197
Sizzler(R) franchise locations compared to 198 as of April 30, 1998.

                                       20
<PAGE>

Prime costs were $61.9 million in fiscal 1999 compared to $60.6 million in
fiscal 1998.  Prime costs, which include food, paper and labor, decreased to
65.0 percent of sales compared to 65.2 percent in fiscal 1998 due to lower labor
costs partially offset by a slight increase in food cost.

Other operating expenses amounted to $21.2 million in fiscal 1999 compared to
$21.4 million in fiscal year 1998 primarily due to an additional week in fiscal
1998.


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

Revenues from Company-operated Sizzler(R) restaurants were $39.0 million in
fiscal 1999 compared to $47.3 million in fiscal 1998, a decrease of $8.3 million
or 17.5 percent. This decrease includes $5.4 million related to a decrease in
the Australian dollar exchange rate. On a comparative restaurant basis, in
Australian dollars Sizzler restaurants open more than one year, with fiscal 1998
adjusted to 52 weeks, experienced a 0.2 percent decrease in average sales per
restaurant, a 2.8 percent decrease in average customers per restaurant and a 2.7
percent increase in the average customer check total.  There were 31 Company-
operated Sizzler(R) restaurants as of both April 30, 1999 and 1998.  Franchise
revenues were $1.2 million in fiscal 1999 compared to $2.1 million in fiscal
1998, a decrease of $0.9 million or 42.9 percent. The decrease is due to a
decrease in the Australian dollar exchange rate and to a decrease in the number
of franchise locations. As of April 30, 1999 there were 48 international
franchised restaurants and three joint venture restaurants in six countries
compared to 49 international franchised restaurants and three joint venture
restaurants as of April 30, 1998.  During fiscal 1999 two franchised restaurants
were opened in Japan and three restaurants were closed, one each in Indonesia,
South Korea and Taiwan.

Prime costs were $26.3 million in fiscal 1999 compared to $32.9 million in
fiscal 1998.  Prime costs, which include food, paper and labor, decreased to
67.4 percent of sales compared to 69.6 percent in the prior year.

Other operating expenses amounted to $6.5 million in fiscal year 1999 compared
to $10.6 million in fiscal year 1998 primarily due to a decrease in the
Australian dollar exchange rate and the additional week in fiscal 1998.

                                       21
<PAGE>

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

Revenues from the Company's KFC(R) restaurants were $84.3 million in fiscal 1999
compared to $94.8 million in fiscal 1998, a decrease of $10.5 million or 11.1
percent. This decrease includes $11.6 million related to a decrease in the
Australian dollar exchange rate offset by higher unit sales. On a comparative
restaurant basis in Australian dollars, KFC(R) restaurants open more than one
year, with fiscal 1998 adjusted to 52 weeks, experienced a 4.3 percent increase
in average sales per restaurant, a 0.4 percent decrease in average customers per
restaurant and a 4.7 percent increase in the average customer check total. As of
April 30, 1999 there were 101 KFC(R) restaurants compared to 98 as of April 30,
1998.

Prime costs were $50.7 million in fiscal 1999 compared to $57.8 million in
fiscal 1998.  Prime costs, which include food, paper and labor, decreased to
60.1 percent of sales compared to 61.0 percent in the prior year.

Other operating expenses amounted to $17.9 million in fiscal 1999 compared to
$22.5 million in fiscal 1998 primarily due to a decrease in the Australian
dollar exchange rate, the additional week in fiscal 1998 and to lower marketing
expenses in fiscal 1999.

                                       22
<PAGE>

--------------------------------------------------------------------------------

LIQUIDITY AND CAPITAL RESOURCES

--------------------------------------------------------------------------------

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

The Company's primary source of liquidity is cash flows from operations which
was $17.3 million in fiscal 2000 and $15.3 million in fiscal 1999. This increase
is primarily due to improved U.S. and international operations. The current
ratio was 2.0 at April 30, 2000 and 1.0 at April 30, 1999. At April 30, 2000,
working capital was $24.8 million compared to $0.2 million at the end of the
prior year. The increase in the current ratio and working capital is primarily
due to the increase in cash flows from operations and proceeds from the sale and
leaseback of the Australian KFC(R) and Sizzler(R) restaurant properties.

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

Total assets increased $1.2 million or 1.0 percent in fiscal year 2000. Property
and equipment represented 40.0 percent of total assets at the end of fiscal 2000
and 67.8 percent at the end of fiscal 1999.  This decrease is due to the sale
and leaseback transaction.

Capital expenditures were $11.0 million in fiscal year 2000, which included new
restaurant construction of $0.3 million and remodels of $10.7 million. The
Company anticipates continuing to grow international operations through
additional investment in Company-operated restaurants, joint ventures and the
development of the franchise system.

The Company anticipates capital expenditures in fiscal year 2001 will be
approximately $16.0 million, which will be used for new restaurants, remodels
and maintenance of existing restaurants and expect to fund this requirement with
cash flows from operations.

In addition, under the Company's agreement to purchase an 82 percent ownership
interest in FFPE, LLC, the holding company which owns the assets of Oscar's
Restaurants ("Oscar's") (see Notes to Consolidated Financial Statements Note 14-
Subsequent Event), the Company is obligated to pay approximately $16.0 million
to the sellers and issue warrants to purchase up to 1,250,000 shares of Sizzler
common stock at $4.00 per share.  In addition, the Company agreed to pay an
earn-out of up to $3.1 million or more if certain targets are achieved over a
two and a half-year period.  The Company has also made commitments to provide up
to an additional $9.5 million in loans to Oscar's for expansion purposes over
the next two years.  The Company expects to finance these requirements with
existing cash, proceeds from the future sale and leaseback of the remaining
Australia properties and/or an additional outside loan facility.  The Company's
cash from the sale and leaseback resides in a bank account in Australia pending
resolution of certain tax matters related to repatriating the funds to the U.S.
If the cash cannot be repatriated without a significant tax impact, the funds
will be

                                       23
<PAGE>

used to repay the Company's debt with Westpac Banking Corporation ("Westpac")
and the Company will put in place new debt, either in the U.S. or Australia, to
replace these funds.

Debt
----

On September 23, 1997, the Company obtained a $63.5 million AUD (approximately
$46.9 million US) bank facility from Westpac in order to refinance the claims of
the Company's unsecured creditors. The Westpac loan provides for a five-year
term at an interest rate equal to the Australian interbank borrowing rate, plus
a margin. The margin is based on a formula tied to the Company's international
operations ratio of debt to earnings before interest and taxes, and varies
between 1.25 percent and 2.25 percent. The Westpac loan involved the
collateralization of the Company's principal operating assets of its
international division. The Westpac loan is subject to a number of financial
covenants and other restrictions.

Based on current levels of operations and anticipated sales growth, management
believes that cash flow from operations will be sufficient to meet all of its
debt service requirements when due and to fund its capital expenditure and
working capital requirements through fiscal year 2001.

The Company anticipates that its U.S. assets will be free from encumbrances
related to the its Chapter 11 plan of organization by September 2000.

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

In accordance with SFAS NO. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133,"
the Company delayed the implementation of SFAS NO. 133, "Accounting for
Derivative Instruments and Hedging Activities."

