See accompanying notes to unaudited condensed consolidated financial statements.

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE TWENTY SIXTHIRTY-NINE WEEKS ENDED MARCH 31,JUNE 30, 2012 AND APRILJULY 2, 2011

(in thousands)

See accompanying notes to unaudited condensed consolidated financial statements.statements

FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE TWENTY SIXTHIRTY-NINE WEEKS ENDED MARCH 31,JUNE 30, 2012 AND APRILJULY 2, 2011

(in thousands)

(Continued)

See accompanying notes to unaudited condensed consolidated financial statements

FLANIGAN’S ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012

MARCH 31, 2012

(1) BASIS OF PRESENTATION:

The accompanying condensed consolidated financial information for the thirteen and thirty nine weeks ended March 31,June 30, 2012 and AprilJuly 2, 2011 are unaudited. Financial information as of October 1, 2011 has been derived from the audited financial statements of the Company, but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. For further information regarding the Company's accounting policies, refer to the Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended October 1, 2011. Operating results for interim periods are not necessarily indicative of results to be expected for a full year.

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and the accounts of the nine limited partnerships in which we act as general partner and have controlling interests. Flanigan’s Calusa Center, LLC, a wholly owned subsidiary, was formed in the first quarter of our fiscal year 2012 for the purpose of investing in the real property and a two building shopping center in Miami, Florida where we lease one building to twelve unaffiliated third parties and a second stand-alone building where our Kendall, Florida based restaurant, which is owned by our affiliated limited partnership (Store #70), operates. All intercompany balances and transactions have been eliminated. Non-controlling interest represents the limited partners’ proportionate share of the net assets and results of operations of eightnine limited partnerships.

These condensed consolidated financial statements include estimates relating to performance based officers’ bonuses. The estimates are reviewed periodically and the effects of any revisions are reflected in the financial statements in the period they are determined to be necessary. Although these estimates are based on management’s knowledge of current events and actions it may take in the future, they may ultimately differ from actual results.

(2) EARNINGS PER SHARE:

We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 260 - “Earnings per Share”. This section provides for the calculation of basic and diluted earnings per share. The data on Page 3 shows the amounts used in computing earnings per share and the effects on income and the weighted average number of shares of potentially dilutive common stock equivalents. As of March 31,June 30, 2012 and AprilJuly 2, 2011, no stock options were outstanding.

(3) RECLASSIFICATION:

Certain amounts in the fiscal year 2011 financial statements have been reclassified to conform to the fiscal year 2012 presentation. The reclassifications had no effect on consolidated net income.

(4) RECENT ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

Adopted

There were no recently adopted accounting pronouncements during the secondthird quarter of our fiscal year 2012 that we believe will have a material impact on our consolidated financial statements.

Issued

In May 2011, the FASB issued an update to ASC Topic 820 -Fair Value Measurements and Disclosures. This update provides guidance on how fair value accounting should be applied where its use is already required or permitted by other standards and does not extend the use of fair value accounting. The Company will adopt this guidance effective in fiscal year 2013 as required and does not expect the adoption to have a significant impact on our consolidated financial statements.

(5) INVESTMENT IN LIMITED PARTNERSHIPS:

Miami, Florida

On January 27, 2012, a limited partnership in which (i) we are the sole general partner; and (ii) we and a wholly owned subsidiary are currentlywere the sole limited partners, acquired personal property assets and a leasehold interest of a non-affiliated restaurant operation located in Miami, Florida for $155,000. We advanced$155,000 for the purchase price to the limited partnership and through March 31, 2012, have advanced an additional $100,000 for expensespurpose of the limited partnership.establishing a new restaurant. During the secondthird quarter of our fiscal year 2012, the limited partnership commencedcompleted its private offering to raiseof limited partnership interests, raising funds to renovate this new restaurant location using our limited partnership model. We anticipate that this private offering will close by May 15, 2012. The amounts advanced the purchase price to the limited partnership will be used as a creditand through the closing of the private offering advanced an additional $196,000 for expenses of the limited partnership. $105,000 of the amounts advanced by us to the limited partnership were allocated to pay for our equity investmentsinterest in the limited partnership, we may acquire (which equity interests shall bewere purchased at the same price and upon the same terms as other equity investors). If we do not acquire equity in, and the limited partnership for at least $255,000, any excess amounts advanced by us, will be($246,000), were reimbursed to us by the limited partnership without interest.

Sinceinterest from the proceeds of the limited partnership acquired these restaurant assets, it has been preparing plans to renovate and upgrade the business premises for operation as a "Flanigan's Seafood Bar and Grill" restaurant. We project the cost to carry out these plans will be approximately $1,745,000, exclusive of the $255,000 already advanced by us. The percentage of limited partnership interest we maintain in the limited partnership will primarily depend upon the demand for the limited partnership interests.partnership’s private offering. The limited partnership anticipates that the Miami, Florida location will be open for business as a "Flanigan's Seafood Bar and Grill" restaurant byduring the endfirst quarter of our fiscal year 2012.2013.

