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Ruby Tuesday, Inc. Reports Fifth Consecutive Year Of Earnings Per Share Growth Of 20% Or Better

07/09/2001

MARYVILLE, Tenn., July 9 /PRNewswire/ -- Ruby Tuesday, Inc., (NYSE: RI) one of America's leading companies in the fast-growing casual dining segment of the restaurant industry, today reported results for its fourth quarter and year ended June 5, 2001. For the quarter, net income increased 21% and earnings per share increased 18% to $0.26 from $0.22 a year ago. For the year, net income increased 27% and earnings per share increased 26% to $0.91 from $0.72 in fiscal 2000 (fiscal 2000 amounts for both the fourth quarter and the year exclude the 15 cents per share impact recorded in the fourth quarter of fiscal 2000 in conjunction with the then planned sale of the American Cafe and Tia's Tex-Mex restaurants; this sale was completed in the second quarter of fiscal 2001). This marks the fifth consecutive year of earnings per share growth at or in excess of 20%. Fiscal 2001 earnings per share growth was largely attributable to same-store sales growth of 3.7% and 3.4% for the year and quarter, respectively, at Company-owned Ruby Tuesday(R) restaurants. Average unit volumes at Company-owned Ruby Tuesday restaurants continued outpacing same-store sales growth, rising 4.2% for the quarter and for the year. The Company's Board of Directors declared a semi-annual cash dividend of $.0225 per share, payable on August 6, 2001 to shareholders of record at the close of business on July 23, 2001.

Sandy Beall, the Company's Chairman and CEO, commented, "This marks our fifth consecutive year of consistent, predictable results. Much of our success revolves around recruiting, developing and retaining great talent. I am happy to say that our team turnover, at less than 110%, is at a record low. This is a tremendous accomplishment and one we are very proud of because in our business, everything starts with our teams. Our teams have been one of our core focus areas for several years now, and our investments in our teams continue to generate huge dividends."

"In addition to our never relenting focus on our teams, our focus on operational excellence has led to tremendous financial success, even during uncertain economic times", continued Beall. "This marks our second consecutive year of same-store sales growth in the three to four percent range, which we believe is remarkable considering that our growth strategy does not include a hefty media budget. Our earnings per share growth has been consistent, our margins continue expanding, our return on equity is among the highest in the industry, and we have a strong balance sheet. We are excited about our accomplishments and equally as excited with our direction, as we are positioned to take full advantage of the continuing growth potential of the casual dining segment, and in particular the bar and grill segment."

Outlook for Fiscal 2002

Based on current business trends, the Company's earnings per share growth goal for fiscal 2002 is approximately 20%, and the Company is comfortable with the current analyst consensus of earnings per share of $1.09 for fiscal 2002. The Company's goal for same-store sales growth for fiscal year 2002 is approximately 2.0%-3.0% and the Company anticipates that first quarter same- store sales will be in the 2.5% range as same-store sales are up 2.5%-3.0% thus far in fiscal 2002. Accordingly, the Company believes that first quarter 2002 earnings per share will be in the $0.24 to $0.25 range. Current plans call for the addition of 45-50 Company-owned units and 30-35 franchised units during fiscal 2002. In addition, the Company plans to refranchise 20 units to three new franchise partners and one to an existing partner during the second quarter of fiscal 2002.

    Fourth Quarter Highlights:

    * Earnings per share increased 18.2% to $0.26 from $0.22.
    * Net income increased 21.2% to $17,131,000 from $14,131,000.
    * Average unit volumes increased 4.2% and same-store sales increased 3.4%
      at Company-owned Ruby Tuesday restaurants.
    * System-wide Ruby Tuesday revenue increased 18.6% to $269,987,000 from
      $227,741,000.
    * 21 Company-owned Ruby Tuesday restaurants were opened and three were
      closed due to normal lease expirations.
    * Six franchise units were opened and ten were closed (nine of which were
      reacquired by the Company).
    * The Company purchased 1.0 million shares of its common stock during the
      quarter.