In fiscal 2000, the SEC issued Staff Accounting Bulletin 101, "Revenue
Recognition" ("SAB No. 101").  SAB No. 101 addresses issues related to revenue
recognition and does not impact 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 timing 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 2001; (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

                                       24
<PAGE>

2001; (7) the anticipated investment of approximately $16 million of cash from
operations to promote the growth of U.S. and international Company operated
restaurants, joint ventures, and the U.S. and international Sizzler(R) franchise
system; (8) 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 2001; (9) the closing of Oscar's acquisition by September
2000; (10) the opening of new Oscar's locations during fiscal 2001; (11) the use
of the proceeds from the sale and leaseback transactions and/or a U.S. credit
facility to finance the Oscar's transaction; (12) whether higher rent expense
from the sale/leasebacks will continue to be partially offset by a reduction in
depreciation and income tax expense; and (13) the sufficiency of the Company's
supplies to carry on its 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 the implementation of the
new goods and services tax in Australia; (2) the Company's ability to complete
the remodel program and initiate 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 satisfaction of all
conditions to consummate  the Oscar's transaction by September 1, 2000; (10) the
ability of Oscar's to achieve the opening of the projected number of new
restaurants in fiscal 2001; (11) the Company's ability to repatriate the
proceeds from the sale and leaseback transactions without significant tax impact
or to secure new debt financing; (12) the Company's ability to reduce
depreciation and income tax expense to offset its increased rent expense; and
(13) that there will not be any shortages in critical supplies for the Company
to continue its business operations.

                                       25
<PAGE>

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

The Company's primary financial instrument subject to market risk is a bank loan
with an outstanding principal balance at April 30, 2000 of $23,356,000.  The
loan is payable in Australian dollars and is collateralized by the principal
operating assets of the Company's international division.  The line-of-credit
bears variable interest at a rate equal to the Australian interbank borrowing
rate (6.1 percent at April 30, 2000), plus a margin of 1.25 percent to 2.25
percent. The primary exposures relating to this financial instrument result from
both changes in the interest rates and fluctuation in foreign exchange rates.

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

To limit the Company's exposure to interest rate increases, the Company entered
into an interest rate cap contract which prevents the Company's interest rate
from exceeding 7.67 percent, in which case the subsidiary would receive the
difference between the contract rate and the actual interest rate.  The interest
rate cap is in place and covers approximately 31 percent of the loan principal
outstanding and expires September 30, 2002.

In addition, the Company has entered into an interest rate swap contract to
convert part of its variable interest exposure to a fixed rate of 7.67 percent.
The interest rate swap contract in place as of the end of the fiscal year
covered approximately 31 percent of the loan principal outstanding and expires
September 30, 2002.

At April 30, 2000, a hypothetical one percentage point increase in short-term
interest rates would result in a reduction of $161,000 in annual pre-tax
earnings. The estimated reduction is based on holding the unhedged portion of
bank debt at its April 30, 2000 level and using the foreign exchange rate at
April 30, 2000.

Foreign Exchange Exposure
-------------------------

The Company's foreign exchange exposure related to its bank debt is hedged since
payments are made from operating cash flows generated from the operations of the
Company's Australian subsidiaries.

                                       26
<PAGE>

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

              INDEX TO FINANCIAL STATEMENTS AND SUPPLEMNTARY 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, 2000 and April 30, 1999    F-4

     Consolidated Statements of Operations and Comprehensive Income
     for the Years Ended  April 30, 1998, 1999 and 2000                     F-6

     Consolidated Statements of Stockholders' Investment for the
     Years Ended April 30, 1998, 1999 and 2000                              F-7

     Consolidated Statements of Cash Flows for the Years Ended
     April 30, 1998, 1999 and 2000                                          F-8

     Notes to Consolidated Financial Statements                             F-9

Schedule I - Condensed Financial Information of the Registrant:

     Report of Independent Public Accountants                               F-31

     Balance Sheets as of April 30, 2000 and April 30, 1999                 F-32

     Statements of Operations for the Years Ended April 30, 1998,
     1999 and 2000                                                          F-34

     Statements of Cash Flows for the Years Ended April 30, 1998,
     1999 and 2000                                                          F-35

     Notes to Financial Statements                                          F-36

Schedule II - Valuation and Qualifying Accounts                             F-38
</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 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
Non-recurring items                                                     -            -       12,087             -
General and administrative expenses                                 4,658        4,094        6,713         4,881
                                                                 --------      -------      -------       -------
Earnings before interest, taxes and depreciation                    5,744        5,413       (7,312)        4,689
Depreciation and amortization                                       2,078        2,154        2,652         1,744
                                                                 --------      -------      -------       -------
Earnings (loss) before interest and taxes                           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
                                                                 ========      =======      =======       =======
Pro-forma diluted earnings per share(a)                          $   0.09      $  0.07      $  0.04       $  0.09
                                                                 ========      =======      =======       =======
=================================================================================================================


-----------------------------------------------------------------------------------------------------------------

                                                                 First       Second        Third        Fourth
Fiscal Year 1999                                                Quarter      Quarter      Quarter       Quarter
-----------------------------------------------------------------------------------------------------------------

Restaurants                                                       $50,733      $48,973      $66,147       $52,708
Franchise revenues                                                  1,845        2,041        1,955         1,924
                                                                  -------      -------      -------       -------
Revenues                                                           52,578       51,014       68,102        54,632

Cost of sales                                                      18,550       17,971       24,728        19,446
Labor and related costs                                            13,745       13,443       18,380        13,611
Other operating expenses                                           10,604       10,584       15,238        11,463
General and administrative expenses                                 4,267        4,233        4,228         4,146
                                                                  -------      -------      -------       -------
Earnings before interest, taxes and depreciation                    5,412        4,783        5,528         5,966
Depreciation and amortization                                       2,259        2,152        3,048         2,468
                                                                  -------      -------      -------       -------
Earnings before interest and taxes                                  3,153        2,631        2,480         3,498
                                                                  =======      =======      =======       =======
Net income                                                        $ 2,061      $ 1,604      $ 1,212       $ 2,515
                                                                  =======      =======      =======       =======

Basic and diluted earnings per share                              $  0.07      $  0.06      $  0.04       $  0.09
=================================================================================================================
</TABLE>
(a) See Notes to Consolidated Financial Statements, Note 12--Earnings per Share

                                      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, 2000 and 1999, and the related consolidated statements of
operations, comprehensive income, shareholders' 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 audited 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, 2000 and 1999, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States.



ARTHUR ANDERSEN LLP

Los Angeles, California
June 14, 2000

                                      F-3
<PAGE>

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

<TABLE>
<CAPTION>
As of April 30,                                                                2000                 1999
---------------------------------------------------------------------    ----------------     ----------------
<S>                                                                      <C>                  <C>
ASSETS
Current assets
  Cash and cash equivalents                                                      $ 38,789            $  14,691
  Receivables, net of reserves of $847
    in 2000 and $1,726 in 1999                                                      4,173                3,546
  Inventories                                                                       4,333                4,346
  Current tax asset                                                                 2,544                    -
  Prepaid expenses and other current assets                                         1,132                2,669
---------------------------------------------------------------------    ----------------     ----------------
  Total current assets                                                             50,971               25,252
---------------------------------------------------------------------    ----------------     ----------------

Property and equipment, at cost
  Land                                                                              6,804               22,582
  Buildings and leasehold improvements                                             58,628               88,537
  Equipment                                                                        61,801               64,969
  Capital leases                                                                    2,616                2,616
  Construction in progress                                                          4,168                2,628
---------------------------------------------------------------------    ----------------     ----------------
                                                                                  134,017              181,332
  Less - Accumulated depreciation and amortization                                (87,701)            (103,496)
---------------------------------------------------------------------    ----------------     ----------------
  Total property and equipment, net                                                46,316               77,836
---------------------------------------------------------------------    ----------------     ----------------

