Ruby Tuesday, Inc. Reports: First Quarter Earnings Per Share Up 25%; Financing Set for Sale of American Cafe and Tia's Tex-Mex Restaurants
MARYVILLE, Tenn., Oct. 5 /PRNewswire/ -- Ruby Tuesday, Inc. (NYSE: RI), one of America's leading companies in the fast-growing casual dining segment, today reported first quarter earnings per share of $0.20, up 25% from $0.16 a year ago. This marks the tenth consecutive quarter and the sixteenth out of eighteen quarters of earnings per share growth in excess of 20%. Net income of $12.9 million was also up 25% from $10.3 million a year ago. Pre-tax margin of 9.8% was 150 basis points higher than the prior year. Company-owned Ruby Tuesday(R) restaurants average unit volumes increased 4.5% and same-store sales increased 2.1% for the quarter. Additionally, the Company announced the signing of a definitive agreement with Specialty Restaurant Group, LLC, ("SRG") led by James CarMichael, for SRG's purchase of the Company's American Cafe(R) and Tia's(R) Tex-Mex restaurants and that SRG has signed a commitment letter with a third party lender to provide financing for this transaction.
EXECUTION ON CORE STRATEGIES RESULTS IN ANOTHER QUARTER
OF EXCEPTIONAL PERFORMANCE AND RESULTS
"We are extremely excited about the positive trend our Company continues to demonstrate", said Sandy Beall, Chairman and CEO. "After completing a record year in fiscal 2000, our teams remain focused and maintain the tenacity needed to continue delivering outstanding results. Average unit volumes continue increasing due, in large part, to the strong performance of our new restaurants which are opening at and maintaining higher volumes. Our same- store sales grew throughout the quarter. After starting off soft in June, same-store sales grew to 3.2% in August, which put us up 2.1% for the quarter, in addition to the 3.6% increase in the same quarter of the prior year. This positive trend has continued into our second quarter and we anticipate same- store sales for our September period, which ends this weekend, will be over 5.0%."
"Our business is all about people; our teams, our guests and our shareholders", continued Beall. "Generating exceptional results begins with taking care of our teams who will in turn take care of our guests, resulting in increased value for our shareholders. We strive to develop the strongest culture in the business and to out execute our competition. We focus on quality staffing, controlling team turnover and increasing employee satisfaction."
"We realize that once the right teams are in place, it's the customers that drive our business. Our commitment to consistently delivering "WOW" food and "WOW" service to each and every guest has contributed to our ability to maintain high customer satisfaction scores and develop a strong national brand in the casual dining industry."
"We continue generating strong returns for our shareholders as we continue meeting, and generally exceeding, our high performance goals. Our business model is very solid and allows us to maximize growth while minimizing risk. Our long-term plans center around goals we believe will create the most long- term shareholder value and we eagerly take on the challenge our five year goals present."
DIVESTITURE OF AMERICAN CAFE AND TIA'S TEX-MEX RESTAURANTS UPDATE
Ruby Tuesday, Inc. has signed a definitive agreement with SRG, led by James CarMichael, providing for the sale of all of the Company's American Cafe and Tia's Tex-Mex restaurants. Mr. CarMichael is the current President and Partner of the American Cafe and Tia's Tex-Mex concepts. The transaction, expected to close by the end of the Company's second quarter, is valued at approximately $60 million. SRG has entered into an arrangement with a third party lender to provide for $30 million of financing relating to the transaction, with the remaining estimated $30 million to be financed by the Company. After the closing of the transaction, the restaurants will be operated under their current brand names and the current team members will remain in place. "I am extremely excited about this opportunity", Mr. CarMichael said. "The two concepts are financially sound and have great team members." Mr. Beall noted, "since first announcing the planned sale, James has been able to focus solely on these concepts and has done an excellent job improving operations at both. American Cafe and Tia's completed the first quarter with positive same-store sales and the teams continue getting stronger. The sale will permit the newly created entity, SRG, to take full advantage of the growth opportunity available to these two concepts while allowing the Company to focus completely on its Ruby Tuesday brand which has a tremendous amount of growth opportunity available."
OUTLOOK FOR THE REMAINDER OF FISCAL 2001
Based on current business trends, the Company is comfortable with its previously stated goal of 20-25% earnings per share growth for fiscal 2001 (excluding the $0.15 per share charge recorded in fiscal 2000 in conjunction with the planned sale of American Cafe and Tia's). The Company believes the second quarter same-store sales growth to be in the range of 2.5-3.0% and is comfortable with the current consensus analyst estimate of second quarter earnings per share of $0.16. The Company currently projects 2.0% same-store sales growth for its third and fourth quarters of fiscal 2001 as it will be overlapping same-store sales growth of 4.0% and 4.8%, respectively, in the third and fourth quarters of the prior year.
