Mexican Restaurants, Inc. Announces 2009 First Quarter Operating Results

Houston, Texas (May 11, 2009)    For the Company’s 2009 first quarter ended March 29, 2009, the Company reported net income of $179,853 or $0.05 per diluted share, compared with a net income of $75,517 or $0.02 per diluted share for the first quarter of fiscal year 2008.  The first quarter ended March 29, 2009 included a net loss from discontinued operations of $93,230 compared with net income from discontinued operations of $77,946 for the first quarter of fiscal year 2008.

The Company’s revenues for the first quarter of fiscal year 2009 increased $619,201 or 3.3% to $19.2 million compared with $18.5 million for the same quarter in fiscal year 2008.  Restaurant sales for first quarter 2009 increased by $616,001 or 3.3% to $19.0 million compared with $18.4 million for the first quarter of fiscal year 2008.  The increase in restaurant revenues primarily reflects an increase in same-store sales and the opening of new restaurants.  For the first quarter ended March 29, 2009, Company-owned same-restaurant sales increased approximately 0.6%, the seventh straight quarter of positive same-store sales.  Franchised-owned same-restaurant sales, as reported by franchisees, increased approximately 2.3% over the same quarter in fiscal 2008.

Commenting on the Company’s first quarter results, Curt Glowacki, Chief Executive Officer, stated, “We are pleased with our first quarter results, but remain cautious about the economy and consumer spending.  We will continue to focus on the fundamentals of running great restaurants that offer delicious food at very affordable prices.”

Mr. Glowacki continued, “We are pleased to have sold our Michigan-based La Senorita brand on April 7, 2009 for $2.6 million.  The sale will help us focus on our strategies of building Mission Burrito and enhancing our core concepts in our Southwestern-based trade area.  The proceeds of the sale were used to reduce our existing bank debt.”   

Mexican Restaurants, Inc. operates and franchises 73 Mexican restaurants.  The current system includes 55 Company-operated restaurants, 17 franchisee operated restaurants and one licensed restaurant.

Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, among others, the following: growth strategy; dependence on executive officers; geographic concentration; increasing susceptibility to adverse conditions in the region; changes in consumer tastes and eating habits; national, regional or local economic and real estate conditions; demographic trends; inclement weather; traffic patterns; the type, number and location of competing restaurants; inflation; increased food, labor and benefit costs; the availability of experienced management and hourly employees; seasonality and the timing of new restaurant openings; changes in governmental regulations; dram shop exposure; and other factors not yet experienced by the Company.  The use of words such as “believes”, “anticipates”, “expects”, “intends” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  Readers are urged to carefully review and consider the various disclosures made by the Company in this release and in the Company’s most recent Annual Report and Form 10-K , that attempt to advise interested parties of the risks and factors that may affect the Company’s business.