----

----

|   | R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|--------|---|----------------------------------------------------------------------------------------|

|   | £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 |
|--------|--------|-----------------------------------------------------------------------------------------|

| Delaware                                                       | 62-1254388                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
| 6075 Poplar Avenue, Suite 800, Memphis, TN                     | 38119                                |
| (Address of principal executive offices)                       | (Zip code)                           |
|                                                           |                                 |
| (901) 766-6400                                                 |
| (Registrant’s telephone number, including area code)     |

| Large accelerated filer  £                                        | Accelerated filer £                    |
|----------------------------------------------------------------------------------|---------------------------------------------|
| Non-accelerated filer  R (Do not check if a smaller reporting company) | Smaller reporting company  £ |

----

----

----

TABLE OF CONTENTS

| PART I — FINANCIAL INFORMATION                                                                                                        |     Page |
|---------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|  Item 1. Financial Statements:                                                                                                         |                    |
|  Consolidated Statements of Operations (Unaudited) – Quarter and Year-to-Date Periods Ended July 11, 2010 and July 12, 2009 | 2                       |
|  Consolidated Balance Sheets – July 11, 2010 (Unaudited) and December 27, 2009                                                   | 3                       |
|  Consolidated Statements of Cash Flows (Unaudited) – Year-to-Date Periods Ended July 11, 2010 and July 12, 2009                  | 4                       |
|  Notes to Consolidated Financial Statements (Unaudited)                                                                                | 5                       |
|  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                                   | 24                      |
|  Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                                    | 41                      |
|  Item 4. Controls and Procedures                                                                                                       | 41                      |
|   PART II — OTHER INFORMATION                                                                                               |                    |
|  Item 1. Legal Proceedings                                                                                                             | 42                      |
|  Item 1A. Risk Factors                                                                                                                 | 42                      |
|  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                   | 42                      |
|  Item 3. Defaults Upon Senior Securities                                                                                               | 42                      |
|  Item 4. Removed and Reserved                                                                                                          | 42                      |
|  Item 5. Other Information                                                                                                             | 42                      |
|  Item 6. Exhibits                                                                                                                      | 42                      |
|                                                                                                                                        |                    |
| SIGNATURE                                                                                                                                   | 43                      |
|                                                                                                                                        |                    |
| Ex-31.1 Section 302 Certification of the CEO                                                                                                |                    |
|  Ex-31.2 Section 302 Certification of the CFO                                                                                          |                    |
|  Ex-32.1 Section 906 Certification of the CEO                                                                                          |                    |
|  Ex-32.2 Section 906 Certification of the CFO                                                                                     |                    |
|                                                                                                                                        |                    |

----

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                | Quarter       |   |    | Quarter       |   |   | Year-to-Date  |   |   | Year-to-Date  |    |
|-----------------------------------------------------|---------------|--------|---------|---------------|--------|--------|---------------|--------|--------|---------------|---------|
|                                                | Ended         |   |    | Ended         |   |   | Ended         |   |   | Ended         |    |
|                                                | July 11, 2010 |   |    | July 12, 2009 |   |   | July 11, 2010 |   |   | July 12, 2009 |    |
| REVENUES:                                           |          |   |    |          |   |   |          |   |   |          |    |   |
| Food sales                                          |          | $      | 107,573 |          |   |   | 115,061       |   |   |          | 254,888 |   |   |   | 275,938 |   |
| Franchise and other revenue                         |          |   | 6,580   |          |   |   | 6,815         |   |   |          | 15,070  |   |   |   | 15,191 |   |
|     Total revenues              |          |   | 114,153 |          |   |   | 121,876       |   |   |          | 269,958 |   |   |   | 291,129 |   |
| COSTS AND EXPENSES:                                 |          |   |    |          |   |   |          |   |   |          |    |   |   |   |   |   |
| Cost of sales (excluding depreciation shown below): |          |   |    |          |   |   |          |   |   |          |    |   |   |
|     Food cost                   |          |   | 27,434  |          |   |   | 30,301        |   |   |          | 64,716  |   |   |   | 73,275 |   |
|     Labor and benefits          |          |   | 38,846  |          |   |   | 40,904        |   |   |          | 92,208  |   |   |   | 96,229 |   |
|     Operating expenses          |          |   | 32,534  |          |   |   | 32,072        |   |   |          | 76,269  |   |   |   | 77,773 |   |
| General and administrative                          |          |   | 10,835  |          |   |   | 10,129        |   |   |          | 24,941  |   |   |   | 24,218 |   |
| Depreciation and amortization                       |          |   | 5,059   |          |   |   | 5,557         |   |   |          | 11,965  |   |   |   | 12,913 |   |
| Interest, net                                       |          |   | 10,299  |          |   |   | 10,130        |   |   |          | 23,864  |   |   |   | 23,745 |   |
| Asset impairments and closed store expenses         |          |   | 440     |          |   |   | 346           |   |   |          | 2,105   |   |   |   | 1,208 |   |
| Other, net                                          |          |   | (140    | )             |   |   | (1,716        | )      |   |          | (358    | ) |   |   | (2,677 | ) |
|     Total costs and expenses    |          |   | 125,307 |          |   |   | 127,723       |   |   |          | 295,710 |   |   |   | 306,684 |   |
| Loss before income taxes                            |          |   | (11,154 | )             |   |   | (5,847        | )      |   |          | (25,752 | ) |   |   | (15,555 | ) |
| Benefit from (provision for) income taxes           |          |   | -       |          |   |   | -             |   |   |          | -       |   |   |   | - |   |
| Net loss                                            |          |   | (11,154 | )             |   |   | (5,847        | )      |   |          | (25,752 | ) |   |   | (15,555 | ) |
| Less: net (loss) earnings attributable to           |          |   |    |          |   |   |          |   |   |          |    |   |   |   |   |   |
|     non-controlling interests   |          |   | (1      | )             |   |   | 33            |   |   |          | 7       |   |   |   | 79 |   |
| Net loss attributable to Perkins & Marie        |          |   |    |          |   |   |          |   |   |          |    |   |   |   |   |   |
|     Callender's Inc.            |          | $      | (11,153 | )             |   |   | (5,880        | )      |   |          | (25,759 | ) |   |   | (15,634 | ) |

----

Table of Contents

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                               |   | July 11,    |     |   | December 27, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|----------|--------|--------------|--------|
|                                                                                                                                                               |   | 2010        |     |   | 2009         |   |
| ASSETS                                                                                                                                                             |   | (Unaudited) |     |   |         |   |
| CURRENT ASSETS:                                                                                                                                                    |   |        |     |   |         |   |
| Cash and cash equivalents                                                                                                                                          |   | $           | 2,263    |   |         |   | 4,288 |   |
| Restricted cash                                                                                                                                                    |   |        | 7,462    |   |         |   | 8,110 |   |
| Receivables, less allowances for doubtful accounts of $859    and $829 in 2010 and 2009, respectively                                          |   |        | 15,141   |   |         |   | 18,125 |   |
| Inventories                                                                                                                                                        |   |        | 10,383   |   |         |   | 11,062 |   |
| Prepaid expenses and other current assets                                                                                                                          |   |        | 3,676    |   |         |   | 1,864 |   |
| Assets held for sale, net                                                                                                                           |   |        | 1,304    |   |         |   | - |   |
|      Total current assets                                                                                                                 |   |        | 40,229   |   |         |   | 43,449 |   |
|                                                                                                                                                               |   |        |     |   |         |   |   |   |
| PROPERTY AND EQUIPMENT, net of accumulated   depreciation and amortization of $156,381 and $156,898 in   2010 and 2009, respectively |   |        | 62,987   |   |         |   | 75,219 |   |
| INVESTMENT IN UNCONSOLIDATED PARTNERSHIP                                                                                                                           |   |        | 33       |   |         |   | 50 |   |
| GOODWILL                                                                                                                                                           |   |        | 23,100   |   |         |   | 23,100 |   |
| INTANGIBLE ASSETS, net of accumulated amortization of   $21,257 and $20,179 in 2010 and 2009, respectively                                          |   |        | 145,935  |   |         |   | 147,013 |   |
| OTHER ASSETS                                                                                                                                                       |   |        | 14,690   |   |         |   | 16,074 |   |
| TOTAL ASSETS                                                                                                                                                       |   | $           | 286,974  |   |         |   | 304,905 |   |
|                                                                                                                                                               |   |        |     |   |         |   |   |   |
|  LIABILITIES AND DEFICIT                                                                                                                                      |   |        |     |   |         |   |   |   |
|                                                                                                                                                               |   |        |     |   |         |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                               |   |        |     |   |         |   |   |   |
| Accounts payable                                                                                                                                                   |   |        | 14,383   |   |         |   | 14,657 |   |
| Accrued expenses                                                                                                                                                   |   |        | 40,886   |   |         |   | 41,605 |   |
| Franchise advertising contributions                                                                                                                                |   |        | 5,265    |   |         |   | 4,327 |   |
| Current maturities of long-term debt and capital lease obligations                                                                                                 |   |        | 379      |   |         |   | 503 |   |
|      Total current liabilities                                                                                                            |   |        | 60,913   |   |         |   | 61,092 |   |
|                                                                                                                                                               |   |        |     |   |         |   |   |   |
| LONG-TERM DEBT, less current maturities                                                                                                                            |   |        | 331,303  |   |         |   | 326,042 |   |
| CAPITAL LEASE OBLIGATIONS, less current maturities                                                                                                                 |   |        | 10,906   |   |         |   | 11,054 |   |
| DEFERRED RENT                                                                                                                                                      |   |        | 18,478   |   |         |   | 17,092 |   |
| OTHER LIABILITIES                                                                                                                                                  |   |        | 23,951   |   |         |   | 22,277 |   |
| DEFERRED INCOME TAXES                                                                                                                                              |   |        | 45,457   |   |         |   | 45,457 |   |
|                                                                                                                                                               |   |        |     |   |         |   |   |   |
| DEFICIT:                                                                                                                                                           |   |        |     |   |         |   |   |   |
| Common stock, $.01 par value; 100,000 shares authorized;                                                                                                           |   |        |     |   |         |   |   |   |
|      10,820 issued and outstanding                                                                                                        |   |        | 1        |   |         |   | 1 |   |
| Additional paid-in capital                                                                                                                                         |   |        | 150,870  |   |         |   | 150,870 |   |
| Accumulated other comprehensive income                                                                                                                             |   |        | 47       |   |         |   | 45 |   |
| Accumulated deficit                                                                                                                                                |   |        | (355,092 | )      |         |   | (329,333 | ) |
|      Total PMCI stockholder's deficit                                                                                                     |   |        | (204,174 | )      |         |   | (178,417 | ) |
| Non-controlling interests                                                                                                                                          |   |        | 140      |   |         |   | 308 |   |
|      Total deficit                                                                                                                        |   |        | (204,034 | )      |         |   | (178,109 | ) |
| TOTAL LIABILITIES AND DEFICIT                                                                                                                                      |   | $           | 286,974  |   |         |   | 304,905 |   |