Property held for sale, net                                                         8,931                  711

Long-term notes receivable, net of reserves
  of $73 in 2000 and $508 in 1999                                                   1,224                1,553

Deferred income taxes                                                               3,405                  795

Intangible assets, net of accumulated amortization
  of $889 in 2000 and $887 in 1999                                                  1,876                2,104

Other assets, net of accumulated amortization
  and reserves of $16 in 2000 and $6 in 1999                                        3,157                6,440
---------------------------------------------------------------------    ----------------     ----------------
Total assets                                                                     $115,880            $ 114,691
=====================================================================    ================     ================
</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,                                                                   2000                 1999
-----------------------------------------------------------------------    -----------------    -----------------
<S>                                                                        <C>                  <C>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
  Current portion of long-term debt                                                $   5,206            $   5,898
  Accounts payable                                                                     8,196                7,892
  Other current liabilities                                                           10,209                8,853
  Income taxes payable                                                                 2,530                2,449
-----------------------------------------------------------------------    -----------------    -----------------
  Total current liabilities                                                           26,141               25,092
-----------------------------------------------------------------------    -----------------    -----------------

Long-term debt, net of current portion                                                21,198               26,918

Deferred gain on sale and leaseback                                                    8,269                    -

Pension liability                                                                      9,637                9,938

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 28,067,539 in 2000
    and 28,797,828 shares in 1999                                                        288                  288
  Additional paid-in capital                                                         278,408              278,365
  Accumulated deficit                                                               (219,769)            (222,191)
  Treasury stock, 706,700 shares at cost at April 30, 2000
    and none at April 30, 1999                                                        (1,948)                   -
  Accumulated other comprehensive income                                              (6,344)              (3,719)
-----------------------------------------------------------------------    -----------------    -----------------
  Total stockholders' investment                                                      50,635               52,743
-----------------------------------------------------------------------    -----------------    -----------------
Total liabilities and stockholders' investment                                     $ 115,880            $ 114,691
=======================================================================    =================    =================
</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,                                           2000                1999                1998
-------------------------------------------------------------    ----------------    ----------------    ----------------
<S>                                                              <C>                 <C>                 <C>
Revenues
  Restaurant sales                                                       $230,869            $218,561            $235,991
  Franchise revenues                                                        8,625               7,765               6,342
-------------------------------------------------------------    ----------------    ----------------    ----------------
  Total revenues                                                          239,494             226,326             242,333
-------------------------------------------------------------    ----------------    ----------------    ----------------
Costs and Expenses
  Cost of sales                                                            84,599              80,695              88,480
  Labor and related costs                                                  63,081              59,179              64,626
  Other operating expenses (asset write downs of $800                      50,847              47,889              49,157
        for 2000, $609 for 1999 and $0 for 1998),
  Depreciation and amortization                                             8,628               9,927              11,769
  Non-recurring items                                                      12,087                   -                   -
  General and administrative expenses                                      20,346              16,874              16,695
-------------------------------------------------------------    ----------------    ----------------    ----------------
  Total operating costs and expenses                                      239,588             214,564             230,727
-------------------------------------------------------------    ----------------    ----------------    ----------------
  Interest expense                                                          3,631               3,284               5,274
  Investment income, net                                                   (1,423)               (724)             (1,271)
  Other income                                                             (1,411)                  -                   -
-------------------------------------------------------------    ----------------    ----------------    ----------------
  Total costs and expenses                                                240,385             217,124             234,730
-------------------------------------------------------------    ----------------    ----------------    ----------------
Income (loss) before income taxes                                            (891)              9,202               7,603
Provision (benefit) for income taxes                                       (3,313)              1,810               2,225
-------------------------------------------------------------    ----------------    ----------------    ----------------
Net income                                                               $  2,422            $  7,392            $  5,378
=============================================================    ================    ================    ================
Basic and diluted earnings per share                                     $   0.08            $   0.26            $   0.19
=============================================================    ================    ================    ================
Weighted Average common shares outstanding:
  Basic                                                                    28,559              28,815              28,864
  Diluted                                                                  28,877              28,878              28,879
=============================================================    ================    ================    ================
Comprehensive Income:
  Net Income                                                             $  2,422            $  7,392            $  5,378
  Foreign currency translation adjustments (no tax effect)                 (2,625)                579              (7,171)
-------------------------------------------------------------    ----------------    ----------------    ----------------
Total comprehensive income (loss)                                        $   (203)           $  7,971            $ (1,793)
=============================================================    ================    ================    ================
</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>
                                                                                                  Accum-
                                                                                                lated Other
                                      Common               Additional     Accum-                  Compre-
                                      Shares      Common    Paid-In       lated      Treasury     hensive
                                    Outstanding   Stock     Capital      Deficit      Stock       Income       Total
----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>           <C>       <C>         <C>          <C>          <C>         <C>
Balance at April 30, 1997           28,898,003    $ 289     $276,200    $(234,961)   $     -       $ 2,873    $ 44,401
   Restricted stock repurchased         (7,022)                  (17)                                              (17)
   Restricted stock canceled           (55,833)      (1)                                                            (1)
   Stock issued                          5,760                    14                                                14
   Net income                                                               5,378                                5,378
   Amortization of restricted stock                            1,156                                             1,156
   Foreign currency translation
     adjustment                                                                                     (7,171)     (7,171)
----------------------------------------------------------------------------------------------------------------------

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                    (24,422)                  (50)                                              (50)
    repurchased
   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
======================================================================================================================
</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,                                          2000                 1999                  1998
-------------------------------------------------------------    ----------------     ----------------     -----------------
<S>                                                              <C>                  <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                               $  2,422             $  7,392              $  5,378
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                                            8,628                9,927                11,769
   Deferred income tax provision (benefit)                                 (6,294)               3,377                  (925)
   Provision for bad debts                                                   (137)                 446                   651
   Non-recurring items                                                     12,087                    -                     -
   Other                                                                     (384)               1,114                  (473)
Changes in operating assets and liabilities:
   Receivables                                                               (410)              (1,394)                1,015
   Inventories                                                               (304)                 (13)                1,131
   Prepaid expenses and other current assets                                3,285               (5,410)                  (50)
   Accounts payable                                                           785                  139                (5,881)
   Accrued liabilities                                                     (2,705)               3,415                (9,681)
   Income taxes payable                                                     1,149               (1,703)                2,353
Changes due to reorganization activities:
   Payments of reorganization costs                                          (779)              (2,016)               (6,442)
   Interest expense accrued                                                     -                    -                 2,773
-------------------------------------------------------------    ----------------     ----------------     -----------------
Net cash provided by operating activities                                  17,343               15,274                 1,618
-------------------------------------------------------------    ----------------     ----------------     -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Additions to property and equipment                                    (10,983)              (7,684)               (8,931)
   Proceeds from sale of assets                                            26,781                1,754                28,896
   Other assets                                                              (856)              (1,137)                 (489)
-------------------------------------------------------------    ----------------     ----------------     -----------------
Net cash provided by (used in) investing activities                        14,942               (7,067)               19,476
-------------------------------------------------------------    ----------------     ----------------     -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Long-term borrowings                                                         -                    -                46,895
   Reduction of long-term debt                                             (2,922)              (8,580)               (4,865)
   Payment of allowed claims pursuant to
     the reorganization plan                                               (4,047)              (6,000)              (75,159)
   Repurchase of common stock                                              (1,948)                   -                     -
   Other, net                                                                 730                 (103)                 (883)
-------------------------------------------------------------    ----------------     ----------------     -----------------
Net cash used in financing activities                                      (8,187)             (14,683)              (34,012)
-------------------------------------------------------------    ----------------     ----------------     -----------------
Net increase (decrease) in cash and cash equivalents                       24,098               (6,476)              (12,918)
-------------------------------------------------------------    ----------------     ----------------     -----------------
Cash and cash equivalents at beginning of year                             14,691               21,167                34,085
-------------------------------------------------------------    ----------------     ----------------     -----------------
Cash and cash equivalents at end of year                                 $ 38,789             $ 14,691              $ 21,167
=============================================================    ================     ================     =================

Supplemental Cash Flow Disclosures
  Cash paid during the year for:
    Interest expense                                                     $  3,635             $  3,290              $  2,481
    Income taxes                                                         $  1,720             $     72              $    693
</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 and the operation of
Kentucky Fried Chicken ("KFC(R)") franchises in Australia.

