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Ruby Tuesday, Inc. - Reports 22% Increase in Fourth Quarter Diluted EPS - Reports Fiscal 2003 Diluted EPS of $1.36 - Provides Additional Comments Regarding Consolidation of Its Franchise Partnership System

07/09/2003

MARYVILLE, Tenn., July 9 /PRNewswire-FirstCall/ -- Ruby Tuesday, Inc. (NYSE: RI) today reported results for its fourth quarter and fiscal year ended June 3, 2003. For the quarter, diluted earnings per share were $0.39, an increase of 21.9% from $0.32 a year ago. For the year, diluted earnings per share were $1.36, an increase of 18.3% from adjusted (non-GAAP) earnings of $1.15 a year ago (GAAP fiscal 2002 earnings per share were $0.88, which included the non-recurring charge recorded to fully reserve the Specialty Restaurant Group, LLC ("SRG") note receivable). Gross same-store sales (non- GAAP) and net same-store sales increased 4.5% and 1.7% for the quarter, respectively, at Company-owned Ruby Tuesday restaurants. The Company has historically evaluated same-store sales performance based on gross same-store sales as the Company believes this provides for a more meaningful measure of performance and comparability with its competitors -- see the attached Schedule A for a quarterly and annual comparison of reported Company-owned and franchise partnership same-store sales growth based on gross sales as compared to net sales for fiscal years 2002 and 2003.

The Company's Board of Directors declared a semi-annual cash dividend of $0.0225 per share, payable on August 4, 2003 to shareholders of record at the close of business on July 21, 2003.

The Company also announced that it is on track to early adopt FASB Interpretation No. 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"), effective with its first quarter fiscal 2004, which began June 4, 2003. Under FIN 46, the Company will consolidate its franchise partnerships. Consolidation will result in a one-time $0.60-0.62 per share charge as a result of the cumulative effect of a change in accounting principle. The Company originally estimated an additional dilutive impact on its fiscal 2004 consolidated statements of income resulting from this consolidation of $0.01 to $0.03 per share. However, the Company now anticipates no additional dilutive impact on annual earnings per share in fiscal 2004. In an effort to assist financial statement readers in understanding the consolidation process, a projected consolidating statement of income for first quarter fiscal 2004 and a consolidating balance sheet as of the end of the quarter are attached as Schedule B.

Sandy Beall, the Company's Chairman and CEO commented on the quarter and the year, "We are very pleased with our financial results for the quarter. Both Company-owned and franchise partnership operations have strong momentum thanks in part to our most recently released menu, which has been a tremendous success. Since its release during the fourth quarter, we have seen our highest ever food quality and value ratings, reduced table turn times and achieved a slight increase in check, while at the same time lowering both food and labor costs for the quarter. We anticipate the food and labor cost improvements will continue throughout fiscal 2004. In addition to the success of the new menu we are experiencing, we continue to see positive results from our new service initiative rolled out last fall."

"We are firm believers in constant evolution and we accomplished much of that this year with our new menu and service initiatives as well as the revamping of our field supervisory role. Despite somewhat soft global economic times, we have remained committed to investing in what has gotten us where we are today -- food and service. As we look forward to next year, we are optimistic about continuing to reap the rewards from the investments we have made and continue making in our business. We have a great brand, tremendous Company-owned growth opportunities, a solid balance sheet and strong cash flow as well as franchise systems that continue growing and adding tremendous value."

Commenting on consolidation, Beall continued, "We are also excited about consolidation as it should provide an even clearer picture of the performance of our franchise partnership system as well as Company-owned operations. Other than the one-time cumulative effect estimated to be $0.60-0.62 per share, we do not anticipate any negative effect on earnings per share or underlying cash flow in fiscal 2004 or any changes to our program."