----

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                         |   | Year-to-Date  |    |    | Year-to-Date  |   |
|--------------------------------------------------------------|--------|---------------|---------|---------|---------------|--------|
|                                                         |   | Ended         |    |    | Ended         |   |
|                                                         |   | July 11, 2010 |    |    | July 12, 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                        |   |          |    |    |          |   |
| Net loss                                                     |   | $             | (25,752 | )       |          |   | (15,555 | ) |
| Adjustments to reconcile net loss to net cash provided by    |   |          |    |    |          |   |   |   |
|  (used in) operating activities:                        |   |          |    |    |          |   |   |   |
|   Depreciation and amortization                    |   |          | 11,965  |    |          |   | 12,913 |   |
|   Asset impairments                                |   |          | 2,273   |    |          |   | 434 |   |
|   Amortization of debt discount                    |   |          | 946     |    |          |   | 829 |   |
|   Other non-cash income items                      |   |          | (232    | )       |          |   | (2,344 | ) |
|   (Gain) loss on disposition of assets             |   |          | (168    | )       |          |   | 774 |   |
|   Equity in net loss of unconsolidated partnership |   |          | 17      |    |          |   | 8 |   |
|   Net changes in operating assets and liabilities  |   |          | 7,625   |    |          |   | (493 | ) |
|   Total adjustments                                |   |          | 22,426  |    |          |   | 12,121 |   |
| Net cash used in operating activities                   |   |          | (3,326  | )  |          |   | (3,434 | ) |
|                                                         |   |          |    |    |          |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                        |   |          |    |    |          |   |   |   |
| Purchases of property and equipment                          |   |          | (2,572  | )       |          |   | (4,316 | ) |
| Proceeds from sale of assets                                 |   |          | 5       |    |          |   | 490 |   |
| Net cash used in investing activities                        |   |          | (2,567  | )       |          |   | (3,826 | ) |
|                                                         |   |          |    |    |          |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                        |   |          |    |    |          |   |   |   |
| Proceeds from revolving credit facilities                    |   |          | 17,759  |    |          |   | 18,248 |   |
| Repayment of revolving credit facilities                     |   |          | (13,444 | )       |          |   | (12,719 | ) |
| Repayment of capital lease obligations                       |   |          | (262    | )       |          |   | (223 | ) |
| Repayment of other debt                                      |   |          | (10     | )       |          |   | (10 | ) |
| Debt financing costs                                         |   |          | -       |    |          |   | (142 | ) |
| Distributions to non-controlling interest holders            |   |          | (175    | )       |          |   | (71 | ) |
| Net cash provided by financing activities                    |   |          | 3,868   |    |          |   | 5,083 |   |
|                                                         |   |          |    |    |          |   |   |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS               |   |          | (2,025  | )  |          |   | (2,177 | ) |
|                                                         |   |          |    |    |          |   |   |   |
| CASH AND CASH EQUIVALENTS:                                   |   |          |    |    |          |   |   |   |
|   Balance, beginning of period                     |   |          | 4,288   |    |          |   | 4,613 |   |
|   Balance, end of period                           |   | $             | 2,263   |    |          |   | 2,436 |   |

----

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| ·   | Perkins & Marie Callender’s Holding Inc., which is a wholly-owned subsidiary of |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | P&MC’s Holding Corp, which is a wholly-owned subsidiary of |
|--------------------|----------------------------------------------------------------------|

| ·   | P&MC’s Real Estate Holding LLC, which is a wholly-owned subsidiary of |
|--------------------|---------------------------------------------------------------------------------|

| ·   | P&MC’s Holding LLC, which is principally owned by affiliates of Castle Harlan, Inc. |
|--------------------|-----------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

----

Table of Contents

| # of        |   | Quarter        |   | Year-to-Date   |   | # of        |   | Quarter        |   | Year-to-Date   |
|-------------|--------|----------------|--------|----------------|--------|-------------|--------|----------------|--------|----------------|
| Restaurants |   | Ended          |   | Ended          |   | Restaurants |   | Ended          |   | Ended          |
| (2010)      |   | July 11, 2010  |   | July 11, 2010  |   | (2009)      |   | July 12, 2009  |   | July 12, 2009  |
|        |   |           |   |           |   |        |   |           |   |           |
| 39          |   |  $430,000 |   |  $963,000 |   | 40          |   |  $449,000 |   |  $999,000 |
| 27          |   |  348,000  |   |  787,000  |   | 27          |   |  337,000  |   |  763,000  |
| 21          |   |  323,000  |   |  736,000  |   | 21          |   |  342,000  |   |  777,000  |

| # of        |   | Quarter       |   | Year-to-Date   |   | # of        |   | Quarter       |   | Year-to-Date   |
|-------------|--------|---------------|--------|----------------|--------|-------------|--------|---------------|--------|----------------|
| Restaurants |   | Ended         |   | Ended          |   | Restaurants |   | Ended         |   | Ended          |
| (2010)      |   | July 11, 2010 |   | July 11, 2010  |   | (2009)      |   | July 12, 2009 |   | July 12, 2009  |
|        |   |          |   |           |   |        |   |          |   |           |
| 4           |   |  $77,000 |   |  $187,000 |   | 5           |   |  $70,000 |   |  $220,000 |
| 4           |   |  74,000  |   |  189,000  |   | 4           |   |  84,000  |   |  201,000  |
| 4           |   |  66,000  |   |  148,000  |   | 4           |   |  57,000  |   |  138,000  |

----

Table of Contents

|                                                       |   | Year-to-Date  |   |   | Year-to-Date  |   |
|------------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|
|                                                       |   | Ended         |   |   | Ended         |   |
|                                                       |   | July 11, 2010 |   |   | July 12, 2009 |   |
| Decrease (increase) in:                                    |   |          |   |   |          |   |
|   Restricted cash                                |   | $             | 648    |   |          |   | 2,100 |   |
|   Receivables                                    |   |          | 2,885  |   |          |   | 4,874 |   |
|   Inventories                                    |   |          | 679    |   |          |   | (138 | ) |
|   Prepaid expenses and other current assets      |   |          | (1,812 | )      |          |   | (2,189 | ) |
|   Other assets                                   |   |          | 1,694  |   |          |   | 854 |   |
|                                                       |   |          |   |   |          |   |   |   |
| Increase (decrease) in:                                    |   |          |   |   |          |   |   |   |
|   Accounts payable                               |   |          | (274   | )      |          |   | (5,287 | ) |
|   Accrued expenses and other current liabilities |   |          | 745    |   |          |   | (3,181 | ) |
|   Other liabilities                              |   |          | 3,060  |   |          |   | 2,474 |   |
| Net changes in operating assets and liabilities            |   | $             | 7,625  |   |          |   | (493 | ) |

|                                  |   | July 11, |    |   | December 27, |   |
|---------------------------------------|--------|----------|---------|--------|--------------|--------|
|                                  |   | 2010     |    |   | 2009         |   |
| Amortizing intangible assets:         |   |     |    |   |         |   |
| Franchise agreements                  |   | $        | 35,000  |   |         |   | 35,000 |   |
| Customer relationships                |   |     | 10,000  |   |         |   | 10,000 |   |
| Acquired franchise rights             |   |     | 10,758  |   |         |   | 10,758 |   |
| Design prototype                      |   |     | 834     |   |         |   | 834 |   |
| Subtotal                              |   |     | 56,592  |   |         |   | 56,592 |   |
| Less — accumulated amortization |   |     | (21,257 | )      |         |   | (20,179 | ) |
| Net amortizing intangible assets      |   |     | 35,335  |   |         |   | 36,413 |   |
| Non-amortizing intangible asset:      |   |     |    |   |         |   |   |   |
| Tradenames                            |   |     | 110,600 |   |         |   | 110,600 |   |
| Total intangible assets               |   | $        | 145,935 |   |         |   | 147,013 |   |

----

Table of Contents

|                                  |   | July 11, |   |   | December 27, |   |
|---------------------------------------|--------|----------|--------|--------|--------------|--------|
|                                  |   | 2010     |   |   | 2009         |   |
|                                  |   |     |   |   |         |   |   |   |
| Payroll and related benefits          |   | $        | 14,376 |   |         |   | 15,423 |   |
| Interest                              |   |     | 7,505  |   |         |   | 6,065 |   |
| Gift cards and gift certificates      |   |     | 3,004  |   |         |   | 5,090 |   |
| Property, real estate and sales taxes |   |     | 5,294  |   |         |   | 4,267 |   |
| Insurance                             |   |     | 2,383  |   |         |   | 2,219 |   |
| Advertising                           |   |     | 1,042  |   |         |   | 792 |   |
| Other                                 |   |     | 7,282  |   |         |   | 7,749 |   |
| Total accrued expenses                |   | $        | 40,886 |   |         |   | 41,605 |   |

