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Ruby Tuesday, Inc. Reports Third Quarter: * - Same-Store Sales Growth of 2.5% * - Earnings Per Share Increase of 21%, Excluding a $17.5 Million After- Tax Charge Recorded in Conjunction With the SRG Note Receivable

04/10/2002

MARYVILLE, Tenn., April 10 /PRNewswire-FirstCall/ -- Ruby Tuesday, Inc. (NYSE: RI), one of America's leading companies in the bar and grill segment of casual dining, today reported third quarter earnings per share of $0.34, excluding a $17.5 million ($0.27 per share) non-recurring, after tax charge associated with fully reserving a note receivable issued when the Company sold its American Cafe and Tia's Tex-Mex restaurants to Specialty Restaurant Group, LLC ("SRG"). The $0.34 in earnings per share is a 21% increase compared to the same period in the prior year, when earnings per share increased 33%. Same-store sales at Company-owned Ruby Tuesday(R) restaurants increased 2.5% for the quarter on top of being up a record 6.5% for the same quarter in the prior year.

Sandy Beall, the Company's Chairman and CEO, commented, "I am very pleased with our performance. We are operating our business extremely well and have solid momentum. Going into the quarter we were very cognizant of the challenging sales comparisons from the prior year when we were up a record 6.5%, and I am proud that our 2.5% same-store sales growth was accomplished without heavy use of our neighborhood marketing program or any media advertising. Instead, the growth in same-store sales was propelled by solid operations and a very successful shrimp promotion, which rolled out in February. This led to our exceeding the consensus analysts' expectation for earnings per share by $0.02."

Beall continued, "We continue increasing our operational intensity and investing more in our teams, just as we have done all year. We remain focused on our people, processes and standards. This is what has, and will continue to, drive our performance. Our success is based on having great teams and being fully staffed. For this reason, we continue making substantial investments in our teams. Additionally, the Ruby Tuesday brand continues getting stronger and we constantly evolve the brand to ensure further strengthening. The restaurant business is all about having a strong brand, great teams, and a world class support infrastructure to support it all, and that is precisely what we have."

"This quarter we fully reserved the note we received in conjunction with the sale of our American Cafe and Tia's Tex-Mex restaurants to SRG. The sluggish economy over the last year had a negative effect on SRG's sales and resulting cash flow. We anticipate SRG will be in default of its debt covenants with its senior lender for SRG's recently ended fiscal year and payments under our note receivable will be suspended by SRG's senior lender. Accordingly, our third quarter results do not include any interest income on the note for the January and February periods."

"We are poised and positioned to take advantage of the great growth potential in the casual dining sector, and in particular the Bar and Grill segment, of the restaurant industry as the Bar and Grill segment is projected to grow at 9% versus the 6% for the overall casual dining sector. We have the brand, teams, processes, infrastructure and balance sheet to continue controlled growth and increasing our market share."

Outlook for Remainder of Fiscal 2002

Fourth quarter same-store sales at Company-owned Ruby Tuesday restaurants are up 2.4% through April 9th. The Company reiterates its goal for fourth quarter same-store sales growth of approximately 2.0%, after being up 3.4% in the same quarter of the prior year. Based on this, the Company is comfortable with the current consensus analysts estimate of $0.31 per share for the fourth quarter, and thus 25% earnings per share growth for the year(excluding the non-recurring charge), which would represent the sixth consecutive year of earnings per share growth of 20% or more.
Third Quarter Highlights:

    * Earnings per share increased 21.4% to $0.34 from $0.28, excluding a
      $17.5 million ($0.27 per share) after tax charge recorded in conjunction
      with fully reserving the note receivable issued to the Company in
      conjunction with the sale of the American Cafe and Tia's Tex-Mex
      restaurants.
    * Net income, excluding the same $17.5 million charge, increased 23.8% to
      $22,574,000 from $18,237,000.
    * Pre-tax profit margins, excluding the same $17.5 million charge,
      increased 120 basis points to 16.2% from 15.0%.
    * System-wide Ruby Tuesday revenue increased 15.3% to $305,727,000 from
      $265,246,000.
    * System-wide same-store sales increased 2.0%.  Company-owned same-store
      sales increased 2.5% and domestic franchise same-store sales increased
      1.0%.
    * 12 Company-owned Ruby Tuesday restaurants were opened, two were closed
      and 19 units were sold to new franchise partners.
    * 25 franchise units were opened (19 of which were former Company-owned
      restaurants sold to new franchise partners) and two were closed.
    * The Company purchased 80,000 shares of its common stock during the
      quarter.  7.0 million shares remain authorized for repurchase under
      the Company's ongoing share repurchase program.

