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Ruby Tuesday, Inc. Reports Second Quarter Earnings Per Share Growth of 35%

01/10/2002

MARYVILLE, Tenn., Jan. 10 /PRNewswire/ -- Ruby Tuesday, Inc. (NYSE: RI), one of America's leading companies in the bar and grill segment of casual dining, today reported second quarter earnings per share of $0.23, up 35% from $0.17 a year ago. Net income of $15.1 million for the quarter ended December 4, 2001 was up 37% from $11.0 million a year ago. As previously reported, same-store sales at Company-owned Ruby Tuesday(R) restaurants increased 1.9% for the quarter. System-wide same-store sales increased 1.2%, as same-store sales decreased 1.0% at domestic franchise Ruby Tuesday restaurants primarily as a result of the concentration of franchised units in Florida. The Company also announced it completed the sales of 19 units in Indiana, Missouri, Arkansas and Illinois to three new domestic franchise partners on December 5, 2001. In addition, the Board of Directors declared a semi-annual cash dividend of $0.0225 per share, payable on February 8, 2002 to shareholders of record at the close of business on January 25, 2002.

Sandy Beall, the Company's Chairman and CEO, commented, "I am very pleased with our second quarter results and how our teams pulled together after the tragic events of September 11th. Not only did our team members make monetary contributions to the relief efforts, they also displayed tremendous tenacity to overcome the effects the events had on our business. After starting the first four weeks of the second quarter down 0.3% in same-store sales, our teams stayed focused and battled back and we ended the quarter up 1.9% in same-store sales. This was accomplished with no media advertising."

Beall continued, "While our teams were focusing on driving sales, we continued to support them by investing more money in labor through increasing the number of managers in each unit and continuing our focus on being fully staffed at each and every restaurant. I believe any slowdown presents an opportunity to further distance yourself from the competition provided you are willing to make the necessary investments, and we are doing just that. The investments we have made and continue making will allow us to continue to be a dominant player in the bar and grill segment of casual dining, which we believe is the most attractive segment of the industry and offers the greatest long-term growth potential due to multiple demographic factors and relatively limited chain domination as compared to other segments of the industry."

Outlook for Remainder of Fiscal 2002

Third quarter same-store sales at Company-owned Ruby Tuesday restaurants increased 5.3% through December 31, 2001 and are up 3.9% through January 8th after the effect of the snow in the first week of 2002. The Company reiterates its goal of flat to up 1.0% same-store sales for the third quarter as prior year third quarter same-store sales increased 6.5%, the largest increase ever. The Company's goal for fourth quarter same-store sales growth is approximately 2.0%. Based on this, the Company is comfortable with the current consensus analysts estimate of $0.31 per share for each of the third and fourth quarters, and thus 22% earnings per share growth for the year.

    Second Quarter Highlights:
    * Earnings per share increased 35.3% to $0.23 from $0.17.
    * Net income increased 37.3% to $15,082,000 from $10,982,000.
    * System-wide Ruby Tuesday revenue increased 15.3% to $272,810,000 from
      $236,512,000.
    * Company-owned same-store sales increased 1.9%.  System-wide same-store
      sales increased 1.2%.
    * 18 Company-owned Ruby Tuesday restaurants were opened and 2 were closed.
    * Nine franchise units were opened, one unit was closed, and three units
      in the Boston market were sold to the Company.
    * The Company purchased approximately 111,000 shares of its common stock
      during the quarter.  The Company has 7.1 million shares remaining
      authorized for repurchase under its ongoing share repurchase program.

    Year-to-date Highlights:
    * Earnings per share increased 32.4% to $0.49 from $0.37.
    * Net income increased 33.7% to $31,923,000 from $23,871,000.
    * System-wide Ruby Tuesday revenue increased 16.1% to $552,149,000 from
      $475,431,000.
    * Company-owned same-store sales increased 2.0%.  System-wide same-store
      sales increased 1.7%.
    * Pre-tax profit margin increased 300 basis points to 12.3% from 9.3%.
    * 32 Company-owned Ruby Tuesday restaurants opened and six closed,
      including one sold to an existing franchise partner.
    * 17 franchise units were opened, two were closed, and three units in the
      Boston market were sold to the Company.

As of December 4, 2001, Ruby Tuesday, Inc. owned and operated 400 Ruby Tuesday restaurants located in 26 states. Franchise operations included 161 domestic units and 14 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 2:00 Eastern Time. The call will be available live at the following web-sites:

http://www.videonewswire.com/event.asp?id=2535

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

The call will be archived on both sites through the close of business on January 17, 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 Second Quarter of Fiscal Year 2002 (unaudited)
    (Amounts in thousands except per share amounts)



                                     13 Weeks         13 Weeks
                                      Ended            Ended
                                     December 4,     December 3,
                                             Percent          Percent  Percent
                                       2001  of Sales   2000  of Sales Change
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday
     revenue                         $195,729         $170,429
    Franchised revenue                 77,081           66,083
        Total system-wide sales      $272,810         $236,512           15.3

    Revenues:
       Ruby Tuesday                  $195,729   98.4  $170,429   87.1
       Other concepts                       0    0.0    22,339   11.4
          Company restaurant
           revenues                   195,729   98.4   192,768   98.5     1.5
       Franchise income                 3,256    1.6     2,838    1.5
          Total operating revenues    198,985  100.0   195,606  100.0     1.7

