Ruby Tuesday, Inc. Reports Second Quarter Results
MARYVILLE, Tenn., January 7 /PRNewswire-FirstCall/ -- Ruby Tuesday, Inc. (NYSE: RI) today reported results for its second quarter of fiscal 2004, which ended December 2, 2003. For the quarter, diluted earnings per share increased 22.2% to $0.33, total operating revenues increased 15.8% to $245.0 million, and pre-tax profit margin increased 110 basis points to 13.9%. Same-store sales at Company-owned Ruby Tuesday restaurants increased 3.9%, while same-store sales at franchise partnership restaurants increased 4.6% during the quarter. The Company's Board of Directors declared a semi-annual cash dividend of $0.0225 per share, payable on February 6, 2004 to shareholders of record at the close of business on January 23, 2004.
Sandy Beall, the Company's Chairman and Chief Executive Officer commented, "We were excited to see the sales momentum, which really began in August, continue throughout the quarter. The significant investments we made in staffing, service initiatives, our menu and our new supervisory system, as well as higher operational standards, continued to result in improved operations, which is reflected in our same-store sales momentum. In addition, the roll-out of the 'curb-side to-go(SM)' initiative was completed at Company-owned and franchise partnership restaurants during the quarter. Curb-side to-go sales grew throughout the quarter. 'To-go' represented 4.5% of Company-owned revenue during the quarter and continues to grow and drive incremental business. We are very excited about the success of 'to-go' and the opportunity it represents. In addition to the roll-out of curbside to-go during the quarter, in mid-November we released our latest menu. While offering our same popular core menu items, the new menu caters to the growing number of health conscious consumers with an array of healthier and lower carbohydrate menu items. Research indicates that a growing percentage of our customer base, and Americans in general, are increasingly interested in healthy eating alternatives. Healthier eating is becoming a way of life for many Americans and research reveals that one in seven adults is on some sort of low carbohydrate diet. This is the focus of our latest menu, which contains over twenty 'Ruby Tuesday Smart Eating(SM)' items. In addition, we converted from hydrogenated oil to heart healthy canola oil as our frying medium. We believe that a sizable portion of our customer base is excited about healthier alternatives when they dine out. In addition to responding to the desires of our existing customer base, we are also excited about the opportunity our latest menu affords us to reach an entirely new customer base. And all of this was accomplished while maintaining the same great menu items our customers love and to which they are accustomed."
For the third quarter, the Company's goal for diluted earnings per share growth is approximately 15% based on approximately 2.0% same-store sales growth at Company-owned Ruby Tuesday restaurants. Third quarter-to-date same-store sales at Company-owned Ruby Tuesday restaurants are up approximately 1.0% despite multiple weeks of severe weather in the Northeast during December. Beall commented, "Considering the large number of Company-owned restaurants in the Northeast, where there has been consistent inclement weather during December, it is a tremendous achievement we were still positive in same-store sales during our December period. Our ability to achieve positive same-store sales in our December period despite the weather is attributable to the momentum in our brand, the positive impact of 'to-go', and the fact that the recent 'mad-cow' event has not had any impact on sales. Third quarter-to-date same-store sales at franchise partnership restaurants are up approximately 3.0%, which is higher than the Company because the franchise partnerships were much less impacted by weather. As a result of the positive impact both Company-owned and the franchise partnership restaurants are achieving with 'to-go' and other programs, we remain committed to investing in these programs. These additional costs are included in our 15% diluted earnings per share growth goal for the third quarter." The Company's goal for fiscal 2004 diluted earnings per share growth remains at 17-18% based on same-store sales growth of approximately 2.0% at Company-owned Ruby Tuesday restaurants for fiscal 2004. The 17-18% earnings per share growth goal does not reflect any one-time cumulative effect adjustment which may be recorded should consolidation of the Company's franchise partnership system be required under FIN 46.
Highlights for the second quarter compared with the same period of the prior year are shown below:
2Q fiscal 2004 2Q fiscal 2003 Diluted earnings per share $0.33 $0.27 Company-owned same-store sales change 3.9% (0.6%) Company-owned average unit volume increase 4.4% 1.6% Total operating revenues $245,004,000 $211,503,000 Pre-tax margins 13.9% 12.8%
Additional Second Quarter Highlights:
- Diluted earnings per share increased 22.2% to $0.33 from $0.27.
- Net income increased 25.3% to $22,042,000 from $17,585,000.
- Sales at franchise partnership and traditional franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise income on the Company's income statement) totaled $103,511,000 and $89,707,000 for the second quarter of fiscal 2004 and fiscal 2003, respectively.
- Seventeen Company-owned Ruby Tuesday restaurants were opened and none were closed.
- Six franchise partnership units were opened and none were closed.
- Seven traditional franchise units were opened and none were closed.
- Diluted earnings per share increased 20.7% to $0.70 from $0.58.
- Net income increased 23.2% to $46,555,000 from $37,774,000.
- Sales at franchise partnership and traditional franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise income on the Company's income statement) totaled $206,956,000 and $185,334,000 for the second quarter year-to-date of fiscal 2004 and fiscal 2003, respectively.
