Ruby Tuesday Reports Second Quarter Fiscal 2013 Results:

  Ruby Tuesday Reports Second Quarter Fiscal 2013 Results:

  *Same-Restaurant Sales up 0.3%
  *Announces Plan to Exit Marlin & Ray’s, Truffles Grill, and Wok Hay
    Concepts; Incurs Pre-Tax Charge of $16.9 Million in Second Quarter
  *Repurchases 2.4 Million Shares of Its Common Stock
  *Repurchases $11.5 Million of Its High Yield Bonds
  *Board Increases Share Repurchase Authorization by 10 Million Shares

Business Wire

MARYVILLE, Tenn. -- January 9, 2013

Ruby Tuesday, Inc. (NYSE: RT) today reported financial results for the fiscal
second quarter ended December 4, 2012.

Results for second quarter 2013 compared to second quarter 2012 include:

  *Same-restaurant sales increased 0.3% at Company-owned Ruby Tuesday
  *Restaurant-level operating margin of 16.1%, compared to 14.4% for the
    prior year, an improvement of 170 basis points primarily driven by cost
  *Net loss of $15.1 million, or net loss of $4.6 million excluding the
    following: 1) Pre-tax impairment charges of $16.9 million incurred due to
    our decision to close and exit the Marlin & Ray’s and Wok Hay concepts,
    close two Company-developed Lime Fresh restaurants, and seek a buyer for
    the Truffles Grill concept which we currently license, and 2) CEO
    transition expenses of $0.4 million primarily related to search fees. This
    compares to the prior-year net loss of $2.0 million. We have included a
    reconciliation of these items and the related loss per share impact on the
    Investor Relations page of the Ruby Tuesday website:
  *Diluted loss per share of ($0.24), or diluted loss per share of ($0.07)
    excluding the impact of the items noted above, compared to diluted loss
    per share of ($0.03) for the prior year

JJ Buettgen, President and CEO, commented, “I am honored and excited to be
leading this great company and look forward to working with the Board and the
management team to drive profitable sales growth and create significant
shareholder value going forward. We were pleased to report our second
consecutive quarter of positive same-restaurant sales in this challenging
economic environment and are intently focused on consistently and profitably
growing same-restaurant sales at our Ruby Tuesday concept. However, given the
uncertain and volatile consumer spending environment, as well as the level of
competitive intensity we have seen in the restaurant sector over the last
several months, we are projecting approximately flat same-restaurant sales for
the year.

Over the last several weeks I have been working with the Board and the senior
management team to shape our long-term vision for the Company. Based on a
significant amount of discussion and analysis, and a clear understanding that
driving profitable same-restaurant sales at Ruby Tuesday is our first and most
critical priority, we have decided to close our 13 Marlin & Ray’s restaurants
immediately. While this was a difficult decision to make, we have determined
the Marlin & Ray’s brand is not an optimal conversion vehicle for us going
forward. For similar reasons, we also have decided to close and exit our one
Wok Hay restaurant and seek a buyer for our two licensed Truffles Grill
restaurants. Additionally, based on experience gained since our initial
involvement in Lime Fresh, we have decided to close two Company-developed Lime
Fresh restaurants that we have determined to be outside our updated site
selection criteria for the concept. As we make these difficult decisions, we
want to let the team members of these closed restaurants know that we
appreciate their passion and commitment and we are working to ensure the
employees affected by these planned closures are given opportunities at other
Ruby Tuesday or Lime Fresh restaurants.

In addition to the aggregate pre-tax impairment charges of $16.9 million
incurred in the second quarter in connection with these decisions, we will
also incur an estimated $2.0-$5.0 million in pre-tax lease reserves and other
charges in the third quarter. Exiting these concepts will enable us to
optimally allocate our time, capital, and resources to focus on the successful
sales turnaround at our Ruby Tuesday restaurants, in addition to creating
value with our Lime Fresh fast casual concept going forward. While these
decisions are difficult, we are convinced that this action is appropriate,
timely, and beneficial longer term to our shareholders.”