(6) INCOME TAXES:

We account for our income taxes using FASB ASC Topic 740, “Income Taxes”, which requires among other things, recognition of future tax benefits measured at enacted rates attributable to deductible temporary differences between financial statement and income tax basis of assets and liabilities and to tax net operating loss carryforwards and tax credits to the extent that realization of said tax benefits is more likely than not.

(7) STOCK OPTION PLANS:

We have one stock option plan under which qualified stock options may be granted to our officers and other employees. Under this plan, the exercise price for the qualified stock options must be no less than 100% of the fair market value of the Company’s Common Stock on the date the options are granted. In general, options granted under our stock option plan expire after a five (5) year period and generally vest no later than one (1) year from the date of grant. As of March 31,June 30, 2012, no options to acquire shares were outstanding. Under this plan, options to acquire an aggregate of 45,000 shares are available for grant.

There was no stock option activity during the twenty sixthirty nine weeks ended March 31,June 30, 2012, nor was there stock option activity during the twenty sixthirty nine weeks ended AprilJuly 2, 2011.

(8) ACQUISITIONS:

Purchase of Company Common Stock

Pursuant to a discretionary plan approved by the Board of Directors at its meeting on May 17, 2007, during the thirteen weeks ended March 31,June 30, 2012 and July 2, 2011, we did not purchase any shares of our common stock. During the twenty sixthirty nine weeks ended March 31,June 30, 2012, we purchased 800 shares of our common stock from the Joseph G. Flanigan Charitable Trust for an aggregate purchase price of $6,200. During the twenty sixthirty nine weeks ended AprilJuly 2, 2011, we purchased 818 shares of our common stock for an aggregate purchase price of $6,500. Of the stock purchased, we purchased 18 shares from an unrelated shareholder in an off the market private transaction for an aggregate purchase price of $152 and 800 shares from the Joseph G. Flanigan Charitable Trust for an aggregate purchase price of $6,400 in an off the market private transaction.

(9) COMMITMENTS AND CONTINGENCIES:

Guarantees

We guarantee various leases for franchisees and locations sold in prior years. Remaining rental commitments required under thesethe leases that have been sold are approximately $114,000.$72,000. In the event of a default under any of these agreements, we will have the right to repossess the premises and operate the business to recover amounts paid under the guarantee either by liquidating assets or operating the business.

We account for such lease guarantees in accordance with FASB ASC Topic 460,“Guarantees”.460. Under FASB ASC Topic 460, we would be required to recognize the fair value of guarantees issued or modified after December 31, 2002, for non-contingent guarantee obligations, and also a liability for contingent guarantee obligations based on the probability that the guaranteed party will not perform under the contractual terms of the guaranty agreement.

We do not believe it is probable that we will be required to perform under the remaining lease guarantees and therefore, no liability has been accrued in our condensed consolidated financial statements.

Litigation

From time to time, we are a defendant in litigation arising in the ordinary course of our business, including claims resulting from “slip and fall” accidents, claims under federal and state laws governing access to public accommodations, employment-related claims and claims from guests alleging illness, injury or other food quality, health or operational concerns. To date, none of this litigation, some of which is covered by insurance, has had a material effect on us.

(10) SUBSEQUENT EVENTS:

Subsequent events have been evaluated through the date these condensed consolidated financial statements were issued. No events required disclosure.

(11) BUSINESS SEGMENTS:

We operate principally in two reportable segments – package stores and restaurants. The operation of package stores consists of retail liquor sales and related items. Information concerning the revenues and operating income for the thirteen weeks and twenty sixthirty nine weeks ended March 31,June 30, 2012 and AprilJuly 2, 2011, and identifiable assets for the two reportable segments in which we operate, are shown in the following table. Operating income is total revenue less cost of merchandise sold and operating expenses relative to each segment. In computing operating income, none of the following items have been included: interest expense, other non-operating income and expenses and income taxes. Identifiable assets by segment are those assets that are used in our operations in each segment. Corporate assets are principally cash and real property, improvements, furniture, equipment and vehicles used at our corporate headquarters. We do not have any operations outside of the United States and transactions between restaurants and package liquor stores are not material. For the thirteen and twenty sixthirty nine weeks ended March 31,June 30, 2012, we generated revenue of $179,000$140,000 and $230,000$333,000 from our leasing to unaffiliated third parties of retail space.

Reported financial results may not be indicative of the financial results of future periods. All non-historical information contained in the following discussion constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “anticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and uncertainties, including but not limited to customer demand and competitive conditions. Factors that could cause actual results to differ materially are included in, but not limited to, those identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Annual Report on our Form 10-K for the fiscal year ended October 1, 2011 and in this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect events or circumstances after the date of this report.

