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O'Charley's Issues Guidance for Fourth Quarter; Completes $50 Million Sale and Leaseback Transaction; Announces $25 Million Share Repurchase Authorization

NASHVILLE, Tenn.--(BUSINESS WIRE)--Oct. 21, 2003--O'Charley's Inc.
(NASDAQ/NM:CHUX), a leading casual dining restaurant company, today announced the completion of a $50 million sale and leaseback transaction and the establishment of a $25 million share repurchase authorization. The Company also issued its sales and earnings guidance for the fourth fiscal quarter ending December 28, 2003.

The Company announced it has completed a sale and leaseback transaction involving 23 of its O'Charley's restaurants for $50 million. The terms of the agreement provide for an initial 20-year term with renewal options for up to an additional 20 years and provide for minimum average annual lease payments of $4.2 million for the initial 20-year term. The Company has used the net proceeds from this transaction to pay down amounts outstanding under its senior credit facility. The Company intends to enter into additional sale and leaseback transactions pursuant to which the Company may sell and lease back up to 20 O'Charley's restaurants, which the Company expects will generate gross proceeds of up to approximately $35 million.

For the fourth fiscal quarter ending December 28, 2003, the Company expects to report earnings in the range of $0.15 to $0.18 per diluted share before an estimated pre-tax charge of $1.9 million for debt extinguishment costs related to the anticipated repayment of the outstanding term loan and a portion of the currently outstanding revolving credit loans under the Company's credit facility. The Company's range of estimated earnings for the fourth fiscal quarter assumes same store sales at O'Charley's are flat to down 2% when compared with the prior-year period and same store sales at Ninety Nine are up 1% to 2% when compared with the prior-year period. The Company's guidance also includes the estimated impact of the recently completed sale and leaseback transaction, the anticipated debt repayment and the lower sales in its Knoxville-area stores as a result of adverse publicity concerning a Hepatitis A incident. The Company's guidance does not include any potential benefit from any insurance recovery related to the Hepatitis A incident.

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