UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                            -------------------------


                                    FORM 10-Q


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


        For quarter ended                         Commission file number
          June 13, 2000                                  0-19907
          -------------                                  -------


                       LONE STAR STEAKHOUSE & SALOON, INC.
             (Exact name of registrant as specified in its charter)



             Delaware                                  48-1109495
             --------                                  ----------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                    Identification Number)

                           224 East Douglas, Suite 700
                              Wichita, Kansas 67202
               (Address of principal executive offices) (Zip code)

                                 (316) 264-8899
              (Registrant's telephone number, including area code)

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

                                                                 /X/ Yes / / No

            Indicate  the number of shares  outstanding  of each of the issuer's
classes of common stock, as of the latest practicable date.

            Class                            Outstanding at July 21, 2000
Common Stock, $.01 par value                       25,678,219 shares



<PAGE>
                       Lone Star Steakhouse & Saloon, Inc.

                                      Index

                                                                           Page
                                                                          Number
                                                                          ------
PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.  Financial Statements

      Condensed Consolidated Balance Sheets
      at June 13, 2000 and December 28, 1999                            2

      Condensed Consolidated Statements of
      Income for the twelve weeks ended
      June 13, 2000 and June 15, 1999                                   3

      Condensed Consolidated Statements of
      Income for the twenty-four weeks ended
      June 13, 2000 and June 15, 1999                                   4

      Condensed Consolidated Statements of
      Cash Flows for the twenty-four weeks ended
      June 13, 2000 and June 15, 1999                                   5

      Notes to Condensed Consolidated
      Financial Statements                                              6

Item 2.  Management's Discussion and
      Analysis of Financial Condition and
      Results of Operations                                             8

Item 3.  Quantitative and Qualitative
      Disclosures about Market Risks                                   13

PART II.  OTHER INFORMATION
--------  -----------------
Items 1, 3 and 5 have been omitted
since the items are either inapplicable or the
answer is negative

Item 2.  Changes in Securities and Use of Proceeds                     13
Item 4.  Submission of Matters to a Vote of Stockholders               14

Item 6.  Exhibits and Reports on Form 8-K                              14

<PAGE>
                       LONE STAR STEAKHOUSE & SALOON, INC.
                      Condensed Consolidated Balance Sheets
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                          June 13, 2000     December 28, 1999
                                                                                         --------------     -----------------
                                           ASSETS

<S>                                                                                      <C>                <C>
Current assets:
    Cash and cash equivalents                                                            $      24,965      $      50,673
    Inventories                                                                                 12,409             11,440
    Other current assets                                                                         7,771              7,256
                                                                                            ----------         ----------
         Total current assets                                                                   45,145             69,369

Property and equipment, net                                                                    425,838            430,482
Intangible and other assets, net                                                                35,272             33,682
                                                                                            ----------         ----------
             Total assets                                                                $     506,255      $     533,533
                                                                                            ==========         ==========
                            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                                     $      13,692      $      11,726
    Other current liabilities                                                                   32,050             37,428
                                                                                            ----------         ----------
             Total current liabilities                                                          45,742             49,154


Long-term debt                                                                                   6,955                  -
Stockholders' equity:
    Preferred stock                                                                                  -                  -
    Common stock                                                                                   257                299
    Additional paid-in capital                                                                 200,062            238,000
    Retained earnings                                                                          263,586            253,923
    Accumulated other comprehensive loss                                                       (10,347)            (7,843)
                                                                                            ----------         ----------
             Total stockholders' equity                                                        453,558            484,379
                                                                                            ----------         ----------
             Total liabilities and stockholders' equity                                  $     506,255      $     533,533
                                                                                            ==========         ==========

                             See accompanying notes.