Outlook for Fiscal 2004

The Company reiterates its goal for fiscal 2004 diluted earnings per share growth of 17-18% based on gross same-store sales growth of 2.0-3.0% at Company-owned Ruby Tuesday restaurants. Based on gross same-store sales growth of 2.0-3.0%, the Company would anticipate net same-store sales growth of 1.0-2.0% for the year. The 17-18% earnings per share growth goal is before the $0.60-0.62 per share estimated cumulative effect of a change in accounting principle that will be required upon the adoption of FIN 46. Taking consolidation into account, the Company's goals for consolidated revenue, pre-tax margins (before the cumulative effect of a change in accounting principle) and debt to capital for fiscal 2004 are:

     Revenue                                          $1.40-1.45 billion
     Pre-tax margins                                   11.5-12.0%
     Book debt to capital                                   42.0%
     Total debt (including book debt, operating lease
      debt, and letters of credit) to capital               54.0%

The Company's goal for first quarter gross same-store sales growth at Company-owned restaurants is 1.0-2.0% and the Company estimates net same-store sales at Company-owned restaurants will be flat to down 1.0% for the first quarter. Quarter-to-date gross same-store sales are up approximately 1.0% at Company-owned restaurants, while net same-store sales growth is down approximately 1.0%. Based on 1.0-2.0% gross same-store sales, the Company is comfortable with the current consensus analyst estimate of $0.36 diluted earnings per share for the first quarter (before the $0.60-0.62 per share estimated cumulative effect of a change in accounting principle) after taking into consideration the estimated additional $750 thousand in depreciation to be incurred during the first quarter of fiscal 2004 due to refinancing the Company's bank-financed operating leases during the first quarter of fiscal 2003.

Because of the Company's intention to early adopt FIN 46, the Company believes it useful to provide same-store sales guidance on a consolidated basis. Realizing Ruby Tuesday, Inc. owns only 1-50% of the franchise partnerships and does not control the marketing efforts of the franchise partnerships, the Company's best estimate for consolidated same store sales growth for first quarter fiscal 2004 is down 1.0% to up 2.0% for consolidated gross same store sales and down 1.0% to up 2.0% for consolidated net same store sales. For the year, the Company's best estimate for consolidated same- store sales growth is flat to up 3.0% for consolidated gross same-store sales and flat to up 3.0% for consolidated net same-store sales growth.

    Fourth Quarter Highlights:
     -- Diluted earnings per share increased 21.9% to $0.39 from $0.32.
     -- Net income increased 19.2% to $25,318,000 from $21,248,000.
     -- Pre-tax profit margins increased 70 basis points to 15.7% from 15.0%.
     -- System-wide Ruby Tuesday revenue increased 11.6% to $344,979,000 from
        $309,203,000.
     -- Fifteen Company-owned Ruby Tuesday restaurants were opened and two
        were closed.
     -- Three franchise partnership units were opened and none were closed.
     -- Three traditional franchise units were opened and none were closed.
     -- The Company purchased 250,000 shares of its common stock during the
        quarter.  Five million shares remain authorized for repurchase under
        the Company's ongoing share repurchase program.

    Fiscal Year 2003 Highlights:
     -- Earnings per share increased 18.3% to $1.36 from $1.15, excluding a
        $17.5 million ($0.27 per share) after-tax charge recorded during the
        prior year in conjunction with fully reserving the SRG note
        receivable.
     -- Net income, excluding the same $17.5 million charge, increased 16.8%
        to $88,484,000 from $75,745,000.
     -- Pre-tax profit margins, excluding the same $17.5 million charge,
        increased 90 basis points to 14.9% from 14.0%.
     -- System-wide Ruby Tuesday revenue increased 10.2% to $1,286,032,000
        from $1,167,079,000.
     -- Fifty Company-owned Ruby Tuesday restaurants were opened and seven
        were closed.
     -- Fifteen franchise partnership units were opened and four were closed.
     -- Eight traditional franchise units were opened and one was closed.
     -- The Company exercised its right to acquire an additional 49% interest
        in four of its franchise partnerships during fiscal 2003.  As of the
        end of fiscal 2003, the Company held a 50% interest in nine franchise
        partnerships collectively operating 97 Ruby Tuesday restaurants.
        After exercising its right to acquire an additional 49% interest in
        three additional franchise partnerships subsequent to year end, the
        Company now holds a 50% interest in 12 franchise partnerships
        collectively operating 116 Ruby Tuesday restaurants.
     -- The Company purchased 804,000 shares of its common stock during the
        year.  Five million shares remain authorized for repurchase under the
        Company's ongoing share repurchase program.