----

Table of Contents

|                                       |   | Quarter       |    |   | Quarter       |   |    | Year-to-Date  |   |               | Year-to-Date  |   |
|--------------------------------------------|--------|---------------|---------|--------|---------------|--------|---------|---------------|--------|--------------------|---------------|--------|
|                                       |   | Ended         |    |   | Ended         |   |    | Ended         |   |               | Ended         |   |
| Revenues                                   |   | July 11, 2010 |    |   | July 12, 2009 |   |    | July 11, 2010 |   |               | July 12, 2009 |   |
|                                       |   |          |    |   |          |   |    |          |   |               |          |   |
| Restaurant operations                      |   | $             | 100,961 |   |          |   | 106,495 |          |   |               | 240,566       |   |   |   | 255,723 |   |
| Franchise operations                       |   |          | 5,288   |   |          |   | 5,305   |          |   |               | 11,959        |   |   |   | 12,249 |   |
| Foxtail                                    |   |          | 10,901  |   |          |   | 12,942  |          |   |               | 24,366        |   |   |   | 30,504 |   |
| Intersegment revenue                       |   |          | (4,289  | )      |          |   | (4,376  | )             |   |               | (10,044       | )      |   |   | (10,289 | ) |
| Other                                      |   |          | 1,292   |   |          |   | 1,510   |          |   |               | 3,111         |   |   |   | 2,942 |   |
| Total                                      |   | $             | 114,153 |   |          |   | 121,876 |          |   |               | 269,958       |   |   |   | 291,129 |   |
|                                       |   |          |    |   |          |   |    |          |   |               |          |   |   |   |   |   |
| Segment income (loss) attributable to PMCI |   |          |    |   |          |   |    |          |   |               |          |   |   |   |   |   |
|                                       |   |          |    |   |          |   |    |          |   |               |          |   |   |   |   |   |
| Restaurant operations                      |   |          | 3,259   |   |          |   | 5,335   |          |   |               | 8,829         |   |   |   | 14,411 |   |
| Franchise operations                       |   |          | 4,742   |   |          |   | 4,840   |          |   |               | 10,867        |   |   |   | 11,269 |   |
| Foxtail                                    |   |          | 933     |   |          |   | 1,164   |          |   |               | 1,574         |   |   |   | 1,323 |   |
| Other                                      |   |          | (20,087 | )      |          |   | (17,219 | )             |   |               | (47,029       | )      |   |   | (42,637 | ) |
| Total                                      |   | $             | (11,153 | )      |          |   | (5,880  | )             |   |               | (25,759       | )      |   |   | (15,634 | ) |
|                                       |   |          |    |   |          |   |    |          |   |               |          |   |   |   |   |   |
| Segment assets                             |   |          |    |   |          |   |    |          |   | July 11, 2010 |          |   | December 27, 2009 |   |
|                                       |   |          |    |   |          |   |    |          |   |               |          |   |   |   |   |   |
| Restaurant operations                      |   |          |    |   |          |   |    |          |   |               | 122,740       |   |   |   | 132,611 |   |
| Franchise operations                       |   |          |    |   |          |   |    |          |   |               | 101,359       |   |   |   | 101,672 |   |
| Foxtail                                    |   |          |    |   |          |   |    |          |   |               | 29,175        |   |   |   | 31,754 |   |
| Other                                      |   |          |    |   |          |   |    |          |   |               | 33,700        |   |   |   | 38,868 |   |
| Total                                      |   |          |    |   |          |   |    |          |   | $                  | 286,974       |   |   |   | 304,905 |   |

|   |   |
|--------|--------|

|                                                   |   | Quarter       |   |   | Quarter       |   |   | Year-to-Date  |   |   | Year-to-Date  |   |
|--------------------------------------------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|                                                   |   | Ended         |   |   | Ended         |   |   | Ended         |   |   | Ended         |   |
|                                                   |   | July 11, 2010 |   |   | July 12, 2009 |   |   | July 11, 2010 |   |   | July 12, 2009 |   |
|                                                   |   |          |   |   |          |   |   |          |   |   |          |   |   |   |   |   |
| General and administrative expenses                    |   | $             | 9,993  |   |          |   | 9,079  |          |   |   | 22,674        |   |   |   | 21,229 |   |
| Depreciation and amortization expenses                 |   |          | 721    |   |          |   | 784    |          |   |   | 1,677         |   |   |   | 1,821 |   |
| Interest expense, net                                  |   |          | 10,299 |   |          |   | 10,130 |          |   |   | 23,864        |   |   |   | 23,745 |   |
| Loss (gain) on disposition of assets, net              |   |          | (102   | )      |          |   | 114    |          |   |   | (168          | )      |   |   | 774 |   |
| Asset impairments                                      |   |          | 542    |   |          |   | 232    |          |   |   | 2,273         |   |   |   | 434 |   |
| Net earnings attributable to non-controlling interests |   |          | (1     | )      |          |   | 33     |          |   |   | 7             |   |   |   | 79 |   |
| Licensing revenue                                      |   |          | (1,258 | )      |          |   | (1,448 | )             |   |   | (2,990        | )      |   |   | (2,808 | ) |
| Other                                                  |   |          | (107   | )      |          |   | (1,705 | )             |   |   | (308          | )      |   |   | (2,637 | ) |
| Total other segment loss                               |   | $             | 20,087 |   |          |   | 17,219 |          |   |   | 47,029        |   |   |   | 42,637 |   |

----

Table of Contents

----

Table of Contents

|                                                |   | 2010   |   |
|-----------------------------------------------------|--------|--------|--------|
|                                                |   |   |   |   |
| Unrecognized tax benefit - beginning of fiscal year |   | $      | 1,153  |   |
| Additions for tax positions of prior years          |   |   | -      |   |
| Reductions for tax positions of prior years         |   |   | -      |   |
| Additions for tax positions of current year         |   |   | -      |   |
| Reductions due to settlements                       |   |   | -      |   |
| Reductions for lapse of statute of limitations      |   |   | -      |   |
| Unrecognized tax benefit - as of July 11, 2010      |   | $      | 1,153  |   |

----

Table of Contents

|                                              |   | Year-to-Date Ended July 11, 2010 |   |
|---------------------------------------------------|--------|----------------------------------|--------|
|                                              |   |                             |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |   |   |   |
|                                              |   |                             |   |   | Additional |   |   |   |   |   | Other |   |   | Total PMCI |   |   |   |   |   |   |   |
|                                              |   | Common                           |   |   | Paid-in |   |   | Accumulated |   |   | Comprehensive |   |   | Stockholder's |   |   | Non-controlling |   |   | Total |   |
|                                              |   | Stock                            |   |   | Capital |   |   | Deficit |   |   | Income |   |   | Deficit |   |   | Interests |   |   | Deficit |   |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 27, 2009                        |   | $                                | 1      |   |   |   | 150,870 |   |   |   | (329,333 | ) |   |   | 45 |   |   |   | (178,417 | ) |   |   | 308 |   |   |   | (178,109 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions to non-controlling interest holders |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (175 | ) |   |   | (175 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) earnings                               |   |                             | -      |   |   |   | - |   |   |   | (25,759 | ) |   |   | - |   |   |   | (25,759 | ) |   |   | 7 |   |   |   | (25,752 | ) |
| Currency translation adjustment                   |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | 2 |   |   |   | - |   |   |   | 2 |   |
| Total comprehensive loss                          |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (25,750 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, July 11, 2010                            |   | $                                | 1      |   |   |   | 150,870 |   |   |   | (355,092 | ) |   |   | 47 |   |   |   | (204,174 | ) |   |   | 140 |   |   |   | (204,034 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | Year-to-Date Ended July 12, 2009 |   |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |                             |   |   |   | Additional |   |   |   |   |   |   | Other |   |   | Total PMCI |   |   |   |   |   |   |   |   |   |
|                                              |   | Common                           |   |   | Paid-in |   |   | Accumulated |   |   | Comprehensive |   |   | Stockholder's |   |   | Non-controlling |   |   | Total |   |
|                                              |   | Stock                            |   |   | Capital |   |   | Deficit |   |   | Income (Loss) |   |   | Deficit |   |   | Interests |   |   | Deficit |   |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 28, 2008                        |   | $                                | 1      |   |   |   | 149,851 |   |   |   | (293,114 | ) |   |   | (4 | ) |   |   | (143,266 | ) |   |   | 215 |   |   |   | (143,051 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions to non-controlling interest holders |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (71 | ) |   |   | (71 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) earnings                               |   |                             | -      |   |   |   | - |   |   |   | (15,634 | ) |   |   | - |   |   |   | (15,634 | ) |   |   | 79 |   |   |   | (15,555 | ) |
| Currency translation adjustment                   |   |                             | -      |   |   |   | - |   |   |   | - |   |   |   | 24 |   |   |   | 24 |   |   |   | - |   |   |   | 24 |   |
| Total comprehensive loss                          |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (15,531 | ) |
|                                              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, July 12, 2009                            |   | $                                | 1      |   |   |   | 149,851 |   |   |   | (308,748 | ) |   |   | 20 |   |   |   | (158,876 | ) |   |   | 223 |   |   |   | (158,653 | ) |