</TABLE>

                                      -2-
<PAGE>
                       LONE STAR STEAKHOUSE & SALOON, INC.
                   Condensed Consolidated Statements of Income
                  (In thousands, except for per share amounts)
                                   (Unaudited)

                                                    For the twelve weeks ended
                                               ---------------------------------
                                               June 13, 2000       June 15, 1999
                                               ----------------  ---------------


Net sales                                       $134,187                $134,753
Costs and expenses:
    Costs of sales                                47,228                  47,805
    Restaurant operating expenses                 62,662                  61,087
    Depreciation and amortization                  6,610                   6,819
                                               ---------              ----------
Restaurant costs and expenses                    116,500                 115,711
                                               ---------              ----------
Restaurant operating income                       17,687                  19,042
General and administrative expenses                9,014                   8,101
                                               ---------              ----------
Income from operations                             8,673                  10,941
Other income, net                                    393                     333
                                               ---------              ----------
Income before income taxes                         9,066                  11,274
Provision for income taxes                         3,208                   4,191
                                               ---------              ----------
Net income                                      $  5,858                $  7,083
                                               =========              ==========
Basic earnings per share                        $   0.22                $   0.20
                                               =========              ==========
Diluted earnings per share                      $   0.22                $   0.20
                                               =========              ==========



                             See accompanying notes.


                                      -3-
<PAGE>

                       LONE STAR STEAKHOUSE & SALOON, INC.
                   Condensed Consolidated Statements of Income
                  (In thousands, except for per share amounts)
                                   (Unaudited)

                                              For the twenty-four weeks ended
                                            ------------------------------------
                                             June 13, 2000         June 15, 1999
                                            ---------------        -------------

Net sales                                      $273,442                 $274,691
Costs and expenses:
    Costs of sales                               94,885                   98,191
    Restaurant operating expenses               125,772                  122,717
    Depreciation and amoritzation                13,160                   14,051
                                             ----------               ----------
Restaurant costs and expenses                   233,817                  234,959
                                             ----------               ----------
Restaurant operating income                      39,625                   39,732
General and administrative expenses              20,355                   16,390
                                             ----------               ----------
Income from operations                           19,270                   23,342
Other income, net                                   809                      580
                                             ----------               ----------

Income before income taxes                       20,079                   23,922
Provision for income taxes                        7,118                    9,057
                                             ----------               ----------
Net income                                     $ 12,961                 $ 14,865
                                             ==========               ==========

Basic earnings per share                       $   0.47                 $   0.41
                                             ==========               ==========
Diluted earnings per share                     $   0.47                 $   0.40
                                             ==========               ==========




                             See accompanying notes.

                                      -4-
<PAGE>


                       LONE STAR STEAKHOUSE & SALOON, INC.
                 Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                               For the twenty-four weeks ended
                                                                            ------------------------------------
                                                                            June 13, 2000          June 15, 1999
                                                                            --------------        --------------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
    Net income                                                                  $ 12,961             $ 14,865
    Adjustments to reconcile net income to net cash provided
         by operating activities:
         Depreciation and amortization                                            14,503               14,881
         Net change in operating assets and liabilities:
                  Change in operating assets                                      (1,591)               3,387
                  Change in operating liabilities                                 (3,412)              (6,440)
                                                                               ---------          -----------
Net cash provided by operating activities                                         22,461               26,693
Cash flows from investing activities:
    Purchases of property and equipment                                          (14,806)             (25,344)
    Proceeds from sale of assets                                                   3,921                 --
    Other                                                                         (2,956)                (240)
                                                                               ---------          -----------
         Net cash used in investing activities                                   (13,841)             (25,584)
Cash flows from financing activities:
    Net proceeds from issuance of common stock                                       157                   12
    Common stock repurchased and retired                                         (38,137)             (26,864)
    Proceeds from long-term borrowings                                             6,955                 --
    Cash dividends paid                                                           (3,298)                --
                                                                               ---------          -----------
         Net cash used in financing activities                                   (34,323)             (26,852)
Effect of exchange rate on cash                                                       (5)                  48
                                                                               ---------          -----------
    Net decrease in cash and cash equivalents                                    (25,708)             (25,695)
Cash and cash equivalents at beginning of period                                  50,673               89,847
                                                                               ---------          -----------
Cash and cash equivalents at end of period                                      $ 24,965             $ 64,152
                                                                               =========          ===========

Supplemental disclosure of cash flow information:
    Cash paid for income taxes                                                  $ 10,984             $ 10,029
                                                                               =========          ===========
</TABLE>


                             See accompanying notes.