Ruby Tuesday, Inc. has Company-owned, franchise partnership and/or traditional franchise Ruby Tuesday brand restaurants in 38 states, the District of Columbia, Puerto Rico and 12 foreign countries. As of June 3, 2003, the Company owned and operated 440 Ruby Tuesday restaurants while franchise partnerships and traditional franchisees operated 189 and 28 locations, respectively. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RI).

For more information, contact: Phone: 865-379-5700

Price Cooper

The Company will host a conference call which will be a live web-cast this afternoon at 4:00 Eastern Time. The call will be available live at the following websites:

http://www.companyboardroom.com

http://www.rubytuesday.com

The call will be archived on both sites through the close of business on July 16, 2003.

Special Note Regarding Forward-Looking Information

This press release contains various "forward-looking statements" which represent the Company's expectations or beliefs concerning future events, including the following: future financial performance and unit growth (both Company-owned and franchised), future capital expenditures, future borrowings and repayment of debt, and payment of dividends. The Company cautions that a number of important factors could, individually or in the aggregate, cause actual results to differ materially from those included in the forward-looking statements, including, without limitation, the following: consumer spending trends and habits; mall-traffic trends; increased competition in the casual dining restaurant market; weather conditions in the regions in which Company- owned and franchised restaurants are operated; consumers' acceptance of the Company's development prototypes; laws and regulations affecting labor and employee benefit costs; costs and availability of food and beverage inventory; the Company's ability to attract qualified managers, franchisees and team members; changes in the availability of capital; impact of adoption of new accounting standards; and general economic conditions.

                              RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2003 (unaudited)
    (Amounts in thousands except per share amounts)


                                                   13 Weeks
                                                     Ended
                                                     June 3,          Percent
                                                      2003            of Sales
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue              $242,839
    Franchised revenue                               102,140
        Total system-wide Ruby Tuesday
         sales                                      $344,979

    Revenues:
       Company restaurant revenues                  $242,839             98.4
       Franchise income                                4,074              1.6
          Total operating revenues                   246,913            100.0

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise                        63,439             26.1
           Payroll and related costs                  78,514             32.3
           Other restaurant operating
            costs                                     41,125             16.9
           Depreciation and amortization              12,609              5.2
           Loss on valuation of SRG Note
            Receivable                                    --              0.0
       (as a percent of Total operating
        revenues)
           Selling, general and
            administrative                            12,469              5.0
           Equity in (earnings) of
            unconsolidated franchises                   (921)            (0.4)
    Total operating costs and expenses               207,235

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                            39,678             16.1

       Interest expense (income), net                    847              0.3

    Pre-tax Profit                                    38,831             15.7

       Provision for income taxes                     13,513              5.5

    Income before cumulative effect of
     change in accounting principle                   25,318             10.3

    Cumulative effect of change in
     accounting principle, net                            --

    Net Income                                       $25,318             10.3

    Earnings Per Share:

    Before cumulative effect of change in
    accounting principle:
    Basic                                              $0.39
    Diluted                                            $0.39

    After cumulative effect of change in
    accounting principle:
    Basic                                              $0.39
    Diluted                                            $0.39

    Shares:
    Basic                                             64,123
    Diluted                                           65,321




    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2003 (unaudited)
    (Amounts in thousands except per share amounts)





                                          13 Weeks
                                           Ended      Percent
                                           June 4,      of         Percent
                                            2002       Sales        Change
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue    $214,048
    Franchised revenue                      95,155
        Total system-wide Ruby Tuesday
         sales                            $309,203                   11.6

    Revenues:
       Company restaurant revenues        $214,048     98.4
       Franchise income                      3,428      1.6
          Total operating revenues         217,476    100.0          13.5