Other highlights from our second quarter results include:

  *Total revenue decreased 1.0% from the prior-year primarily due to the
    permanent closure of 29 Company-owned Ruby Tuesday concept restaurants
    over the prior year, slightly offset by the same-restaurant sales increase
    at the Ruby Tuesday concept and unit growth of the Lime Fresh and Marlin &
    Ray’s concepts
  *Same-restaurant sales for domestic franchise restaurants increased by 0.2%
  *Opened two Company-owned Lime Fresh restaurants during the quarter and now
    have 17 Company-owned and five franchised locations, with our
    Company-owned restaurant count being subsequently reduced to 15 as a
    result of our planned closures
  *Permanently closed two Company-owned Ruby Tuesday restaurants
  *Domestic and international franchisees opened one and closed two Ruby
    Tuesday restaurants
  *RT Midwest Franchise successfully emerged from bankruptcy subsequent to
    the quarter end and is now operating 11 Ruby Tuesday franchised
  *Repurchased 2.4 million shares of common stock at an average price of
    $7.33 per share during the quarter. Subsequent to quarter end, we
    repurchased an additional 400 thousand shares at an average price of
  *Repurchased $11.5 million of high yield bonds at a 5% discount to par,
    resulting in a pre-tax gain of $0.6 million
  *Closed sale leaseback transactions on five restaurants during the quarter
    resulting in $11.7 million of gross proceeds. Subsequent to the end of the
    quarter, we closed sale leaseback transactions on an additional two
    restaurants resulting in $4.7 million of gross proceeds. Since the third
    quarter of fiscal 2012, we have completed sale leaseback transactions on
    26 restaurants, resulting in $58.9 million of gross proceeds.
  *Total capital expenditures were $12.1 million
  *Total book debt of $309 million at the end of the second quarter compared
    to $342 million for the prior-year quarter, a decrease of $33 million.
    Additionally, we had $26 million of cash on the balance sheet at quarter
    end compared to $9 million in the prior year.

Share repurchase authorization

On January 8, 2013 the Board of Directors increased the share repurchase
authorization amount by 10 million shares, resulting in 12.7 million shares
now authorized for repurchase under the Company’s share repurchase plan.

                          Fiscal Year 2013 Guidance

  *Same-Restaurant Sales – We estimate same-restaurant sales for
    Company-owned restaurants will be approximately flat for the year
  *Company-Owned Restaurant Development – We plan to open 10 to 12 Lime Fresh
    restaurants, close two Lime Fresh restaurants, close 13 Marlin & Ray’s
    restaurants, close one Wok Hay restaurant, sell two Truffles Grill
    restaurants, and close six to eight Company-owned Ruby Tuesday restaurants
  *Franchise Restaurant Development – We estimate our franchisees will open
    12 to 14 restaurants, up to 10 of which will be international, and close
    four to five restaurants
  *Restaurant Operating Margins – We estimate margins will improve
    approximately 150-175 basis points due to cost savings initiatives
  *Depreciation – Estimated to  be in the range of $60-$62 million for the
  *Selling, General, and Administrative Expenses – Advertising expense is
    estimated to be in the range of $78-$82 million for the year compared to
    $47.9 million in fiscal 2012 primarily due to incremental television
    advertising expense which is largely funded by our cost savings
    initiatives and reduction in promotions expense. Excluding advertising
    expense, selling, general, and administrative expenses are estimated to be
    slightly lower primarily due to lower consulting fees and other cost
    savings initiatives being partially offset by the projected fourth quarter
    pension settlement expense attributable to our former CEO.
  *Interest Expense – Estimated to be $26-$27 million for the year
  *Tax Benefit – Based on our lower pre-tax income coupled with our
    employment-related tax credits, we anticipate a net tax benefit of $15 to
    $20 million for the year
  *Diluted Earnings Per Share – Diluted earnings per share for the year is
    estimated to be in the ($0.03) to $0.03 range including the second quarter
    impairment charges and third quarter lease and other charges mentioned
    above, in addition to including the CEO pension settlement expense and new
    CEO transition expenses. Excluding the impact of these items, diluted
    earnings per share for the year are estimated to be in the $0.24 to $0.30
    range. On a go-forward basis, exiting these non-core brands should result
    in an annual earnings improvement of approximately $0.03 per share.
  *Fully-Diluted Weighted Average Shares Outstanding – Estimated to be
    approximately 60-61 million for the year
  *Capital Expenditures – Estimated to be $38-$42 million for the year
  *Free Cash Flow – Estimated to be $10-$20 million for the year. On an
    adjusted basis, free cash flow is estimated to be $22-$32 million after
    excluding the impact of our former CEO’s pension payout (approximately $8
    million) and estimated lease reserve settlements from restaurants closed
    in the fourth quarter of fiscal year 2012 and planned restaurant closures
    in the third quarter of fiscal 2013 (approximately $4 million).
  *Sale Leaseback – We plan to pursue sale leaseback transactions on up to 20
    additional properties representing estimated gross proceeds of
    approximately $40-$45 million which we estimate will take another five to
    six quarters to complete