                                      -5-
<PAGE>

                       Lone Star Steakhouse & Saloon, Inc.

              Notes to Condensed Consolidated Financial Statements
                  (All amounts in thousands, except share data)

1.    Basis of Presentation
      ---------------------

      The unaudited  condensed  consolidated  financial  statements  include all
adjustments,  consisting  of  normal,  recurring  accruals,  which  the  Company
considers  necessary for a fair  presentation of the financial  position and the
results of operations for the periods presented. The results for the twenty-four
weeks ended June 13, 2000 are not  necessarily  indicative  of the results to be
expected for the full year ending  December 26, 2000.  This quarterly  report on
Form 10-Q should be read in conjunction with the Company's audited  consolidated
financial statements in its 1999 Form 10-K.


2.    Comprehensive Income
      --------------------

Comprehensive income is comprised of the following:

<TABLE>
<CAPTION>
                                               For the twelve weeks ended          For the twenty-four weeks ended
                                               --------------------------          -------------------------------
                                             June 13, 2000     June 15, 1999     June 13, 2000          June 15, 1999
                                             -------------     -------------     -------------          -------------

<S>                                           <C>                 <C>                <C>                 <C>
Net income                                    $  5,858            $  7,083           $ 12,961            $ 14,865
Foreign currency translation
        adjustments                               (665)                616             (2,504)              1,549
                                             ---------         -----------           --------            --------
  Comprehensive income                        $  5,193            $  7,669           $ 10,457            $ 16,414
                                              ========            ========            =======             =======
</TABLE>

3.    Earnings Per Share
      ------------------

      Basic  earnings  per share  amounts  are  computed  based on the  weighted
average  number  of  shares  actually  outstanding.   For  purposes  of  diluted
computations,  the number of shares  that would be issued  from the  exercise of
stock  options  has been  reduced by the number of shares  which could have been
purchased from the proceeds at the average  market price of the Company's  stock
or price of the Company's  stock on the exercise date if options were  exercised
during the period presented.

      The weighted average shares  outstanding for the periods  presented are as
follows:

<TABLE>
<CAPTION>
                                                     For the twelve weeks ended          For the twenty-four weeks ended
                                                     --------------------------          -------------------------------
                                                June 13, 2000         June 15, 1999     June 13, 2000      June 15, 1999
                                                -------------         -------------     -------------      -------------

<S>                                               <C>                    <C>               <C>               <C>
Basic average shares outstanding                  26,232                 35,813            27,304            36,663
Diluted average shares outstanding                27,148                 36,078            27,834            36,843
</TABLE>


                                      -6-


<PAGE>
4.    Long - Term Debt
      ----------------

      The Company has entered into a $20,000  revolving term loan agreement with
a bank, under which $6,955 was outstanding at June 13, 2000. The loan matures in
April 2005 and requires interest only payments through April 2003, at which time
the loan will  convert  to a term  note  with  monthly  principal  and  interest
payments  sufficient to amortize the loan over its remaining  term. The interest
rate is at the daily  prime rate as  published  in the Wall Street  Journal.  In
addition,  the Company  pays a facility  fee of 1/4 of one percent on the unused
portion of the facility.

5.    Treasury Stock Transactions
      ---------------------------

      The Board of Directors has  authorized  the Company to purchase  shares of
the  Company's  common  stock  in the open  market  or in  privately  negotiated
transactions.  Pursuant to the  authorization,  the Company purchased  4,134,600
shares of its common stock during the  twenty-four  weeks ended June 13, 2000 at
an average  price of $9.22 per share and  2,798,000  shares of its common  stock
during the  twenty-four  weeks ended June 15, 1999 at an average  price of $9.60
per share.  The Company is accounting for the purchases  using the  constructive
retirement method of accounting  wherein the aggregate par value of the stock is
charged to the  common  stock  account  and the excess of cost over par value is
charged to paid-in capital.

