Wyatt's Cafeterias files Chapter 11 reorganization plan.

DALLAS--(BUSINESS WIRE)--July 28, 1995--Wyatt's Cafeterias, recently renamed Triangle FoodService Corporation, has filed a plan for reorganization with the bankruptcy court.

Only 34 days earlier, Triangle FoodService had filed for bankruptcy protection under Chapter 11 of the Federal Bankruptcy

Code. Joe Colonnetta, CEO of Triangle FoodService Corporation, said, "What made this 65-year-old company a once great cafeteria chain had been lost forever by the time we took control of the Board last June.

"Our mission was not to restore it to its previous stature, but to find the remaining core value which could be revitalized into a viable and competitive company. In order to continue to revitalize the core business of Wyatt's, we needed to restructure the capital base of the company.

"We are pleased to submit a plan which offers a more secure future for the hundreds of people employed by Wyatt's and which deals fairly with all the company's constituents."

The major thrust of the plan is to exchange the debt held by secured creditors for equity in the new Triangle FoodService Corporation. This reorganization will enable Triangle FoodService to move forward with the revitalization strategy the company began in January 1995.

Wyatt's Faced Considerable Challenges When New Management Took Over -------------------------------------------------------------------

Colonnetta and his associate, Malcolm McArdle, Triangle's current chairman, took control of the Wyatt's Board of Directors June 13, 1994. Once Wyatt's was stabilized, Wyatt's institutional owners recruited Colonnetta as president of the company in the fall of 1994 with the mandate of trying to rebuild a company which was in desperate trouble.

Colonnetta has a positive track record in advising troubled restaurant boards and participating in restaurant turnarounds, including the 700-unit Friendly's and the 450-unit Perkins Family Restaurants.

Colonnetta recalls that when his team arrived at Wyatt's they immediately faced the challenge of making $1.2 million payroll with virtually no money in the bank. "Wyatt's was a company in dire straits when we were brought in," he noted.

"A good part of Wyatt's demise had to do with the company's failure to deliver a quality dining experience to customers," added Colonnetta. "Over the years they created a very disrespectful environment for customers with discourteous service. As a food professional, that's a crime. It's a good way to run yourself out of business," Colonnetta explained.

"We quickly formulated and launched an aggressive revitalization strategy in January 1995," Colonnetta said. "The focus of our strategy is to save as many jobs as possible while identifying and improving the core assets of the company.

"While working on a plan to reorganize the company, it became necessary that we file for bankruptcy to gain the time and financial relief required to give the company a chance at a turnaround," Colonnetta added.

Management Accomplishments Have Already Added Significant Value --------------------------------------------------------------- to the Company --------------

According to Colonnetta, the company was able to file its reorganization plan in an unprecedented 34 days because the new management's turnaround work on the company had begun many months before the filing.

Prior to its Chapter 11 filing, Wyatt's had completed comprehensive revitalization of four cafeterias in Dallas and Houston.

Believing strongly that urban settings can offer excellent turnaround potential, the company implemented its three-pronged revitalization plan which includes sharpening the focus on quality and service, remodeling the facility, improving food products and adding new dishes such as chicken parmigiano, steak italiano and sauteed spinach.

After being revitalized, these cafeterias are registering significant sales improvements. Four additional cafeterias are currently being revitalized. Former Governor Mark White, former Mayor Steve Bartlett, Mayor Ron Kirk, Dallas County Judge Lee Jackson along with a host of other dignitaries attended the opening of a revitalized Wyatt's in inner city Dallas.

White said the revitalized cafeterias help bring the community closer together. "It's a place for people with all different backgrounds," White explained. "You see one of the biggest car dealers at a table next to someone who probably has difficulty buying a car.

"This reinvestment in inner cities is wonderful for the communities and this new management team of Triangle FoodService is doing it all," White continued.

Already Triangle FoodService has streamlined its operations from 61 Wyatt's Cafeterias at the beginning of 1995 to its current 41 cafeterias by closing units which have long been unprofitable. As further evidence that the company's turnaround strategy is working, cash flow during June for the 41 Wyatt's units was $1 million more than the cash flow for 70 units during the same month in 1994.

"This additional cash flow provided us both the means to pay for additional remodeling as well as operate only those units where we can deliver a quality dining experience," noted Colonnetta.

Additional value added to Triangle FoodService as part of management's strategy includes securing licensing and developing concepts which can serve as future growth vehicles for the company. The company obtained a licensing agreement with Bishop's Cafeteria & Bakery and is currently constructing its first unit in College Station.

Wyatt's Express, a new takeout division of Triangle FoodService and an additional avenue of growth in universities, malls, etc., is proving popular with customers and has the potential to become the "Boston Market of the inner city," according to Colonnetta.