Introduction: As discussed in Note 2 - Bankruptcy Reorganization, to
Consolidated Financial Statements, 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 22, 1997, when the reorganization plans became
effective. Consequently, the consolidated statements for the year ended April
30, 1998 have been prepared in accordance with Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,"
issued by the American Institute of Certified Public Accountants in November
1980.

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.

Certain financial statements, notes and supplementary data for the prior years
have been reclassified to conform with the 2000 presentation.

Accounting Period: The Company utilizes a fifty-two, fifty-three week fiscal
year ending on the Sunday nearest to April 30. Fiscal year 2000 and 1999 were
fifty-two week years ending on April 30, 2000 and May 2, 1999, respectively.
Fiscal year 1998 was a fifty-three week year ending on May 3, 1998. 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.

                                      F-9
<PAGE>

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. Royalties which are based
upon a percentage of sales, are recognized as income on the accrual basis. On a
limited basis, franchisees have also entered into leases of restaurant
properties leased or owned by Sizzler. 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 which measures compensation cost as the
excess, if any, of the quoted market price of Sizzler'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 is computed as net income or loss
divided by the weighted average number of common shares outstanding for the
period. Diluted EPS includes the dilutive effects of options and warrants using
the treasury stock method.

Cash and Cash Equivalents: At April 30, 2000 and 1999 cash and cash equivalents
consists of cash and short-term investments, carried at cost, with an original
maturity of less than ninety days.  Restricted cash balances were $25.2 million
and zero as of April 30, 2000 and 1999, respectively.

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

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.

                                      F-10
<PAGE>

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 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 estimated future cash flows. Considerable management
judgment is necessary to estimate discounted future cash flows. Accordingly,
actual results could vary significantly from such estimates.

Depreciation and Amortization: Depreciation and amortization are provided 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 its expected net
realizable value based upon the historical trend and their expected impact on
future operating cash flows.

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

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.

                                      F-11
<PAGE>

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.

Comprehensive Income: In fiscal year 1999, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income". Accumulated other comprehensive income may
include foreign currency translation adjustments, minimum pension liability
adjustments, and unrealized gains and losses on investments in equity
securities.

New Accounting Standards: In accordance with SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB Statement No. 133," the Company had delayed the implementation of SFAS
NO. 133, "Accounting for Derivative Instruments and Hedging Activities."

In fiscal year 2000, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101, "Revenue Recognition" ("SAB No.101").  SAB No. 101
addresses issues related to revenue recognition and does not impact the
Company's consolidated results of operations, financial position or cash flows.


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 the bankruptcy proceedings.

The Company's plan of reorganization provided for full payment of allowed
creditor claims, including interest, from the Company's international
operations. In September

                                      F-12
<PAGE>

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 4 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.

Reorganization Costs
--------------------

The Company incurred severance, temporary staff, legal and professional costs
relating to the 1996 reorganization of $0.8 million, $2.0 million and $6.4
million, in fiscal 2000, 1999, and 1998, respectively. These reorganization
costs were charged against established reserves.


Note 3 - Nonrecurring Items
--------------------------------------------------------------------------------

Results for fiscal 2000 include two non-recurring items.  During the year the
Company completed the sale and leaseback of 48 of its 67 Australian KFC(R) and
Sizzler(R) restaurant properties. 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 immediately recognized a $5.5 million loss on the transaction and
has deferred an $8.8 million gain. The gain will be recognized over the life of
the leases which average 8 years.

Also during the year, 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 that 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.

                                      F-13
<PAGE>

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
$5,953,000 of the Company's foreign operations at April 30, 2000. It is the
Company's intention to reinvest such earnings permanently in its foreign
operations.

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,
                                               -------------------------------
                                                 2000        1999        1998
     Current
        Federal                                $   236      $    -     $     -
        State                                       88           -           -
        Foreign                                  3,623       1,435       3,150
                                               -------------------------------
                                                 3,947       1,435       3,150
                                               -------------------------------
     Deferred
        Federal                                   (255)          -           -
        State                                      (95)          -         450
        Foreign                                   (745)        375      (1,375)
                                               -------------------------------
                                                (1,095)        375        (925)
                                               -------------------------------
     Change in Valuation Allowance              (6,165)          -           -
                                               -------------------------------
     Provision (benefit) for income taxes      $(3,313)     $1,810     $ 2,225
                                               ===============================

                                      F-14
<PAGE>

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

<TABLE>
<CAPTION>
                                                             For the years ended April 30,
                                                         --------------------------------------
                                                           2000            1999            1998
                                                         ------           -----           -----
<S>                                                     <C>               <C>             <C>
     Federal statutory tax rate                           (35.0)           35.0            35.0
     State and local income taxes, net of
        federal benefit                                    (5.8)            6.1             6.1
     Australian taxes, net of federal benefit             205.0            12.8            15.2
     Permanent differences                                 37.9             4.0             2.8
     Change in valuation allowance                       (691.9)          (38.2)          (29.8)
     Change in effective tax rate                         118.0               -               -
                                                         ------           -----           -----
        Effective tax rate                               (371.8)           19.7            29.3
                                                         ======           =====           =====
</TABLE>

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

<TABLE>
<CAPTION>
                                                                For the years ended April 30,
                                                         ------------------------------------------
                                                          2000               1999              1998
                                                         -----             ------            ------
<S>                                                      <C>               <C>               <C>
     Domestic                                            $(405)            $3,741            $3,527
     Foreign                                              (486)             5,461             4,076
                                                         -----             ------            ------
                                                         $(891)            $9,202            $7,603
                                                         =====             ======            ======
</TABLE>

                                      F-15
<PAGE>

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

<TABLE>
<CAPTION>
                                                                      As of April 30,
                                                             ---------------------------------
                                                                    2000               1999
                                                             ---------------------------------
<S>                                                          <C>                 <C>
Current tax assets:
   Deferred income                                                 $      -           $     18
   Operating reserves and accruals                                    2,129              2,487
   Creditor trust liability                                             415                605
                                                             --------------      -------------
   Gross current tax assets                                           2,544              3,110
   Valuation allowance                                                    -             (3,110)
                                                             --------------      -------------
   Current tax assets                                              $  2,544           $      -
                                                             ==============      =============

Non-current tax assets:
   Other                                                           $ (2,600)          $ (2,796)
   Property and equipment                                             2,294               (886)
   Other credits                                                      4,925              4,689
   Australia, net                                                     1,230              3,858
   Deferred gain                                                      3,090                  -
   Foreign tax credits                                               10,920             11,075
   Net operating loss                                                45,218             49,582
                                                             --------------      -------------
   Gross deferred income taxes                                       65,077             65,522
   Valuation allowance                                              (61,672)           (64,727)
                                                             --------------      -------------
   Net deferred income taxes                                       $  3,405           $    795
                                                             ==============      =============
</TABLE>

                                      F-16
<PAGE>

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.

