Ruby Tuesday, Inc. (NYSE:RT) today announced financial results for
the fourth quarter and fiscal year ended June 6, 2017.
Fiscal Fourth Quarter 2017 Highlights
(14 weeks ended June 6, 2017, compared to the 13 weeks ended May
31, 2016):
- Total revenue declined 8.8% to $254.9 million, which included a
net reduction of 103 Company-owned Ruby Tuesday restaurants
compared to the fourth quarter of the prior fiscal year. 95 of
these restaurants were closed in connection with our August 11,
2016 announcement. Excluding the 14th week in 2017, total revenues
decreased 14.4% to $239.1 million.
- Same-restaurant sales (on a 13-week comparable basis) declined
1.6% compared to a 3.7% decrease in the fourth quarter of the prior
fiscal year.
- Closures and Impairments expense was $10.5 million, net of $4.4
million in gains on the sale of surplus properties, compared to
$43.8 million, which included a loss of $0.2 million on the sale of
surplus properties, in the fourth quarter of the prior fiscal
year.
- Net Loss was $8.7 million, or ($0.14) per diluted share,
compared to Net Loss of $27.6 million, or ($0.46) per diluted share
in the fourth quarter of the prior fiscal year.
- Restaurant level margin* contracted 40 basis points to
18.3%.
- Adjusted Net Income* was $3.9 million, or $0.06 per diluted
share, compared to Adjusted Net Income of $6.3 million, or $0.10
per diluted share in the fourth quarter of the prior fiscal
year.
- Adjusted EBITDA* was $22.6 million compared to $28.3 million in
the fourth quarter of the prior fiscal year.
- As of June 6, 2017, the Company had cash and cash equivalents
of $41.7 million.
Fiscal Year 2017 Highlights (53 weeks
ended June 6, 2017, compared to the 52 weeks ended May 31,
2016):
- Total revenue declined 12.8% to $952 million, which included a
net reduction of 103 Company-owned Ruby Tuesday restaurants
compared to the prior fiscal year. 95 of these restaurants were
closed in connection with our August 11, 2016 announcement.
Excluding the 53rd week in 2017, total revenues decreased 14.2% to
$936.2 million.
- Same-restaurant sales (on a 52-week comparable basis) declined
3.1% following a 1.4% decline in the prior fiscal year.
- Closures and Impairments expense was $69.8 million, net of $4.4
million in gains on the sale of surplus properties, compared to
$64.7 million, net of $0.8 million in gains on the sale of surplus
properties, in the prior fiscal year.
- Net Loss was $106.1 million, or ($1.76) per diluted share,
compared to Net Loss of $50.7 million, or ($0.83) per diluted share
in the last fiscal year.
- Restaurant level margin* contracted 180 basis points to
15.0%.
- Adjusted Net Loss* was $17.5 million, or $(0.29) per diluted
share, compared to Adjusted Net Income of $3.9 million, or $0.06
per diluted share in the last fiscal year.
- Adjusted EBITDA* was $33.6 million compared to $77.7 million in
the prior fiscal year.
* Restaurant Level Margin, EBITDA, Adjusted
EBITDA, Adjusted Net Income/(Loss) and Adjusted Net Income/(Loss)
per share are non-GAAP measures. Reconciliations of Restaurant
Level Margin, EBITDA, Adjusted EBITDA, Adjusted Net Income/(Loss)
and Adjusted Net Income/(Loss) per share to the most directly
comparable financial measures presented in accordance with United
States Generally Accepted Accounting Principles (GAAP) are set
forth in the schedules accompanying this release. See “Non-GAAP
Reconciliation Table” and “Condensed Consolidated Statements of
Operations.”