OVERVIEW

At March 31,June 30, 2012, we (i) operated 24 units, (excluding the adult entertainment club referenced in (ii) below), consisting of restaurants, package stores and combination restaurants/package stores that we either own or have operational control over and partial ownership in; (ii) own but do not operate one adult entertainment club; and (iii) franchise an additional five units, consisting of one restaurant and four combination restaurants/package stores, (one restaurant of which we operate). The table below provides information concerning the type (i.e. restaurant, package store or combination restaurant/package liquor store) and ownership of the units (i.e. whether (i) we own 100% of the unit; (ii) the unit is owned by a limited partnership of which we are the sole general partner and/or have invested in; or (iii) the unit is franchised by us), as of March 31,June 30, 2012 and as compared to AprilJuly 2, 2011 and October 1, 2011. With the exception of “The Whale’s Rib”, a restaurant we operate but do not own, all of the restaurants operate under our service mark “Flanigan’s Seafood Bar and Grill” and all of the package liquor stores operate under our service mark “Big Daddy’s Liquors”.For the thirteen and twenty sixthirty nine weeks ended March 31,June 30, 2012, we generated revenue of $179,000$140,000 and $230,000$333,000 from our leasing to unaffiliated third parties of retail space.

Notes:

(1) During the fourth quarter of our fiscal year 2011, we purchased from a limited partnership the operating assets of the restaurant located in Stuart, Florida and accordingly, on July 31, 2011, the restaurant converted from a limited partnership unit to a Company owned restaurant.

(2) We operate a restaurant for one (1) franchisee. This unit is included in the table both as a franchised restaurant, as well as a restaurant operated by us.

Franchise Financial Arrangement: In exchange for our providing management and related services to our franchisees and granting them the right to use our service marks “Flanigan’s Seafood Bar and Grill” and “Big Daddy’s Liquors”, our franchisees (four of which are franchised to members of the family of our Chairman of the Board, officers and/or directors), are required to (i) pay to us a royalty equal to 1% of gross package sales and 3% of gross restaurant sales; and (ii) make advertising expenditures equal to between 1.5% to 3% of all gross sales based upon our actual advertising costs allocated between stores, pro-rata, based upon gross sales.

Limited Partnership Financial Arrangement: We manage and control the operations of all restaurants owned by limited partnerships, except the Fort Lauderdale, Florida restaurant which is owned and managed by a related franchisee. Accordingly, the results of operations of all limited partnership owned restaurants, except the Fort Lauderdale, Florida restaurant are consolidated into our operations for accounting purposes. The results of operations of the Fort Lauderdale, Florida restaurant are accounted for by us utilizing the equity method. In general, until the investors’ cash investment in a limited partnership (including any cash invested by us and our affiliates) is returned in full, the limited partnership distributes to the investors annually out of available cash from the operation of the restaurant up to 25% of the cash invested in the limited partnership, with no management fee paid to us. Any available cash in excess of the 25% of the cash invested in the limited partnership distributed to the investors annually, is paid one-half (½) to us as a management fee, with the balance distributed to the investors. Once the investors in the limited partnership have received, in full, amounts equal to their cash invested, an annual management fee is payable to us equal to one-half (½) of available cash to the limited partnership, with the other one half (½) of available cash distributed to the investors (including us and our affiliates). As of March 31,June 30, 2012, limited partnerships owning three (3) restaurants, (Surfside, Florida, Kendall, Florida and West Miami, Florida locations), have returned all cash invested and we receive an annual management fee equal to one-half (½) of the cash available for distribution by the limited partnership. In addition to its receipt of distributable amounts from the limited partnerships, we receive a fee equal to 3% of gross sales for use of the service mark “Flanigan’s Seafood Bar and Grill”.

RESULTS OF OPERATIONS

Comparison of Thirteen Weeks Ended March 31,June 30, 2012 and AprilJuly 2, 2011.

Revenues. Total revenue for the thirteen weeks ended March 31,June 30, 2012 increased $1,454,000$1,262,000 or 7.59%6.96% to $20,618,000$19,382,000 from $19,164,000$18,120,000 for the thirteen weeks ended AprilJuly 2, 2011. $179,000 of our total revenue for the thirteen weeks ended March 31, 2012 was derived from rental income of retail space.