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,
2000.

<TABLE>
<CAPTION>
                                                  Gross
                                                  Amount              Expiration
                                                 --------            ------------
<S>                                           <C>                  <C>
     Federal net operating loss                  $124,192             2012 - 2013
     California net operating loss               $ 19,903             2002 - 2004
     Foreign tax credit                          $ 10,920             2001 - 2003
     Minimum tax credit                          $  2,085             Indefinite
     General business credit                     $  2,840             2005 - 2010
</TABLE>


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 2013. 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.

                                      F-17
<PAGE>

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>
2001                                                                $ 196          $11,742            $  853
2002                                                                  101           10,928               853
2003                                                                  101           10,175               793
2004                                                                  101            9,438               733
2005                                                                  101            8,134               617
Thereafter                                                            283           27,571             1,293
                                                             ------------     ------------       -----------
Total minimum lease
  commitments/receivables                                             883          $77,988            $5,142
                                                                              ============       ===========

Less amount representing interest                                    (272)
                                                             ------------
Present value of minimum lease payments                               611
Less current portion of capital lease obligations                    (116)
                                                             ------------

Long-term capital lease obligations                                 $ 495
                                                             ============
</TABLE>


Rent expense consists of (in thousands):

<TABLE>
<CAPTION>
                                               Years ended April 30,
                                         ---------------------------------------
                                          2000            1999            1998
                                         -------         -------         -------
<S>                                      <C>             <C>             <C>
     Minimum rentals                     $11,249         $ 8,564         $11,594
     Contingent rentals                      547             475             489
     Less sublease rentals                (1,053)         (1,018)         (1,477)
                                         ---------------------------------------

     Net rent expense                    $10,743         $ 8,021         $10,606
                                         =======================================
</TABLE>

                                      F-18
<PAGE>

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

A summary of debt outstanding as of April 30, 2000 and 1999 is as follows (in
thousands):

<TABLE>
                                                                      2000              1999
---------------------------------------------------------------------------------------------
<S>                                                                 <C>                <C>
Non-collateralized borrowings, at variable interest rates,
 due through 2012                                                   $ 1,874           $ 2,255
Mortgage notes payable, with an interest rate of 10.015
 percent, collateralized by land and building with an original
 cost of approximately $600 due through 2039                            563               564
Other collateralized note, with a variable interest rate, due
 through 2002                                                        23,356            29,110
Capital lease obligations                                               611               887
---------------------------------------------------------------------------------------------
                                                                     26,404            32,816
Less - current portion                                               (5,206)           (5,898)
---------------------------------------------------------------------------------------------
  Long-term debt                                                    $21,198           $26,918
=============================================================================================
</TABLE>

Payment of $5,206 on long-term debt, including capital lease obligations is due
in fiscal 2001, $5,055 in 2002 $14,471 in 2003, $285 in 2004, and $1,387
thereafter.

On September 23, 1997, the Company obtained a $63.5 million AUD (approximately
$46.9 million US dollar) bank facility from Westpac Banking Corporation
("Westpac") (included in `Other collateralized note' above) in order to
refinance the claims of the Company's unsecured creditors. The Westpac loan
provides for a five-year term at an interest rate equal to the Australian
interbank borrowing rate, plus a margin. The margin is based on a formula tied
to the Company's international operations ratio of debt to earnings before
interest and taxes, and varies between 1.25 percent and 2.25 percent. The
Westpac loan involved the collateralization of the Company's principal operating
assets of its international division. The Westpac loan is subject to a number of
financial covenants and other restrictions. The Company is in compliance with
all covenants and restrictions.

Management believes that the aggregate fair value of the Company's long-term
debt approximates the aggregate book value, as substantially all such debt is
comprised of variable-rate obligations.

                                      F-19
<PAGE>

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

The Company maintains an executive supplemental benefit 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, 2000, 1999 and 1998 determined under
SFAS No. 87 "Employees Accounting for Pensions" are as follows:

<TABLE>
<CAPTION>
                                                                     Fiscal Year Ended
                                                       --------------------------------------------
                                                        April 30,         April 30,       April 30,
                                                           2000             1999            1998
                                                       ------------     ------------    -----------
<S>                                                    <C>               <C>              <C>
     (in thousands)
     Pension Plan:
     Service cost                                      $          5      $       51     $       44
     Interest cost                                              885             962          1,024
     Expected return on plan assets                               -               -              -
     Amortization of prior service cost                           -               -              -
     Recognized net actuarial loss                               86              81             57
                                                       ------------      ----------     ----------
     Net periodic benefit cost                         $        976      $    1,094     $    1,125
                                                       ============      ==========     ==========
</TABLE>


                                      F-20
<PAGE>

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,
                                                           2000         1999
                                                      -----------     ---------
     (in thousands)
     Change in Benefit Obligation
     Benefit obligation at beginning of year              $ 9,938       $10,065
     Service cost                                               5            51
     Interest cost                                            885           962
     Actuarial loss                                            (9)           42
     Benefits paid                                         (1,182)       (1,182)
                                                          -------       -------
     Benefit obligation at end of year                    $ 9,637       $ 9,938
                                                          =======       =======

     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                                $     -       $     -
                                                          =======       =======

     Amounts Recognized in the Consolidated
     Balance Sheets Consist of:
     Accrued benefit liability                            $ 9,637       $ 9,938
     Accumulated other comprehensive income                     -             -
                                                          -------       -------
     Net amount recognized                                $ 9,637       $ 9,938
                                                          =======       =======

                                      F-21
<PAGE>

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

                                                   2000     1999     1998
                                                   ----     ----     ----

     Discount rate (percent)                       9.5      9.5      9.5
     Rates of salary progression (percent)         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 the plan. Under the plan the Company can
elect to make matching contributions, with certain limitations. Amounts charged
to income under these plans were $130,000, $78,000 and zero for the years ended
April 30, 2000, 1999 and 1998, respectively.


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

At April 30, 2000, there were no material commitments for capital projects.

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.


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

On November 11, 1999, the Board of Directors authorized a plan to repurchase up
to 1.5 million shares of Sizzler common stock. During fiscal 2000, the Company
repurchased 706,700 shares for a total of $1.9 million.


Note 10 - Stock Options and Restricted Stock
--------------------------------------------------------------------------------

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.

                                      F-22
<PAGE>

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 new 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:

                                             2000       1999      1998
                                             ----       ----      ----

          Expected Life (years)                 5          5         5
          Volatility (percent)                 64         61        72
          Risk Interest (percent)            5.55       5.30      6.90
          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.