Year-to-date Highlights:

    * Earnings per share increased 27.7% to $0.83 from $0.65, excluding a
      $17.5 million ($0.27 per share) after tax charge recorded in
      conjunction with fully reserving the note receivable issued to the
      Company in conjunction with the sale of the American Cafe and Tia's Tex-
      Mex restaurants.
    * Net income, excluding the same $17.5 million charge, increased 29.4% to
      $54,499,000 from $42,108,000.
    * Pre-tax profit margins, excluding the same $17.5 million charge,
      increased 250 basis points to 13.7% from 11.2%.
    * System-wide Ruby Tuesday revenue increased 15.8% to $857,876,000 from
      $740,677,000.
    * System-wide same-store sales increased 1.8%.  Company-owned same-store
      sales increased 2.1% and domestic franchise same-store sales increased
      1.0%.

As of March 5, 2002, Ruby Tuesday, Inc. owned and operated 391 Ruby Tuesday restaurants located in 25 states. Franchise operations included 182 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 4:00 Eastern Time. The call will be available live at the following web-sites:

http://www.videonewswire.com/event.asp?id=4093

http://www.rubytuesday.com

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

               Including          Excluding
                Loss on            Loss on                           Excluding
               Valuation           Valuation                         Loss on
              of SRG Note        of SRG Note                         Valuation
               13 Weeks           13 Weeks          13 Weeks          of SRG
                 Ended              Ended             Ended            Note
                March 5, Percent   March 5, Percent  March 4, Percent  Percent
                  2002   of Sales   2002    of Sales  2001   of Sales  Change

    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby
     Tuesday
     revenue    $ 209,628          $ 209,628         $ 185,451
    Franchised
     revenue       96,099             96,099            79,795
     Total system-
      wide Ruby
      Tuesday
      sales     $ 305,727          $ 305,727         $ 265,246           15.3
    Revenues:
     Ruby
      Tuesday   $ 209,628   98.1   $ 209,628   98.1  $ 185,451   98.1
     Other
      concepts         --    0.0          --    0.0         --    0.0
     Company
      restaurant
      revenues    209,628   98.1     209,628   98.1    185,451   98.1    13.0
    Franchise
     income         4,108    1.9       4,108    1.9      3,560    1.9
    Total operating
     revenues     213,736  100.0     213,736  100.0    189,011  100.0    13.1

    Operating Costs and Expenses:
    (as a percent of Company restaurant revenues)
    Cost of
     merchandise   56,900   27.1      56,900   27.1     51,606   27.8
    Payroll and
     related
     costs         67,584   32.2      67,584   32.2     58,118   31.3
    Other          36,791   17.6      36,791   17.6     33,321   18.0
    Depreciation
     and
     amortization   8,425    4.0       8,425    4.0      7,500    4.0
    Loss on valuation
     of SRG Note
     Receivable    28,856   13.8          --    0.0         --    0.0
    (as a percent of Total operating revenues)
    Selling, general
    and
    administrative 10,972    5.1      10,972    5.1     11,517    6.1
    Total operating
     costs and
     expenses     209,528            180,672           162,062

    Earnings before Interest, Taxes and
     cumulative effect of change in
     accounting
     principle      4,208    2.0      33,064   15.5     26,949   14.3    22.7

    Interest income
     (net)          1,662    0.8       1,662    0.8      1,460    0.8

    Pre-tax Profit  5,870    2.7      34,726   16.2     28,409   15.0

    Provision for
     income taxes     823    0.4      12,152    5.7     10,172    5.4

    Income before
     cumulative effect
     of change in
     accounting
     principle      5,047    2.4      22,574   10.6     18,237    9.6

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

    Net Income   $  5,047    2.4   $  22,574   10.6  $  18,237    9.6    23.8

    Earnings Per Share:

    Before cumulative
     effect of change in
     accounting principle:
    Basic        $   0.08          $    0.35         $    0.29           20.7
    Diluted      $   0.07          $    0.34         $    0.28           21.4

    After cumulative effect of change in
     accounting principle:
    Basic        $   0.08          $    0.35         $    0.29           20.7
    Diluted      $   0.07          $    0.34         $    0.28           21.4

    Shares:
    Basic          64,465             64,465            63,385
    Diluted        66,347             66,347            65,518


    RUBY TUESDAY, INC.

