Rock Bottom Refinances to Bolster Growth Potential

LOUISVILLE, Col. – Colorado based, Rock Bottom Restraurants, Inc., a national restaurant and brewery operator, announced today that it closed a deal to refinance the Company last month. Bank of America arranged the financing that enabled Rock Bottom Restraurants, Inc. (RBR) to reset and lower its capital costs giving the Company the financial resources necessary to continue with its significant growth strategy. Under the new capital structure RBR will more than double its current growth rate with plans to open 17 new stores in 2005 and 21 in 2006 among its corporate owned and franchise locations, according to Ned Lidvall, President and Chief Executive Officer.

“Due to the refinance, the Company was also able to pay a significant dividend to our shareholders and it allowed employees with equity incentive plans to receive substantial compensation in consideration of the equity value growth achieved. We’re proud that all of management participated,” said Lidvall.

“Rock Bottom achieves its success through the will and determination of its restaurant managers and its Executive and Support Management teams. The Founders and I saw it fit to share in our success with the employees in this current event which also sets the stage for even bigger employee participation in the ownership of the Company in the near future,” said Frank Day, Founder and Chairman of the Board of Directors for Rock Bottom Restraurants, Inc.

The Company is still majority owned by its founding team led by Boulder-based entrepreneur Frank Day, former Boulder Mayor Bob Greenlee, Colorado Springs restaurateur Dave Lux and Chicago-based investor, Arthur Wong. Subsequent to now, the Founders hadn’t extracted any capital from the Company since prior to going public in 1994. Rather than sell the Company in what could be a peak market prime for restaurant company sellers, the Founders chose to take partial liquidity via a dividend and continue their investment in RBR and its management team, symbolizing our confidence in the direction of the Company and its even brighter future, according to Day.

A Compelling Investment History

RBR went private in 1999 when Founder, Frank Day and his group leveraged a buyout of the publicly held stock. The buyout permitted RBR to better focus on its long term operational goals rather than the prioritized short-term demands of being a publicly held entity. At the time of the buyout RBR had 66 total operating units.

In 2002, three year post buyout, RBR refinanced its senior debt in order to capture a more favored interest rate environment and once again improve its growth capacity.

The current deal involved five major banking institutions led by Bank of America which has partnered with RBR since its going private transaction in 1999. “Bank of America is pleased to continue its relationship with Rock Bottom. It is a sound, robust company with compelling brands that enable significant growth capacity, newly refined prototype buildings, and site selection processes. We are proud to financially back such planned growth” said Nick Cole, ­ Bank of America Funds Managing Director.

“This event signifies our ownership culture among employees and reinforces the strength of our employment brand which is unique and compelling among the world of corporate employers. As a result, our turnover is among the lowest in the industry and our family of employees is now even more energized toward our exciting future,” said Lidvall.

Currently RBR owns or franchises 115 units under its various brands and plans to have approximately 200 total operating units by 2008. The company which employs over 7,000 nationwide remains one of the largest employers on Colorado’s Front Range.

Rock Bottom Restraurants, Inc. currently owns and operates 89 restaurants across the United States – 55 “Old Chicago” restaurants and 34 brewery concepts operating under the names “Rock Bottom Restaurant & Brewery,” “ChopHouse & Brewery,” and “Walnut Brewery”. The Company also operates two Sing Sing concepts, an entertainment venue that features a dueling piano bar in a club setting. It has franchise partnerships under its Old Chicago brand that account for more than 20 locations with plans for an additional eight in 2005 and nearly 100 total franchise locations operating over the next five years.

The Company’s annual sales for 2004 were $265.6 million, a 5.4% increase from fiscal 2003. Projected sales for 2005 are $275.2 million and future sales growth expectations are more than 10% per year thereafter.

All of Rock Bottom’s restaurants are casual dining establishments featuring excellent service, high-quality, moderately priced food and a distinctive selection of micro-brewed and specialty beers served in a comfortable, hospitable atmosphere.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

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