SOURCE: Santa Fe Holding Company, Inc.

June 17, 2008 11:57 ET

Santa Fe Holdings Corporate Update: Period 5 EBITDAR Increased 93%, New Restaurant Design Delivering 30% Increase in Sales

Possible Acquisition Target

Poor Economy Helping Sales

Menu Prices Holding Steady

Check Totals Increasing

BRENTWOOD, TN--(Marketwire - June 17, 2008) - Danny York, CEO of Santa Fe Holdings Company (PINKSHEETS: SFHD) (, the parent company of the popular Santa Fe Cattle Co. roadhouse steak restaurant chain, told investors in a conference call on June 5th that the company is growing revenues faster than any of the 96 publicly traded restaurant chain companies and is one of only six that has a revenue growth rate of more than 30%. Preliminary sales for Period 5, the four-week period ending May 18, were $4.07 million, up 70% over the comparable period in 2007. Preliminary EBITDAR had increased 93% for period 5, rising to $641,900 from $309,200. Preliminary EBITDAR for the 20-week year to date ending May 18 rose 63% over the previous comparable period.

Danny York stated, "Santa Fe Cattle Co. is in the top echelon of restaurant growth and we are on target to have 100 stores by 2012. There is no better price/value ratio in our industry. We believe we're one of the most profitable steakhouse chains in our sector. We're generating profit by building top line sales -- which is bottom line."

He noted, "Our growth has captured the attention of investors and we've been approached by multiple parties for a possible buyout. We're looking to continue to build our profitability and shareholder value. We're taking the appropriate steps to advance from the bulletin board to a listed exchange as soon as possible."

Santa Fe Cattle Co. will launch six more of its newly designed steakhouse restaurants before yearend in addition to the four new restaurants it has already opened in 2008. The company is on track to add 12 more in 2009.

The company's new store design is extremely efficient at 5947 square feet and seating 187 patrons -- a size that York believes is optimal for return on investment. York noted that Santa Fe's new design delivers one of the highest sales to square foot ratios in the casual dining segment -- a direct result of the restaurant atmosphere and the quality and value of the menu items.

In light of skyrocketing steel and energy costs, the company is modifying its new store designs to include wooden trusses rather than steel and has made other modifications to the electrical switch gear layout that will allow 300 extra sq. ft. of work space and save more than $1.8 million in the next 24 months.

Santa Fe Cattle Co.'s new stores are breaking company records for weekly sales long after the grand openings. After the first four months sales at the newly designed stores are leveling off at 30% higher than the company's older stores. The Ardmore, Oklahoma store continues to shatter previous records with the fourth consecutive week at more than $100,000 in sales -- a level that is unheard of for a restaurant of that size.

"We've seem to have struck gold with our new growth strategy," York said. "We have an advantage over our competition in that we're young and growing and able to channel our resources into building attractive, efficient new restaurants that increase revenues through organic growth. We're able to obtain better real estate prices right now because our larger more established competitors are having to remodel existing stores and reinvent tired concepts which doesn't have as dramatic of an impact on revenue."

While food and fuel costs are increasing for consumers, Santa Fe Cattle Company says its cost of goods has remained flat year over year in large part due to its management's efforts at cost control and negotiation. The company has had no significant menu price increases in two years and plans to hold prices steady without sacrificing profitability. The company has been able to negate rising costs through consolidating national account contracts with their major vendors to get lower pricing and by introducing new menu items with high profit margins. With historically minimal lunchtime dessert sales, their new $.99 mini desserts available only during lunch, and in-store promotions for frozen alcohol drinks are driving additional sales resulting in bigger check totals, increasing revenues by approximately 3%.

"While many people are giving up their vacations and other extras, they are not giving up their one luxury of eating out. The higher gas prices are actually favoring our restaurant concept by keeping customers in town," York stated. "We are not reducing portion sizes to compensate for rising food costs. We're simply providing them with additional irresistible choices at extremely affordable prices. People come here expecting generous portions of USDA choice beef and Texas Hill Country fare and we're going to send them home with big smiles and full stomachs."

An archived version of the investor conference call is available at:


Santa Fe Holding Company of Brentwood, Tenn., operates Santa Fe Cattle Co., one of the nation's fastest growing casual dining "roadhouse" steak restaurant chains. Started in 1996, it provides customers with a unique blend of perfectly aged USDA Choice steaks, ribs, fajitas, Texas Hill Country-influenced homemade sauces and dressings, and mouth-watering Chuck Wagon favorites developed exclusively for the company. Each restaurant's distinctive signature décor creates a nostalgic, down-home, family-oriented atmosphere reminiscent of the Old West with simply awesome food, amazingly friendly service -- all at a reasonable price. For more information, visit:

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Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the markets, variations in the company's cash flow, competition, availability and cost of materials and labor and suitable real estate locations; and other risk factors.

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