FIRST QUARTER HIGHLIGHTS: EARNINGS PER SHARE UP 25.0% * Earnings per share increased 25.0% to $0.20 from $0.16. The Company has successfully grown earnings per share at or in excess of 20% in each of the last ten quarters as well as for the last four years. * Net income increased 25.1% to $12,889,000 from $10,300,000. * Pre-tax profit margin increased 150 basis points to 9.8% from 8.3%. * Average unit volumes increased 4.5% and same-store sales increased 2.1% for Company-owned Ruby Tuesday restaurants in addition to being up 3.6% in the same quarter of the prior year. System-wide same-store sales for Company-owned and domestic franchise partner Ruby Tuesday restaurants increased 1.5%. * System-wide sales increased 14.9% to $268,075,000 from $233,230,000. * Revenue increased 5.0% to $205,010,000 from $195,285,000 despite selling 42 units to franchise partners during the third and fourth quarters of the prior fiscal year. * Company-owned unit openings totaled 12 Ruby Tuesday restaurants and two Tia's Tex-Mex Restaurants. * Company-owned unit closings included two Ruby Tuesday restaurants. * Six franchise units were opened and one was closed.
As of September 3, 2000, the Company owned and operated 414 restaurants, including 346 Ruby Tuesday, 41 American Cafe, and 27 Tia's Tex-Mex Restaurants, located in 37 states. Franchised operations included 141 domestic units and 10 international units. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RI).
For more information, contact: Phone: 865-379-5700 Russell Mothershed Price Cooper Sr. Vice President and Director, Investor Chief Financial Officer Relations and Planning 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 concepts; 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 First Quarter of Fiscal Year 2001 (unaudited) (Amounts in thousands except per share amounts) 13 Weeks 13 Weeks Ended Ended September 3, Percent September 5, Percent Percent 2000 of Sales 1999 of Sales Change System-Wide Sales: Company-owned revenue $ 202,223 $ 193,589 Franchised revenue 65,852 39,641 Total system-wide sales $ 268,075 $ 233,230 14.9 Revenues: Ruby Tuesday $ 174,613 85.2 $ 167,646 85.8 Other concepts 27,610 13.5 25,943 13.3 Company restaurant revenues 202,223 98.6 193,589 99.1 4.5 Franchise income 2,787 1.4 1,696 0.9 Total operating revenues 205,010 100.0 195,285 100.0 5.0
Operating Costs and Expenses: (as a percent of Company
restaurant revenues) Cost of merchandise 54,777 27.1 52,992 27.4 Payroll and related costs 65,123 32.2 61,616 31.8 Other 40,428 20.0 40,385 20.9 Depreciation and amortization 9,691 4.8 10,361 5.4 (as a percent of Total operating revenues) Selling, general and administrative 15,277 7.5 13,350 6.8 Total operating costs and expenses 185,296 178,704 Earnings before Interest and Taxes (EBIT) 19,714 9.6 16,581 8.5 18.9 Interest expense (net) (362) (0.2) 420 0.2 Provision for income taxes 7,187 3.5 5,861 3.0 Net Income $ 12,889 6.3 $ 10,300 5.3 25.1 Earnings Per Share: Basic $ 0.21 $ 0.16 31.3 Diluted $ 0.20 $ 0.16 25.0 Shares: Basic 61,907 63,962 Diluted 64,258 66,280 RUBY TUESDAY, INC.
Financial Results For the First Quarter of Fiscal Year 2001 (unaudited)
(Amounts in thousands except per share amounts)
September 3, June 4, CONDENSED BALANCE SHEETS 2000 2000 Assets Cash and Short-Term Investments $ 11,871 $ 10,154 Accounts and Notes Receivable 8,161 6,880 Inventories 9,488 9,378 Prepaid Income Taxes 263 312 Assets Held for Disposal 63,729 59,057 Other Current Assets 8,242 8,674 Total Current Assets 101,754 94,455 Property and Equipment, Net 286,729 281,865 Costs in Excess of Net Assets Acquired 8,133 8,229 Notes Receivable, Net 22,966 23,126 Deferred Income Taxes 3,243 5,355 Other Assets 27,590 26,182 Total Assets $450,415 $439,212 Liabilities Current Liabilities $83,025 $151,796 Long-Term Debt 68,601 636 Other Deferred Liabilities 58,689 56,956 Total Liabilities 210,315 209,388 Shareholders' Equity 240,100 229,824 Total Liabilities and Shareholders' Equity $450,415 $439,212
SOURCE Ruby Tuesday, Inc.
Web site: http: //www.ruby-tuesday.com
CONTACT: Russell Mothershed, Sr. Vice President and Chief Financial Officer, or Price Cooper, Director, Investor Relations and Planning, of Ruby Tuesday, Inc., 865-379-5700