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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the Quarterly Period Ended March 28, 2004.

or

For the Transition Period from              to             .

Commission file number 0-25721.

BUCA, Inc.

(Exact name of registrant as specified in its Charter)

1300 Nicollet Mall

Minneapolis, Minnesota 55403

(Address of principal executive offices) (Zip Code)

(612) 288-2382

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2).    Yes  x    No  ¨

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date: Common stock, $.01 par value, 20,120,505 shares outstanding as of April 30, 2004.

INDEX

BUCA, INC. AND SUBSIDIARIES

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PART 1. — FINANCIAL INFORMATION

Item 1. Financial Statements

BUCA, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited, in thousands, except share data)

See notes to consolidated financial statements.

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BUCA, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited, in thousands, except share and per share data)

See notes to consolidated financial statements.

4

BUCA, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

See notes to consolidated financial statements.

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BUCA, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

BUCA, Inc. and Subsidiaries (we, us, or our) develop, own and operate immigrant Southern Italian restaurants under the names Buca di Beppo and Vinny T’s of Boston. At March 28, 2004, we had 105 restaurants located in 30 states and the District of Columbia.

The accompanying financial statements have been prepared by us without audit and reflect all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of financial position and the results of operations for the interim periods. The statements have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) and with the regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such SEC rules and regulations. Operating results for the thirteen weeks ended March 28, 2004 are not necessarily indicative of the results that may be expected for the year ending December 26, 2004.

Certain reclassifications have been made in the financial statements for prior years to conform to the current presentation. Such reclassifications had no effect on net income or stockholders’ equity as previously reported.

The balance sheet at December 28, 2003 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and notes for the fiscal year ended December 28, 2003 included in our Annual Report on Form 10-K.

2. LOSS ON IMPAIRMENT OF LONG-LIVED ASSETS

We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value amount of an asset or group of assets may not be recoverable. We consider a history of consistent and significant operating losses to be a primary indicator of potential asset impairment. Assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows, primarily the individual restaurants. A restaurant is deemed to be impaired if a forecast of discounted future operating cash flows directly related to the restaurant is less than its carrying amount. If a restaurant is determined to be impaired, the loss is measured as the amount by which the carrying amount of the restaurant exceeds its fair value. Fair value is an estimate based on the best information available, including prices for similar assets or the results of valuation techniques such as discounted estimated future cash flows as if the decision to continue to use the impaired restaurant was a new investment decision.

At December 28, 2003, we recorded a loss on the impairment of long-lived assets at nine restaurants due to each restaurant’s estimated future cash flows not supporting the carrying value of its long-lived assets. We are reviewing potential closure of one of these restaurants. Because of declining restaurant sales and profitability in the first quarter of fiscal 2004, we are also reviewing an additional six restaurants for potential asset impairment due to these restaurants’ inability to generate cash flows from restaurant operations during the past 12 months. We believe that each of these restaurants’ estimated future cash flows will support the carrying value of its assets. However, if trends at these six restaurants do not improve, we may need to take additional losses on the impairment of long-lived assets. At March 28, 2004, the total net book value of fixed and other long-term assets at these six locations was $7,256,000.

3. LEASE TERMINATION COSTS

On April 20, 2004, our board of directors and management reached the decision to exit leases at two of our undeveloped restaurant locations. These lease agreements were executed during fiscal 2002 and 2003 and have

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initial non-cancelable terms of 10 to 20 years. During the first quarter for fiscal 2004, we made $110,000 in lease payments related to these two leases. During the second quarter of fiscal 2004, we expect to incur termination costs related to these leases, recognized in accordance with Statement of Financial Accounting Standards (SFAS) No, 146, Accounting for Costs Associated with Exit or Dispersal Activities. This will require that we negotiate a settlement with each landlord or estimate the present value of the future minimum lease obligations offset by the estimated sublease rentals that could be reasonably obtained for these properties.

4. PRIVATE PLACEMENT OF EQUITY

On February 26, 2004, we completed the sale in a private placement of 3.3 million shares of our common stock at a price of $5.50 per share, for a total gross proceeds of $18,150,000. After deducting transaction costs of approximately $1 million, we received net proceeds of approximately $17 million, $8.5 million of which was used to prepay our term loan facility, $7.5 million of which was used to pay down our line of credit borrowings and the remaining proceeds were used for general corporate purposes. We filed a registration statement on Form S-3 with the SEC on March 19, 2004 to register the resale of the shares. If the SEC does not declare the registration statement effective by May 26, 2004, we will incur a monthly penalty of 1% of the gross proceeds of the transaction.

5. CREDIT FACILITY

In February 2004, we amended our credit facility. The amendment, which waived certain financial covenant defaults, required us to pay $8.5 million as a permanent reduction in our term loan facility and changed the maturity date of the term loan facility from October 11, 2007 to October 11, 2006. Of the $8.5 million in payments against the term loan, $5.0 million was applied to the required term loan payments due in fiscal 2007. The remaining $3.5 million was applied evenly against the required term loan payments for fiscal years 2004 through 2006. Thus, our revised term loan requirement is to pay $3,833,333 annually for fiscal years 2004 through 2006. These payments are required to be made evenly over the four quarters of each fiscal year. The amendment changed certain financial covenants and eliminated our minimum interest coverage ratio. Our annual capital expenditures are limited as follows: $13 million in fiscal 2004; $17 million in fiscal 2005; $19 million in fiscal 2006 and $21 million in fiscal 2007. The amendment also limits our ability to sign leases for new restaurant locations. We paid a waiver fee of $112,500 in connection with the amendment. At May 4, 2004, we had $10.5 million outstanding on our term loan and $16.0 million outstanding on our line of credit.

6. NET (LOSS) INCOME PER SHARE

Net (loss) income per share is computed in accordance with SFAS No. 128, Earnings per Share. Basic (loss) income per share is computed by dividing net (loss) income by the weighted average number of common shares outstanding. Diluted income per share assumes the exercise of stock options using the treasury stock method, if dilutive. Diluted net loss per share for the thirteen-week period ended March 28, 2004 equals basic net loss per share because the effect of stock options to the weighted average shares assumed outstanding would be anti-dilutive. The following table sets forth the calculation of basic and diluted net (loss) income per common share (in thousands, except share and per share data):

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7. STOCK-BASED COMPENSATION

We have chosen to continue to account for stock-based compensation using the intrinsic value based method prescribed by Accounting Principles Board Option No. 25 and related interpretations. No compensation cost has been recognized for options issued to employees under the plans when the exercise price of the options granted is at least equal to the fair value of the common stock on the date of grant. Had compensation costs for our Employee Stock Purchase Plan, 1996 Stock Incentive Plan and 2000 Stock Incentive Plan been determined using a fair value based method as described in SFAS No. 123, Accounting for Stock-Based Compensation, our net loss would have been increased and our net income would have been decreased to the following pro-forma amounts (in thousands, except for per share data):