Ruby Tuesday, Inc. Reports Fourth Quarter and Annual Fiscal 2010 Results
MARYVILLE, Tenn., Jul 22, 2010 (BUSINESS WIRE) --
Ruby Tuesday, Inc. today reported diluted earnings per share of $0.33 on net income of $21.0 million for the Company's fourth quarter of fiscal 2010, which ended on June 1, 2010. This compares to diluted earnings per share of $0.28 on net income of $14.4 million for the fourth quarter of the prior fiscal year. The fourth quarter fiscal 2010 results represent a 45% improvement in net income over the prior year quarter.
Same-restaurant sales for the fourth quarter increased 0.3% at Company-owned Ruby Tuesday restaurants and decreased by 0.5% for domestic franchised restaurants. The gap between franchise and Company-owned same-restaurant sales narrowed as the franchisees participated in virtually all promotional incentive programs during the quarter.
For the fiscal year ended June 1, 2010, the Company reported diluted earnings per share of $0.73 on net income of $45.3 million as compared to a loss per share of $0.35 on a net loss of $17.9 million for fiscal 2009. The fiscal 2009 loss includes after-tax charges for restaurant closures and impairments and the impairment of goodwill that totaled $0.92 per share, or $47.2 million. Excluding the impact of these 2009 charges, the fiscal year 2010 results represent a 55% improvement in net income over the prior year.
Sandy Beall, Founder and CEO, commented on the fiscal year results, saying, "Fiscal 2010 presented a number of economic challenges. I am very proud of the way our team members responded to these challenges and enabled us to create positive momentum throughout our business. We have remained focused on our mission to be the best in the bar and grill segment by delivering a high quality casual dining experience with compelling value to every guest."
Our key accomplishments for the year included:
"We made solid progress on the corporate strategies we outlined at the beginning of the year. Our first goal was to increase same-restaurant sales and get guests in seats. We recognized sequential quarterly improvement in our same-restaurant sales throughout the year, on both a one and two-year basis, including positive fourth quarter same-restaurant sales of 0.3%, our best same-restaurant sales results in the last 16 quarters. Additionally, on a traffic basis, we outperformed the Knapp-Track industry benchmark on both a one and two-year basis.
The focus on our second goal, maximizing our cash flow and reducing debt, resulted in an improved balance sheet and leverage ratios. Our book debt to EBITDA ratio of 2.1 at the end of the fourth quarter represents a sizeable improvement from the prior-year ratio of 3.6. We continue to focus on paying down debt with our excess cash flow.
Our third goal was to further strengthen and differentiate our brand through quality and remain true to our core operating strategies: Uncompromising Freshness and Quality of our food; service with Gracious Hospitality; a Fresh New Look for our restaurants; and Compelling Value. We continue to focus on "Game Changers," which are innovative product offerings that drive brand enhancement and increased sales. The momentum created by our Tuesday Steak and Lobster dinner and four-course Sunday brunch Game Changers is very positive, and we look forward to our upcoming new offerings which we believe will drive increased trial and momentum for our brand. These Game Changers are a critical component of our strategy to drive increased average restaurant volumes and EBITDA levels over the next three years."
Other highlights for the 13-week fourth quarter included:
Fiscal Year 2010 Highlights
Mr. Beall said, "We feel very good about our business as we head into fiscal 2011. The improvements in our sales and balance sheet have allowed us to begin focusing on longer-term strategies to further strengthen and grow the business and to create additional shareholder value."
Fiscal Year 2011 Guidance
Regarding the fiscal 2011 outlook, Mr. Beall added, "We continue to feel good about our business model, our marketing and menu programs, and our ability to control costs through leveraging our technology platform. While the current volatile economic environment makes guiding future sales trends and earnings per share more difficult, we believe our guidance outlined above is reasonable based on the uncertainty in the economy."
In closing, Mr. Beall said, "It has been a difficult two years and although the economy is still vulnerable, we have accomplished a lot and enter fiscal 2011 with the best momentum we have had in several years. We believe our repositioning efforts and investments in quality menu offerings, combined with targeted and effective marketing, are driving improved results, and we are excited about the strategies we have in place to rebuild shareholder value going forward."
A FRESH NEW RUBY TUESDAY
Ruby Tuesday, Inc. has Company-owned and/or franchise Ruby Tuesday brand restaurants in 46 states, the District of Columbia, Guam, and 14 foreign countries. As of June 1, 2010, the Company owned and operated 656 Ruby Tuesday restaurants, while domestic and international franchisees (including Hawaii and Guam) operated 165 and 58 restaurants, respectively. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RT).