    Fiscal Year 2001 Highlights:

    * Earnings per share increased 26.4% to $0.91 from $0.72.
    * Net income increased 27.1% to $59,239,000 from $46,593,000.
    * System-wide Ruby Tuesday revenue increased 17.2% to $1,015,746,000 from
      $866,860,000.
    * Average unit volumes increased 4.2% and same-store sales increased 3.7%
      at Company-owned Ruby Tuesday restaurants.
    * Pre-tax profit margin increased 260 basis points to 11.7%.
    * 55 Company-owned Ruby Tuesday restaurants were opened and 17 were closed
      (six due to normal lease expirations, six of which were sold to a new
      franchise partner, two of which were leased to SRG, and three closed in
      Texas).
    * 30 franchise units were opened (six of which were former Company-owned
      Ruby Tuesday restaurants sold to a new domestic franchise partner) and
      13 were closed (nine of which were reacquired by the Company and four
      planned closings due to lease expirations and subleases).
    * The sale of the American Cafe and Tia's Tex-Mex restaurants was
      completed on November 20, 2000.

As of June 5, 2001, Ruby Tuesday, Inc. owned and operated 374 Ruby Tuesday restaurants located in 27 states. Franchised operations included 151 domestic units and 12 international units. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RI).

    For more information, contact:
    Price Cooper    Phone: 865-379-5700
    Director, Investor Relations and Planning

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 web-sites:

http://www.videonewswire.com/RUBY/070901

http://www.rubytuesday.com/company/investorrelations.htm

The call will be archived on both sites through the close of business on July 16, 2001.

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 and franchisees; changes in the availability of capital; and general economic conditions.

    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2001 (unaudited)
    (Amounts in thousands except per share amounts)

                                                    Excluding Estimated
                                                     Loss on Sale of
                                                American Cafe and Tia's
                                   13 Weeks           13 Weeks
                                    Ended               Ended
                                   June 5,  Percent    June 4, Percent Percent
                                    2001   of Sales     2000  of Sales  Change

    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby
     Tuesday revenue            $ 193,171            $ 168,028
    Franchised Ruby Tuesday
     revenue                       76,816               59,713
      Total system-wide Ruby
       Tuesday sales            $ 269,987            $ 227,741           18.6

    Revenues:
     Ruby Tuesday               $ 193,171    98.3    $ 168,028   84.3
     Other concepts                    --     0.0       28,468   14.3
      Company restaurant
       revenues                   193,171    98.3      196,496   98.6    (1.7)
     Franchise income               3,271     1.7        2,713    1.4
       Total operating revenues   196,442   100.0      199,209  100.0    (1.4)

    Operating Costs and Expenses:
    (as a percent of Company restaurant revenues)
      Cost of merchandise          53,697    27.8       52,578   26.8
      Payroll and related costs    61,517    31.8       62,786   32.0
      Other restaurant operating
       costs                       34,486    17.9       36,786   18.7
      Depreciation and
       amortization                 7,941     4.1       10,610    5.4
    (as a percent of Total operating revenues)
      Selling, general and
       administrative              13,768     7.0       14,511    7.3
    Total operating costs and
     expenses                     171,409              177,271

    Earnings before Interest and Taxes
    (EBIT)                         25,033    12.7       21,938   11.0    14.1

    Interest (income)/expense,
     net                           (1,650)   (0.8)        (107)  (0.1)

    Provision for income taxes      9,552     4.9        7,914    4.0

    Net Income                   $ 17,131     8.7     $ 14,131 *  7.1    21.2

    Earnings Per Share:
    Basic                        $   0.27             $   0.23           17.4
    Diluted                      $   0.26             $   0.22 *         18.2

    Shares:
    Basic                          64,014               61,721
    Diluted                        66,094               63,678

    * - Net income, including the impact of the estimated loss on the sale of
        American Cafe and Tia's, reported for the 13 and 52 weeks ended
        June 4, 2000 was $4,078 and $36,540, respectively.
        Diluted earnings per share for the same periods was $0.07 and $0.57,
        respectively.