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise              57,776     27.0
           Payroll and related costs        71,034     33.2
           Other restaurant operating
            costs                           37,930     17.7
           Depreciation and amortization     8,895      4.2
           Loss on valuation of SRG Note
            Receivable                          --      0.0
       (as a percent of Total operating
        revenues)
           Selling, general and
            administrative                  10,995      5.1
           Equity in (earnings) of
            unconsolidated franchises         (508)    (0.2)
    Total operating costs and expenses     186,122

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                  31,354     14.4           26.5

       Interest expense (income), net       (1,336)    (0.6)

    Pre-tax Profit                          32,690     15.0

       Provision for income taxes           11,442      5.3

    Income before cumulative effect of
     change in accounting principle         21,248      9.8

    Cumulative effect of change in
     accounting principle, net                  --

    Net Income                             $21,248      9.8           19.2

    Earnings Per Share:

    Before cumulative effect of change in
    accounting principle:
    Basic                                    $0.33                    18.2
    Diluted                                  $0.32                    21.9

    After cumulative effect of change in
    accounting principle:
    Basic                                    $0.33                    18.2
    Diluted                                  $0.32                    21.9

    Shares:
    Basic                                   64,983
    Diluted                                 66,754




    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2003 (unaudited)
    (Amounts in thousands except per share amounts)




                                               52 Weeks
                                                 Ended
                                                June 3,           Percent
                                                 2003             of Sales
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue          $898,440
    Franchised revenue                           387,592
        Total system-wide Ruby Tuesday
         sales                                $1,286,032

    Revenues:
       Company restaurant revenues              $898,440            98.3
       Franchise income                           15,344             1.7
          Total operating revenues               913,784           100.0

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise                   238,598            26.6
           Payroll and related costs             297,769            33.1
           Other restaurant operating
            costs                                151,950            16.9
           Depreciation and amortization          45,956             5.1
           Loss on valuation of SRG Note
            Receivable                                --             0.0
       (as a percent of Total operating
        revenues)
           Selling, general and
            administrative                        44,830             4.9
           Equity in (earnings) of
            unconsolidated franchises             (3,331)           (0.4)
    Total operating costs and expenses           775,772

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                       138,012            15.1

       Interest expense (income), net              2,302             0.3

    Pre-tax Profit                               135,710            14.9

       Provision for income taxes                 47,226             5.2

    Income before cumulative effect of
     change in accounting principle               88,484             9.7

    Cumulative effect of change in
     accounting principle, net                        --

    Net Income                                   $88,484             9.7

    Earnings Per Share:

    Before cumulative effect of change in
    accounting principle:
    Basic                                          $1.38
    Diluted                                        $1.36

    After cumulative effect of change in
    accounting principle:
    Basic                                          $1.38
    Diluted                                        $1.36

    Shares:
    Basic                                         63,967
    Diluted                                       65,093



    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2003 (unaudited)
    (Amounts in thousands except per share amounts)


                                                  Excluding Loss
                                                 on Valuation of
                                                     SRG Note

                                           52 Weeks
                                            Ended    Percent
                                           June 4,     of         Percent
                                             2002     Sales        Change
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue      $819,097
    Franchised revenue                       347,982
        Total system-wide Ruby Tuesday
         sales                            $1,167,079                10.2

    Revenues:
       Company restaurant revenues          $819,097   98.3
       Franchise income                       14,084    1.7
          Total operating revenues           833,181  100.0          9.7

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise               220,556   26.9
           Payroll and related costs         268,395   32.8
           Other restaurant operating
            costs                            155,211   18.9
           Depreciation and amortization      33,895    4.1
           Loss on valuation of SRG Note
            Receivable                            --    0.0
       (as a percent of Total operating
        revenues)
           Selling, general and
            administrative                    44,824    5.4
           Equity in (earnings) of
            unconsolidated franchises           (861)  (0.1)
    Total operating costs and expenses       722,020

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                   111,161   13.3            24.2