Restaurant Food Sales.Restaurant revenue generated from the sale of food at restaurants (food sales) totaled $13,007,000$12,443,000 for the thirteen weeks ended March 31,June 30, 2012 as compared to $12,169,000$11,712,000 for the thirteen weeks ended AprilJuly 2, 2011. Comparable weekly food sales (for restaurants open for all of the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $969,000 and $902,000 for the thirteen weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 7.43%. Comparable weekly food sales for Company owned restaurants was $445,000 and $400,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 11.25%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $524,000 and $502,000 for the second quarter of our fiscal year 2012 and the second quarter of our fiscal year 2011, respectively, an increase of 4.38%.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $3,522,000 for the thirteen weeks ended March 31, 2012 as compared to $3,133,000 for the thirteen weeks ended April 2, 2011. Comparable weekly bar sales (for restaurants open for all of the secondthird quarter of our fiscal years 2012 and 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $262,000$927,000 and $869,000 for the thirteen weeks ended March 31,June 30, 2012 and $233,000July 2, 2011, respectively, an increase of 6.67%. Comparable weekly food sales for Company owned restaurants was $409,000 and $375,000 for the third quarter of our fiscal year 2012 and the third quarter of our fiscal year 2011, respectively, an increase of 9.07%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $518,000 and $494,000 for the third quarter of our fiscal year 2012 and the third quarter of our fiscal year 2011, respectively, an increase of 4.86%.Restaurant food sales increased for the thirteen weeks ended AprilJune 30, 2012 due in part to the increase in menu prices instituted during the fourth quarter of our fiscal year 2011 and the third quarter of our fiscal year 2012.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $3,428,000 for the thirteen weeks ended June 30, 2012 as compared to $2,958,000 for the thirteen weeks ended July 2, 2011.Comparable weekly bar sales (for restaurants open for all of the third quarter of our fiscal years 2012 and 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $257,000 for the thirteen weeks ended June 30, 2012 and $221,000 for the thirteen weeks ended July 2, 2011, an increase of 12.45%16.29%. Comparable weekly bar sales for Company owned restaurants was $113,000$107,000 and $102,000$93,000 for the secondthird quarter of our fiscal year 2012 and the secondthird quarter of our fiscal year 2011, respectively, an increase of 10.78%15.05%. Comparable weekly bar sales for affiliated limited partnership owned restaurants was $149,000$150,000 and $131,000$128,000 for the secondthird quarter of our fiscal year 2012 and the secondthird quarter of our fiscal year 2011, respectively, an increase of 13.74 %.17.19%. Restaurant bar sales increased for the thirteen weeks ended June 30, 2012 due in part toour increase in restaurant bar prices during the second quarter of our fiscal year 2012.

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores (package store sales) totaled $3,575,000$3,050,000 for the thirteen weeks ended March 31,June 30, 2012 as compared to $3,505,000$3,117,000 for the thirteen weeks ended AprilJuly 2, 2011, an increasea decrease of $70,000.$67,000. The weekly average of same store package store sales, (which includes all nine (9) Company owned package liquor stores open for all of the secondthird quarter of our fiscal years 2012 and 2011), was $275,000$235,000 for the thirteen weeks ended March 31,June 30, 2012 as compared to $270,000$240,000 for the thirteen weeks ended AprilJuly 2, 2011, an increasea decrease of 1.85%2.08%.Package store sales are expected to remain stable throughout the balance of our fiscal year 2012.

Operating Costs and Expenses. Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for the thirteen weeks ended March 31,June 30, 2012 increased$1,548,0001,115,000 or 8.62%6.45% to $19,505,000$18,413,000 from $17,957,000$17,298,000 for the thirteen weeks ended AprilJuly 2, 2011. The increase was primarily due to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012, the shopping center in Miami, Florida acquired during the first quarter of our fiscal year 2012 andto an expected general increase in food costs, including an increase in the cost of ribs and poultry, offset by a decrease in repairs and maintenance to our units and actions taken by management to reduce and/or control costs and expenses.We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2012 due primarily to an expected general increase in food costs.for the same reasons.Operating costs and expenses increaseddecreased as a percentage of total sales to approximately 94.60%95.00% in the secondthird quarter of our fiscal year 2012 from 93.70%95.46% in the secondthird quarter of our fiscal year 2011.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.

Restaurant Food Sales and Bar Sales. Gross profit for food sales and bar sales for the thirteen weeks ended March 31,June 30, 2012 increased to $10,684,000$10,093,000 from $10,135,000$9,589,000 for the thirteen weeks ended AprilJuly 2, 2011. Our gross profit margin for food sales and bar sales (calculated as gross profit reflected as a percentage of restaurant food sales and bar sales), was 64.64%63.59% for the thirteen weeks ended March 31,June 30, 2012 and 66.23%65.36% for the thirteen weeks ended AprilJuly 2, 2011. The decrease in our gross profit margin, (-1.59%(-1.77%), was primarily due to increases in our food costs, including our cost of ribs and poultry, which was only partially offset by menu price and liquor price increases.We anticipate that our gross profit for restaurant food and bar sales will remain stable during the balance of our fiscal year 2012 due to our menu price increases during the fourth quarter of our fiscal year 2011 and third quarter of our fiscal year 2012 and liquor price increases during the second quarter of our fiscal year 2012, offset by higher food costs, including our cost of ribs.ribs and poultry.

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended March 31,June 30, 2012 decreased to $1,064,000$980,000 from $1,213,000$1,024,000 for the thirteen weeks ended AprilJuly 2, 2011. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package liquor store sales was 29.76%32.13% for the thirteen weeks ended March 31,June 30, 2012 and 34.61%32.85% for the thirteen weeks ended AprilJuly 2, 2011. The decrease in our gross profit margin, (-4.85%(-0.72%), was primarily due to ourinability to purchase “close out” and inventory reduction merchandise from wholesalers.We anticipate that the gross profit margin for package store sales will decreasebe stable throughout the balance of our fiscal year 2012 due to our inability to continue purchasing “close out” and inventory reduction merchandise from wholesalers.2012.