6.    Stock Options
      -------------

      During the  twenty-four  weeks ended June 13,  2000,  the Company  granted
stock options for 1,730,258  shares of common stock at exercise  prices  ranging
from  $8.47 to $8.88  per  share  pursuant  to its 1992  stock  option  plan for
employees.

7.    Recently Issued Accounting Standards
      ------------------------------------

      In June 1998 the  Financial  Accounting  Statements  Board  (FASB)  issued
Statement of  Financial  Accounting  Standards  (SFAS) No. 133  "Accounting  for
Derivative  Instruments and Hedging Activities," which is required to be adopted
in years beginning after June 15, 2000. The statement  permits early adoption as
of the beginning of any fiscal quarter after its issuance.  The Company  expects
to adopt the new  statement  effective  December 27, 2001.  The  statement  will
require the Company to recognize  all  derivatives  on the balance sheet at fair
value.  Derivatives not considered hedges must be adjusted to fair value through
income.  If a  derivative  is a hedge,  depending  on the  nature of the  hedge,
changes in the fair value of the  derivative  will either be offset  against the
change in fair value of the hedged asset,  liability or firm commitment  through
earnings,  or recognized in other comprehensive  income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value  will  be  immediately  recognized  in  earnings.  The  Company  does  not
anticipate  the adoption of SFAS No. 133 will have a  significant  effect on its
results of  operations  or financial  position.

      In March 2000,  the FASB issued  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation:  An  Interpretation of APB
Opinion No. 25" (the FASB  Interpretation).  The FASB Interpretation among other
things, requires that certain modifications to outstanding stock options as to a
direct change to the exercise price  (repricings)  or the number of shares or an
indirect change to the exercise price or number of shares (sometimes referred to
as "synthetic pricings") must be accounted for using variable-award  accounting.
The FASB Interpretation,  when adopted, requires compensation accounting for all
awards for which share repricings or synthetic  pricings occurred after December
15,  1998.  Imputed  non-cash  compensation  expense  is to be  recognized  on a
prospective  basis only to the extent that the market  prices of the stock after
July 1, 2000, exceeds the stock price on July 1, 2000, the FASB Interpretation's
effective date; consequently, the last measurement of compensation expense would
occur at the date the options are exercised. The Company has repriced options to
purchase  approximately  4,740,000 shares of common stock during fiscal 1999 and
in January 2000 which will be subject to the FASB Interpretation.  The impact of
the FASB Interpretation is not currently determinable.

8.    Subsequent Event
      ----------------

      In July 2000, the Board of Directors declared the Company's quarterly cash
dividend of $.125 per share payable August 3, 2000 to  stockholders of record on
July 18, 2000.

                                      -7-
<PAGE>
                       Lone Star Steakhouse & Saloon, Inc.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

      The following  discussion and analysis should be read in conjunction  with
the  condensed  consolidated  financial  statements  including the notes thereto
included elsewhere in this Form 10-Q.
      The  Company  recently  opened  one  of the  eleven  completed  Lone  Star
Steakhouse  & Saloon  (Lone  Star)  restaurants  and intends to try and open the
remaining unopened units during the current fiscal year;  however,  there can be
no assurance that these restaurants will be opened this fiscal year.
      In March 2000, a Lone Star  restaurant  was destroyed by fire and will not
be  reopened.  In  addition,  the Company has eight sites  available  for future
development,  six of which are owned and two which are under  lease.  There were
241 operating  domestic Lone Star  restaurants as of June 13, 2000. In addition,
licensees operate three Lone Star restaurants in California, and one in Guam.
      The Company is currently  operating  four Del Frisco's  Double Eagle Steak
Houses.  There is one Del  Frisco's  Double Eagle Steak House  restaurant  under
construction  in Las  Vegas,  Nevada  which the  Company  expects to open in the
summer of 2000;  a licensee  operates a Del  Frisco's  Steak  House in  Orlando,
Florida.
      As of  June  13,  2000  the  Company  was  operating  fourteen  Sullivan's
Steakhouse  restaurants.  The  Company  expects to open a Sullivan's  Steakhouse
restaurant in the fall of 2000 in Tucson, Arizona.
      The  Company  believes  considerable  opportunities  exist in the  upscale
steakhouse market;  however, there are no current commitments to open additional
upscale  units beyond the one Del Frisco's  Double Eagle Steak House  restaurant
and one  Sullivan's  Steakhouse  restaurant  scheduled to open in the summer and
fall of 2000, respectively.
      Internationally,  there are 40 Lone Star  Steakhouse & Saloon  restaurants
operated through a joint venture in Australia.