       Interest expense (income), net         (5,841)  (0.7)

    Pre-tax Profit                           117,002   14.0

       Provision for income taxes             41,199    4.9

    Income before cumulative effect of
     change in accounting principle           75,803    9.1

    Cumulative effect of change in
     accounting principle, net                    58

    Net Income                               $75,745    9.1            16.8

    Earnings Per Share:

    Before cumulative effect of change in
    accounting principle:
    Basic                                      $1.18                   16.9
    Diluted                                    $1.15                   18.3

    After cumulative effect of change in
    accounting principle:
    Basic                                      $1.18                   16.9
    Diluted                                    $1.15                   18.3

    Shares:
    Basic                                     64,086
    Diluted                                   65,912



    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2003 (unaudited)
    (Amounts in thousands except per share amounts)


                                                       Including Loss
                                                       on Valuation of
                                                           SRG Note

                                                       52 Weeks
                                                         Ended     Percent
                                                        June 4,      of
                                                         2002       Sales
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue                  $819,097
    Franchised revenue                                   347,982
        Total system-wide Ruby Tuesday
         sales                                        $1,167,079

    Revenues:
       Company restaurant revenues                      $819,097     98.3
       Franchise income                                   14,084      1.7
          Total operating revenues                       833,181    100.0

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise                           220,556     26.9
           Payroll and related costs                     268,395     32.8
           Other restaurant operating
            costs                                        155,211     18.9
           Depreciation and amortization                  33,895      4.1
           Loss on valuation of SRG Note
            Receivable                                    28,856      3.5
       (as a percent of Total operating
        revenues)
           Selling, general and
            administrative                                44,824      5.4
           Equity in (earnings) of
            unconsolidated franchises                       (861)    (0.1)
    Total operating costs and expenses                   750,876

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                                82,305      9.9

       Interest expense (income), net                     (5,841)    (0.7)

    Pre-tax Profit                                        88,146     10.6

       Provision for income taxes                         29,870      3.6

    Income before cumulative effect of
     change in accounting principle                       58,276      7.0

    Cumulative effect of change in
     accounting principle, net                                58

    Net Income                                           $58,218      7.0

    Earnings Per Share:

    Before cumulative effect of change in
    accounting principle:
    Basic                                                  $0.91
    Diluted                                                $0.88

    After cumulative effect of change in
    accounting principle:
    Basic                                                  $0.91
    Diluted                                                $0.88

    Shares:
    Basic                                                 64,086
    Diluted                                               65,912




    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter
    of Fiscal Year 2003 (unaudited)
    (Amounts in thousands)

                                                   June 3,         June 4,
    CONDENSED BALANCE SHEETS                         2003            2002
    Assets
       Cash and Short-Term Investments             $8,662         $32,699
       Accounts and Notes Receivable               10,509          14,410
       Inventories                                 12,200          10,276
       Deferred Income Taxes                        3,155           4,248
       Income Tax Receivable                        2,485          16,311
       Prepaid Rent                                 2,136           2,012
       Assets Held for Disposal                     5,217           3,242
       Other Current Assets                         6,099           5,678

         Total Current Assets                      50,463          88,876

       Property and Equipment, Net                660,897         351,921
       Goodwill, Net                                7,845           7,845
       Notes Receivable, Net                       39,827          35,655
       Other Assets                                46,035          36,030

         Total Assets                            $805,067        $520,327

    Liabilities
       Current Liabilities                        $80,554         $90,723
       Long-Term Debt                             207,064           7,626
       Deferred Income Taxes                       32,627          20,966
       Other Deferred Liabilities                  70,294          66,606

         Total Liabilities                        390,539         185,921

    Shareholders' Equity                          414,528         334,406

         Total Liabilities and
           Shareholders' Equity                  $805,067        $520,327




                                  Schedule A
         Company-owned Same-store Sales Reconciliation and Comparison

                               Gross                   Net Same-store sales
                             same-store    Effect of        increase/

sales Sales (decrease) Fiscal Fiscal increase/ Incentives based on Quarter Year (decrease) & Discounts GAAP sales