----

Table of Contents

| Consolidating Statement of Operations for the Quarter ended July 11, 2010 (unaudited; in thousands): |   |
|------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                 |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES:                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                                                                                           |   | $ | 66,759 |   |   |   | 35,379 |   |   |   | 5,435 |   |   |   | - |   |   |   | 107,573 |   |
| Franchise and other revenue                                                                          |   |   | 4,571 |   |   |   | 2,009 |   |   |   | - |   |   |   | - |   |   |   | 6,580 |   |
|    Total revenues                                                                     |   |   | 71,330 |   |   |   | 37,388 |   |   |   | 5,435 |   |   |   | - |   |   |   | 114,153 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS AND EXPENSES:                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales (excluding depreciation shown below):                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Food cost                                                                          |   |   | 16,378 |   |   |   | 9,604 |   |   |   | 1,452 |   |   |   | - |   |   |   | 27,434 |   |
|    Labor and benefits                                                                 |   |   | 23,276 |   |   |   | 13,573 |   |   |   | 1,997 |   |   |   | - |   |   |   | 38,846 |   |
|    Operating expenses                                                                 |   |   | 18,709 |   |   |   | 11,692 |   |   |   | 2,133 |   |   |   | - |   |   |   | 32,534 |   |
| General and administrative                                                                           |   |   | 9,569 |   |   |   | 1,266 |   |   |   | - |   |   |   | - |   |   |   | 10,835 |   |
| Depreciation and amortization                                                                        |   |   | 3,739 |   |   |   | 1,150 |   |   |   | 170 |   |   |   | - |   |   |   | 5,059 |   |
| Interest, net                                                                                        |   |   | 10,221 |   |   |   | 78 |   |   |   | - |   |   |   | - |   |   |   | 10,299 |   |
| Asset impairments and closed store expenses                                                          |   |   | 51 |   |   |   | 389 |   |   |   | - |   |   |   | - |   |   |   | 440 |   |
| Other, net                                                                                           |   |   | (235 | ) |   |   | 95 |   |   |   | - |   |   |   | - |   |   |   | (140 | ) |
|    Total costs and expenses                                                           |   |   | 81,708 |   |   |   | 37,847 |   |   |   | 5,752 |   |   |   | - |   |   |   | 125,307 |   |
| Loss before income taxes                                                                             |   |   | (10,378 | ) |   |   | (459 | ) |   |   | (317 | ) |   |   | - |   |   |   | (11,154 | ) |
| Benefit from (provision for) income taxes                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                                                                                             |   |   | (10,378 | ) |   |   | (459 | ) |   |   | (317 | ) |   |   | - |   |   |   | (11,154 | ) |
| Less: net loss attributable to non-controlling interests                                        |   |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | (1 | ) |
| Equity in earnings (loss) of subsidiaries                                                            |   |   | (776 | ) |   |   | - |   |   |   | - |   |   |   | 776 |   |   |   | - |   |
| Net (loss) income attributable to Perkins & Marie Callender's Inc.                               |   | $ | (11,154 | ) |   |   | (459 | ) |   |   | (316 | ) |   |   | 776 |   |   |   | (11,153 | ) |

----

Table of Contents

| Consolidating Statement of Operations for the Quarter ended July 12, 2009 (unaudited; in thousands): |   |   |   |   |
|------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                 |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES:                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                                                                                           |   | $      | 71,865 |   |   |   | 37,443 |   |   |   | 5,753 |   |   |   | - |   |   |   | 115,061 |   |
| Franchise and other revenue                                                                          |   |   | 4,608  |   |   |   | 2,207 |   |   |   | - |   |   |   | - |   |   |   | 6,815 |   |
|    Total revenues                                                                     |   |   | 76,473 |   |   |   | 39,650 |   |   |   | 5,753 |   |   |   | - |   |   |   | 121,876 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS AND EXPENSES:                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales (excluding depreciation shown below):                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Food cost                                                                          |   |   | 18,918 |   |   |   | 9,265 |   |   |   | 2,118 |   |   |   | - |   |   |   | 30,301 |   |
|    Labor and benefits                                                                 |   |   | 24,278 |   |   |   | 15,136 |   |   |   | 1,490 |   |   |   | - |   |   |   | 40,904 |   |
|    Operating expenses                                                                 |   |   | 18,407 |   |   |   | 11,511 |   |   |   | 2,154 |   |   |   | - |   |   |   | 32,072 |   |
| General and administrative                                                                           |   |   | 8,732  |   |   |   | 1,397 |   |   |   | - |   |   |   | - |   |   |   | 10,129 |   |
| Depreciation and amortization                                                                        |   |   | 4,018  |   |   |   | 1,402 |   |   |   | 137 |   |   |   | - |   |   |   | 5,557 |   |
| Interest, net                                                                                        |   |   | 9,915  |   |   |   | 215 |   |   |   | - |   |   |   | - |   |   |   | 10,130 |   |
| Asset impairments and closed store expenses                                                          |   |   | 63     |   |   |   | 274 |   |   |   | 9 |   |   |   | - |   |   |   | 346 |   |
| Other, net                                                                                           |   |   | (139   | )      |   |   | (1,577 | ) |   |   | - |   |   |   | - |   |   |   | (1,716 | ) |
|    Total costs and expenses                                                           |   |   | 84,192 |   |   |   | 37,623 |   |   |   | 5,908 |   |   |   | - |   |   |   | 127,723 |   |
| Profit (loss) before income taxes                                                                    |   |   | (7,719 | )      |   |   | 2,027 |   |   |   | (155 | ) |   |   | - |   |   |   | (5,847 | ) |
| Benefit from (provision for) income taxes                                                            |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net profit (loss)                                                                                    |   |   | (7,719 | )      |   |   | 2,027 |   |   |   | (155 | ) |   |   | - |   |   |   | (5,847 | ) |
| Less: net earnings attributable to non-controlling interests                                         |   |   | -      |   |   |   | - |   |   |   | 33 |   |   |   | - |   |   |   | 33 |   |
| Equity in earnings (loss) of subsidiaries                                                            |   |   | 1,872  |   |   |   | - |   |   |   | - |   |   |   | (1,872 | ) |   |   | - |   |
| Net (loss) income attributable to Perkins & Marie Callender's Inc.                               |   | $      | (5,847 | )      |   |   | 2,027 |   |   |   | (188 | ) |   |   | (1,872 | ) |   |   | (5,880 | ) |

----

Table of Contents

| Consolidating Statement of Operations for the Year-to-Date Period ended July 11, 2010 (unaudited; in thousands): |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                             |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES:                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                                                                                                       |   | $ | 159,118 |   |   |   | 82,915 |   |   |   | 12,855 |   |   |   | - |   |   |   | 254,888 |   |
| Franchise and other revenue                                                                                      |   |   | 10,212 |   |   |   | 4,857 |   |   |   | 1 |   |   |   | - |   |   |   | 15,070 |   |
|    Total revenues                                                                                 |   |   | 169,330 |   |   |   | 87,772 |   |   |   | 12,856 |   |   |   | - |   |   |   | 269,958 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS AND EXPENSES:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales (excluding depreciation shown below):                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Food cost                                                                                      |   |   | 39,176 |   |   |   | 22,121 |   |   |   | 3,419 |   |   |   | - |   |   |   | 64,716 |   |
|    Labor and benefits                                                                             |   |   | 55,705 |   |   |   | 31,864 |   |   |   | 4,639 |   |   |   | - |   |   |   | 92,208 |   |
|    Operating expenses                                                                             |   |   | 44,532 |   |   |   | 26,810 |   |   |   | 4,927 |   |   |   | - |   |   |   | 76,269 |   |
| General and administrative                                                                                       |   |   | 22,109 |   |   |   | 2,832 |   |   |   | - |   |   |   | - |   |   |   | 24,941 |   |
| Depreciation and amortization                                                                                    |   |   | 8,813 |   |   |   | 2,759 |   |   |   | 393 |   |   |   | - |   |   |   | 11,965 |   |
| Interest, net                                                                                                    |   |   | 23,703 |   |   |   | 161 |   |   |   | - |   |   |   | - |   |   |   | 23,864 |   |
| Asset impairments and closed store expenses                                                                      |   |   | 876 |   |   |   | 1,223 |   |   |   | 6 |   |   |   | - |   |   |   | 2,105 |   |
| Other, net                                                                                                       |   |   | (361 | ) |   |   | 3 |   |   |   | - |   |   |   | - |   |   |   | (358 | ) |
|    Total costs and expenses                                                                       |   |   | 194,553 |   |   |   | 87,773 |   |   |   | 13,384 |   |   |   | - |   |   |   | 295,710 |   |
| Loss before income taxes                                                                                    |   |   | (25,223 | ) |   |   | (1 | ) |   |   | (528 | ) |   |   | - |   |   |   | (25,752 | ) |
| Benefit from (provision for) income taxes                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                                                                                                         |   |   | (25,223 | ) |   |   | (1 | ) |   |   | (528 | ) |   |   | - |   |   |   | (25,752 | ) |
| Less: net earnings attributable to non-controlling interests                                                     |   |   | - |   |   |   | - |   |   |   | 7 |   |   |   | - |   |   |   | 7 |   |
| Equity in earnings (loss) of subsidiaries                                                                        |   |   | (529 | ) |   |   | - |   |   |   | - |   |   |   | 529 |   |   |   | - |   |
| Net (loss) income attributable to Perkins & Marie Callender's Inc.                                           |   | $ | (25,752 | ) |   |   | (1 | ) |   |   | (535 | ) |   |   | 529 |   |   |   | (25,759 | ) |

