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Ruby Tuesday, Inc. Reports: * Fourth Quarter EPS Growth of 23%; * Plans to Refinance Synthetic Lease Facilities

07/08/2002

MARYVILLE, Tenn., July 8 /PRNewswire-FirstCall/ -- Ruby Tuesday, Inc. (NYSE: RI), one of America's leading companies in the bar and grill segment of casual dining, today reported results for its fourth quarter and year ended June 4, 2002. For the quarter, net income increased 24% and earnings per share increased 23% to $0.32 from $0.26 a year ago. During the quarter, same- store sales at Company-owned Ruby Tuesday(R) restaurants increased 2.7%. For the year, net income increased 28% and earnings per share increased 26% to $1.15, excluding a $17.5 million ($0.27 per share) non-recurring, after tax charge incurred in the third quarter associated with fully reserving the Company's note receivable from Specialty Restaurant Group ("SRG") issued to the Company in conjunction with the sale of the American Cafe and Tia's Tex- Mex restaurants. Same-store sales at Company-owned Ruby Tuesday(R) restaurants increased 2.3% for the year on top of being up 3.7% in the prior year. The Company's Board of Directors declared a semi-annual cash dividend of $0.0225 per share, payable on August 5, 2002 to shareholders of record at the close of business on July 22, 2002. Additionally, the Company announced it plans to refinance the Company's synthetic lease facilities with traditional bank debt through its existing credit group. The Company anticipates the transaction will be completed during its quarter ending September 3, 2002. As of June 4, 2002, the Company had utilized $209 million of synthetic lease financing for new restaurant development.

Sandy Beall, the Company's Chairman and CEO, commented, "We just completed our sixth consecutive year of consistent, predictable results. I am especially proud of this most recent year's results considering the lackluster state of the economy. We finished this year up 2.3% in same-store sales in a slowing economy with absolutely no media advertising and on top of being up 3.7% in the prior year. This supports the overall strength of the Ruby Tuesday brand as well as the broader bar and grill segment of casual dining."

Beall continued, "Our results are driven by our continuing commitment to our teams, our guests and our shareholders. We continue investing more in our teams in the form of increased staffing levels and our training programs. Increased staffing increases team satisfaction, reduces team turnover, improves the guest experience, and thus increases sales and profits. We believe that our intense focus on staffing will help us maintain the great momentum of the Ruby Tuesday brand. Additionally, we constantly evolve our menus and units as guests become more and more sophisticated every time they dine out. Part of maintaining a strong brand entails staying on the forefront of the consumer and that is just what we are doing at Ruby Tuesday. Nothing in and of itself is monumental change -- just constant evolution."

Outlook for Fiscal 2003

Taking into consideration the anticipated negative, aggregate impact of refinancing the synthetic leases with traditional bank debt (estimated to be approximately $0.05 per share for fiscal 2003 primarily resulting from increased depreciation), the Company's earnings per share growth goal for fiscal 2003 is anticipated to be approximately 18% (excluding the non- recurring charge recorded in fiscal 2002 to fully reserve the SRG note receivable). This earnings per share growth is based on same-store sales growth of 2.0 to 3.0% at Company-owned Ruby Tuesday restaurants. Current plans call for the addition of 50-55 Company-owned units and approximately 25 franchise units during fiscal 2003. Same-store sales are up 2.0% thus far in fiscal 2003 on top of being up 2.9% during the same period of the prior year. As the Company's June period represents the most challenging same-store sales comparison in the first quarter, the Company's goal for first quarter same-store sales growth is approximately 2.5%. The Company's goal for first quarter earnings per share is $0.31 after an estimated additional $750,000 of depreciation in the first quarter due to the replacement of its synthetic leases.

    Fourth Quarter Highlights:

    * Earnings per share increased 23.1% to $0.32 from $0.26.
    * Net income increased 24.0% to $21,248,000 from $17,131,000.
    * Pre-tax profit margins increased 130 basis points to 15.0% from 13.7%.
    * System-wide Ruby Tuesday revenue increased 15.3% to $309,203,000 from
      $268,098,000.
    * System-wide same-store sales increased 2.6%.  Company-owned same-store
      sales increased 2.7%, while domestic franchise same-store sales
      increased 2.2%.
    * Nine Company-owned Ruby Tuesday restaurants were opened and 3 were
      closed due to lease terminations.
    * Two franchise units were opened and 1 was closed.
    * The Company purchased 1.2 million shares of its common stock during the
      quarter.  5.8 million shares remain authorized for repurchase under the
      Company's ongoing share repurchase program.