                                      -8-

<PAGE>



                       Lone Star Steakhouse & Saloon, Inc.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Results of Operations
      The  following  table  sets  forth  for  the  periods  indicated  (i)  the
percentages which certain items included in the condensed consolidated statement
of income bear to net sales, and (ii) other selected operating data:

<TABLE>
<CAPTION>
                                                                       Twelve Weeks Ended (1)         Twenty-four Weeks Ended
                                                                       ----------------------         -----------------------
                                                                    June 13, 2000  June 15, 1999   June 13, 2000  June 15, 1999
                                                                    -------------  -------------   -------------  -------------
                                                                        (dollars in thousands)        (dollars in thousand)

<S>                                                                      <C>            <C>            <C>            <C>
Income Statement Data:
      Net sales ...................................................      100.0%         100.0%         100.0%         100.0%
      Costs and expenses:
            Costs of sales ........................................       35.2           35.5           34.7           35.7
            Restaurant operating expenses .........................       46.7           45.3           46.0           44.7
            Depreciation and amortization .........................        4.9            5.1            4.8            5.1

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

                 Restaurant costs and expenses ....................       86.8           85.9           85.5           85.5

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

      Restaurant operating income .................................       13.2           14.1           14.5           14.5
      General and administrative expenses .........................        6.7            6.0
                                                                                                         7.5            6.0

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


      Income from operations ......................................        6.5            8.1            7.0            8.5
      Other income, net ...........................................        0.3            0.3            0.3            0.2

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


      Income before provision for income taxes ....................        6.8            8.4            7.3            8.7
      Provision for income taxes ..................................        2.4            3.1            2.6            3.3

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

      Net income ..................................................        4.4%           5.3%           4.7%           5.4%

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

Restaurant Operating Data:
      Average sales per restaurant on an annualized basis (2) .....   $  1,942     $    1,811       $  1,973       $  1,843
      Number of restaurants at end of the period ..................        299            322            299            322
</TABLE>


(1)   The Company operates on a fifty-two or fifty-three week fiscal year ending
      the last Tuesday in December.  The fiscal quarters for the Company consist
      of accounting periods of twelve,  twelve,  twelve and sixteen or seventeen
      weeks, respectively.

(2)   Average  sales per  restaurant  on an  annualized  basis are  computed  by
      dividing a  restaurant's  total  sales for full  accounting  periods  open
      during the reporting period, and annualizing the result.



                                       -9-


<PAGE>

Lone Star Steakhouse & Saloon, Inc.

 Twelve Weeks Ended June 13, 2000 Compared to Twelve Weeks Ended June 15, 1999
                          (Dollar amounts in thousands)

      Net sales  decreased  $566 (0.4%) to $134,187  for the twelve  weeks ended
June 13,  2000,  compared to $134,753  for the twelve weeks ended June 15, 1999.
The decrease was  principally  attributable to the closing of two restaurants in
fiscal 1999 and 24  restaurants in January 2000. The decrease was largely offset
by additional  sales of $3,945 from one new domestic Lone Star  restaurant,  two
Sullivan's  restaurants  and one new Del Frisco's  restaurant  opened since June
1999.  Same store sales  increased 0.9% compared with the comparable  prior year
period.

      Costs of sales, primarily food and beverages, decreased as a percentage of
sales to 35.2% from 35.5% due primarily to lower prices on certain  commodities,
except beef, and lower prices on produce and dairy products.