                                                         2000     1999    1998
                                                        ------   ------  ------
   Net Income:                            As Reported   $2,422   $7,392  $5,378
                                          Pro Forma     $1,382   $6,501  $4,515

   Basic and Diluted Earnings Per Share:  As Reported   $ 0.08   $ 0.26  $ 0.19
                                          Pro Forma     $ 0.05   $ 0.23  $ 0.16

                                      F-23
<PAGE>

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

The outstanding options become exercisable in varying amounts through 2005. A
summary of stock option transactions follows:

<TABLE>
<CAPTION>
                                                               For The Years Ended April 30
                           ---------------------------------------------------------------------------------------------------

                                         2000                                  1999                            1998
                           ------------------------------------      ---------------------------     -------------------------

                                                     Average                           Average                         Average
                                 Option               Price            Option           Price          Option           Price
                                 ------               -----            ------           -----          ------           ----
<S>                        <C>                      <C>              <C>              <C>            <C>              <C>
Options outstanding
  beginning of the year            2,331,154        $    2.43          229,523        $    3.92        109,347            7.85
Options granted                      284,240             2.33        2,182,752             2.31        164,040            2.55
Options exercised                       (833)            2.69                -                -              -               -
Options canceled                    (187,617)            3.39          (81,121)            3.27        (43,864)           8.57
                                   ---------                         ---------        ---------        -------           -----
Options outstanding
  end of year                      2,426,944        $    2.35        2,331,154        $    2.43        229,523        $   3.92
                                   =========        =========        =========        =========        =======        ========

Options exercisable at
  end of year                        648,889        $    2.24          217,381        $    2.89         97,483        $   5.53
                                     =======        =========        =========        =========        =======        ========


Weighted average fair
  value of options granted
  during the year.                                  $    1.50                         $    1.35                       $   2.19
                                                    =========                         =========                       ========
</TABLE>

The following table summarizes information about stock options outstanding at
April 30, 2000.

<TABLE>
<CAPTION>
                                                                 Weighted Average
           Exercise                     Number                      Remaining                    Number
            Prices                    Outstanding                Contractual Life             Exercisable
            ------                    -----------                ----------------             -----------
         <S>                          <C>                        <C>                          <C>
         $0.00 - 1.25                     167,284                     7.5 years                   136,604
         $1.26 - 2.50                   1,195,748                     8.7 years                   292,374
         $2.51 - 5.00                   1,035,000                     7.7 years                   190,999
         $5.01 - 7.50                      23,412                     4.5 years                    23,412
         $7.51 - 12.50                      5,500                     1.6 years                     5,500
                                      -----------                                             -----------

                                        2,426,944                                                 648,889
                                      ===========                                             ===========
</TABLE>


                                      F-24
<PAGE>

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 2000, approximately $1,115,000 in
1999 and $1,156,000 in 1998. A summary of restricted stock transactions follows:

<TABLE>
<CAPTION>
                                                            For the years ended April 30,
                                                     --------------------------------------------
    Shares Outstanding                                 2000              1999             1998
    ---------------------------------------------------------------------------------------------
    <S>                                              <C>               <C>              <C>
    Shares restricted at beginning of the year        286,162           526,336         1,016,625
    Shares granted                                          -                 -                 -
    Shares released                                  (278,162)         (234,174)         (434,456)
    Shares canceled                                         -            (6,000)          (55,833)
    ---------------------------------------------------------------------------------------------
    Shares restricted at end of the year                8,000           286,162           526,336
    =============================================================================================
</TABLE>

                                      F-25
<PAGE>

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

Substantially all of the Company's revenues 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 foreign Sizzler(R)
restaurant and franchise operations. KFC consists of KFC(R) franchise
restaurants in Australia. Corporate and other includes any items not included in
the reportable segments listed above. The effect of all intercompany
transactions are eliminated when computing revenues, earnings before interest,
taxes, and corporate overhead, and identifiable assets.

Earnings before interest and taxes include segment operating results before
investment income, interest expense, income taxes, non-recurring charges, 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. The negative amount in corporate and
other assets in fiscal years 1999 and 1998 are a result of a deferred income tax
liability that exceeded the deferred assets of the other segments.

<TABLE>
                                                     2000         1999        1998
                                                     ----         ----        ----
<S>                                              <C>           <C>          <C>
Revenues (in thousands):
------------------------
Sizzler - Domestic                                 $104,720     $101,872    $ 97,127
Sizzler -  International                             42,255       40,176      50,364
KFC                                                  92,519       84,278      94,842
Corporate and other                                       -            -           -
                                                 ----------    ---------    --------
Total                                              $239,494     $226,326    $242,333
                                                 ----------    ---------    --------

Depreciation and Amortization (in thousands):
----------------------------------------------
Sizzler - Domestic                                 $  3,369     $  3,484    $  3,942
Sizzler - International                               1,877        2,565       3,081
KFC                                                   3,052        3,575       4,149
Corporate and other                                     330          303         597
                                                 ----------     --------    --------
Total                                              $  8,628     $  9,927    $ 11,769
                                                 ----------     --------    --------
</TABLE>

                                      F-26
<PAGE>

<TABLE>
<CAPTION>
                                                             2000               1999             1998
                                                             ----               ----             ----
<S>                                                         <C>                <C>               <C>
Earnings Before Interest, Taxes and
-----------------------------------
Non-Recurring Items (in thousands):
---------------------------------
Sizzler - Domestic                                           $  9,958           $  8,175         $  6,973
Sizzler - International                                         2,375              2,161            2,214
KFC                                                             9,312              7,679            8,164
Corporate and other                                            (8,241)            (6,253)          (5,745)
                                                         ------------     --------------   --------------
Total                                                        $ 13,404           $ 11,762         $ 11,606
                                                         ------------     --------------   --------------

Capital Expenditures (in thousands):
----------------------------------
Sizzler - Domestic                                           $  7,471           $  4,501         $  4,286
Sizzler - International                                         1,163                619              726
KFC                                                             1,729              2,453            3,582
Corporate and other                                               620                111              337
                                                         ------------     --------------   --------------
Total                                                        $ 10,983           $  7,684         $  8,931
                                                         ------------     --------------   --------------

Identifiable Assets (in thousands):
----------------------------------
Sizzler - Domestic                                           $ 37,332           $ 38,713         $ 37,585
Sizzler - International                                        15,315             33,641           30,939
KFC                                                            16,847             33,384           42,626
Corporate and other                                            46,386              8,953            9,311
                                                         ------------     --------------   --------------
Total                                                        $115,880           $114,691         $120,461
                                                         ------------     --------------   --------------
</TABLE>

                                      F-27
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                             FOR THE YEARS ENDED APRIL 30,
(In thousands, except EPS)                                              2000              1999               1998
                                                                     -------           -------            -------
<S>                                                                  <C>               <C>                <C>
Numerator for both basic and diluted
   EPS - Net income                                                  $ 2,422           $ 7,392            $ 5,378
                                                                     =======           =======            =======

Denominator:
 Denominator for basic EPS - weighted average
  shares of common stock outstanding                                  28,559            28,815             28,864
 Effect of dilutive stock options                                        318                63                 15
                                                                     -------           -------            -------
 Denominator for diluted EPS - adjusted
  weighted average shares outstanding                                 28,877            28,878             28,879
                                                                     =======           =======            =======

      Basic and diluted earnings per share                           $  0.08           $  0.26            $  0.19
                                                                     =======           =======            =======

Pro-forma earnings per share data:
   Non-recurring items:
      Sale-leasebacks                                                $(5,500)/(a)/
      Restructuring charge                                            (6,600)/(a)/
      Income tax benefit                                               5,900 /(b)/
                                                                     -------
      Total non-recurring items                                      $(6,200)
   Denominator for diluted EPS                                        28,877
                                                                     -------
   Impact of non-recurring items                                     $  0.21           $     -            $     -
                                                                     =======           =======            =======

     Diluted earnings per share without
       non-recurring items                                           $  0.29           $  0.26            $  0.19
                                                                     =======           =======            =======
</TABLE>

     (a)  See Note 3 - Non-recurring Items
     (b)  See Note 4 - Income Taxes

                                      F-28
<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 obligated to be
available 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. Payments in the amount of $34,000 were made
to Mr. Smith under the agreement 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 on
September 30, 1999. During fiscal years 2000, 1999 and 1998, the Company paid
Mr. Krantz an aggregate of $103,000, $124,000 and  $244,000 respectively, for
fees and expenses under the consulting agreement. These amounts are recorded in
general and administrative expenses in the 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 payment 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 administrate expenses in
the statement of operations and comprehensive income.

