RYAN Ryans Restaurant

Higher Gas Prices Taking Biggest Toll on Family Dining and Midwest Restaurants NEW YORK, April 26 /PRNewswire/ -- In its latest semi-annual survey on the restaurant industry, Standard & Poor's Equity Research Services outlines its neutral outlook on the industry and explains how higher fuel costs and consumers' economic concerns are the leading factors negatively impacting family dining chains and restaurants in the Midwest. These and other findings are available in the report, Restaurants Industry Survey, published twice yearly by Standard & Poor's, a leading provider of independent investment research. According to Standard & Poor's Equity Research, higher gas prices have caused consumers to curb their discretionary spending, which has hurt customer traffic trends and average checks throughout the industry. The segment most impacted has been the family dining chains such as Cracker Barrel Old Country Store (NASDAQ:CBRLNASDAQ:3-STARSNASDAQ:$42), Bob Evans Farms (NASDAQ:BOBENASDAQ:2-STARSNASDAQ: $29) and Ryan's (NASDAQ:RYANNASDAQ:2-STARSNASDAQ:$13), due to the proximity of their locations to highways and their reliance on lower and middle income consumers, who have been disproportionately affected. Additionally, restaurants with concentrations in the Midwest have also underperformed. These chains have been negatively impacted by consumers' economic concerns regarding the manufacturing sector of the economy, according to S&P. Relative to services, manufacturing is struggling and a disproportionate number of these jobs are located in the Midwest. "Longer term, industry fundamentals look solid. Declining food costs and product innovation have spurred industry growth, but the impact of gasoline prices cannot be overstated, particularly for the family dining chains," says Dennis Milton, Restaurant Analyst with Standard & Poor's Equity Research Services. "These companies' customers have the least amount of discretionary dollars and their jobs are the most economically sensitive." Despite a difficult operating environment, Standard & Poor's Equity Research Services sees opportunities for a few restaurant chains and has a "Strong Buy" (5-STARS out of 5) recommendation on Applebee's International (NASDAQ:APPBNASDAQ:$24) due to its low relative valuation compared with casual dining peers, despite S&P's view of its superior historical returns on equity and strong growth prospects. Standard & Poor's Equity Research Services also has a "Strong Buy" (5-STARS) recommendation on Red Robin Gourmet Burgers (NASDAQ:RRGBNASDAQ:$46) due to its view of a strong near-term outlook and excellent long-term growth prospects. View a video clip of Standard & Poor's equity analyst Dennis Milton, discussing the sector here, mms://wmd31sea.activate.net/sandp/windows/sptv-survey-25.wmv. Standard & Poor's Industry Surveys provide a broad and fundamental overview of each industry's structure, its recent performance, and an analysis of trends that are expected to influence it in the future. Each Survey is organized into the following sections: Current Environment, Industry Profile/Industry Trends, How the Industry Operates, Key Industry Ratios and Statistics, How to Analyze a Company, Industry References, Comparative Company Analysis, and a Glossary of terms used in that industry. Both text and data are provided, as are references to additional sources of industry information. Two surveys on each industry are published each year. Readers can purchase Standard & Poor's Industry Surveys three ways: Online for immediate download at http://sandp.ecnext.com/, by telephone at 212-438-4052, or via e-mail order sent to . Members of the media can request a copy from the communications contact listed at the end of this release. The analyst quoted above is a Standard & Poor's equity analyst. He has no affiliation with any company he covers, nor any ownership interest in any company he covers. About Standard & Poor's Equity Research Services As the world's largest producer of independent equity research, over 1,000 institutions license Standard & Poor's research for their investors and advisors, including 19 of the top 20 securities firms, 13 of the top 20 banks, and 11 of the top 20 life insurance companies. Standard & Poor's team of 100 experienced U.S., European and Asian equity analysts use a fundamental, bottom-up approach to assess a global universe of approximately 2,000 equities across more than 120 industries worldwide. Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/. The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are performed separately from any other analytic activity of Standard & Poor's. Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's. Standard & Poor's does not trade on its own account. The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at http://www.standardandpoors.com/. About Standard & Poor's Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With approximately 6,300 employees located in 21 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/. DATASOURCE: Standard & Poor's CONTACT: Ed Sweeney Communications Tel.: 212-438-6634 Web site: http://www.standardandpoors.com/ http://www.equityresearch.standardandpoors.com/ http://sandp.ecnext.com/

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