----

Table of Contents

| Consolidating Statement of Operations for the Year-to-Date Period ended July 12, 2009 (unaudited; in thousands): |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                             |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REVENUES:                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                                                                                                       |   | $ | 173,591 |   |   |   | 88,582 |   |   |   | 13,765 |   |   |   | - |   |   |   | 275,938 |   |
| Franchise and other revenue                                                                                      |   |   | 10,391 |   |   |   | 4,800 |   |   |   | - |   |   |   | - |   |   |   | 15,191 |   |
|    Total revenues                                                                                 |   |   | 183,982 |   |   |   | 93,382 |   |   |   | 13,765 |   |   |   | - |   |   |   | 291,129 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS AND EXPENSES:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales (excluding depreciation shown below):                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Food cost                                                                                      |   |   | 45,763 |   |   |   | 23,884 |   |   |   | 3,628 |   |   |   | - |   |   |   | 73,275 |   |
|    Labor and benefits                                                                             |   |   | 57,745 |   |   |   | 33,494 |   |   |   | 4,990 |   |   |   | - |   |   |   | 96,229 |   |
|    Operating expenses                                                                             |   |   | 45,778 |   |   |   | 26,977 |   |   |   | 5,018 |   |   |   | - |   |   |   | 77,773 |   |
| General and administrative                                                                                       |   |   | 21,080 |   |   |   | 3,138 |   |   |   | - |   |   |   | - |   |   |   | 24,218 |   |
| Depreciation and amortization                                                                                    |   |   | 9,454 |   |   |   | 3,130 |   |   |   | 329 |   |   |   | - |   |   |   | 12,913 |   |
| Interest, net                                                                                                    |   |   | 23,296 |   |   |   | 449 |   |   |   | - |   |   |   | - |   |   |   | 23,745 |   |
| Asset impairments and closed store expenses                                                                      |   |   | 824 |   |   |   | 295 |   |   |   | 89 |   |   |   | - |   |   |   | 1,208 |   |
| Other, net                                                                                                       |   |   | (1,101 | ) |   |   | (1,576 | ) |   |   | - |   |   |   | - |   |   |   | (2,677 | ) |
|    Total costs and expenses                                                                       |   |   | 202,839 |   |   |   | 89,791 |   |   |   | 14,054 |   |   |   | - |   |   |   | 306,684 |   |
| Profit (loss) before income taxes                                                                                |   |   | (18,857 | ) |   |   | 3,591 |   |   |   | (289 | ) |   |   | - |   |   |   | (15,555 | ) |
| Benefit from (provision for) income taxes                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net profit (loss)                                                                                                |   |   | (18,857 | ) |   |   | 3,591 |   |   |   | (289 | ) |   |   | - |   |   |   | (15,555 | ) |
| Less: net earnings attributable to non-controlling interests                                                     |   |   | - |   |   |   | - |   |   |   | 79 |   |   |   | - |   |   |   | 79 |   |
| Equity in earnings (loss) of subsidiaries                                                                        |   |   | 3,302 |   |   |   | - |   |   |   | - |   |   |   | (3,302 | ) |   |   | - |   |
| Net (loss) income attributable to Perkins & Marie Callender's Inc.                                           |   | $ | (15,555 | ) |   |   | 3,591 |   |   |   | (368 | ) |   |   | (3,302 | ) |   |   | (15,634 | ) |

----

Table of Contents

| Consolidating Balance Sheet as of July 11, 2010 (unaudited; in thousands):          |   |   |     |   |      |   |     |
|-------------------------------------------------------------------------------------|--------|--------|----------|--------|-----------|--------|----------|
|                                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |
|                                                                                |   |   |     |   |      |   |     | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                |   | Issuer |     |   | Guarantor |   |     | Guarantors |   |   | Eliminations |   |   | PMCI |   |
| ASSETS                                                                              |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |
| CURRENT ASSETS:                                                                     |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                           |   | $      | 1,458    |   |      |   | 204      |   |   |   | 601 |   |   |   | - |   |   |   | 2,263 |   |
| Restricted cash                                                                |   |   | 7,462    |   |      |   | -        |   |   |   | - |   |   |   |  - |   |   |   |  7,462 |   |
| Receivables, less allowances for   doubtful accounts                 |   |   | 9,940    |   |      |   | 5,196    |   |   |   | 5 |   |   |   | - |   |   |   | 15,141 |   |
| Inventories                                                                         |   |   | 7,446    |   |      |   | 2,749    |   |   |   | 188 |   |   |   | - |   |   |   | 10,383 |   |
| Prepaid expenses and other current assets                                           |   |   | 2,909    |   |      |   | 761      |   |   |   | 6 |   |   |   | - |   |   |   | 3,676 |   |
| Assets held for sale, net                                                           |   |   | 1,304    |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 1,304 |   |
|      Total current assets                                  |   |   | 30,519   |   |      |   | 8,910    |   |   |   | 800 |   |   |   | - |   |   |   | 40,229 |   |
|                                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PROPERTY AND EQUIPMENT, net                                                         |   |   | 43,549   |   |      |   | 17,280   |   |   |   | 2,158 |   |   |   | - |   |   |   | 62,987 |   |
| INVESTMENT IN   UNCONSOLIDATED PARTNERSHIP                           |   |   | -        |   |      |   | 24       |   |   |   | 9 |   |   |   | - |   |   |   | 33 |   |
| GOODWILL                                                                            |   |   | 23,100   |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 23,100 |   |
| INTANGIBLE ASSETS, net                                                              |   |   | 145,841  |   |      |   | 94       |   |   |   | - |   |   |   | - |   |   |   | 145,935 |   |
| INVESTMENTS IN SUBSIDIARIES                                                         |   |   | (79,517  | )      |      |   | -        |   |   |   | - |   |   |   | 79,517 |   |   |   | - |   |
| DUE FROM SUBSIDIARIES                                                               |   |   | 79,204   |   |      |   | -        |   |   |   | - |   |   |   | (79,204 | ) |   |   | - |   |
| OTHER ASSETS                                                                        |   |   | 13,354   |   |      |   | 1,126    |   |   |   | 210 |   |   |   | - |   |   |   | 14,690 |   |
| TOTAL ASSETS                                                                        |   | $      | 256,050  |   |      |   | 27,434   |   |   |   | 3,177 |   |   |   | 313 |   |   |   | 286,974 |   |
|                                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND EQUITY (DEFICIT)                                                    |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES:                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable                                                                    |   |   | 9,202    |   |      |   | 4,742    |   |   |   | 439 |   |   |   | - |   |   |   | 14,383 |   |
| Accrued expenses                                                                    |   |   | 31,844   |   |      |   | 7,898    |   |   |   | 1,144 |   |   |   | - |   |   |   | 40,886 |   |
| Franchise advertising contributions                                                 |   |   | 5,265    |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 5,265 |   |
| Current maturities of long-term debt and   capital lease obligations |   |   | 162      |   |      |   | 217      |   |   |   | - |   |   |   | - |   |   |   | 379 |   |
|      Total current liabilities                             |   |   | 46,473   |   |      |   | 12,857   |   |   |   | 1,583 |   |   |   | - |   |   |   | 60,913 |   |
|                                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LONG-TERM DEBT, less current   maturities                            |   |   | 331,303  |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 331,303 |   |
| CAPITAL LEASE OBLIGATIONS, less   current maturities                 |   |   | 8,026    |   |      |   | 2,880    |   |   |   | - |   |   |   | - |   |   |   | 10,906 |   |
| DEFERRED RENT                                                                       |   |   | 13,749   |   |      |   | 4,671    |   |   |   | 58 |   |   |   | - |   |   |   | 18,478 |   |
| OTHER LIABILITIES                                                                   |   |   | 15,216   |   |      |   | 8,735    |   |   |   | - |   |   |   | - |   |   |   | 23,951 |   |
| DEFERRED INCOME TAXES                                                               |   |   | 45,457   |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 45,457 |   |
| DUE TO PARENT                                                                       |   |   | -        |   |      |   | 77,764   |   |   |   | 1,440 |   |   |   | (79,204 | ) |   |   | - |   |
|                                                                                |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EQUITY (DEFICIT):                                                                   |   |   |     |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                                                                        |   |   | 1        |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Preferred stock                                                                     |   |   | -        |   |      |   | 64,296   |   |   |   | - |   |   |   | (64,296 | ) |   |   | - |   |
| Capital in excess of par                                                            |   |   | -        |   |      |   | 9,338    |   |   |   | - |   |   |   | (9,338 | ) |   |   | - |   |
| Additional paid-in capital                                                          |   |   | 150,870  |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 150,870 |   |
| Treasury stock                                                                      |   |   | -        |   |      |   | (137     | ) |   |   | - |   |   |   | 137 |   |   |   | - |   |
| Accumulated other comprehensive income                                              |   |   | 47       |   |      |   | -        |   |   |   | - |   |   |   | - |   |   |   | 47 |   |
| Accumulated (deficit) earnings                                                      |   |   | (355,092 | )      |      |   | (152,970 | ) |   |   | (44 | ) |   |   | 153,014 |   |   |   | (355,092 | ) |
|   Total PMCI stockholder's (deficit) investment                           |   |   | (204,174 | )      |      |   | (79,473  | ) |   |   | (44 | ) |   |   | 79,517 |   |   |   | (204,174 | ) |
| Non-controlling interests                                                           |   |   | -        |   |      |   | -        |   |   |   | 140 |   |   |   | - |   |   |   | 140 |   |
|   Total equity (deficit)                                                  |   |   | (204,174 | )      |      |   | (79,473  | ) |   |   | 96 |   |   |   | 79,517 |   |   |   | (204,034 | ) |
| TOTAL LIABILITIES AND EQUITY (DEFICIT)                                              |   | $      | 256,050  |   |      |   | 27,434   |   |   |   | 3,177 |   |   |   | 313 |   |   |   | 286,974 |   |