Jim Hyatt, President and Chief Executive
Officer, commented, “While the casual dining environment remains
challenging and highly competitive, we are pleased to have achieved
a sequential improvement in same-restaurant sales and operating
performance for the fourth quarter as we had expected. Our
same-restaurant sales trend improved 240 basis points from a 4.0%
decline in the third quarter to a 1.6% decline in the fourth
quarter while we held our performance gap relative to the industry
constant. Additionally, we reported adjusted net income for the
fourth quarter following three quarters of adjusted net losses, as
we have stemmed the decline in our top-line while controlling
expenses. Looking ahead to fiscal 2018, we expect to achieve
year-over-year improvement in restaurant level margins and EBITDA
as we execute our new ‘Plan to Win’ strategy.”
Hyatt concluded, “Based on learnings from the
field and feedback from team members and guests, we have developed
our ‘Plan to Win’ road-map for the next 12 months. Our top three
priorities are to improve the total guest experience, ignite
same-restaurant sales growth, and deliver system profitability. We
have developed a comprehensive strategy to realize these goals over
the stated time frame and believe this game plan will position Ruby
Tuesday towards achieving sustained profitable growth and
increasing shareholder value.”
Strategic Initiatives
The “Plan to Win”
Ruby Tuesday has launched its “Plan to Win” to
address its sales and operational challenges, improve financial
profitability, and thereby enhance long-term value for
shareholders. As the Company executes against this new strategy it
expects to achieve year-over-year improvement in restaurant level
margins and EBITDA in fiscal 2018. The “Plan to Win” is a road-map
for the Company over the next 12 months and includes the following
priorities:
- Improve Total Guest Experience- Develop and rollout 9 to 12
months operations calendar to enhance operational excellence and
support the marketing calendar- Deploy Operations and Restaurant
Support Center platforms to drive performance- Focus on progressive
improvement on all guest experience attributes
- Ignite Same Restaurant Sales Growth- Develop 12 to 15 month
marketing calendar to increase frequency of existing and new target
guests- Drive improved ROI for marketing and media spending-
Implement menu simplification and test & pilot new lunch menu-
Re-energize To-Go and Catering Programs
- Deliver System Profitability- Reconfigure and optimize G&A
expenses- Deploy P&L benchmarking tool to drive accountability
and enhance unit profitability- Optimize supply chain process for
profitability
Asset Rationalization Plan
- Ruby Tuesday is in the contract process to sell 21 properties
with expected net proceeds of $28.2 million or approximately $1.3
million per location. During fiscal 2017, the Company completed
sales for 13 properties that closed as a result of the Asset
Rationalization Project and received $20.1 million in net proceeds.
Also during fiscal 2017, the Company has settled 32 of the 61
leased properties closed as a result of the Asset Rationalization
Plan for approximately $8.4 million.
Review of Strategic
Alternatives
On March 13, 2017, the Company announced that
its Board of Directors had authorized an exploration of strategic
alternatives in order to maximize shareholder value. The Board of
Directors is considering all strategic alternatives including, but
not limited to, a potential sale or merger of the Company, and has
retained UBS as its financial advisor to assist in the process.
As of August 21, 2017, the strategic
alternatives review process is ongoing and entering its final
phase. The Board is focused on the completion of this process and
remains dedicated to delivering value to its customers,
franchisees, employees, and shareholders to better position the
brand to achieve top line growth and higher operating
profitability.
Annual Meeting of
Shareholders
Ruby Tuesday today announced that, in light of
the ongoing strategic review process, the Board of Directors has
postponed the 2017 Annual Meeting of Shareholders to January 22,
2018 from its original date of December 6, 2017. If a shareholder
intends to nominate a person for election to the Board or to
propose other business for consideration at the Annual Meeting,
notice must be delivered to the Company by October 23, 2017.
The Company does not anticipate any further postponement of the
Annual Meeting.
Additional information about the Annual Meeting,
including the location and time of the Annual Meeting, will be
contained in the Company’s Proxy Statement for the Annual Meeting,
which will be made available to shareholders of record prior to the
Annual Meeting. The Company invites all of its shareholders to
attend the Annual Meeting.