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

               Including          Excluding
                Loss on            Loss on                          Excluding
               Valuation           Valuation                         Loss on
               of SRG Note        of SRG Note                       Valuation
                39 Weeks           39 Weeks           39 Weeks         of SRG
                 Ended              Ended              Ended            Note
                March 5,  Percent  March 5, Percent   March 4, Percent Percent
                  2002    of Sales  2002    of Sales   2001   of Sales  Change

    System-Wide Ruby Tuesday Sales:
    Company-owned Ruby
     Tuesday
     revenue    $ 605,049          $ 605,049         $ 528,947
    Franchised
     revenue      252,827            252,827           211,730
    Total system-wide
     Ruby Tuesday
     sales      $ 857,876          $ 857,876         $ 740,677           15.8

    Revenues:
     Ruby
      Tuesday   $ 605,049   98.3   $ 605,049   98.3  $ 528,947   89.9
     Other
      concepts         --    0.0          --    0.0     49,923    8.5
     Company
      restaurant
      revenues    605,049   98.3     605,049   98.3    578,870   98.4     4.5
    Franchise
     income        10,656    1.7      10,656    1.7      9,185    1.6
    Total operating
     revenues     615,705  100.0     615,705  100.0    588,055  100.0     4.7

Operating Costs and Expenses: (as a percent of Company restaurant revenues)

     Cost of
      merchandise 162,780   26.9     162,780   26.9    159,367   27.5
     Payroll and
      related
      costs       197,361   32.6     197,361   32.6    186,561   32.2
     Other        116,928   19.3     116,928   19.3    113,712   19.6
     Depreciation and
      amortization 25,000    4.1      25,000    4.1     26,439    4.6
     Loss on valuation
      of SRG Note
      Receivable   28,856    4.8          --    0.0         --    0.0
    (as a percent of Total operating revenues)
    Selling, general
    and
    administrative 33,829    5.5      33,829    5.5     38,271    6.5
    Total operating
     costs and
     expenses     564,754            535,898           524,350

    Earnings before
     Interest, Taxes and
     cumulative effect
     of change in
     accounting
     principle     50,951    8.3      79,807   13.0     63,705   10.8    25.3

Interest income

    (net)           4,505    0.7       4,505    0.7      1,886    0.3

     Pre-tax
      Profit       55,456    9.0      84,312   13.7     65,591   11.2

    Provision for
     income taxes  18,428    3.0      29,755    4.8     23,483    4.0

    Income before cumulative
     effect of change in
     accounting
     principle     37,028    6.0      54,557    8.9     42,108    7.2

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

    Net Income  $  36,970    6.0   $  54,499    8.9  $  42,108    7.2    29.4

    Earnings Per Share:

    Before cumulative effect of change in
     accounting principle:
    Basic       $    0.58          $    0.85         $    0.67           26.9
    Diluted     $    0.56          $    0.83         $    0.65           27.7

    After cumulative effect of change in
     accounting principle:
    Basic       $    0.58          $    0.85         $    0.67           26.9
    Diluted     $    0.56          $    0.83         $    0.65           27.7

    Shares:
    Basic          63,787             63,787            62,528
    Diluted        65,631             65,631            64,753



    RUBY TUESDAY, INC.

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

                                                   March 5,           June 5,
    CONDENSED BALANCE SHEETS                        2002               2001
    Assets
     Cash and Short-Term Investments              $55,722            $10,636
     Accounts and Notes Receivable                 11,742              6,754
     Inventories                                    9,693              9,372
     Deferred Income Taxes                         14,056                 64
     Assets Held for Disposal                         792             22,197
     Other Current Assets                           6,013             15,397

       Total Current Assets                        98,018             64,420

     Property and Equipment, Net                  323,637            290,135
     Goodwill, Net                                  7,845              7,845
     Notes Receivable, Net                         36,352             56,881
     Other Assets                                  32,512             26,386

       Total Assets                              $498,364           $445,667

    Liabilities
     Current Liabilities                          $84,872            $88,433
     Long-Term Debt                                 6,811             15,212
     Deferred Income Taxes                         10,900              4,127
     Other Deferred Liabilities                    61,632             53,624

       Total Liabilities                          164,215            161,396

    Shareholders' Equity                          334,149            284,271

       Total Liabilities and
        Shareholders' Equity                     $498,364           $445,667

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SOURCE Ruby Tuesday, Inc.
Web site: http: //www.rubytuesday.com
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=4093 http://www.rubytuesday.com