In closing, Mr. Buettgen said, “We enter the second half of our fiscal year
with a clear focus on three key initiatives. First, we are focused on driving
profitable same-restaurant sales growth at Ruby Tuesday. We will accomplish
this by continuing to refine the quality of our menu, our in-restaurant
experience, and the effectiveness of our advertising and promotion efforts.
Second, we are focused on prudently growing our Lime Fresh fast casual
concept. Our final key initiative is to increase shareholder value by
investing our capital to yield attractive returns. While we are cautious
near-term given the current economic environment, we believe there is
significant opportunity ahead to strengthen our Company and create shareholder

        Reporting Reclassifications to Prior-Year Financial Statements

Similar to the first quarter, we made several reporting reclassifications to
our prior-year statements of operations for the 13 week period ended November
29, 2011 to better align our financial statement presentation with our peer
group. These reclassifications, which had no effect on pre-tax or net loss
were primarily in two key areas: 1) Amortization of deferred debt issuance
costs and revolving credit facility commitment fees of $0.5 million were
reclassified from other restaurant operating costs to interest expense, net;
and 2) Corporate and field executive fringe benefits and payroll taxes of $2.0
million were reclassified from payroll and related costs to selling, general,
and administrative, net, where the corresponding salary expenses are reported.
In the current year quarter, these amounts were $0.8 million and $2.1 million,

                              ABOUT RUBY TUESDAY

Ruby Tuesday, Inc. has Company-owned and/or franchise Ruby Tuesday brand
restaurants in 45 states, the District of Columbia,11 foreign countries, and
Guam. As of December 4, 2012, we owned and operated 709 Ruby Tuesday
restaurants and franchised 77 Ruby Tuesday restaurants, comprised of 33
domestic and 44 international 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 websites:

Special Note Regarding Forward-Looking Information

This press release contains various forward-looking statements, which
represent our 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 repayments of debt, availability of financing on terms
attractive to the Company, payment of dividends, stock and bond repurchases,
restaurant acquisitions, conversions of Company-owned restaurants to other
dining concepts, 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 (such statements include, but are not limited to, statements
relating to cost savings that we estimate may result from any programs we
implement, our estimates of future capital spending and free cash flow, our
targets for annual growth in same-restaurant sales and average annual sales
per restaurant, and the benefits of our television marketing), including,
without limitation, the following: general economic conditions; changes in
promotional, couponing and advertising strategies; changes in our guests’
disposable income; consumer spending trends and habits; increased competition
in the restaurant market; laws and regulations affecting labor and employee
benefit costs, including further potential increases in state and federally
mandated minimum wages, and healthcare reform; guests’ acceptance of changes
in menu items; guests’ acceptance of our development prototypes and remodeled
restaurants; our ability to successfully integrate acquired companies;
mall-traffic trends; changes in the availability and cost of capital; weather
conditions in the regions in which Company-owned and franchised restaurants
are operated; costs and availability of food and beverage inventory; our
ability to attract and retain qualified managers, franchisees and team
members; impact of adoption of new accounting standards; impact of food-borne
illnesses resulting from an outbreak at either Ruby Tuesday or other
restaurant concepts; our ability to complete our planned sale-leaseback
transactions; effects of actual or threatened future terrorist attacks in the
United States; and significant fluctuations in energy prices.