In a Dallas Business Journal article on May 12, 1995, Wallace Swanson, chairman and CEO of Highland Park Cafeterias, said Colonnetta's ideas will benefit everyone involved in cafeteria concepts. "He doesn't follow conventional thought processes," Swanson said. "If anybody can bring new insights to the cafeteria industry, I would like to think it would be him."

Colonnetta and his management team also have struck new relationships and expanded the potential for Triangle FoodService in procurement and product development. StarMark Foods Division of Triangle FoodService has been revived to gain product consistency and labor savings though product innovation.

Already, StarMark has formed relationships with foodservice leaders such as Basic American and Fortune Foods. Wayne Barnes of Basic American Foods said, "This new management team is really leading the foodservice industry in utilizing new food technology for the benefit of its customers."

Another strategic relationship Colonnetta has led Wyatt's to form an aggressive partnership with McLane/Foodservice, a subsidiary of Wal-Mart Stores, Inc.

"This is an exciting time for Wyatt's Cafeterias and McLane is proud to be part of it," said Drayton McLane, president/chief executive officer of McLane Group, one of three vice chairman of Wal-Mart Stores, Inc. and owner of the Houston Astros. "Our experience and commitment to customer service will enable us to support Wyatt's as it begins a new chapter in its history.

"While Wyatt's has significant challenges ahead, its only hope of survival was finding a leader such as Colonnetta with both the vision and strategy for a successful turnaround, plus the courage to execute the strategy."

Most Important Change at Wyatt's is Strong Field Operations -----------------------------------------------------------

Without a doubt, the greatest value Colonnetta's team has created for the Wyatt's division is the legacy of a highly skilled and motivated field operations team. "This new operations team is the commando squad which has been deployed to move Wyatt's Cafeterias from the '60s to the '90s.

"The first promise I made to our shareholders was to recruit the most aggressive and talented operators in the industry," stated Colonnetta. Colonnetta initially served as vice president-operations, as well as president, because he wanted to make sure corporate strategy was clearly understood in the field.

The company has recruited more than 125 new managers in just over six months, many of them coming from such respected organizations as PepsiCo, Brinker, Cracker Barrel, Black-eyed Pea, Boston Market and Metromedia.

For its operations leader, Triangle selected Bob Whan as its new vice president of operations. Whan, whom Colonnetta brought in this spring, has 20 years of experience with foodservice companies including Black-eyed Pea and PepsiCo. "I have never seen such expertise and resources mobilized so quickly and successfully in rebuilding a company from the ground up.

"It was as if we started a fully operational company overnight, staffed with some of the finest turnaround talent in the restaurant industry," said Whan.

Whan's new managers are equally excited about the turnaround they're creating. "Like many of the other new managers, I joined Triangle FoodService because I believe in the vision of our leadership and wanted to be a part of a dramatic turnaround of a company that was in a lot of trouble.

"Now, I'm very excited about the impact of changes we're making and am positive about our company's future," said Charles Hendrix, general manager of the remodeled Wyatt's Cafeteria and Wyatt's Express in Wynnewood Village in Dallas, formerly with PepsiCo.

Underlining the importance of Triangle's field team, Colonnetta summarized, "If we fail, I'll take 100 percent of the blame. If we succeed, give me 5 percent of the credit and the remaining 95 percent to the field."

The Company and its Employees Look Forward to a Brighter Future ---------------------------------------------------------------

Colonnetta said, "As a result of extreme competition in the foodservice industry coupled with the fact that many cafeteria operators have not kept up with the times, there are 25 percent fewer cafeterias across the industry today than there were five years ago. And not all of today's cafeteria operators will be around in five more years."

He added, "We have made hard decisions and taken dramatic actions to make sure the new Triangle FoodService Corporation will not only survive, but will have the potential to emerge as one of the cafeteria segment leaders in the foodservice industry."

When apprised of Wyatt's decision to reorganize and seek Chapter 11 protection, Jack Evans (Dallas businessman, former mayor) said, "I've watched the company struggle over the years and am glad somebody has come in who's very committed to the company and wants to turn it around."

Allan Hickok, restaurant industry analyst with Piper Jaffray in Minneapolis, noted, "It's rare that such a focused management team has attacked a troubled situation with such a clear understanding of the issues ad solutions in turning a chain around."

Triangle FoodService Corporation is a privately held company founded in 1931 which today operates 41 cafeterias in five states with most of its units concentrated in Texas.

CONTACT: C. Pharr & Company

Cynthia Pharr, 214/243-0644

or

Triangle FoodService Corp.

Jennifer Maloney, 214/349-0060