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise         52,511   26.8    52,984   27.5
           Payroll and related
            costs                      65,040   33.2    63,320   32.8
           Other                       39,769   20.3    39,959   20.7
           Depreciation and
            amortization                8,491    4.3     9,248    4.8
       (as a percent of Total
        operating revenues)
           Selling, general and
            administrative             11,249    5.7    13,053    6.7
    Total operating costs and
     expenses                         177,060          178,564

    Earnings before Interest, Taxes
     and cumulative effect of change in
      accounting principle             21,925   11.0    17,042    8.7    28.7

       Interest income, net             1,460    0.7        64    0.0

    Pre-tax Profit                     23,385   11.8    17,106    8.7

       Provision for income taxes       8,303    4.2     6,124    3.1

    Income before cumulative effect
     of change in accounting
      principle                        15,082    7.6    10,982    5.6

    Cumulative effect of change in
     accounting principle, net             -     0.0         -    0.0

    Net Income                       $15,082     7.6   $10,982    5.6    37.3

    Earnings Per Share:

    Before cumulative effect of
     change in accounting principle:
    Basic                              $0.23            $0.17           35.3
    Diluted                            $0.23            $0.17           35.3

    After cumulative effect of
     change in accounting principle:
    Basic                              $0.23            $0.17           35.3
    Diluted                            $0.23            $0.17           35.3

    Shares:
    Basic                             63,652           62,291
    Diluted                           65,360           64,483



                                   26 Weeks         26 Weeks
                                    Ended            Ended
                                   December 4,     December 3,
                                            Percent           Percent  Percent
                                     2001   of Sales  2000   of Sales   Change
    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby Tuesday
     revenue                       $395,421         $343,496
    Franchised revenue              156,728          131,935
        Total system-wide sales    $552,149         $475,431             16.1

    Revenues:
       Ruby Tuesday                $395,421   98.4  $343,496   86.1
       Other concepts                     0    0.0    49,923   12.5
          Company restaurant
           revenues                 395,421   98.4   393,419   98.6       0.5
       Franchise income               6,548    1.6     5,625    1.4
          Total operating revenues  401,969  100.0   399,044  100.0       0.7

    Operating Costs and Expenses:
       (as a percent of Company
        restaurant revenues)
           Cost of merchandise      105,880   26.8   107,761   27.4
           Payroll and related
            costs                   129,777   32.8   128,443   32.6
           Other                     80,137   20.3    80,391   20.4
           Depreciation and
            amortization             16,575    4.2    18,939    4.8
       (as a percent of Total
        operating revenues)
           Selling, general and
            administrative           22,857    5.7    26,754    6.7
    Total operating costs and
     expenses                       355,226          362,288

    Earnings before Interest,
     Taxes and cumulative effect
     of change in accounting
     principle                       46,743   11.6    36,756    9.2      27.2

       Interest income, net           2,843    0.7       426    0.1

    Pre-tax Profit                   49,586   12.3    37,182    9.3

       Provision for income taxes    17,605    4.4    13,311    3.3

    Income before cumulative
     effect of change in
      accounting principle           31,981    8.0    23,871    6.0

    Cumulative effect of change in
     accounting principle, net           58    0.0       -      0.0

    Net Income                      $31,923    7.9   $23,871    6.0      33.7

    Earnings Per Share:

    Before cumulative effect of
     change in
    accounting principle:
    Basic                             $0.50            $0.38             31.6
    Diluted                           $0.49            $0.37             32.4

    After cumulative effect of
     change in
    accounting principle:
    Basic                             $0.50            $0.38             31.6
    Diluted                           $0.49            $0.37             32.4

    Shares:
    Basic                            63,449           62,099
    Diluted                          65,273           64,370


    RUBY TUESDAY, INC.

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

                                                 December 4,       June 5,
    CONDENSED BALANCE SHEETS                        2001            2001
    Assets
       Cash and Short-Term Investments           $16,251         $10,636
       Accounts and Notes Receivable              10,303           6,754
       Inventories                                10,183           9,372
       Prepaid Income Taxes                        2,410              64
       Assets Held for Disposal                   28,490          22,197
       Other Current Assets                       14,184          15,397

         Total Current Assets                     81,821          64,420

       Property and Equipment, Net               316,248         290,135
       Goodwill, Net                               7,845           7,845
       Notes Receivable, Net                      57,039          56,881
       Other Assets                               30,606          26,386

         Total Assets                           $493,559        $445,667

    Liabilities
       Current Liabilities                       $78,115         $88,433
       Long-Term Debt                             23,948          15,212
       Deferred Income Taxes                       7,850           4,127
       Other Deferred Liabilities                 64,488          53,624

         Total Liabilities                       174,401         161,396

    Shareholders' Equity                         319,158         284,271

         Total Liabilities and
           Shareholders' Equity                 $493,559        $445,667


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SOURCE Ruby Tuesday, Inc.
Web site: http: //www.rubytuesday.com/company/investorrelations.htm
CONTACT: Price Cooper, Vice President, Investor Relations and Planning of Ruby Tuesday, Inc., +1-865-379-5700
Audio: http: //www.videonewswire.com/event.asp?id=2535