      Restaurant  operating  expenses  for the twelve weeks ended June 13, 2000,
increased  $1,575 from $61,087 in 1999, to $62,662 and increased as a percentage
of net sales from 45.3% to 46.7%. The increase in restaurant  operating expenses
is  primarily  attributable  to a  $2,200  increase  in media  advertising.  The
increase  was  offset  in part  by the  impact  of the  closed  restaurants  and
decreases to various operating costs.

      Depreciation  and  amortization  decreased  $209 in the twelve weeks ended
June 13,  2000,  compared to the same period in 1999.  The decrease is primarily
attributable to the 26 restaurants closed since March 1999.

      General and administrative expenses increased $913 as compared to the same
period in 1999.  The  increases  in general  and  administrative  expenses  were
primarily  attributable  to (1)  increased  salaries and wage  related  expenses
reflecting the costs  associated  with the new positions added to strengthen the
Company's  corporate  infrastructure,  general salary  increases and the Company
costs related to employee  retirement  benefit  plans,  (2) increased  costs for
software amortization and (3) increased training and recruiting expenses.

      Other  income,  net for the twelve weeks ended June 13, 2000 was $393,  as
compared to $333 in 1999. The increase is attributable to an increase in the net
gain on the disposition of assets offset by an increase in interest expense.

      The  effective  income tax rates for the twelve weeks ended June 13, 2000,
and the twelve weeks ended June 15, 1999 were 35.4% and 37.1%, respectively. The
decrease in the effective tax rate is primarily attributable to the reduction in
valuation allowances associated with Australian losses.


                                      -10-

<PAGE>
Lone Star Steakhouse & Saloon, Inc.

    Twenty-four Weeks Ended June 13, 2000 Compared to Twenty-four Weeks Ended
                                  June 15, 1999

                          (Dollar amounts in thousands)

      Net sales decreased  $1,249 (0.5%) to $273,442 for the  twenty-four  weeks
ended June 13, 2000,  compared to $274,691 for the twenty-four  weeks ended June
15,  1999.  The  decrease  was  principally  attributable  to the closing of two
restaurants  in fiscal 1999 and 24 restaurants in January 2000. The decrease was
partially  offset by additional  sales of $6,332 from one new domestic Lone Star
restaurant,  two  Sullivan's  restaurants  and one new Del  Frisco's  restaurant
opened  since June 1999.  Same store  sales  increased  0.7%  compared  with the
comparable prior year period.

      Costs of sales, primarily food and beverages, decreased as a percentage of
sales to 34.7% from 35.7% due primarily to lower prices on certain  commodities,
except beef, and lower prices on produce and dairy products.

      Restaurant  operating  expenses for the  twenty-four  weeks ended June 13,
2000,  increased  $3,055 from  $122,717 in 1999,  to $125,772 and increased as a
percentage  of net  sales  from  44.7% to  46.0%.  The  increase  in  restaurant
operating  expenses  is  primarily  attributable  to a $3,338  increase in media
advertising  and a $1,025  increase in  restaurant  preopening  expenses.  These
increases  were  offset in part by the  impact  of the  closed  restaurants  and
decreases to various operating costs.

      Depreciation  and  amortization  decreased $891 in the  twenty-four  weeks
ended June 13,  2000,  compared  to the same  period in 1999.  The  decrease  is
primarily attributable to the 26 restaurants closed since March 1999.

      General and  administrative  expenses  increased $3,965 as compared to the
same period in 1999. The increases in general and  administrative  expenses were
primarily  attributable  to (1)  increased  salaries and wage  related  expenses
reflecting the costs  associated  with the new positions added to strengthen the
Company's  corporate  infrastructure,  general salary  increases and the Company
costs related to employee  retirement  benefit  plans,  (2) increased  costs for
software  amortization and consulting costs related to the Company's information
systems and (3) increased training and recruiting expenses.

      Other income, net for the twenty-four weeks ended June 13, 2000, was $809,
as compared to $580 in 1999.  The increase is  attributable  to better  interest
rates  available for short term  investment  purposes and an increase in the net
gain on the disposition of assets.

      The effective  income tax rates for the  twenty-four  weeks ended June 13,
2000,  and the  twenty-four  weeks  ended  June 15,  1999 were  35.4% and 37.9%,
respectively.  The decrease in the effective tax rate is primarily  attributable
to the reduction in valuation allowances associated with Australian losses.

