MARYVILLE, Tenn. - October 08, 2015 - (BUSINESS WIRE) - Ruby Tuesday, Inc. (NYSE: RT) today reported financial results for the fiscal first quarter ended September 1, 2015.
*A reconciliation of non-GAAP information is included in the schedules accompanying the financial statements in this release.
JJ Buettgen, Chairman of the Board, President, and CEO, commented, “We were pleased with positive same-restaurant sales in the quarter, on top of a relatively strong sales performance in the first quarter of last year. Our same-restaurant sales gain reflected check growth partially offset by a decline in guest counts during the quarter.
“Year-over-year first quarter restaurant-level margins and profitability contracted primarily due to an increase in other restaurant operating costs, mainly repair and maintenance expense and other restaurant supplies. We accelerated spending in these critical areas to ensure our restaurant facilities support the delivery of a consistently great guest experience. These were necessary investments that will support positive results in the future. Further, we expect our inventory management system, which was fully rolled out in the first quarter, will benefit restaurant level margins in the back-half of this fiscal year and expect restaurant level margins to be in-line with guidance for the year.”
Buettgen continued, “We made progress in the quarter on our four key brand transformation pillars – menu, service, communication and atmosphere. As a result of these efforts, we are excited about our product innovation pipeline, have broadened our communication strategies to include digital and social platforms, have improved guest satisfaction metrics on quality, taste, pace of meal, and server attentiveness, and have positive early feedback from guests on certain remodel elements.”
Buettgen concluded, “Our entire team is committed to executing our long-term brand transformation strategies which should produce sustainable same-restaurant sales growth, improve long-term profitability, and maximize value for our shareholders.”
The Company is reaffirming its full-year Adjusted Net Income per diluted share guidance of $0.12 to $0.17, based on the following assumptions:
Beginning in the first quarter of 2016, the Company reclassified its Amortization of intangible assets from “Other restaurant operating costs” to “Depreciation and amortization.” The Company believes this reclassification better aligns the Company with its peers and increased both current and prior period Restaurant-Level Margins by approximately 20 basis points. The schedule accompanying the condensed unaudited consolidated financial statements has been revised to reflect the reclassification of Amortization of intangible assets for the preceding eight quarters.
The Company believes excluding certain items from its financial results provides investors with a clearer understanding of the Company’s operating performance and comparison to prior-period results. In addition, management uses these non-GAAP financial measures and ratios to assess the results of the Company’s operations.
We have included EBITDA, Adjusted EBITDA, Adjusted Net (Loss)/ Income and Adjusted Net (Loss)/ Income per share to provide investors with supplemental measures of our operating performance. We believe these are important supplemental measures of operating performance because they eliminate items that have less bearing on our Company-wide operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on financial measures in accordance with United States Generally Accepted Accounting Principles (GAAP). We also believe that securities analysts, investors and other interested parties frequently use EBITDA, Adjusted EBITDA, Adjusted Net (Loss)/ Income and Adjusted Net (Loss)/ Income per share in evaluating issuers. Because other companies in some cases calculate EBITDA, Adjusted EBITDA, Adjusted Net (Loss)/ Income, or Adjusted Net (Loss)/ Income per share differently from the way we calculate such measures, these metrics may not be comparable to similarly titled measures reported by other companies. Additionally, supplemental non-GAAP financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
The use of these measures permits a comparative assessment of the Company's operating performance relative to its performance based on GAAP results, while isolating the effects of certain items that vary from period to period without correlation to core operating performance and certain items that vary widely among similar companies. However, the inclusion of these adjusted measures should not be construed as an indication that future results will be unaffected by unusual or infrequent items or that the items for which the adjustments have been made are necessarily unusual or infrequent.
The following table shows the reconciliation of Net (Loss)/ Income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA, Adjusted Net (Loss)/ Income and Adjusted Net (Loss)/ Income per share, all of which are non-GAAP financial measures. The Company defines EBITDA as income before interest, taxes, and depreciation and amortization and Adjusted EBITDA as EBITDA, excluding certain non-cash and/or non-recurring expenses including, but not limited to, Closures and Impairments and Executive Transition. Adjusted Net (Loss)/ Income is defined as Net (Loss)/ Income, excluding certain non-cash and/or non-recurring expenses/(income) as detailed in Adjusted EBITDA, net of tax as well as adjustments related to Debt Prepayment Penalties, Deferred Financing Fees, and Income Tax (Benefit)/Provision Adjusted to the Statutory Rate. Adjusted Net (Loss)/ Income per share is defined as Adjusted Net (Loss)/ Income divided by diluted shares outstanding.
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Ruby Tuesday, Inc. owns and franchises Ruby Tuesday and Lime Fresh brand restaurants. As of September 1, 2015, there were 734 Ruby Tuesday restaurants in 44 states, 12 countries, and Guam, and there were 27 Lime Fresh restaurants in six states and the District of Columbia. Of those restaurants, we owned and operated 656 Ruby Tuesday restaurants and franchised 78 Ruby Tuesday restaurants, comprised of 28 domestic and 50 international restaurants. We also owned and operated 19 Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. Our Company-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic, and Midwest of the United States, which we consider to be our core markets.
Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RT).
The Company will host a conference call, which will be a live web-cast, this afternoon at 5:00 p.m. Eastern Time. The call will be available live at the following website: http://www.rubytuesday.com
This press release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent our expectations or beliefs concerning future events, including one or more of the following: future financial performance (including our estimates of growth in same-restaurant sales, average unit volumes, operating margins, expenses, and other items), future capital expenditures, the effect of strategic initiatives (including statements relating to cost savings initiatives and the benefits of our marketing), the opening or closing of restaurants by us or our franchisees, sales of our real estate or purchases of new real estate, future borrowings and repayments of debt, availability of financing on terms attractive to the Company, compliance with financial covenants in our debt instruments, payment of dividends, stock and bond repurchases, restaurant acquisitions, and changes in senior management and in the Board of Directors. We caution the reader that a number of important factors and uncertainties could, individually or in the aggregate, cause our actual results to differ materially from those included in the forward-looking statements, including, without limitation, the risks and uncertainties described in the Risk Factors included in Part I, Item A of our Annual Report on Form 10-K for the year ended June 2, 2015.
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SOURCE Ruby Tuesday, Inc.
Jill Golder
Ruby Tuesday, Inc.
865-379-5700
EVP & Chief Financial Officer
Our Company-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic, and Midwest of the United States, which we consider to be our core markets.