                                      F-29
<PAGE>

Note 14 - Subsequent Event
--------------------------------------------------------------------------------

On May 23, 2000, the Company entered into an agreement to acquire 82 percent of
the outstanding shares of FFPE, LLC, the holding company which owns the assets
of Oscar's, a San Diego, California-based restaurant company operating under the
name "Oscar's".  Upon closing, the Company will pay approximately $16 million in
cash and issue warrants to purchase up to 1,250,000 shares of Sizzler common
stock at $4.00 per share. In addition, the Company has agreed to pay an earn-out
amount in two and one-half years which may amount to as much as $3.1 million or
more if certain targets are achieved.  Completion of the acquisition is expected
to occur by September 2000 subject to government approvals and other conditions.

The Company will account for the acquisition under the purchase method and
estimates goodwill will be approximately $16.2 million to be amortized over 20
years.

                                      F-30
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Sizzler International Inc.:

We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated balance sheets of Sizzler International, Inc.
("the Company") and subsidiaries as of April 30, 2000 and 1999, and the related
consolidated statements of operations and comprehensive income, stockholders'
investment and cash flows for each of the three years then ended April 30, 2000,
and, in our report dated June 14, 2000, we expressed an unqualified opinion on
those statements.  In our opinion, the information set forth in the attached
schedules is fairly stated, in all material respects, in relation to the
financial statements from which it has been derived.

ARTHUR ANDERSEN LLP

Los Angeles, California
June 14, 2000

                                      F-31
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                                 As of April 30,
                                                                                 ---------------
                                                                           2000               1999
                                                                        ----------        ------------
<S>                                                                     <C>               <C>
ASSETS
Current assets
 Cash and cash equivalents                                                $  2,167            $   2,910
 Receivables                                                                   604                  528
 Inventories                                                                    41                  106
 Prepaid expenses and other current assets                                      76                  602
------------------------------------------------------                  ----------        -------------
 Total current assets                                                        2,888                4,146
------------------------------------------------------                  ----------        -------------

Property and equipment, at cost
 Buildings and leasehold improvement                                           659                    -
 Equipment                                                                   6,666                    7
 Construction in progress                                                      124                    -
------------------------------------------------------                  ----------        -------------
                                                                             7,449                    7
 Less - Accumulated depreciation and amortization                           (6,643)                  (1)
------------------------------------------------------                  ----------        -------------
 Total property and equipment, net                                             806                    6
------------------------------------------------------                  ----------        -------------

Investment in subsidiaries                                                  63,780               56,713

Deposits and other assets                                                    2,851                6,030

------------------------------------------------------                  ----------        -------------
Total assets                                                              $ 70,325            $  66,895
======================================================                  ==========        =============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-32
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                     As of April 30,
                                                                                     ---------------
                                                                                  2000              1999
                                                                                --------          ---------
<S>                                                                             <C>               <C>
LIABILITIES
Current liabilities
 Accounts payable                                                               $       256       $      23
 Other current liabilities                                                              435              46
------------------------------------------------------------------              -----------       ---------
Total current assets                                                                    691              69
------------------------------------------------------------------              -----------       ---------
Intercompany payable                                                                  9,362           4,145

Pension liability                                                                     9,637           9,938

Stockholders' investment
 Common stock, authorized 50,000,000 shares at $.01
 par value; issued and outstanding 28,067,539 in 2000
 and 28,797,828 shares in 1999                                                          288             288
 Additional paid-in capital                                                         278,408         278,365
 Accumulated deficit                                                               (219,769)       (222,191)
 Treasury stock, 706,700 shares at cost at April 30, 2000
  and none at April 30, 1999                                                         (1,948)              -
 Translation adjustment                                                              (6,344)         (3,719)
------------------------------------------------------------------              -----------       ---------
  Total stockholders' investment                                                     50,635          52,743
------------------------------------------------------------------              -----------       ---------
Total liabilities and stockholders' investment                                    $  70,325       $  66,895
==================================================================              ===========       =========
</TABLE>

See Notes to Condensed Financial Statements

                                      F-33
<PAGE>

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

<TABLE>
<CAPTION>
                                                                     For the Years Ended April 30,
                                                                     -----------------------------
                                                               2000               1999              1998
                                                           ------------      -------------      ------------
<S>                                                        <C>               <C>                <C>
Revenues
  Allocated general and  administrative                      $   9,375           $   2,458         $   3,642

Costs and expenses
  Depreciation and amortization                                    323                 296               132
  General and administrative                                    14,947               5,859             4,218
------------------------------------------------------     -----------       -------------      ------------

  Total operating costs                                         15,270               6,155             4,350
------------------------------------------------------     -----------       -------------      ------------

  Interest expense                                                 893                 307             2,854
  Equity in earnings of subsidiaries                            (9,090)            (11,160)           (8,652)
  Investment income                                               (120)               (236)             (288)
------------------------------------------------------     -----------       -------------      ------------

  Total costs and expenses                                       6,953              (4,934)           (1,736)
------------------------------------------------------     -----------       -------------      ------------

Net Income                                                   $   2,422           $   7,392         $   5,378
======================================================     ===========       =============      ============

Comprehensive Income:

  Net Income                                                 $   2,422           $   7,392         $   5,378

  Foreign currency translation adjustments
  (no tax effect)                                               (2,625)                579            (7,171)
------------------------------------------------------     -----------       -------------      ------------

Total Comprehensive Income (loss)                            $    (203)          $   7,971         $  (1,793)
======================================================     ===========       =============      ============

See Notes to Condensed Financial Statements
</TABLE>

                                      F-34
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                    For the Years Ended April 30,
                                                                                    -----------------------------
                                                                              2000               1999                1998
                                                                          -------------      ------------       -------------
<S>                                                                       <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net cash provided by (used in) operating activities                        $   (2,889)        $    2,078        $     (4,950)

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchases of property and equipment                                              (172)                 -                   -

CASH FLOWS FROM FINANCING ACTIVITIES
 Borrowings (repayment) intercompany amounts                                     4,266             (8,106)             10,096
  Repurchase of common stock                                                    (1,948)                 -                   -

---------------------------------------------------------------------    -------------       ------------       -------------
Net cash provided by (used in) financing activities                              2,318             (8,106)             10,096
---------------------------------------------------------------------    -------------       ------------       -------------
Net increase (decrease) in cash and equivalents                                   (743)            (6,028)              5,146
---------------------------------------------------------------------    -------------       ------------       -------------
Beginning balance, cash and cash equivalents                                     2,910              8,938               3,792
---------------------------------------------------------------------    -------------       ------------       -------------
Ending balance, cash and cash equivalents                                   $    2,167         $    2,910        $      8,938
=====================================================================    =============       ============       =============
</TABLE>

See Notes to Condensed Financial Statements

                                      F-35
<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.  As of April 30, 2000 asset distributions from certain
Australian subsidiaries 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 a 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
$893,000, $307,000, and $2,854,000 for the years ending April 30, 2000, 1999 and
1998, respectively.

The statement of cash flows reflects a non-cash transfer of property and
equipment from a subsidiary to SII, with a net book value of $951,000, during
the year ended April 30, 2000.

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).

                                      F-36
<PAGE>

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

Notes Payable:  SII has no debt at April 30, 2000 (See Note 6 - Debt to
Consolidated Financial Statements for a discussion of the total debt for the
consolidated group).