Payroll and Related Costs.Payroll and related costs for the thirteen weeks ended March 31,June 30, 2012 increased $558,000$337,000 or 9.74%6.14% to $6,289,000$5,828,000 from $5,731,000$5,491,000 for the thirteen weeks ended AprilJuly 2, 2011 due primarilyto an increase in the Florida minimum wage (4.92%), which was effective January 1, 2012, and to increases in payroll taxes, including unemployment taxes. We anticipate that our payroll and related costs will increase throughout the balance of our fiscal year 2012 due primarily to payroll associated withthe new restaurant location in Miami, Florida expected to open for business during the first quarter of our fiscal 2013.Payroll and related costs as a percentage of total sales was 30.07% in the third quarter of our fiscal year 2012 and 30.30% of total sales in the third quarter of our fiscal year 2011.

Occupancy Costs.Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases)for the thirteen weeks ended June 30, 2012increased $36,000 or 3.34% to $1,115,000 from $1,079,000 for the thirteen weeks ended July 2, 2011. Our occupancy costs increased primarily due to escalating rents at various locations and rental payments for the new restaurant location in Miami, Florida acquired by a limited partnership, which rental payments commenced January 27, 2012, partially offset bythe elimination of rent from a limited partnership owned restaurant located in the shopping center in Miami, Florida which we purchased during the first quarter of our fiscal year 2012. We anticipate that our occupancy costs will increase throughout the balance of our fiscal year 2012 due to escalating rents at several locations andrental payments for the new restaurant location in Miami, Florida, offset by theelimination of rent from a limited partnership owned restaurant .

Selling, General and Administrative Expenses.Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead)for the thirteen weeks ended June 30, 2012 increased $68,000 or 1.91% to $3,622,000 from $3,554,000 for the thirteen weeks ended July 2, 2011. Selling, general and administrative expenses decreased as a percentage of total sales in the third quarter of our fiscal year 2012 to approximately 18.69% as compared to 19.61% in the third quarter of our fiscal year 2011. We anticipate that our selling, general and administrative expenses will increase throughout the balance of our fiscal year 2012 due primarily to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012 and expected to open for business during the first quarter of our fiscal year 2013, the shopping center acquired during the first quarter of our fiscal year 2012 and increases across all categories.

Depreciation and Amortization.Depreciation and amortization expense for the thirteen weeks ended June 30, 2012 and July 2, 2011 were unchanged at $626,000. As a percentage of revenue, depreciation and amortization expense was 3.23% of revenue in the thirteen weeks ended June 30, 2012 and 3.45% of revenue in the thirteen weeks ended July 2, 2011.

Interest Expense, Net.Interest expense, net, for the thirteen weeks ended June 30, 2012 increased $48,000 to $208,000 from $160,000 for the thirteen weeks ended July 2, 2011. Interest expense increased during the thirteen weeks ended June 30, 2012 primarily due to the interest paid on the $4.5 million mortgage loan, the proceeds of which we used to purchase a shopping center in Miami, Florida and a $1.6 million term loan the proceeds of which were also ultimately used to purchase the shopping center, while permitting us to retain our working capital and cash reserves.

Net Income.Net income for the thirteen weeks ended June 30, 2012 decreased$109,000 or 31.59% to $236,000 from $345,000for the thirteen weeks ended July 2, 2011. As a percentage of sales, net income for the third quarter of our fiscal year 2012 is 1.22%, as compared to 1.90% in the third quarter of our fiscal year 2011.

Comparison of Thirty-Nine Weeks Ended June 30, 2012 and July 2, 2011.

Revenues. Total revenue for the thirty nine weeks ended June 30, 2012 increased $3,843,000 or 6.98% to $58,915,000 from $55,072,000 for the thirty nine weeks ended July 2, 2011

Restaurant Food Sales.Restaurant revenue generated from the sale of food at restaurants (food sales) totaled $37,141,000 for the thirty nine weeks ended June 30, 2012 as compared to $34,795,000 for the thirty nine weeks ended July 2, 2011. Comparable weekly food sales(for restaurants open for all of the thirty nine weeks of our fiscal years 2012 and 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $921,000 and $860,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 7.09%.Comparable weekly food sales for Company owned restaurants was $411,000 and $373,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 10.19%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $510,000 and $487,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 4.72%. Restaurant food sales increased for the thirty nine weeks ended June 30, 2012 due in part to the increase in menu prices instituted during the fourth quarter of our fiscal year 2011 and the third quarter of our fiscal year 2012.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $10,043,000 for the thirty nine weeks ended June 30, 2012 as compared to $8,937,000 for the thirty nine weeks ended July 2, 2011.Comparable weekly bar sales (for restaurants open for all of the thirty nine weeks of our fiscal years 2012 and 2011, which consists of eight restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $250,000 for the thirty nine weeks ended June 30, 2012 and $223,000 for the thirty nine weeks ended July 2, 2011, an increase of 12.11%. Comparable weekly bar sales for Company owned restaurants was $107,000 and $95,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 12.63%. Comparable weekly bar sales for affiliated limited partnership owned restaurants was $143,000 and $128,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 11.72%. Restaurant bar sales increased for the thirty nine weeks ended June 30, 2012 due in part toour increase in restaurant bar prices during the second quarter of our fiscal year 2012.