Financial Results
For the Second
Quarter of Fiscal
Year 2013
(Amounts in
thousands except
per share amounts)
                      13 Weeks                13 Weeks                             26 Weeks                26 Weeks
                      Ended                   Ended                                Ended                   Ended
                      December 4,   Percent   November      Percent   Percent      December 4,   Percent   November    Percent   Percent
                                              29,                                                          29,
                      2012         of        2011         of       Change       2012         of        2011       of       Change
                                    Revenue                 Revenue                              Revenue               Revenue
Restaurant sales
and operating         $ 302,753     99.5      $ 306,155     99.6                   $ 634,018     99.5      $ 635,009   99.6
Franchise revenue      1,480      0.5        1,250      0.4                     3,136      0.5        2,741     0.4
Total revenue           304,233     100.0       307,405     100.0     (1.0     )     637,154     100.0       637,750   100.0     (0.1     )
Operating Costs and
(as a percent of
Restaurant sales
and operating
Cost of merchandise     84,297      27.8        91,562      29.9                     173,822     27.4        189,137   29.8
Payroll and related     102,788     34.0        105,814     34.6                     212,022     33.4        216,675   34.1
Other restaurant        66,996      22.1        64,801      21.2                     134,152     21.2        133,538   21.0
operating costs
Depreciation            15,120      5.0         16,414      5.4                      30,512      4.8         32,700    5.1
(as a percent of
Total revenue)
Selling, general
and administrative,     38,958      12.8        25,410      8.3                      82,387      12.9        53,797    8.4
Closures and           18,251     6.0        653        0.2                     19,375     3.0        1,098     0.2
Total operating        326,410               304,654                            652,270               626,945
costs and expenses
(Loss)/Earnings         (22,177 )   (7.3  )     2,751       0.9       (906.1   )     (15,116 )   (2.4  )     10,805    1.7       (239.9   )
From Operations
Interest expense,       7,181       2.4         4,498       1.5                      13,971      2.2         8,895     1.4
Gain on
extinguishment of      (571    )   (0.2  )    0          0.0                     (571    )   (0.1  )    0         0.0
Pre-tax                 (28,787 )   (9.5  )     (1,747  )   (0.6  )   (1,547.8 )     (28,516 )   (4.5  )     1,910     0.3       (1,593.0 )
(Benefit)/provision    (13,719 )   (4.5  )    254        0.1                     (16,047 )   (2.5  )    818       0.1
for income taxes
Net (Loss)/Income     $ (15,068 )   (5.0  )   $ (2,001  )   (0.7  )   (653.0   )   $ (12,469 )   (2.0  )   $ 1,092     0.2       (1,241.8 )
(Loss)/Earnings Per
Basic                 $ (0.24   )             $ (0.03   )             (700.0   )   $ (0.20   )             $ 0.02                (1,100.0 )
Diluted               $ (0.24   )             $ (0.03   )             (700.0   )   $ (0.20   )             $ 0.02                (1,100.0 )
Basic                  62,005                62,598                             62,409                63,177
Diluted                62,005                62,598                             62,409                63,729

Financial Results For the Second
of Fiscal Year 2013
(Amounts in thousands)
                                               December 4,         June 5,
CONDENSED BALANCE SHEETS                       2012                2012
Cash and Cash Equivalents                      $ 25,594            $ 48,184
Accounts Receivable                              6,772               4,700
Inventories                                      39,345              29,030
Income Tax Receivable                            1,822               837
Deferred Income Taxes                            30,074              27,134
Prepaid Rent and Other Expenses                  12,815              13,670
Assets Held for Sale                            4,178              4,713
Total Current Assets                             120,600             128,268
Property and Equipment, Net                      910,898             966,605
Goodwill                                         9,022               7,989
Other Assets                                    68,620             70,675
Total Assets                                   $ 1,109,140         $ 1,173,537
Current Portion of Long Term Debt,             $ 9,988             $ 12,454
including Capital Leases
Other Current Liabilities                        113,447             119,770
Long-Term Debt, including Capital                298,709             314,209
Deferred Income Taxes                            19,858              37,567
Deferred Escalating Minimum Rents                46,465              45,259
Other Deferred Liabilities                      74,752             68,054
Total Liabilities                                563,219             597,313
Shareholders' Equity                            545,921            576,224
Total Liabilities and Shareholders'            $ 1,109,140         $ 1,173,537


Ruby Tuesday, Inc.
Greg Ashley, 865-379-5700
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