    1             2002          2.0%         0.7%              2.7%
    2             2002          1.9%         0.2%              2.1%
    3             2002          2.5%         0.9%              3.4%
    4             2002          2.7%         0.4%              3.1%
    Total                       2.3%         0.5%              2.8%

    1             2003          1.1%         0.1%              1.2%
    2             2003         -0.7%         0.1%             -0.6%
    3             2003          1.0%        -1.4%             -0.4%
    4             2003          4.5%        -2.8%              1.7%
    Total                       1.5%        -1.0%              0.5%

    Franchise Partnership Same-store Sales Reconciliation and Comparison

                               Gross                   Net Same-store sales
                             same-store    Effect of        increase/

sales Sales (decrease) Fiscal Fiscal increase/ Incentives based on Quarter Year (decrease) & Discounts GAAP sales

    1             2002          2.8%         0.1%              2.9%
    2             2002         -1.0%         0.4%             -0.6%
    3             2002          1.0%         0.5%              1.5%
    4             2002          2.2%         0.3%              2.5%
    Total                       1.3%         0.4%              1.7%

    1             2003         -0.6%         0.2%             -0.4%
    2             2003         -1.2%        -0.1%             -1.3%
    3             2003         -1.7%        -0.2%             -1.9%
    4             2003          0.9%        -1.6%             -0.7%
    Total                      -0.6%        -0.5%             -1.1%

The Company has historically evaluated same-store sales performance based on gross sales, which does not include any reduction for the costs of coupons related to the Company's sales building programs. The Company believes this to be a meaningful measure of performance because it allows for more direct comparability of the Company's performance to its competitors due to the fact the Company has historically utilized sales building programs (the cost of which, under generally accepted accounting principles ("GAAP"), are netted out of sales) as opposed to advertising (the cost of which, under GAAP, is not charged directly against sales) as a means to generate customer trial and traffic.

Schedule B

Although the Company has from time-to-time issued guidance with respect to expected operating results, the Company does not, as a matter of course, publicly disclose or publish detailed forecasts or projections as to future financial results or financial position. However, in connection with its early adoption of FIN 46, the Company believes that it is necessary and appropriate to make an exception to its general policy and is providing the following summary projected statement of income for the first quarter of fiscal year 2004 and summary projected balance sheet as of the end of such quarter (collectively, the "Projections") to assist the Company's shareholders and the investment community in assessing the impact of the adoption of FIN 46 on our consolidated financial statements.

The Projections were not prepared in compliance with published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or accounting principles generally accepted in the United States of America. The Company does not intend the Projections to be a forecast of results of operations or financial condition, and they are not guarantees of future performance. The Projections are based upon a variety of estimates and assumptions and are subject to significant uncertainties and contingencies, many of which are beyond the Company's control. Consequently, there can be no assurance that the Projections will be realized.

The Company expects that there will be differences between its actual and projected results, and such differences may be material. The Projections are based on a variety of estimates and assumptions, some of which are described following the Projections, that involve judgments with respect to, among other things, restaurant openings, same-store sales growth and pre-tax margins. While the Company's management believes that these assumptions are reasonable, they may prove to be inaccurate because they are inherently subject to significant business, economic, competitive and other uncertainties, many of which are beyond the Company's control.

In light of the uncertainties inherent in projections generally and the matters described above, the Projections should not be regarded as, and are not, a representation by the Company or its management that the results reflected in the Projections will be achieved. The Company hereby cautions the readers of these Projections not to place undue reliance on them.

The Projections are being provided by the Company for the sole purpose of illustrating the impact of the early adoption of FIN 46 on the Company's consolidated financial statements. The Company does not intend, and is under no obligation, to issue updates or supplements or to otherwise revise the Projections.

The Projections should be read together with the Company's filings with the Securities and Exchange Commission, and, in particular, in conjunction with the risks and uncertainties relating to the Company's business described in those filings and the "Special Note Regarding Forward-Looking Information" included in the press release to which the Projections are attached.