Package Store Sales. Revenue generated from sales of liquor and related items at package stores (package store sales) totaled $10,407,000 for the thirty nine weeks ended June 30, 2012 as compared to $10,321,000 for the thirty nine weeks ended July 2, 2011, an increase of $86,000. The weekly average of same store package store sales, (which includes all nine (9) Company owned package liquor stores open for all of the thirty nine weeks of our fiscal years 2012 and 2011) was $267,000 and $265,000 for the thirty nine weeks ended June 30, 2012 and July 2, 2011, respectively, an increase of 0.75%. Package liquor store sales are expected to remain stable throughout the balance of our fiscal year 2012.

Operating Costs and Expenses. Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for the thirty nine weeks ended June 30, 2012 increased$3,798,000 or 7.25% to $56,173,000 from $52,375,000 for the thirty nine weeks ended July 2, 2011. The increase was primarily due to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012 and expected to open for business during the first quarter of our fiscal 2013, the shopping center in Miami, Florida acquired during the first quarter of our fiscal year 2012 andto an expected general increase in food costs, including an increase in the cost of ribs and poultry, offset by a decrease in repairs and maintenance to our units and actions taken by management to reduce and/or control costs and expenses.We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2012 for the same reasons.Operating costs and expenses increased as a percentage of total sales to approximately 95.35% for the thirty nine weeks ended June 30, 2012 from 95.10% for the thirty nine weeks ended July 2, 2011.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.

Restaurant Food and Bar Sales. Gross profit for food and bar sales for the thirty nine weeks ended June 30, 2012 increased to $30,457,000 from $28,758,000 for the thirty nine weeks ended July 2, 2011. Our gross profit margin for food sales and bar sales (calculated as gross profit reflected as a percentage of food sales and bar sales), was 64.55% for the thirty nine weeks ended June 30, 2012 and 65.76% for the thirty nine weeks ended July 2, 2011.We anticipate that our gross profit for restaurant food and bar sales will decrease during the balance of our fiscal year 2012 due to higher food costs, including our cost of ribs and poultry.

Package Store Sales. Gross profit for package store sales for the thirty nine weeks ended June 30, 2012 decreased to $3,152,000 from $3,500,000 for the thirty nine weeks ended July 2, 2011. Our gross profit margin, (calculated as gross profit reflected as a percentage of package store sales), was 30.29% for the thirty nine weeks ended June 30, 2012 compared to 33.91% for the thirty nine weeks ended July 2, 2011. The decrease in our gross profit margin, (-3.62%), was primarily due to ourinability to purchase “close out” and inventory reduction merchandise from wholesalers.We anticipate that the gross profit margin for package store sales will remain stable throughout the balance of our fiscal year 2012.

Payroll and Related Costs.Payroll and related costs for the thirty nine weeks ended June 30, 2012 increased $1,209,000 or 7.33% to $17,701,000 from $16,492,000 for the thirty nine weeks ended July 2, 2011, due primarilyto an increase in the Florida minimum wage (4.92%), which was effective January 1, 2012, and to increases in payroll taxes, including unemployment taxes. We anticipate that our payroll and related costs will increase throughout the balance of our fiscal year 2012 due primarily to payroll associated withthe new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012.Payroll2012 and expected to open for business during the first quarter of our fiscal 2013. Payroll and related costs as a percentage of total sales was 30.50% in30.04% for the second quarter of our fiscal yearthirty nine weeks ended June 30, 2012 and 29.91%29.95% of total sales infor the second quarter of our fiscal yearthirty nine weeks ended July 2, 2011.

Occupancy Costs.Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases)for the thirteenthirty nine weeks ended March 31,June 30, 2012 increased $20,000$57,000 or 1.85%1.79% to $1,100,000$3,247,000 from $1,080,000$3,190,000 for the thirteenthirty nine weeks ended AprilJuly 2, 2011. Our occupancy costs increased primarily due to escalating rents at various locations and with rental payments for the new restaurant location in Miami, Florida acquired by a limited partnership, which commenced January 27, 2012, partially offset bythe elimination of rent from a limited partnership owned restaurant located in the shopping center in Kendall,Miami, Florida which we purchased during the first quarter of our fiscal year 2012.2012 and the elimination of rent paid for our combination restaurant and package liquor store located at 13205 Biscayne Boulevard, North Miami, Florida, the real property and building of which we purchased during the first quarter of our fiscal year 2011. We anticipate that our occupancy costs will increaseremain stable throughout the balance of our fiscal year 2012 due toas escalating rents at several locations andrental payments for the new restaurant location in Miami, Florida, will be partially offset by theelimination of rent from a limited partnership owned restaurant.restaurant upon consolidation.