    Year-to-date Highlights:

    * Earnings per share increased 26.4% to $1.15 from $0.91, excluding a
      $17.5 million ($0.27 per share) after tax charge recorded in conjunction
      with fully reserving the SRG note receivable.
    * Net income, excluding the same $17.5 million charge, increased 27.9% to
      $75,745,000 from $59,239,000.
    * Pre-tax profit margins, excluding the same $17.5 million charge,
      increased 220 basis points to 14.0% from 11.8%.
    * System-wide Ruby Tuesday revenue increased 15.7% to $1,167,079,000 from
      $1,008,775,000.
    * System-wide same-store sales increased 2.0%.  Company-owned same-store
      sales increased 2.3% and domestic franchise same-store sales increased
      1.3%.

As of June 4, 2002, Ruby Tuesday, Inc. owned and operated 397 Ruby Tuesday restaurants located in 25 states. Franchise operations included 183 domestic units and 16 international units. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RI).

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

The Company will host a conference call which will be a live web-cast this afternoon at 4:30 Eastern Time. The call will be available live at the following web-sites:

http://www.companyboardroom.com

http://www.rubytuesday.com

The call will be archived on both sites through the close of business on July 15, 2002.

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 2002 (unaudited)
    (Amounts in thousands except per share amounts)


                                  13 Weeks           13 Weeks
                                    Ended              Ended
                                   June 4,  Percent   June 5, Percent  Percent
                                    2002    of Sales   2001   of Sales  Change

    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday
     revenue                      $214,048          $191,282
    Franchised revenue              95,155            76,816
        Total system-wide Ruby
         Tuesday sales            $309,203          $268,098            15.3

    Revenues:
       Ruby Tuesday               $214,048   98.4   $191,282    98.3
       Other concepts                   --    0.0         --     0.0
          Company restaurant
           revenues                214,048   98.4    191,282    98.3    11.9
       Franchise income              3,428    1.6      3,271     1.7
          Total operating
           revenues                217,476  100.0    194,553   100.0    11.8

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise      57,776   27.0     53,697    28.1
           Payroll and related
            costs                   71,034   33.2     61,517    32.2
           Other                    37,930   17.7     34,244    17.9
           Depreciation and
            amortization             8,895    4.2      7,941     4.2
           Loss on SRG Note
            Receivable                  --    0.0         --     0.0
       (as a percent of Total
        operating revenues)
           Selling, general and
            administrative          10,995    5.1     12,013     6.2
           Equity in earnings of
            unconsolidated
            franchises                (508)  (0.2)       108     0.1
    Total operating costs and
     expenses                      186,122           169,520

    Earnings before Interest, Taxes
     and cumulative effect of change
     in accounting principle        31,354   14.4     25,033    12.9    25.3

       Interest income (net)         1,336    0.6      1,650     0.8

    Pre-tax Profit                  32,690   15.0     26,683    13.7

       Provision for income taxes   11,442    5.3      9,552     4.9

    Income before cumulative effect
     of change in accounting
     principle                      21,248    9.8     17,131     8.8

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

    Net Income                     $21,248    9.8    $17,131     8.8    24.0

    Earnings Per Share:

    Before cumulative effect of
     change in accounting principle:
    Basic                            $0.33             $0.27            22.2
    Diluted                          $0.32             $0.26            23.1

    After cumulative effect of
     change in accounting principle:
    Basic                            $0.33             $0.27            22.2
    Diluted                          $0.32             $0.26            23.1

    Shares:
    Basic                           64,983            64,014
    Diluted                         66,754            66,094


                                       Including Loss      Excluding Loss
                                      on Valuation of     on Valuation of
                                          SRG Note            SRG Note

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

    Revenues:
       Ruby Tuesday               $819,097   98.3   $819,097    98.3
       Other concepts                   --    0.0         --     0.0
          Company restaurant
          revenues                 819,097   98.3    819,097    98.3
       Franchise income             14,084    1.7     14,084     1.7
          Total operating
           revenues                833,181  100.0    833,181   100.0

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise     220,556   26.9    220,556    26.9
           Payroll and related
            costs                  268,395   32.8    268,395    32.8
           Other                   155,211   18.9    155,211    18.9
           Depreciation and
            amortization            33,895    4.1     33,895     4.1
           Loss on SRG Note
            Receivable              28,856    3.5         --     0.0
           (as a percent of Total
           operating revenues)
           Selling, general and
            administrative          44,824    5.4     44,824     5.4
           Equity in earnings of
            unconsolidated
            franchises                (861)  (0.1)      (861)   (0.1)
    Total operating costs and
     expenses                      750,876           722,020