Material Contingencies: SII management is not aware of any material
contingencies as of April 30, 2000 (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 $4.3 million and $10.1 million in fiscal year 2000 and 1998,
respectively.  SII loaned $8.1 million to consolidated subsidiaries in fiscal
year 1999.

Dividends: SII did not receive any dividends from subsidiaries during the three
year period ending April 30, 2000.

                                      F-37
<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, 2000, 1999, AND 1998
              --------------------------------------------------

                      Reserve for Accounts Receivable and
                      -----------------------------------
                           Notes Receivable Bad Debt
                           -------------------------
                                (IN THOUSANDS)

                               Balance at                            Balance
                               Beginning                            at End of
                               of Period    Additions   Deductions    Period
                              -----------  ----------   ----------  ----------

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


  Year ended April 30, 1999    $    3,380   $     501    $   1,647    $  2,234
                              ===========  ==========   ==========  ==========


  Year ended April 30, 1998    $    3,971   $   1,169    $   1,760    $  3,380
                              ===========  ==========   ==========  ==========

                                      F-38
<PAGE>

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

None.

                                       27
<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 2000 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, 2000.


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 2000 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 2000 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 2000
Annual Meeting of the Stockholders. Such information is incorporated herein by
reference.

                                       28
<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, 2000 and 1999

          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, 2000

          Consolidated Statements of Stockholders' Investment of Sizzler
          International, Inc. and Subsidiaries for each of the three years in
          the period ended April 30, 2000

          Consolidated Statements of Cash Flows of Sizzler International, Inc.
          and Subsidiaries for each of the three years in the period ended April
          30, 2000

          Notes to Consolidated Financial Statements

     (2)  Financial Statement Schedules:

          i.  Condensed Financial Information of Registrant
          ii. Valuation and Qualifying Accounts

     (3)  Exhibits:

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

       2.1     Registrant's Sixth Amended Plan of Reorganization dated August
               26, 1997, incorporated herein by reference to Exhibit 2.1 to the
               Registrant's Form 8-K report filed October 8, 1997.

       2.2     Sizzler Restaurants International, Inc.'s Second Amended Plan of
               Reorganization, incorporated herein by reference to Exhibit 2.2
               to the Registrant's Form 10-K report for the fiscal year ended
               April 30, 1997.

       2.3     Collins Properties, Inc.'s Plan of Reorganization, incorporated
               herein by reference to Exhibit 2.3 to the Registrant's Form 10-K
               report for the fiscal year ended April 30, 1997.

       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.

       4.1     Rights Agreement dated January 22, 1991 between The Bank of New
               York and Registrant, incorporated herein by reference to Exhibit
               4.1 to Amendment No. 1 to the Registrant's Form S-4 Registration
               Statement Number 33-38412.

                                       29
<PAGE>

    4.2   Amendment to Rights Agreement dated March 20, 1996 between The Bank of
          New York and the Registrant, incorporated herein by reference to
          Exhibit 4.2 to the Registrant's Form 10-K report for the fiscal year
          ended April 30, 1996.

    4.3   Certificate of Designation of Series A Junior Participating Preferred
          Stock of Registrant, incorporated herein by reference to Exhibit 4.2
          to Amendment No. 1 to Registrant's Form S-4 Registration Statement
          Number 33-38412.

    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.

    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

                                       30
<PAGE>

          reference to Exhibit 10.22 to the Registrant's Form 10-K report for
          the fiscal year ended April 30, 1997.

    10.14 Letter of Offer dated August 18, 1997 among certain subsidiaries of
          the Registrant and Westpac Banking Corporation, incorporated herein by
          reference to Exhibit 3.1 to the Registrant's Form 8-K report filed
          October 8, 1997.

    10.15 A $63,500,000 Bill Acceptance and Discount Facility dated as of
          September 19, 1997 among certain subsidiaries of the Registrant and
          Westpac Banking Corporation, incorporated herein by reference to
          Exhibit 3.2 to the Registrant's Form 8-K report filed October 8, 1997.

    10.16 Unlimited Cross Guarantee and Indemnity and Negative Pledge with
          Financial Ratio Covenants dated as of September 19, 1997 among certain
          subsidiaries of the Registrant and Westpac Banking Corporation,
          incorporated herein by reference to Exhibit 3.3 to the Registrant's
          Form 8-K report filed October 8, 1997.

    10.17 Subordination Deed dated as of September 24, 1997 among the Registrant
          and certain of its subsidiaries and Westpac Banking Corporation,
          incorporated herein by reference to Exhibit 3.4 to the Registrant's
          Form 8-K report filed October 8, 1997.

    10.18 Stock Pledge dated as of September 24, 1997 between the Registrant and
          Westpac Banking Corporation, incorporated herein by reference to
          Exhibit 3.5 to the Registrant's Form 8-K report filed October 8, 1997.

    10.19 Form of Fixed and Floating Charge dated as of September 19, 1997
          between various subsidiaries of the Registrant and Westpac Banking
          Corporation, incorporated herein by reference to Exhibit 3.6 to the
          Registrant's Form 8-K report filed October 8, 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 LLC Membership Interest Purchase Agreement dated May 23, 2000 among
          the Registrant, as purchaser, and FFPE Holding Company, Inc., 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 June 5, 2000.

    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 May 23, 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 June 5, 2000.

    10.24 Form of Call Option Agreement to be entered into 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 June 5, 2000.

    10.25 Form of Put Option Agreement (John Sarkisian) to be entered into
          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 June 5, 2000.

                                       31
<PAGE>

    10.26 Form of Put Option Agreement (Tammy-Sarkisian-Celmo) to be entered
          into 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 June 5, 2000.

    10.27 Form of Warrant to be 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 June 5, 2000.

    10.28 Form of Warrant Registration Rights Agreement to be entered into
          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 June 5, 2000.

    10.29 Form of Employment Agreement to be entered into between the Registrant
          and John Sarkisian, incorporated herein by reference to Exhibit 10.9
          to the Registrant's Form 8-K report filed June 5, 2000.

    10.30 Form of Employment Agreement to be entered into between the Registrant
          and Tamara Sarkisian-Celmo, incorporated herein by reference to
          Exhibit 10.10 to the Registrant's Form 8-K report filed June 5, 2000.

    21.00 Subsidiaries of Registrant

    23.00 Consent of Arthur Andersen LLP

    27.00 Financial Data Schedule


(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.

                                       32
<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 21, 2000                   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.

SIGNATURE                        TITLE                      DATE
---------                        -----                      ----


/s/ Charles L. Boppell        President, Chief              July 21, 2000
----------------------
Charles L. Boppell            Executive Officer and
                              Director


/s/ James A. Collins          Chairman Emeritus             July 21, 2000
--------------------
James A. Collins              and Director


/s/ Barry E. Krantz           Director
-------------------                                         July 21, 2000
Barry E. Krantz


/s/ Phillip D. Matthews       Chairman of the Board
-----------------------
Phillip D. Matthews           and Director                  July 21, 2000


/s/ Robert A. Muh             Director                      July 21, 2000
-----------------
Robert A. Muh


/s/ Charles F. Smith          Director                      July 21, 2000
--------------------
Charles F. Smith


/s/ Kevin W. Perkins          Executive Vice President      July 21, 2000
--------------------
Kevin W. Perkins              and Director


/s/ Steven R. Selcer          Vice President and            July 21, 2000
--------------------
Steven R. Selcer              Chief Financial Officer
                              (principal financial and
                              accounting officer)

                                       33