Selling, General and Administrative Expenses.Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead)for the thirteenthirty nine weeks ended March 31,June 30, 2012 increased $73,000$345,000 or 1.98%3.17% to $3,760,000$11,243,000 from $3,687,000$10,898,000 for the thirteenthirty nine weeks ended AprilJuly 2, 2011. Selling, general and administrative expenses decreased as a percentage of total sales infor the second quarter of our fiscal yearthirty nine weeks ended June 30, 2012 to approximately 18.24%19.08% as compared to 19.24% in19.79% for the second quarter of our fiscal yearthirty nine weeks ended July 2, 2011. We anticipate that our selling, general and administrative expenses will increase throughout the balance of our fiscal year 2012 due primarily to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012and expected to open for business during the first quarter of our fiscal year 2013, the shopping center acquired during the first quarter of our fiscal year 2012 and increases across all categories.

Depreciation and Amortization.Depreciation and amortization expense for the thirteenthirty nine weeks ended March 31,June 30, 2012 decreased $24,000 or 3.65% to $634,000 from $658,000 from the thirteen weeks ended Apriland July 2, 2011.2011 was $1,895,000 and $1,937,000 respectively. As a percentage of total revenue, depreciation and amortization expense was 3.07%3.22% of revenue in the thirteenthirty nine weeks ended March 31,June 30, 2012 and 3.43%3.52% of revenue in the thirteenthirty nine weeks ended AprilJuly 2, 2011.

Interest Expense, Net.Interest expense, net, for the thirteenthirty nine weeks ended March 31,June 30, 2012 increased $56,000$145,000 to $217,000$602,000 from $161,000$457,000 for the thirteenthirty nine weeks ended AprilJuly 2, 2011. Interest expense increased during the thirteenthirty nine weeks ended March 31,June 30, 2012 primarily due to the interest paid on the $4.5 million mortgage loan, the proceeds of which we used to purchase a shopping center in Miami, Florida and a $1.6 million term loan the proceeds of which were also ultimately used to purchase the shopping center, while permitting us to retain our working capital and cash reserves.

Net Income.Net income for the thirteenthirty nine weeks ended March 31,June 30, 2012 decreased$226,000349,000 or 30.75%24.41% to $509,000$1,081,000 from $735,000$1,430,000for the thirteenthirty nine weeks ended AprilJuly 2, 2011. As a percentage of sales, net income for the second quarter of our fiscal yearthirty nine weeks ended June 30, 2012 is 2.47%1.83%, as compared to 3.84% in2.60% for the second quarter of our fiscal year 2011. During the thirteenthirty nine weeks ended April 2, 2011, we recognized income of $231,000, offset by income tax of $69,000, from the sale of our interest, as guarantor, of a nine (9) year leasehold interest.

Comparison of Twenty Six Weeks Ended March 31, 2012 and April 2, 2011.

Revenues. Total revenue for the twenty six weeks ended March 31, 2012 increased $2,618,000 or 7.08% to $39,570,000 from $36,952,000 for the twenty six weeks ended April 2, 2011. $230,000 of our total revenue for the twenty six weeks ended March 31, 2012 was derived from rental income of retail space.

Restaurant Food Sales. Restaurant revenue generated from the sale of food at restaurants (food sales) totaled $24,698,000 for the twenty six weeks ended March 31, 2012 as compared to $23,083,000 for the twenty six weeks ended April 2, 2011. Comparable weekly food sales (for restaurants open for all of the first and second quarters of our fiscal years 2012 and 2011, which consists of seven restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $918,000 and $856,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 7.24%. Comparable weekly food sales for Company owned restaurants was $412,000 and $372,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.75%. Comparable weekly food sales for affiliated limited partnership owned restaurants was $506,000 and $484,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 4.55%.

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants (bar sales) totaled $6,615,000 for the twenty six weeks ended March 31, 2012 as compared to $5,979,000 for the twenty six weeks ended April 2, 2011. Comparable weekly bar sales (for restaurants open for all of the first and second quarters of our fiscal years 2012 and 2011, which consists of seven restaurants owned by us and eight restaurants owned by affiliated limited partnerships) was $246,000 for the twenty six weeks ended March 31, 2012 and $223,000 for the twenty six weeks ended April 2, 2011, an increase of 10.31%. Comparable weekly bar sales for Company owned restaurants was $106,000 and $96,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.42%. Comparable weekly bar sales for affiliated limited partnership owned restaurants was $140,000 and $127,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 10.24%.

Package Store Sales. Revenue generated from sales of liquor and related items at package stores (package store sales) totaled $7,357,000 for the twenty six weeks ended March 31, 2012 as compared to $7,204,000 for the twenty six weeks ended April 2, 2011, an increase of $153,000. The weekly average of same store package store sales, (which includes all nine (9) Company owned package liquor stores open for all of the first and second quarters of our fiscal years 2012 and 2011) was $283,000 and $277,000 for the twenty six weeks ended March 31, 2012 and April 2, 2011, respectively, an increase of 2.17%. Package liquor store sales are expected to remain stable throughout the balance of our fiscal year 2012.

Operating Costs and Expenses. Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for the twenty six weeks ended March 31, 2012 increased$2,720,000 or 7.75% to $37,797,000 from $35,077,000 for the twenty six weeks ended April 2, 2011. The increase was primarily due to a general increase in food costs, offset by a decrease in repairs and maintenance to our units and actions taken by management to reduce and/or control costs and expenses.We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2012 due primarilythe new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012, the shopping center in Kendall, Florida acquired during the first quarter of our fiscal year 2012 andto an expected general increase in food costs, including an increase in the cost of ribs.Operating costs and expenses increased as a percentage of total sales to approximately 95.52% for the twenty six weeks ended March 31, 2012 from 94.93% for the twenty six weeks ended April 2, 2011.