    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter of Fiscal Year 2001 (unaudited)
    (Amounts in thousands except per share amounts)

                                               Excluding Estimated
                                                 Loss on Sale of
                                             American Cafe and Tia's
                                  52 Weeks            52 Weeks
                                    Ended               Ended
                                  June 5,   Percent    June 4, Percent Percent
                                   2001    of Sales     2000  of Sales Change

    System-Wide Ruby Tuesday Sales:
     Company-owned Ruby
      Tuesday revenue          $  727,200           $  680,393
     Franchised Ruby Tuesday
      revenue                     288,546              186,467
       Total system-wide Ruby
        Tuesday sales          $1,015,746           $  866,860          17.2

    Revenues:
     Ruby Tuesday              $  727,200    92.1   $  680,393   85.4
     Other concepts                49,978     6.3      108,847   13.6
      Company restaurant
       revenues                   777,178    98.4      789,240   99.0   (1.5)
     Franchise income              12,456     1.6        8,255    1.0
       Total operating revenues   789,634   100.0      797,495  100.0   (1.0)

    Operating Costs and Expenses:
    (as a percent of Company restaurant revenues)
      Cost of merchandise         213,064    27.4      214,136   27.1
      Payroll and related costs   248,078    31.9      251,463   31.9
      Other restaurant operating
       costs                      147,853    19.0      159,398   20.2
      Depreciation and
       amortization                34,380     4.4       41,855    5.3
    (as a percent of Total operating revenues)
      Selling, general and
       administrative              57,521     7.3       56,454    7.1
    Total operating costs and
     expenses                     700,896              723,306

    Earnings before Interest and Taxes
    (EBIT)                         88,738    11.2       74,189    9.3   19.6

    Interest (income)/expense,
     net                           (3,536)   (0.5)       1,415    0.2

    Provision for income taxes     33,035     4.2       26,181    3.3

    Net Income                 $   59,239     7.5   $   46,593 *  5.8   27.1

    Earnings Per Share:
    Basic                      $     0.94           $     0.75          25.3
    Diluted                    $     0.91           $     0.72 *        26.4

    Shares:
    Basic                          62,900               62,532
    Diluted                        65,088               64,576

    * - Net income, including the impact of the estimated loss on the sale of
        American Cafe and Tia's, reported for the 13 and 52 weeks ended
        June 4, 2000 was $4,078 and $36,540, respectively.
        Diluted earnings per share for the same periods was $0.07 and $0.57,
        respectively.


    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter
    of Fiscal Year 2001 (unaudited)
    (Amounts in thousands except per share amounts)

                                                       June 5,        June 4,
    CONDENSED BALANCE SHEETS                            2001           2000

    Assets
      Cash and Short-Term Investments                 $10,636        $10,154
      Accounts and Notes Receivable                     6,754          6,880
      Inventories                                       9,372          9,378
      Prepaid Income Taxes                                 64            312
      Assets Held for Disposal                         22,197         59,057
      Other Current Assets                             15,397          8,674

      Total Current Assets                             64,420         94,455

    Property and Equipment, Net                       290,135        281,865

    Costs in Excess of Net Assets Acquired              7,845          8,229
    Notes Receivable, Net                              56,881         23,126
    Deferred Income Taxes                                   0          5,355
    Other Assets                                       26,386         26,182

      Total Assets                                   $445,667       $439,212

    Liabilities
      Current Liabilities                             $88,433       $151,796
      Long-Term Debt                                   15,212            636
      Deferred Income                                   4,127             --
      Other Deferred Liabilities                       53,624         56,956

      Total Liabilities                               161,396        209,388

    Shareholders' Equity                              284,271        229,824


      Total Liabilities and
        Shareholders' Equity                         $445,667       $439,212


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SOURCE Ruby Tuesday, Inc.
Web site: http: //www.rubytuesday.com
CONTACT: Price Cooper, Director, Investor Relations and Planning of Ruby Tuesday, Inc., 865-379-5700