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle          82,305    9.9    111,161    13.3

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

    Pre-tax Profit                  88,146   10.6    117,002    14.0

       Provision for income taxes   29,870    3.6     41,199     4.9

    Income before cumulative effect of
     change in accounting
     principle                      58,276    7.0     75,803     9.1

    Cumulative effect of change in
     accounting principle, net          58                58

    Net Income                     $58,218    7.0    $75,745     9.1

    Earnings Per Share:

    Before cumulative effect of change
     in accounting principle:
    Basic                            $0.91             $1.18
    Diluted                          $0.88             $1.15

    After cumulative effect of change in
     accounting principle:
    Basic                            $0.91             $1.18
    Diluted                          $0.88             $1.15

    Shares:
    Basic                           64,086            64,086
    Diluted                         65,912            65,912


                                                                Excluding Loss
                                                               on Valuation of
                                                                    SRG Note

                                            52 Weeks
                                              Ended
                                             June 5,     Percent     Percent
                                              2001       of Sales     Change
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday revenue      $720,229
    Franchised revenue                       288,546
        Total system-wide
         Ruby Tuesday sales               $1,008,775                   15.7

    Revenues:
       Ruby Tuesday                         $720,229      92.0
       Other concepts                         49,923       6.4
          Company restaurant revenues        770,152      98.4          6.4
       Franchise income                       12,456       1.6
          Total operating revenues           782,608     100.0          6.5

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise               213,064      27.7
           Payroll and related costs         248,078      32.2
           Other                             148,187      19.2
           Depreciation and amortization      34,380       4.5
           Loss on SRG Note Receivable            --       0.0
           (as a percent of Total operating
           revenues)
           Selling, general and
            administrative                    50,284       6.4
           Equity in earnings of
            unconsolidated franchises           (123)     (0.0)
    Total operating costs and expenses       693,870

    Earnings before Interest, Taxes and
      cumulative effect of change in
      accounting principle                    88,738      11.3         25.3

       Interest income (net)                   3,536       0.5

    Pre-tax Profit                            92,274      11.8

       Provision for income taxes             33,035       4.2

    Income before cumulative effect of
     change in accounting principle           59,239       7.6

    Cumulative effect of change in
     accounting principle, net                    --

    Net Income                               $59,239       7.6         27.9

    Earnings Per Share:

    Before cumulative effect of change in
     accounting principle:
    Basic                                      $0.94                   25.5
    Diluted                                    $0.91                   26.4

    After cumulative effect of change in
     accounting principle:
    Basic                                      $0.94                   25.5
    Diluted                                    $0.91                   26.4

    Shares:
    Basic                                     62,900
    Diluted                                   65,088


    RUBY TUESDAY, INC.

    Financial Results For the Fourth Quarter
    of Fiscal Year 2002 (unaudited)
    (Amounts in thousands except per share amounts)

                                                   June 4,         June 5,
    CONDENSED BALANCE SHEETS                         2002            2001
    Assets
       Cash and Short-Term Investments            $32,699         $10,636
       Accounts and Notes Receivable               15,671           6,754
       Inventories                                 10,276           9,372
       Deferred Income Taxes                        4,248              64
       Income Tax Receivable                       15,050           7,671
       Assets Held for Disposal                     3,242          22,197
       Other Current Assets                         7,690           7,726

         Total Current Assets                      88,876          64,420

       Property and Equipment, Net                351,921         290,135
       Goodwill, Net                                7,845           7,845
       Notes Receivable, Net                       35,655          56,881
       Other Assets                                36,030          26,386

         Total Assets                            $520,327        $445,667

    Liabilities
       Current Liabilities                        $93,283         $88,433
       Long-Term Debt                               7,626          15,212
       Deferred Income Taxes                       24,255           4,127
       Other Deferred Liabilities                  60,757          53,624

         Total Liabilities                        185,921         161,396

    Shareholders' Equity                          334,406         284,271

         Total Liabilities and
           Shareholders' Equity                  $520,327        $445,667


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SOURCE Ruby Tuesday, Inc.
Web site: http: //www.companyboardroom.com http://www.rubytuesday.com
CONTACT: Price Cooper, Vice President, Investor Relations and Planning of Ruby Tuesday, Inc., +1-865-379-5700