----

Table of Contents

|   Consolidating Balance Sheet as of December 27, 2009 (in thousands):          |   |   |     |   |      |   |     |       |   |   |         |   |   |
|-------------------------------------------------------------------------------------|--------|--------|----------|--------|-----------|--------|----------|------------|--------|--------|--------------|--------|--------|
|                                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |
|                                                                                |   |   |     |   |      |   |     | Non-       |   |   |         |   |   | Consolidated |   |
|                                                                                |   | Issuer |     |   | Guarantor |   |     | Guarantors |   |   | Eliminations |   |   | PMCI |   |
| ASSETS                                                                              |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |
| CURRENT ASSETS:                                                                     |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |
| Cash and cash equivalents                                                           |   | $      | 2,013    |   |      |   | 1,293    |       |   |   | 982          |   |   |   | - |   |   |   | 4,288 |   |
| Restricted cash                                                                     |   |   | 8,110    |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 8,110 |   |
| Receivables, less allowances for   doubtful accounts                 |   |   | 11,070   |   |      |   | 7,048    |       |   |   | 7            |   |   |   | - |   |   |   | 18,125 |   |
| Inventories                                                                         |   |   | 8,038    |   |      |   | 2,793    |       |   |   | 231          |   |   |   | - |   |   |   | 11,062 |   |
| Prepaid expenses and other current assets                                           |   |   | 1,613    |   |      |   | 248      |       |   |   | 3            |   |   |   | - |   |   |   | 1,864 |   |
|      Total current assets                                  |   |   | 30,844   |   |      |   | 11,382   |       |   |   | 1,223        |   |   |   | - |   |   |   | 43,449 |   |
|                                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| PROPERTY AND EQUIPMENT, net                                                         |   |   | 52,217   |   |      |   | 20,530   |       |   |   | 2,472        |   |   |   | - |   |   |   | 75,219 |   |
| INVESTMENT IN   UNCONSOLIDATED PARTNERSHIP                           |   |   | -        |   |      |   | 41       |       |   |   | 9            |   |   |   | - |   |   |   | 50 |   |
| GOODWILL                                                                            |   |   | 23,100   |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 23,100 |   |
| INTANGIBLE ASSETS, net                                                              |   |   | 146,889  |   |      |   | 124      |       |   |   | -            |   |   |   | - |   |   |   | 147,013 |   |
| INVESTMENTS IN SUBSIDIARIES                                                         |   |   | (78,981  | )      |      |   | -        |       |   |   | -            |   |   |   | 78,981 |   |   |   | - |   |
| DUE FROM SUBSIDIARIES                                                               |   |   | 81,493   |   |      |   | -        |       |   |   | -            |   |   |   | (81,493 | ) |   |   | - |   |
| OTHER ASSETS                                                                        |   |   | 14,321   |   |      |   | 1,543    |       |   |   | 210          |   |   |   | - |   |   |   | 16,074 |   |
| TOTAL ASSETS                                                                        |   | $      | 269,883  |   |      |   | 33,620   |       |   |   | 3,914        |   |   |   | (2,512 | ) |   |   | 304,905 |   |
|                                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND EQUITY (DEFICIT)                                                    |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES:                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Accounts payable                                                                    |   | $      | 7,946    |   |      |   | 6,074    |       |   |   | 637          |   |   |   | - |   |   |   | 14,657 |   |
| Accrued expenses                                                                    |   |   | 30,628   |   |      |   | 9,635    |       |   |   | 1,342        |   |   |   | - |   |   |   | 41,605 |   |
| Franchise advertising contributions                                                 |   |   | 4,327    |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 4,327 |   |
| Current maturities of long-term debt and   capital lease obligations |   |   | 186      |   |      |   | 317      |       |   |   | -            |   |   |   | - |   |   |   | 503 |   |
|      Total current liabilities                             |   |   | 43,087   |   |      |   | 16,026   |       |   |   | 1,979        |   |   |   | - |   |   |   | 61,092 |   |
|                                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| LONG-TERM DEBT, less current   maturities                            |   |   | 326,042  |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 326,042 |   |
| CAPITAL LEASE OBLIGATIONS, less   current maturities                 |   |   | 8,085    |   |      |   | 2,969    |       |   |   | -            |   |   |   | - |   |   |   | 11,054 |   |
| DEFERRED RENT                                                                       |   |   | 12,263   |   |      |   | 4,765    |       |   |   | 64           |   |   |   | - |   |   |   | 17,092 |   |
| OTHER LIABILITIES                                                                   |   |   | 13,366   |   |      |   | 8,911    |       |   |   | -            |   |   |   | - |   |   |   | 22,277 |   |
| DEFERRED INCOME TAXES                                                               |   |   | 45,457   |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 45,457 |   |
| DUE TO PARENT                                                                       |   |   | -        |   |      |   | 80,421   |       |   |   | 1,072        |   |   |   | (81,493 | ) |   |   | - |   |
|                                                                                |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| EQUITY (DEFICIT):                                                                   |   |   |     |   |      |   |     |       |   |   |         |   |   |   |   |   |   |   |   |   |
| Common stock                                                                        |   |   | 1        |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 1 |   |
| Preferred stock                                                                     |   |   | -        |   |      |   | 64,296   |       |   |   | -            |   |   |   | (64,296 | ) |   |   | - |   |
| Capital in excess of par                                                            |   |   | -        |   |      |   | 9,338    |       |   |   | -            |   |   |   | (9,338 | ) |   |   | - |   |
| Additional paid-in capital                                                          |   |   | 150,870  |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 150,870 |   |
| Treasury stock                                                                      |   |   | -        |   |      |   | (137     | )          |   |   | -            |   |   |   | 137 |   |   |   | - |   |
| Accumulated other comprehensive income                                              |   |   | 45       |   |      |   | -        |       |   |   | -            |   |   |   | - |   |   |   | 45 |   |
| Accumulated (deficit) earnings                                                      |   |   | (329,333 | )      |      |   | (152,969 | )          |   |   | 491          |   |   |   | 152,478 |   |   |   | (329,333 | ) |
|   Total PMCI stockholder's (deficit) investment                           |   |   | (178,417 | )      |      |   | (79,472  | )          |   |   | 491          |   |   |   | 78,981 |   |   |   | (178,417 | ) |
| Non-controlling interests                                                           |   |   | -        |   |      |   | -        |       |   |   | 308          |   |   |   | - |   |   |   | 308 |   |
|   Total equity (deficit)                                                  |   |   | (178,417 | )      |      |   | (79,472  | )          |   |   | 799          |   |   |   | 78,981 |   |   |   | (178,109 | ) |
| TOTAL LIABILITIES AND EQUITY (DEFICIT)                                              |   | $      | 269,883  |   |      |   | 33,620   |       |   |   | 3,914        |   |   |   | (2,512 | ) |   |   | 304,905 |   |

----

Table of Contents

| Consolidating Statement of Cash Flows for the Year-to-Date Period ended July 11, 2010 (unaudited; in thousands): |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                             |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income                                                                                                |   | $ | (25,752 | ) |   |   | (1 | ) |   |   | (528 | ) |   |   | 529 |   |   |   | (25,752 | ) |
| Adjustments to reconcile net (loss) income to net cash                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (used in) provided by operating activities:                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in earnings (loss) of subsidiaries                                                                        |   |   | 529 |   |   |   | - |   |   |   | - |   |   |   | (529 | ) |   |   | - |   |
| Depreciation and amortization                                                                                    |   |   | 8,813 |   |   |   | 2,759 |   |   |   | 393 |   |   |   | - |   |   |   | 11,965 |   |
| Asset impairments                                                                                                |   |   | 997 |   |   |   | 1,270 |   |   |   | 6 |   |   |   | - |   |   |   | 2,273 |   |
| Amortization of debt discount                                                                                    |   |   | 946 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 946 |   |
| Other non-cash income items                                                                                      |   |   | (144 | ) |   |   | (88 | ) |   |   | - |   |   |   | - |   |   |   | (232 | ) |
| Gain on disposition of assets                                                                                    |   |   | (121 | ) |   |   | (47 | ) |   |   | - |   |   |   | - |   |   |   | (168 | ) |
| Equity in loss of unconsolidated partnership                                                                     |   |   | - |   |   |   | 17 |   |   |   | - |   |   |   | - |   |   |   | 17 |   |
| Net changes in operating assets and liabilities                                                                  |   |   | 9,348 |   |   |   | (1,363 | ) |   |   | (360 | ) |   |   | - |   |   |   | 7,625 |   |
| Total adjustments                                                                                                |   |   | 20,368 |   |   |   | 2,548 |   |   |   | 39 |   |   |   | (529 | ) |   |   | 22,426 |   |
| Net cash (used in) provided by operating activities                                                              |   |   | (5,384 | ) |   |   | 2,547 |   |   |   | (489 | ) |   |   | - |   |   |   | (3,326 | )  |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases of property and equipment                                                                              |   |   | (1,692 | ) |   |   | (795 | ) |   |   | (85 | ) |   |   | - |   |   |   | (2,572 | ) |
| Proceeds from sale of assets                                                                                     |   |   | - |   |   |   | 5 |   |   |   | - |   |   |   | - |   |   |   | 5 |   |
| Net cash used in investing activities                                                                            |   |   | (1,692 | ) |   |   | (790 | ) |   |   | (85 | ) |   |   | - |   |   |   | (2,567 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from revolving credit facilities                                                                        |   |   | 17,759 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,759 |   |
| Repayment of revolving credit facilities                                                                         |   |   | (13,444 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (13,444 | ) |
| Repayment of capital lease obligations                                                                           |   |   | (83 | ) |   |   | (179 | ) |   |   | - |   |   |   | - |   |   |   | (262 | ) |
| Repayment of other debt                                                                                          |   |   | - |   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | (10 | ) |
| Distributions to non-controlling interest holders                                                                |   |   | - |   |   |   | - |   |   |   | (175 | ) |   |   | - |   |   |   | (175 | ) |
| Intercompany financing                                                                                           |   |   | 2,289 |   |   |   | (2,657 | ) |   |   | 368 |   |   |   | - |   |   |   | - |   |
| Net cash provided by (used in) financing activities                                                              |   |   | 6,521 |   |   |   | (2,846 | ) |   |   | 193 |   |   |   | - |   |   |   | 3,868 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                        |   |   | (555) |   |   |   | (1,089 | ) |   |   | (381 | ) |   |   | - |   |   |   | (2,025 | )  |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS:                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of period                                                                                     |   |   | 2,013 |   |   |   | 1,293 |   |   |   | 982 |   |   |   | - |   |   |   | 4,288 |   |
| Balance, end of period                                                                                           |   | $ | 1,458 |   |   |   | 204 |   |   |   | 601 |   |   |   | - |   |   |   | 2,263 |   |