                                      -11-
<PAGE>

Impact of inflation

      The  primary  inflationary  factors  affecting  the  Company's  operations
include food and labor costs, utility rates, real estate taxes, and lease common
area maintenance  charges. A large number of the Company's  restaurant personnel
are  paid  at the  federal  and  state  established  minimum  wage  levels  and,
accordingly,  changes in such wage levels  adversely  affect the Company's labor
costs.  Many of the  Company's  personnel  are  tipped  employees,  consequently
increases in the minimum wage rate are mitigated.  To date,  inflation has had a
minor impact on operating margins.

Liquidity and Capital Resources
      The following  table  presents a summary of the  Company's  cash flows for
each of the  twenty-four  weeks  ended  June 13,  2000  and  June  15,  1999 (in
thousands):

                                                       Twenty-four weeks ended
                                                       -----------------------
                                                     June 13, 2000  June 15,1999
                                                     -------------  ------------

Net cash provided by operating activities ..........     $ 22,461      $ 26,693
Net cash used in investing activities ..............      (13,841)      (25,584)
Net cash used in financing activities ..............      (34,323)      (26,852)
Effect of exchange rate on cash ....................           (5)           48
                                                         --------      --------
Net decrease in cash ...............................     $(25,708)     $(25,695)
                                                         ========      ========

      During the  twenty-four  week period  ended June 13, 2000,  the  Company's
investment  in property and  equipment  was $14,806  compared to $25,344 for the
same period in 1999.

      The Company does not have significant receivables or inventory.

      At June 13,  2000,  the Company had $24,965 in cash and cash  equivalents.
The Company has entered  into a $20,000  revolving  term loan  agreement  with a
bank. See Note 4 to Notes to Condensed  Consolidated  Financial  Statements.  At
June 13,  2000,  the Company had  borrowed  $6,955 and had  available  borrowing
capacity of $13,045 pursuant to the revolver.

      The Company's  Board of Directors has  authorized the repurchase of shares
of the  Company's  common  stock  from  time to time in the  open  market  or in
privately negotiated  transactions.  During the twenty-four weeks ended June 13,
2000, the Company purchased 4,134,600 shares at a cost of $38,137.

      In April 2000,  the Board of  Directors  declared  the  Company's  initial
quarterly  cash  dividend  of $.125 per share  which was paid May 10,  2000,  to
stockholders  of record on April 24, 2000. An additional  cash dividend of $.125
per share was declared in July 2000,  payable August 3, 2000, to stockholders of
record on July 18, 2000.

      From time to time the Company utilizes derivative financial instruments in
the form of commodity  futures  contracts to manage  market risks and reduce its
exposure in the price of meat resulting  from  fluctuations  in the market.  The
Company uses live beef cattle futures  contracts in an attempt to accomplish its
objective.  Realized and unrealized changes in the fair values of the derivative
instruments  are  recognized in income in the period in which the change occurs.
Realized and unrealized gains and losses for the period were not significant. As
of June 13, 2000, the Company's exposure for open positions in futures contracts
was not significant.

                                      -12-


<PAGE>

      In March  2000,  the FASB issued  Interpretation  No. 44  "Accounting  for
Certain  Transactions  Involving Stock  Compensation:  An  Interpretation of APB
Opinion No. 25" (the FASB Interpretation).  The FASB Interpretation, among other
things, requires that certain modifications to outstanding stock options as to a
direct change to the exercise price  (repricings)  or the number of shares or an
indirect change to the exercise price or number of shares (sometimes referred to
as "synthetic pricings") must be accounted for using variable-award  accounting.
The FASB Interpretation,  when adopted, requires compensation accounting for all
awards for which share repricings or synthetic  pricings occurred after December
15,  1998.  Imputed  non-cash  compensation  expense  is to be  recognized  on a
prospective  basis only to the extent that the market  prices of the stock after
July 1, 2000, exceeds the stock price on July 1, 2000, the FASB Interpretation's
effective date; consequently, the last measurement of compensation expense would
occur at the date the options are exercised. The Company has repriced options to
purchase approximately  4,740,000 shares of common stocks during fiscal 1999 and
in  January  2000,  which will be  subject  to the FASB  Interpretation  when it
becomes effective.  The Company may incur significant volatility in reporting of
earnings in future periods as  fluctuations in market prices of its common stock
may greatly impact reported compensation expenses on a periodic basis.