    Estimates and assumptions used in preparation of the Projections include:

    * The opening of 12 Company-owned restaurants during the quarter.
    * Gross same-store sales growth of 2.0%.
    * No pre-tax margin improvement for Ruby Tuesday, Inc. when compared to
      the first quarter of fiscal 2003.


    Ruby Tuesday, Inc.
    Projected Consolidating Statement of Income (unaudited)
    First Quarter of Fiscal 2004
    (Amounts in thousands)
                                                                     Percent
                                          Ruby Tuesday, Inc.         of Sales
    Company restaurant revenues                     $245,500             98.2
    Franchise income                                   4,500              1.8
      Total operating revenues                       250,000            100.0

    Operating Costs and Expenses:
      (as a percent of Company restaurant
       revenues)
      Cost of merchandise                             63,400             25.8
      Payroll and related costs                       80,100             32.6
      Other                                           41,200             16.8
      Depreciation and amortization                   12,800              5.2
      (as a percent of Total operating
       revenues)
      Selling, general and administrative             15,600              6.2
      Equity in (earnings) of franchisees             (1,300)            (0.5)
      Minority interest                                   --               --
    Total operating costs and expenses               211,800             84.7

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                            38,200             15.3

      Interest expense, net                            1,400              0.6

    Pre-tax profit                                    36,800             14.7

      Provision for income taxes                      13,100              5.2

    Income before cumulative effect of
     change in accounting principle                   23,700              9.5

    Cumulative effect of change in
      accounting principle, net                           --               --

    Net (Loss)/Income                               $ 23,700



    Ruby Tuesday, Inc.
    Projected Consolidating Statement of Income (unaudited)
    First Quarter of Fiscal 2004
    (Amounts in thousands)
                                                   Franchise         Percent
                                                 Partnerships        of Sales
    Company restaurant revenues                     $94,900            100.0
    Franchise income                                     --               --
      Total operating revenues                       94,900            100.0

    Operating Costs and Expenses:
      (as a percent of Company restaurant
       revenues)
      Cost of merchandise                            24,200             25.5
      Payroll and related costs                      31,700             33.4
      Other                                          21,500             22.7
      Depreciation and amortization                   3,900              4.1
      (as a percent of Total operating
       revenues)
      Selling, general and administrative             5,700              6.0
      Equity in (earnings) of franchisees                --               --
      Minority interest                                  --               --
    Total operating costs and expenses               87,000             91.7

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                            7,900              8.3

      Interest expense, net                           4,500              4.7

    Pre-tax profit                                    3,400              3.6

      Provision for income taxes                         --               --

    Income before cumulative effect of
     change in accounting principle                   3,400              3.6

    Cumulative effect of change in
      accounting principle, net                          --               --

    Net (Loss)/Income                                $3,400



    Ruby Tuesday, Inc.
    Projected Consolidating Statement of Income (unaudited)
    First Quarter of Fiscal 2004
    (Amounts in thousands)
                                                       Consolidated
                                                           Ruby      Percent
                                         Eliminations  Tuesday, Inc. of Sales
    Company restaurant revenues                            $340,400      99.7
    Franchise income                         $(3,500)A        1,000       0.3
      Total operating revenues                (3,500)       341,400     100.0

    Operating Costs and Expenses:
      (as a percent of Company restaurant
       revenues)
      Cost of merchandise                                    87,600      25.7
      Payroll and related costs                             111,800      32.8
      Other                                   (3,500)A       59,200      17.4
      Depreciation and amortization               75 B       16,775       4.9
      (as a percent of Total operating
       revenues)
      Selling, general and administrative                    21,300       6.2
      Equity in (earnings) of franchisees      1,300 C           --        --
      Minority interest                        1,900 D        1,900       0.6
    Total operating costs and expenses          (225)       298,575      87.5

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                    (3,275)        42,825      12.5