----

Table of Contents

| Consolidating Statement of Cash Flows for the Year-to-Date Period ended July 12, 2009 (unaudited; in thousands): |   |
|------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |   |   |   |   |   |   | Non- |   |   |   |   |   | Consolidated |   |
|                                                                                                             |   | Issuer |   |   | Guarantor |   |   | Guarantors |   |   | Eliminations |   |   | PMCI |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (loss) income                                                                                                |   | $ | (15,555 | ) |   |   | 3,591 |   |   |   | (289 | ) |   |   | (3,302 | ) |   |   | (15,555 | ) |
| Adjustments to reconcile net (loss) income to net cash                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| provided by (used in) operating activities:                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity in (loss) earnings of subsidiaries                                                                        |   |   | (3,302 | ) |   |   | - |   |   |   | - |   |   |   | 3,302 |   |   |   | - |   |
| Depreciation and amortization                                                                                    |   |   | 9,454 |   |   |   | 3,130 |   |   |   | 329 |   |   |   | - |   |   |   | 12,913 |   |
| Asset impairments                                                                                                |   |   | 131 |   |   |   | 214 |   |   |   | 89 |   |   |   | - |   |   |   | 434 |   |
| Amortization of debt discount                                                                                    |   |   | 829 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 829 |   |
| Other non-cash income items                                                                                      |   |   | (982 | ) |   |   | (1,362 | ) |   |   | - |   |   |   | - |   |   |   | (2,344 | ) |
| Loss on disposition of assets                                                                                    |   |   | 693 |   |   |   | 81 |   |   |   | - |   |   |   | - |   |   |   | 774 |   |
| Equity in net loss of unconsolidated partnership                                                                 |   |   | - |   |   |   | 8 |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
| Net changes in operating assets and liabilities                                                                  |   |   | 941 |   |   |   | (1,268 | ) |   |   | (166 | ) |   |   | - |   |   |   | (493 | ) |
| Total adjustments                                                                                                |   |   | 7,764 |   |   |   | 803 |   |   |   | 252 |   |   |   | 3,302 |   |   |   | 12,121 |   |
| Net cash (used in) provided by operating activities                                                              |   |   | (7,791 | ) |   |   | 4,394 |   |   |   | (37 | ) |   |   | - |   |   |   | (3,434 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases of property and equipment                                                                              |   |   | (2,126 | ) |   |   | (1,628 | ) |   |   | (562 | ) |   |   | - |   |   |   | (4,316 | ) |
| Proceeds from sale of assets                                                                                     |   |   | 483 |   |   |   | 7 |   |   |   | - |   |   |   | - |   |   |   | 490 |   |
| Net cash used in investing activities                                                                            |   |   | (1,643 | ) |   |   | (1,621 | ) |   |   | (562 | ) |   |   | - |   |   |   | (3,826 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from revolving credit facilities                                                                        |   |   | 18,248 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 18,248 |   |
| Repayment of revolving credit facilities                                                                         |   |   | (12,719 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (12,719 | ) |
| Repayment of capital lease obligations                                                                           |   |   | (91 | ) |   |   | (132 | ) |   |   | - |   |   |   | - |   |   |   | (223 | ) |
| Repayment of other debt                                                                                          |   |   | - |   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | (10 | ) |
| Debt financing costs                                                                                             |   |   | (142 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (142 | ) |
| Distributions to non-controlling interest holders                                                                |   |   | - |   |   |   | - |   |   |   | (71 | ) |   |   | - |   |   |   | (71 | ) |
| Intercompany financing                                                                                           |   |   | 3,701 |   |   |   | (4,244 | ) |   |   | 543 |   |   |   | - |   |   |   | - |   |
| Net cash provided by (used in) financing activities                                                              |   |   | 8,997 |   |   |   | (4,386 | ) |   |   | 472 |   |   |   | - |   |   |   | 5,083 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                                                                        |   |   | (437 | ) |   |   | (1,613 | ) |   |   | (127 | ) |   |   | - |   |   |   | (2,177 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS:                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of period                                                                                     |   |   | 2,155 |   |   |   | 1,662 |   |   |   | 796 |   |   |   | - |   |   |   | 4,613 |   |
| Balance, end of period                                                                                           |   | $ | 1,718 |   |   |   | 49 |   |   |   | 669 |   |   |   | - |   |   |   | 2,436 |   |

----

Table of Contents

----

Table of Contents

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

----

Table of Contents

|                    |   | Company- |   |   |         |   |   |       |   |   |   |   |
|-------------------------|--------|----------|--------|--------|--------------|--------|--------|------------|--------|--------|--------|--------|
| Restaurant Name         |   | operated |   |   | Partnerships |   |   | Franchised |   |   | Total  |   |
|                    |   |     |   |   |         |   |   |       |   |   |   |   |   |   |   |   |
| Marie Callender's       |   |     | 76     |   |         |   | 12     |       |   |   | 36     |   |   |   | 124 |   |
| Marie Callender's Grill |   |     | -      |   |         |   | -      |       |   |   | 1      |   |   |   | 1 |   |
| Callender's Grill       |   |     | 2      |   |         |   | -      |       |   |   | -      |   |   |   | 2 |   |
| East Side Mario's       |   |     | 1      |   |         |   | -      |       |   |   | -      |   |   |   | 1 |   |
| Total                   |   |     | 79     |   |         |   | 12     |       |   |   | 37     |   |   |   | 128 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                        |   | Consolidated Results |    |   | Restaurant Operations |   |    | Franchise Operations |   |
|-----------------------------|--------|----------------------|---------|--------|-----------------------|--------|---------|----------------------|--------|
|                        |   | Quarter Ended        |    |   | Quarter Ended         |   |    | Quarter Ended        |   |
|                        |   | July 11, 2010        |    |   | July 12, 2009         |   |    | July 11, 2010        |   |   | July 12, 2009 |   |   | July 11, 2010 |   |   | July 12, 2009 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |
| Food sales                  |   | $                    | 111,862 |   |                  |   | 119,437 |                 |   |   | 100,961 |   |   |   | 106,495 |   |   |   | - |   |   |   | - |   |
| Franchise and other revenue |   |                 | 6,580   |   |                  |   | 6,815   |                 |   |   | - |   |   |   | - |   |   |   | 5,288 |   |   |   | 5,305 |   |
| Intersegment revenue        |   |                 | (4,289  | )      |                  |   | (4,376  | )                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total revenues              |   |                 | 114,153 |   |                  |   | 121,876 |                 |   |   | 100,961 |   |   |   | 106,495 |   |   |   | 5,288 |   |   |   | 5,305 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food cost                   |   |                 | 25.5    | %      |                  |   | 26.3    | %                    |   |   | 25.5 | % |   |   | 25.2 | % |   |   | - |   |   |   | - |   |
| Labor and benefits          |   |                 | 34.0    | %      |                  |   | 33.6    | %                    |   |   | 37.1 | % |   |   | 36.8 | % |   |   | - |   |   |   | - |   |
| Operating expenses          |   |                 | 28.5    | %      |                  |   | 26.3    | %                    |   |   | 30.4 | % |   |   | 28.9 | % |   |   | 10.4 | % |   |   | 8.8 | % |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment (loss) income       |   | $                    | (11,153 | )      |                  |   | (5,880  | )                    |   |   | 3,259 |   |   |   | 5,335 |   |   |   | 4,742 |   |   |   | 4,840 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | Foxtail (a)          |    |   | Other (b)             |   |    |                 |   |   |   |   |   |   |
|                        |   | Quarter Ended        |    |   | Quarter Ended         |   |    |                 |   |   |   |   |   |   |
|                        |   | July 11, 2010        |    |   | July 12, 2009         |   |    | July 11, 2010        |   |   | July 12, 2009 |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                  |   | $                    | 10,901  |   |                  |   | 12,942  |                 |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Franchise and other revenue |   |                 | -       |   |                  |   | -       |                 |   |   | 1,292 |   |   |   | 1,510 |   |   |   |   |   |   |   |   |   |
| Intersegment revenue        |   |                 | (4,289  | )      |                  |   | (4,376  | )                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Total revenues              |   |                 | 6,612   |   |                  |   | 8,566   |                 |   |   | 1,292 |   |   |   | 1,510 |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food cost                   |   |                 | 55.0    | %      |                  |   | 57.6    | %                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Labor and benefits          |   |                 | 12.2    | %      |                  |   | 13.4    | %                    |   |   | 5.2 | % |   |   | 4.7 | % |   |   |   |   |   |   |   |   |
| Operating expenses          |   |                 | 12.1    | %      |                  |   | 10.5    | %                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment (loss) income       |   | $                    | 933     |   |                  |   | 1,164   |                 |   |   | (20,087 | ) |   |   | (17,219 | ) |   |   |   |   |   |   |   |   |

| (a) | The percentages for food cost, labor and benefits and operating expenses, as presented above, represent manufacturing costs at Foxtail. Foxtail’s selling, general and administrative expenses are included in general and administrative expenses in the consolidated statements of operations and in the Foxtail segment income or loss presented above. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Licensing revenue of $1,258,000 and $1,448,000 for the second quarters of 2010 and 2009, respectively, is included in the other segment revenues. The other segment loss includes corporate general and administrative expenses, interest expense and other non-operational expenses. For details of the other segment loss, see Note 10, “Segment Reporting” in the Notes to Consolidated Financial Statements. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                  |   | Percentage of Total Revenues |   |
|-----------------------|--------|------------------------------|--------|
|                  |   | Quarter                      |   |   | Quarter |   |
|                  |   | Ended                        |   |   | Ended |   |
|                  |   | July 11, 2010                |   |   | July 12, 2009 |   |
|                  |   |                         |   |   |   |   |
| Restaurant operations |   |                         | 88.5   | % |   |   | 87.4 | % |
| Franchise operations  |   |                         | 4.6    | % |   |   | 4.4 | % |
| Foxtail               |   |                         | 5.8    | % |   |   | 7.0 | % |
| Other                 |   |                         | 1.1    | % |   |   | 1.2 | % |
| Total revenues        |   |                         | 100.0  | % |   |   | 100.0 | % |

