Ruby Tuesday, Inc. Reports Second Quarter EPS Growth of 17%
MARYVILLE, Tenn., Jan. 9 /PRNewswire-FirstCall/ -- Ruby Tuesday, Inc. (NYSE: RI) today reported results for its second quarter ended December 3, 2002. For the quarter, earnings per share increased 17.4% to $0.27 from $0.23 a year ago, while net income increased 16.6%. The Company's Board of Directors declared a semi-annual cash dividend of $0.0225 per share, payable on February 7, 2003, to shareholders of record at the close of business on January 24, 2003.
Sandy Beall, the Company's Chairman and CEO, commented, "Our quarter, with 17% earnings per share growth, was solid but not great due to slightly negative same-store sales. Same-store sales decreased 0.7% for the second quarter, with our Company-owned freestanding restaurants declining 0.1% and our mall restaurants, which were negatively affected due to there being one less week between Thanksgiving and Christmas, declining 1.6% in same-store sales. During the quarter, we spent less than $600,000 on our marketing programs, which was over 35% less than we spent on these programs in the same quarter last year. Although I am not happy with our same-store sales performance, I am pleased with our overall earnings results in very challenging economic times."
Beall continued, "It has been a difficult operating environment, but Ruby Tuesday is rising to the challenge with increased operational intensity and marketing programs to achieve positive same-store sales. We realize we must have consistent, positive same-store sales to generate long-term financial returns and constantly increase shareholder value. To that end, I am pleased that same-store sales have turned positive in our December period despite some inclement weather and being compared to strong same-store sales during the same period last year."
Outlook for Fiscal 2003
Same-store sales at Company-owned Ruby Tuesday restaurants increased 0.8% for the Company's five week December period ended January 7, 2003, consisting of a 2.4% increase at freestanding restaurants and a 1.3% decrease at mall restaurants. The 0.8% same-store sales increase is on top of being up 3.9% in same-store sales during the same period of the prior year and after starting the first week of the December period down 3.6% in same-store sales as a result of inclement weather in the Northeast. Given uncertain economic times, and to be conservative, the Company estimates that if fiscal 2003 third quarter same-store sales are approximately flat, third quarter diluted earnings per share will be $0.38-$0.39. If same-store sales were also approximately flat for the fourth quarter, the Company would estimate annual fiscal 2003 earnings per share growth to be 15-16% (excluding the non- recurring charge recorded in fiscal 2002 to fully reserve the Specialty Restaurant Group, LLC note receivable and including approximately $5.5 million in additional depreciation resulting from refinancing the Company's bank- financed operating lease obligations during the current fiscal year). Beall commented, "We are hopeful that same-store sales are greater than approximately flat for the balance of the year and, in that case, we would expect earnings per share to exceed the above amounts. However, should sales remain flattish, 15-16% earnings per share growth would be a very solid year as it equates to 20-21% earnings per share growth if you exclude the negative impact on this year's earnings growth rate resulting from the additional depreciation due to refinancing the bank-financed operating leases."
Second Quarter Highlights: * Earnings per share increased 17.4% to $0.27 from $0.23. * Net income increased 16.6% to $17,585,000 from $15,082,000. * Pre-tax profit margins increased 100 basis points to 12.8% from 11.8%. * System-wide Ruby Tuesday revenue increased 9.1% to $297,761,000 from $272,810,000. * Company-owned same-store sales decreased 0.7% and domestic franchise same-store sales decreased 1.2%. System-wide same-store sales decreased 0.8%. * Average unit sales volumes increased 1.5% at Company-owned Ruby Tuesday restaurants. * Sixteen Company-owned Ruby Tuesday restaurants were opened and none were closed. * Three franchise units were opened and none were closed. * The Company exercised its right to acquire an additional 49% interest in three of its franchise partners. The Company now has a 50% interest in nine franchise partners collectively operating 91 franchised Ruby Tuesday restaurants. * The Company did not repurchase any shares of its common stock during the quarter. 5.3 million shares remain authorized for repurchase under the Company's ongoing share repurchase program. Year-to-date Highlights: * Earnings per share increased 18.4% to $0.58 from $0.49. * Net income increased 18.3% to $37,774,000 from $31,923,000. * Pre-tax profit margins increased 100 basis points to 13.3% from 12.3%. * System-wide Ruby Tuesday revenue increased 10.9% to $612,101,000 from $552,149,000. * Company-owned same-store sales increased 0.2% and domestic franchise same-store sales decreased 0.9%. System-wide same-store sales decreased 0.1%. * Twenty-nine Company-owned Ruby Tuesday restaurants were opened and five were closed. * Nine franchise units were opened and two were closed. * The Company exercised its right to acquire an additional 49% interest in four of its franchise partners. * The Company repurchased 548,000 shares of its common stock.
Ruby Tuesday, Inc. has Company-owned and/or franchised Ruby Tuesday restaurants located in 37 states, the District of Columbia, Puerto Rico and 9 foreign countries. As of December 3, 2002, the Company owned and operated 421 Ruby Tuesday restaurants. Franchise operations included 187 domestic units and 19 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
The Company will host a conference call which will be a live web-cast this afternoon at 2:30 Eastern Time. The call will be available live at the following websites:
The call will be archived on both sites through the close of business on
January 16, 2003.
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, franchisees and team
members; changes in the availability of capital; and general economic
RUBY TUESDAY, INC.