Forward looking statements

      This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange Act of 1934,  amended.  Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of the Company to open new restaurants,  general market
conditions,  competition  and pricing and other risks set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended December 28, 1999. Although
the Company believes the assumptions  underlying the forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
contained in the report will prove to be accurate.



Item 2.        Changes in Securities and Use of Proceeds.
               ------------------------------------------

      As described in Item 4. - Submission of Matters to a Vote of Stockholders,
the Company's  stockholders approved a proposal to amend the Company's Bylaws to
require that the majority of the Board be comprised of Independent Directors who
shall meet specific criteria. The Board of Directors has also amended the Bylaws
to provide an advance notice provision for stockholder nominations of Directors.
These amendments are contained in the Amended and Restated Bylaws of the Company
filed as an exhibit to this Form 10-Q


Item 3.        Quantitative and Qualitative Disclosures About Market Risks
               -----------------------------------------------------------

      The  Company's  exposure to market  risks was not  significant  during the
twenty-four weeks ended June 13, 2000.


                                      -13-
<PAGE>


Item 4.        Submission of Matters to a Vote of Stockholders
               -----------------------------------------------

      On June 9, 2000, the Company held its Annual Meeting of Stockholders  (the
"Meeting"). At the Meeting the stockholders re-elected Clark R. Mandigo and John
D. White to the Board of  Directors  to serve until the 2003  Annual  Meeting of
Stockholders and until their successors have been duly elected and qualified. As
to the  newly  re-elected  Directors,  there  were  21,317,782  votes  "For" and
3,189,979 votes  "Withheld" for Clark R. Mandigo and 21,317,442  votes "For" and
3,190,319  votes  "Withheld"  for John D. White.

      The  stockholders  approved an amendment to the Company's 1992  Directors'
Stock Option Plan to increase  the number of shares of common  stock  subject to
options  granted  there- under from 400,000 to 700,000.  As to the  amendment to
increase  the  number  of option  shares  there  were  13,794,007  votes  "For",
10,579,320  votes "Against" and,  134,434 votes  "Abstained".

      The  stockholders  ratified  the  appointment  of Ernst & Young LLP as the
Company's  independent auditors for the year ending December 26, 2000. As to the
ratification  of auditors  there were  24,195,267  votes  "For",  257,896  votes
"Against" and 54,598 votes "Abstained".

      The  stockholders  approved the proposal by California  Public  Employees'
Retirement  System that the Company's  bylaws be amended to require the majority
of the Board be  comprised of  Independent  Directors,  who shall meet  specific
criteria. As to the proposal there were 12,996,278 votes "For",  7,114,369 votes
"Against" and 410,170 votes "Abstained".

      The stockholders  approved a non-binding  proposal of The Amalgamated Bank
of New York Long View  MidCap  400 Index  that the Board of  Directors  take the
necessary  steps to declassify  the Board of Directors so that all directors are
elected  annually.  As to  the  proposal  there  were  14,218,263  votes  "For",
5,877,813 votes "Against" and 414,741 votes "Abstained".

Item 6.       Exhibits and Reports on Form 8-K
              --------------------------------

               (a) Exhibits:

                    (i) Exhibit 3(a)         Amended and Restated Bylaws

                    (ii) Exhibits 27         Financial Data Schedule

               (b) Reports on Form 8-K       None




                                      -14-
<PAGE>
                                   SIGNATURES

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

                                            Lone Star Steakhouse & Saloon, Inc.
                                            (Registrant)

      Date  July 28, 2000                    /s/ Randall H. Pierce
          ----------------------            ------------------------------------
                                            Randall H. Pierce
                                            Chief Financial Officer







                                      -15-