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                        |   | Consolidated Results |    |   | Restaurant Operations |   |    | Franchise Operations |   |
|-----------------------------|--------|----------------------|---------|--------|-----------------------|--------|---------|----------------------|--------|
|                        |   | Year-to-Date Ended   |    |   | Year-to-Date Ended    |   |    | Year-to-Date Ended   |   |
|                        |   | July 11, 2010        |    |   | July 12, 2009         |   |    | July 11, 2010        |   |   | July 12, 2009 |   |   | July 11, 2010 |   |   | July 12, 2009 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |
| Food sales                  |   | $                    | 264,931 |   |                  |   | 286,227 |                 |   |   | 240,566 |   |   |   | 255,723 |   |   |   | - |   |   |   | - |   |
| Franchise and other revenue |   |                 | 15,071  |   |                  |   | 15,191  |                 |   |   | - |   |   |   | - |   |   |   | 11,959 |   |   |   | 12,249 |   |
| Intersegment revenue        |   |                 | (10,044 | )      |                  |   | (10,289 | )                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total revenues              |   |                 | 269,958 |   |                  |   | 291,129 |                 |   |   | 240,566 |   |   |   | 255,723 |   |   |   | 11,959 |   |   |   | 12,249 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food cost                   |   |                 | 25.4    | %      |                  |   | 26.6    | %                    |   |   | 25.6 | % |   |   | 25.7 | % |   |   | - |   |   |   | - |   |
| Labor and benefits          |   |                 | 34.2    | %      |                  |   | 33.1    | %                    |   |   | 36.9 | % |   |   | 36.0 | % |   |   | - |   |   |   | - |   |
| Operating expenses          |   |                 | 28.3    | %      |                  |   | 26.7    | %                    |   |   | 30.0 | % |   |   | 28.8 | % |   |   | 9.1 | % |   |   | 8.0 | % |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment (loss) income       |   | $                    | (25,759 | )      |                  |   | (15,634 | )                    |   |   | 8,829 |   |   |   | 14,411 |   |   |   | 10,867 |   |   |   | 11,269 |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | Foxtail (a)          |    |   | Other (b)             |   |    |                 |   |   |   |   |   |   |
|                        |   | Year-to-Date Ended   |    |   | Year-to-Date Ended    |   |    |                 |   |   |   |   |   |   |
|                        |   | July 11, 2010        |    |   | July 12, 2009         |   |    | July 11, 2010        |   |   | July 12, 2009 |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food sales                  |   | $                    | 24,366  |   |                  |   | 30,504  |                 |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Franchise and other revenue |   |                 | -       |   |                  |   | -       |                 |   |   | 3,111 |   |   |   | 2,942 |   |   |   |   |   |   |   |   |   |
| Intersegment revenue        |   |                 | (10,044 | )      |                  |   | (10,289 | )                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Total revenues              |   |                 | 14,322  |   |                  |   | 20,215  |                 |   |   | 3,111 |   |   |   | 2,942 |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Food cost                   |   |                 | 54.2    | %      |                  |   | 58.8    | %                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
| Labor and benefits          |   |                 | 13.2    | %      |                  |   | 13.4    | %                    |   |   | 5.4 | % |   |   | 5.9 | % |   |   |   |   |   |   |   |   |
| Operating expenses          |   |                 | 12.2    | %      |                  |   | 10.0    | %                    |   |   | - |   |   |   | - |   |   |   |   |   |   |   |   |   |
|                        |   |                 |    |   |                  |   |    |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment (loss) income       |   | $                    | 1,574   |   |                  |   | 1,323   |                 |   |   | (47,029 | ) |   |   | (42,637 | ) |   |   |   |   |   |   |   |   |

| (a) | The percentages for food cost, labor and benefits and operating expenses, as presented above, represent manufacturing costs at Foxtail. Foxtail’s selling, general and administrative expenses are included in general and administrative expenses in the consolidated statements of operations and in the Foxtail segment income or loss presented above. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Licensing revenue of $2,990,000 and $2,808,000 for the year-to-date periods of 2010 and 2009, respectively, is included in the other segment revenues. The other segment loss includes corporate general and administrative expenses, interest expense and other non-operational expenses. For details of the other segment loss, see Note 10, “Segment Reporting” in the Notes to Consolidated Financial Statements. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                  |   | Percentage of Total Revenues |   |
|-----------------------|--------|------------------------------|--------|
|                  |   | Year-to-Date                 |   |   | Year-to-Date |   |
|                  |   | Ended                        |   |   | Ended |   |
|                  |   | July 11, 2010                |   |   | July 12, 2009 |   |
|                  |   |                         |   |   |   |   |
| Restaurant operations |   |                         | 89.1   | % |   |   | 87.8 | % |
| Franchise operations  |   |                         | 4.4    | % |   |   | 4.2 | % |
| Foxtail               |   |                         | 5.3    | % |   |   | 7.0 | % |
| Other                 |   |                         | 1.2    | % |   |   | 1.0 | % |
| Total revenues        |   |                         | 100.0  | % |   |   | 100.0 | % |

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                   |   | Year-to-DateEndedJuly 11, 2010 |   |    | Year-to-DateEndedJuly 12, 2009 |   |
|---------------------------------------------|--------|--------------------------------|--------|---------|--------------------------------|--------|
|                                        |   |                           |   |    |                           |   |   |   |
| Cash flows used in operating activities     |   | $                              | (3,326 | )  |                           |   | (3,434 | ) |
| Cash flows used in investing activities     |   |                           | (2,567 | )       |                           |   | (3,826 | ) |
| Cash flows provided by financing activities |   |                           | 3,868  |    |                           |   | 5,083 |   |

|                      |   | Year-to-DateEndedJuly 11, 2010 |   |   | Year-to-DateEndedJuly 12, 2009 |   |
|-------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|
|                                |   |                           |   |   |                           |   |   |   |
| New restaurants                     |   | $                              | -      |   |                           |   | 156 |   |
| Restaurant improvements             |   |                           | 1,766  |   |                           |   | 2,261 |   |
| Restaurant remodeling and reimaging |   |                           | 304    |   |                           |   | 1,084 |   |
| Manufacturing plant improvements    |   |                           | 268    |   |                           |   | 440 |   |
| Other                               |   |                           | 234    |   |                           |   | 375 |   |
| Total capital expenditures          |   | $                              | 2,572  |   |                           |   | 4,316 |   |

----

Table of Contents

----

Table of Contents

|   | • | macroeconomic conditions, consumer preferences and demographic patterns, either nationally or in particular regions in which we operate; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | our substantial indebtedness; |
|--------|---------|-------------------------------|

|   | • | our liquidity and capital resources; |
|--------|---------|--------------------------------------|

|   | • | competitive pressures and trends in the restaurant industry; |
|--------|---------|--------------------------------------------------------------|

|   | • | prevailing prices and availability of food, labor, raw materials, supplies and energy; |
|--------|---------|----------------------------------------------------------------------------------------|

|   | • | a failure to obtain timely deliveries from our suppliers or other supplier issues; |
|--------|---------|------------------------------------------------------------------------------------|

|   | • | our ability to successfully implement our business strategy; |
|--------|---------|--------------------------------------------------------------|

|   | • | relationships with franchisees and the financial health of franchisees; |
|--------|---------|-------------------------------------------------------------------------|

|   | • | legal proceedings and regulatory matters; and |
|--------|---------|-----------------------------------------------|

|   | • | our development and expansion plans. |
|--------|---------|--------------------------------------|

----

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

----

Table of Contents

PART II — OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 1A. Risk Factors

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 3. Defaults Upon Senior Securities

ITEM 4. Removed and Reserved

ITEM 5. Other Information

ITEM 6. Exhibits

| 31.1 | Chief Executive Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302. |
|------|--------------------------------------------------------------------------------------------|
| 31.2 | Chief Financial Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 302. |
| 32.1 | Chief Executive Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 906. |
| 32.2 | Chief Financial Officer Certification Pursuant to Sarbanes-Oxley Act of 2002, Section 906. |

----

Table of Contents

SIGNATURE

|                  | PERKINS & MARIE CALLENDER’S INC. |
|-----------------------|--------------------------------------------|
|                  |                                       |
| DATE: August 30, 2010 | BY: /s/ Fred T. Grant, Jr.                 |   |
|                  | Fred T. Grant, Jr.                         |
|                  | Chief Financial Officer                    |