Financial Results For the Second Quarter of Fiscal Year 2003 (unaudited) (Amounts in thousands except per share amounts) 13 Weeks 13 Weeks Ended Ended Dec. 3, Percent Dec. 4, Percent Percent 2002 of Sales 2001 of Sales Change System-Wide Ruby Tuesday Sales: Company-owned Ruby Tuesday revenue $208,054 $195,729 Franchised revenue 89,707 77,081 Total system-wide sales $297,761 $272,810 9.1 Revenues: Company restaurant revenues $208,054 98.4 $195,729 98.4 6.3 Franchise income 3,449 1.6 3,256 1.6 Total operating revenues 211,503 100.0 198,985 100.0 6.3 Operating Costs and Expenses: (as a percent of Company restaurant revenues) Cost of merchandise 55,448 26.7 52,511 26.8 Payroll and related costs 70,825 34.0 65,040 33.2 Other restaurant operating costs 35,474 17.1 39,562 20.2 Depreciation and amortization 11,604 5.6 8,491 4.3 (as a percent of Total operating revenues) Selling, general and administrative 10,497 5.0 11,249 5.7 Equity in (earnings)/loss of unconsolidated franchises (311) (0.1) 207 0.1 Total operating costs and expenses 183,537 177,060 Earnings before Interest, Taxes and Cumulative effect of change in accounting principle 27,966 13.2 21,925 11.0 27.6 Interest expense (income), net 997 0.5 (1,460) (0.7) Provision for income taxes 9,384 4.4 8,303 4.2 Income before cumulative effect of change in accounting principle 17,585 8.3 15,082 7.6 Cumulative effect of change in accounting principle, net -- 0.0 -- 0.0 Net Income $17,585 8.3 $15,082 7.6 16.6 Earnings Per Share: Before cumulative effect of change in accounting principle: Basic $0.27 $0.23 17.4 Diluted $0.27 $0.23 17.4 After cumulative effect of change in accounting principle: Basic $0.27 $0.23 17.4 Diluted $0.27 $0.23 17.4 Shares: Basic 63,870 63,652 Diluted 64,899 65,360 RUBY TUESDAY, INC. Financial Results For the Second Quarter of Fiscal Year 2003 (unaudited) (Amounts in thousands except per share amounts) 26 Weeks 26 Weeks Ended Ended Dec. 3, Percent Dec. 4, Percent Percent 2002 of Sales 2001 of Sales Change System-Wide Ruby Tuesday Sales: Company-owned Ruby Tuesday revenue $426,767 $395,421 Franchised revenue 185,334 156,728 Total system-wide sales $612,101 $552,149 10.9 Revenues: Company restaurant revenues $426,767 98.3 $395,421 98.4 7.9 Franchise income 7,248 1.7 6,548 1.6 Total operating revenues 434,015 100.0 401,969 100.0 8.0 Operating Costs and Expenses: (as a percent of Company restaurant revenues) Cost of merchandise 114,313 26.8 105,880 26.8 Payroll and related costs 145,264 34.0 129,777 32.8 Other restaurant operating costs 73,925 17.3 79,889 20.2 Depreciation and amortization 21,603 5.1 16,575 4.2 (as a percent of Total operating revenues) Selling, general and administrative 21,361 4.9 22,857 5.7 Equity in (earnings)/loss of unconsolidated franchises (876) (0.2) 248 0.1 Total operating costs and expenses 375,590 355,226 Earnings before Interest, Taxes and Cumulative effect of change in accounting principle 58,425 13.5 46,743 11.6 25.0 Interest expense (income), net 491 0.1 (2,843) (0.7) Provision for income taxes 20,160 4.6 17,605 4.4 Income before cumulative effect of change in accounting principle 37,774 8.7 31,981 8.0 Cumulative effect of change in accounting principle, net -- 0.0 58 0.0 Net Income $37,774 8.7 $31,923 7.9 18.3 Earnings Per Share: Before cumulative effect of change in accounting principle: Basic $0.59 $0.50 18.0 Diluted $0.58 $0.49 18.4 After cumulative effect of change in accounting principle: Basic $0.59 $0.50 18.0 Diluted $0.58 $0.49 18.4 Shares: Basic 63,844 63,449 Diluted 65,000 65,273 RUBY TUESDAY, INC. Financial Results For the Second Quarter of Fiscal Year 2003 (unaudited) (Amounts in thousands except per share amounts) December 3, June 4, CONDENSED BALANCE SHEETS 2002 2002 Assets Cash and Short-Term Investments $6,414 $32,699 Accounts and Notes Receivable 14,090 15,671 Inventories 12,782 10,276 Deferred Income Taxes 2,864 4,248 Income Tax Receivable 11,523 15,050 Assets Held for Disposal 6,313 3,242 Other Current Assets 6,911 7,690 Total Current Assets 60,897 88,876 Property and Equipment, Net 611,349 351,921 Goodwill, Net 7,845 7,845 Notes Receivable, Net 36,290 35,655 Other Assets 40,610 36,030 Total Assets $756,991 $520,327 Liabilities Current Liabilities $154,087 $93,283 Long-Term Debt 149,035 7,626 Deferred Income Taxes 30,257 24,255 Other Deferred Liabilities 60,102 60,757 Total Liabilities 393,481 185,921 Shareholders' Equity 363,510 334,406 Total Liabilities and Shareholders' Equity $756,991 $520,327
SOURCE Ruby Tuesday, Inc.