The Company will host a conference call, which will be a live web-cast, this afternoon at 4:30 p.m. Eastern Time. The call will be available live at the following websites:
Special Note Regarding Forward-Looking Information
This press release contains various forward-looking statements, which represent our expectations or beliefs concerning future events, including one or more of the following:future financial performance and restaurant growth (both Company-owned and franchised), future capital expenditures, future borrowings and repayments of debt, availability of financing on terms attractive to the Company, payment of dividends, stock repurchases, and restaurant and franchise acquisitions and refranchises.We caution the reader that a number of important factors and uncertainties could, individually or in the aggregate, cause our actual results to differ materially from those included in the forward-looking statements (such statements include, but are not limited to, statements relating to cost savings that we estimate may result from any programs we implement, our estimates of future capital spending and free cash flow, and our targets for annual growth in same-restaurant sales and average annual sales per restaurant), including, without limitation, the following: general economic conditions; changes in promotional, couponing and advertising strategies; changes in our guests' disposable income; consumer spending trends and habits; increased competition in the restaurant market; laws and regulations affecting labor and employee benefit costs, including further potential increases in state and federally mandated minimum wages; guests' acceptance of changes in menu items; guests' acceptance of our development prototypes and remodeled restaurants; mall-traffic trends; changes in the availability and cost of capital; weather conditions in the regions in which Company-owned and franchised restaurants are operated; costs and availability of food and beverage inventory; our ability to attract qualified managers, franchisees and team members; impact of adoption of new accounting standards; impact of food-borne illnesses resulting from an outbreak at either Ruby Tuesday or other restaurant concepts; effects of actual or threatened future terrorist attacks in the United States; and significant fluctuations in energy prices.
|RUBY TUESDAY, INC.|
|Financial Results For the Fourth Quarter of Fiscal Year 2010|
|(Amounts in thousands except per share amounts)|
|Restaurant sales and operating revenue||$||311,219||99.3||$||315,077||99.3||$||1,188,043||99.4||$||1,239,104||99.2|
|Operating Costs and Expenses:|
|(as a percent of Restaurant sales and operating revenue)|
|Cost of merchandise||88,464||28.4||93,053||29.5||344,462||29.0||349,362||28.2|
|Payroll and related costs||100,801||32.4||101,900||32.3||396,877||33.4||421,023||34.0|
|Other restaurant operating costs||60,580||19.5||60,691||19.3||240,947||20.3||256,063||20.7|
|Depreciation and amortization||15,300||4.9||17,592||5.6||63,767||5.4||74,973||6.1|
|(as a percent of Total revenue)|
|Selling, general and administrative, net||17,432||5.6||14,821||4.7||70,526||5.9||82,167||6.6|
|Closures and impairments||928||0.3||1,565||0.5||3,776||0.3||54,951||4.4|
|Equity in (earnings)/losses of unconsolidated franchises||(62||)||0.0||(462||)||(0.1||)||328||0.0||(14||)||0.0|
|Total operating costs and expenses||283,443||289,160||1,120,683||1,257,482|
|Earnings/(Loss) before Interest and Taxes||30,012||9.6||28,095||8.9||6.8||74,113||6.2||(8,926||)||(0.7||)||930.3|
|Interest expense, net||2,788||0.9||6,470||2.0||16,355||1.4||33,940||2.7|
|Provision/(Benefit) for income taxes||6,254||2.0||7,179||2.3||12,414||1.0||(24,948||)||(2.0||)|
|Earnings/(Loss) Per Share:|
|RUBY TUESDAY, INC.|
|Financial Results For the Fourth Quarter|
|of Fiscal Year 2010|
|(Amounts in thousands)|
|June 1,||June 2,|
|CONDENSED BALANCE SHEETS||2010||2009|
|Cash and Short-Term Investments||$9,569||$9,760|
|Accounts and Notes Receivable||9,746||8,095|
|Income Tax Receivable||8,632|
|Deferred Income Taxes||13,794||15,918|
|Assets Held for Sale||3,234||16,120|
|Prepaid Rent and Other Expenses||11,154||13,423|
|Total Current Assets||76,310||92,973|
|Property and Equipment, Net||943,486||985,099|
|Notes Receivable, Net||269||713|
Current Portion of Long Term Debt, including Capital Leases
|Income Tax Payable||1,049|
|Other Current Liabilities||100,956||97,158|
|Long-Term Debt, including Capital Leases||276,490||476,566|
|Deferred Income Taxes||40,010||20,706|
|Deferred Escalating Minimum Rents||42,305||41,010|
|Other Deferred Liabilities||52,343||55,549|
Total Liabilities and Shareholders' Equity
SOURCE: Ruby Tuesday, Inc.
Ruby Tuesday, Inc.
Greg Ashley, 865-379-5700