- The Company exercised its right to acquire an additional 49% interest in four of the franchise partnerships during the year. As of December 2, 2003, the Company held a 50% interest in thirteen of twenty-four franchise partnerships collectively operating 129 Ruby Tuesday restaurants.
Ruby Tuesday, Inc. has Company-owned, franchise partnership and/or traditional franchise Ruby Tuesday brand restaurants in 39 states, the District of Columbia, Puerto Rico and 13 foreign countries. As of December 2, 2003, the Company owned and operated 466 Ruby Tuesday restaurants, while franchise partnerships and traditional franchisees, including international franchisees, operated 198 and 38 locations, respectively. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RI).
The Company will host a conference call which will be a live web-cast tomorrow morning at 8:30 Eastern Time. The call will be available live at the following websites: http://www.fulldisclosure.com and http://www.rubytuesday.com .
The call will be archived on both sites through the close of business on January 21, 2004.
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; impact of adoption of new
accounting standards; and general economic conditions.
RUBY TUESDAY, INC. Financial Results For the Second Quarter of Fiscal Year 2004 (Amounts in thousands except per share amounts) 13 Weeks 13 Weeks Ended Percent Ended Percent December of December of Percent 2, 2003 Sales 3, 2002 Sales Change Revenues: Company restaurant revenues $240,966 98.4 $208,054 98.4 Franchise income 4,038 1.6 3,449 1.6 Total operating revenues 245,004 100.0 211,503 100.0 15.8 Operating Costs and Expenses: (as a percent of Company restaurant revenues) Cost of merchandise 62,255 25.8 55,448 26.7 Payroll and related costs 77,890 32.3 70,825 34.0 Other restaurant operating costs 41,368 17.2 35,474 17.1 Depreciation and amortization 13,315 5.5 11,604 5.6 (as a percent of Total operating revenues) Selling, general and administrative, net 15,036 6.1 10,497 5.0 Equity in (earnings) of unconsolidated franchises (198) (0.1) (311) (0.1) Total operating costs and expenses 209,666 183,537 Earnings before Interest and Taxes 35,338 14.4 27,966 13.2 26.4 Interest expense, net 1,165 0.5 997 0.5 Pre-tax Profit 34,173 13.9 26,969 12.8 Provision for income taxes 12,131 5.0 9,384 4.4 Net Income $22,042 9.0 $17,585 8.3 25.3 Earnings Per Share: Basic $0.34 $0.27 25.9 Diluted $0.33 $0.27 22.2 Shares: Basic 65,243 63,870 Diluted 66,884 64,899 RUBY TUESDAY, INC. Financial Results For the Second Quarter of Fiscal Year 2004 (Amounts in thousands except per share amounts) 26 Weeks 26 Weeks Ended Percent Ended Percent December of December of Percent 2, 2003 Sales 3, 2002 Sales Change Revenues: Company restaurant revenues $486,740 98.4 $426,767 98.3 Franchise income 8,116 1.6 7,248 1.7 Total operating revenues 494,856 100.0 434,015 100.0 14.0 Operating Costs and Expenses: (as a percent of Company restaurant revenues) Cost of merchandise 125,596 25.8 114,313 26.8 Payroll and related costs 155,578 32.0 145,264 34.0 Other restaurant operating costs 82,822 17.0 73,925 17.3 Depreciation and amortization 26,202 5.4 21,603 5.1 (as a percent of Total operating revenues) Selling, general and administrative, net 31,116 6.3 21,361 4.9 Equity in (earnings) of unconsolidated franchises (1,269) (0.3) (876) (0.2) Total operating costs and expenses 420,045 375,590 Earnings before Interest and Taxes 74,811 15.1 58,425 13.5 28.0 Interest expense, net 2,515 0.5 491 0.1 Pre-tax Profit 72,296 14.6 57,934 13.3 Provision for income taxes 25,741 5.2 20,160 4.6 Net Income $46,555 9.4 $37,774 8.7 23.2 Earnings Per Share: Basic $0.72 $0.59 22.0 Diluted $0.70 $0.58 20.7 Shares: Basic 65,026 63,844 Diluted 66,527 65,000 RUBY TUESDAY, INC. Financial Results For the Second Quarter of Fiscal Year 2004 (Amounts in thousands) December 2, June 3, CONDENSED BALANCE SHEETS 2003 2003 Assets Cash and Short-Term Investments $19,770 $8,662 Accounts and Notes Receivable 11,593 10,509 Inventories 14,670 12,200 Deferred Income Taxes 3,830 3,155 Income Tax Receivable 7,790 2,485 Prepaid Rent 2,125 2,136 Assets Held for Disposal 3,306 5,217 Other Current Assets 6,296 6,099 Total Current Assets 69,380 50,463 Property and Equipment, Net 708,501 660,897 Goodwill, Net 7,845 7,845 Notes Receivable, Net 36,163 39,827 Other Assets 57,178 46,035 Total Assets $879,067 $805,067 Liabilities Current Liabilities $87,768 $81,321 Long-Term Debt 201,782 207,064 Deferred Income Taxes 35,811 32,627 Other Deferred Liabilities 73,528 69,527 Total Liabilities 398,889 390,539 Shareholders' Equity 480,178 414,528 Total Liabilities and Shareholders' Equity $879,067 $805,067
SOURCE Ruby Tuesday, Inc.