Ruby Tuesday, Inc. Provides an Update on the Status of the Amendments to Its Credit Facilities
MARYVILLE, Tenn.--(BUSINESS WIRE)--Ruby Tuesday, Inc. reported today that, while the Company has agreed in principal on the terms of amendments to its Revolving Credit Agreement and Private Placement Notes, the final documentation of the amendments will take additional time to complete. The Company previously obtained waivers of its debt covenant ratios through April 18, 2008. However because the actual ratios fell within allowable limits, such waivers were unnecessary and no further waivers are being pursued at this time. It is anticipated that the documentation of the amendments will be completed within the next several weeks.
Sandy Beall, Founder and CEO, commented, "We appreciate the cooperation of our bank group and private placement holders as we continue to work through the documentation process for these amendments. We believe the terms are fair, allowing for covenants at levels better aligned with our expected future results and providing for variable interest rates based on our leverage ratios. With the completion of our remodeling initiative, our repositioning investments and expenditures, and the temporary suspension of new restaurant openings, our focus is firmly on sales, profits, and cash flows. As we discussed on our recent conference call, our plans provide for substantial levels of positive free cash flow to service and reduce debt, allowing us to strengthen our company over the coming quarters."
Ruby Tuesday, Inc. has Company-owned and/or franchise Ruby Tuesday brand restaurants in 45 states, the District of Columbia, Puerto Rico, Guam, and 11 foreign countries. As of March 4, 2008, the Company owned and operated 721 Ruby Tuesday restaurants, while domestic and international franchisees (including Hawaii) operated 169 and 52 restaurants, respectively.
Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RT).
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 one or more of the following: future financial performance and restaurant growth (both Company-owned and franchised), future capital expenditures, future borrowings and repayment of debt, availability of debt financing at terms attractive to the Company, payment of dividends, stock repurchases, and restaurant and franchise acquisitions and re-franchises. The Company cautions the reader that a number of important factors and uncertainties 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: changes in promotional, couponing and advertising strategies; guests' acceptance of changes in menu items; changes in our guests' disposable income; consumer spending trends and habits; mall-traffic trends; increased competition in the restaurant market; weather conditions in the regions in which Company-owned and franchised restaurants are operated; guests' acceptance of the Company's development prototypes and remodeled restaurants; laws and regulations affecting labor and employee benefit costs, including further potential increases in federally mandated minimum wage; costs and availability of food and beverage inventory; the Company's ability to attract qualified managers, franchisees and team members; changes in the availability and cost of capital; impact of adoption of new accounting standards; impact of food-borne illnesses resulting from an outbreak at either Ruby Tuesday or other restaurant concepts; effects of actual or threatened future terrorist attacks in the United States; significant fluctuations in energy prices; and general economic conditions.