Gross Profit. Gross profit is calculated by subtracting the cost of merchandise sold from sales.

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the twenty six weeks ended March 31, 2012 increased to $20,364,000 from $19,169,000 for the twenty six weeks ended April 2, 2011. Our gross profit margin for food sales and bar sales (calculated as gross profit reflected as a percentage of food sales and bar sales), was 65.03% for the twenty six weeks ended March 31, 2012 and 65.96% for the twenty six weeks ended April 2, 2011.We anticipate that our gross profit for restaurant food and bar sales will decrease during the balance of our fiscal year 2012 due to higher food costs, including our cost of ribs.

Package Store Sales. Gross profit for package store sales for the twenty six weeks ended March 31, 2012 decreased to $2,172,000 from $2,476,000 for the twenty six weeks ended April 2, 2011. Our gross profit margin, (calculated as gross profit reflected as a percentage of package store sales), was 29.52% for the twenty six weeks ended March 31, 2012 compared to 34.37% for the twenty six weeks ended April 2, 2011. The decrease in our gross profit margin, (-4.85%), was primarily due to ourinability to purchase “close out” and inventory reduction merchandise from wholesalers.We anticipate that the gross profit margin for package store sales will decrease throughout the balance of our fiscal year 2012 due to our inability to continue purchasing “close out” and inventory reduction merchandise from wholesalers.

Payroll and Related Costs.Payroll and related costs for the twenty six weeks ended March 31, 2012, increased $872,000 or 7.93% to $11,873,000 from $11,001,000 for the twenty six weeks ended April 2, 2011 due primarilyto an increase in the Florida minimum wage (4.92%), which was effective January 1, 2012, and to increases in payroll taxes, including unemployment taxes. We anticipate that our payroll and related costs will increase throughout the balance of our fiscal year 2012 due primarily to payroll associated withthe new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012.Payroll and related costs as a percentage of total sales was 30.01% for the twenty six weeks ended April 2, 2011 and 29.77% of total sales for the twenty six weeks ended April 2, 2011.

Occupancy Costs.Occupancy costs (consisting of rent, common area maintenance, repairs, real property taxes and amortization of leasehold purchases)for the twenty six weeks ended March 31, 2012 increased $58,000 or 2.75% to $2,169,000 from $2,111,000 for the twenty six weeks ended April 2, 2011. Our occupancy costs increased primarily due to escalating rents at various locations and with rental payments for the new restaurant location in Miami, Florida acquired by a limited partnership, which commenced January 27, 2012, partially offset bythe elimination of rent from a limited partnership owned restaurant located in the shopping center in Kendall, Florida which we purchased during the first quarter of our fiscal year 2012 and the elimination of rent paid for our combination restaurant and package liquor store located at 13205 Biscayne Boulevard, North Miami, Florida, the real property and building of which we purchased during the first quarter of our fiscal year 2011. We anticipate that our occupancy costs will increase throughout the balance of our fiscal year 2012 due to escalating rents at several locations and withrental payments for the new restaurant location in Miami, Florida, partially offset by theelimination of rent from a limited partnership owned restaurant.

Selling, General and Administrative Expenses.Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead)for the twenty six weeks ended March 31, 2012 increased $277,000 or 3.77% to $7,621,000 from $7,344,000 for the twenty six weeks ended April 2, 2011. Selling, general and administrative expenses decreased as a percentage of total sales for the twenty six weeks ended March 31, 2012 to 19.26% as compared to 19.87% for the twenty six weeks ended April 2, 2011. We anticipate that our selling, general and administrative expenses will increase throughout the balance of our fiscal year 2012 due primarily to the new restaurant location in Miami, Florida acquired by a limited partnership during the second quarter of our fiscal year 2012, the shopping center acquired during the first quarter of our fiscal year 2012 and increases across all categories.

Depreciation and Amortization.Depreciation and amortization expense for the twenty six weeks ended March 31 2012 decreased $42,000 or 3.26% to $1,269,000 from $1,311,000 from the twenty six weeks ended April 2, 2011. As a percentage of total revenue, depreciation and amortization expense was 3.20% of revenue in the twenty six weeks ended March 31, 2012 and 3.55% of revenue in the twenty six weeks ended April 2, 2011.

Interest Expense, Net.Interest expense, net, for the twenty six weeks ended March 31, 2012 increased $97,000 to $394,000 from $297,000 for the twenty six weeks ended April 2, 2011. Interest expense increased during the twenty six weeks ended March 31, 2012 primarily due to the interest paid on the $4.5 million mortgage loan, the proceeds of which we used to purchase a shopping center in Miami, Florida and a $1.6 million term loan the proceeds of which were also ultimately used to purchase the shopping center, while permitting us to retain our working capital and cash reserves.