      Interest expense, net                                   5,900       1.7

    Pre-tax profit                            (3,275)        36,925      10.8

      Provision for income taxes                  75         13,175       3.9

    Income before cumulative effect of
     change in accounting principle           (3,350)        23,750       7.0

    Cumulative effect of change in
      accounting principle, net               40,575 E       40,575

    Net (Loss)/Income                       $(43,925)      $(16,825)


    A - Elimination of royalty fees paid by the Franchise Partnerships to
        Ruby Tuesday

    B - Depreciation recorded in conjunction with the write-up of the assets
        of one Franchise Partnership resulting from a prior purchase
        price adjustment

    C - Elimination of Ruby Tuesday, Inc.'s share of the earnings of the 50%
        Franchise Partnerships

    D - Allocation of minority interest to the Franchise Partnerships

    E - Cumulative effect estimated to be $48,500 gross shown net of estimated
        deferred tax benefit of $7,925



Ruby Tuesday, Inc. Projected Condensed Consolidating Balance Sheet (unaudited) As of end of First Quarter Fiscal 2004 (amounts in thousands)

                                                                  Consolidated
                                      Ruby      Franchise               Ruby
                                     Tuesday,   Partner-              Tuesday,
                                       Inc.       ships  Eliminations    Inc.
    Assets
      Cash and short-term
       investments                     $5,600    $3,300                $8,900
      Account and notes receivable     13,600     2,400   $(2,000) A   14,000
      Inventories                      12,000     5,500                17,500
      Income Tax Receivable             6,600        --                 6,600
      Prepaid Rent                      2,900     1,600                 4,500
      Assets held for disposal          5,200        --                 5,200
      Other Current Assets              4,600     1,800                 6,400

         Total Current Assets          50,500    14,600    (2,000)     63,100

      Property and Equipment, Net     690,700   168,700     5,800  B  865,200
      Goodwill, Net                     7,800    38,900   (38,900) C    7,800
      Notes Receivable, Net            37,200        --   (35,300) D    1,900
      Other Assets                     49,100     7,300   (12,900) E   43,500

         Total Assets                 835,300   229,500   (83,300)    981,500

    Liabilities
      Current Portion of Long-Term
       Debt                               500    33,500    (1,800) F   32,200
      Other Current Liabilities        85,800    14,600      (200) G  100,200
      Long-Term Debt                  205,400   177,900   (41,000) H  342,300
      Deferred Income Taxes            41,100        --    (7,850) I   33,250
      Other Deferred Liabilities       59,500     4,900    (2,000) J   62,400

         Total Liabilities            392,300   230,900   (52,850)    570,350

      Minority interest                    --        --     7,900  K    7,900

    Shareholders' Equity              443,000    (1,400)  (38,350)    403,250

         Total Liabilities and
           Shareholders' Equity      $835,300  $229,500  $(83,300)   $981,500


    A - To eliminate the current portion of notes receivable and accrued
        interest due from the Franchise Partnerships

    B - To write-up the assets of one Franchise Partnership (net
        of depreciation) for a prior purchase price adjustment

    C - To eliminate the goodwill arising from the initial purchase of
        restaurants from Ruby Tuesday

    D - To eliminate the long-term portion of notes receivable from the
        Franchise Partnerships, net of the bad debt reserve

    E - To eliminate the balance of the investment in the Franchise
        Partnerships on Ruby Tuesday's books and the deferred
        development fees on the Franchise Partnerships' books

    F - To eliminate the current portion of notes payable from the Franchise
        Partnerships to Ruby Tuesday

    G - To eliminate interest payable to Ruby Tuesday on the Franchise
        Partnerships' notes

    H - To eliminate the long-term portion of notes payable to Ruby Tuesday

    I - To record deferred tax benefit of $7,925 in conjunction with
        cumulative effect of change in accounting principle, net of deferred
        tax expense of $75 anticipated to be incurred in first quarter fiscal
        2004

    J - To eliminate the deferred development fees received from the Franchise
        Partnerships

    K - To assign the Franchise Partnerships their share of minority interest

SOURCE Ruby Tuesday, Inc.