Fiscal Fourth Quarter 2017 Financial
Results
Total revenue was $254.9 million, a decrease of
8.8% or $24.5 million from the fourth quarter of the prior fiscal
year. This decrease was due to a net reduction of 103 Company-owned
Ruby Tuesday restaurants as compared to the fourth quarter of the
prior fiscal year and a same-restaurant sales decline of 1.6% at
Company-owned Ruby Tuesday restaurants. Year-over-year guest counts
fell 2.9% while average check rose 1.3%, reflecting ongoing
challenges affecting the casual dining industry. The 14th week in
the fourth quarter of 2017 contributed approximately $15.7 million
to total revenue.
Restaurant level margin* decreased to $46.5
million from $51.9 million in the fourth quarter of the prior
fiscal year. As a percentage of restaurant sales and operating
revenue, restaurant level margin contracted 40 basis points to
18.3% from 18.7%. The decrease in margin rate was primarily driven
by increases in payroll and related costs offset in part by an
improvement in other restaurant operating costs.
General and administrative expenses (G&A)
increased to $18.7 million from $14.0 million in the fourth quarter
of the prior fiscal year. As a percentage of total revenue, G&A
expenses increased 230 basis points to 7.3% from 5.0%. The increase
in G&A was primarily due to the additional fiscal week and
costs related to the review of strategic alternatives.
Net Loss was $8.7 million, or ($0.14) per
diluted share, compared to Net Loss of $27.6 million, or ($0.46)
per diluted share, in the fourth quarter of the prior fiscal year.
The 14th week in the fourth quarter of 2017 contributed
approximately $0.02.
Adjusted Net Income* was $3.9 million, or $0.06
per diluted share, compared to Adjusted Net Income of $6.3 million,
or $0.10 per diluted share, in the fourth quarter of the prior
fiscal year. The 14th week in the fourth quarter of 2017
contributed approximately $0.02. Adjusted Net Income for the fourth
quarter of fiscal year 2017 excluded after-tax adjustments of $12.6
million, which primarily consisted of closures and impairments
charges and costs related to executive transition, corporate
restructuring, and review of strategic alternatives. Adjusted Net
Income in the fourth quarter of fiscal year 2016 excluded after-tax
adjustments of $33.9 million, primarily related to closures and
impairments charges. A reconciliation between Net Loss and Adjusted
Net Income/(Loss) is included in the accompanying financial
data.
Fiscal Year 2017 Financial
Results
Total revenue was $952.0 million, a decrease of
12.8% or $139.3 million from last fiscal year. This decrease was
due to a net reduction of 103 Company-owned Ruby Tuesday
restaurants and a same-restaurant sales decline of 3.1% at
Company-owned Ruby Tuesday restaurants. The 53rd week in the fourth
quarter 2017 contributed approximately $15.7 million to total
revenue. Year-over-year guest counts fell 3.1% for fiscal year 2017
and average check was flat to the prior year.
Restaurant level margin* decreased to $142.2
million from $182.4 million in the prior fiscal year. As a
percentage of Company-owned restaurant sales and operating revenue,
restaurant level margin contracted 180 basis points to 15.0% from
16.8%. The decrease in margin rate was primarily driven by
increases in cost of goods sold and payroll and related costs
offset in part by an improvement in other restaurant operating
costs.
General & administrative expenses (G&A)
increased to $67.0 million from $58.2 million in the prior fiscal
year. As a percentage of total revenue, G&A expenses increased
170 basis points to 7.0% from 5.3%. The increase in G&A was
primarily due to the additional fiscal week, costs associated with
executive transition, and costs associated with the review of
strategic alternatives.
Net Loss was $106.1 million, or ($1.76) per
diluted share, compared to Net Loss of $50.7 million, or ($0.83)
per diluted share in the last fiscal year. The 53rd week in the
fourth quarter of 2017 contributed approximately $0.02.
Adjusted Net Loss* was $17.5 million, or $(0.29)
per diluted share, compared to Adjusted Net Income of $3.9 million,
or $0.06 per diluted share, in the prior fiscal year. The 53rd week
in the fourth quarter of 2017 contributed approximately $0.02.
Adjusted Net Income for fiscal year 2017 excluded after-tax
adjustments of $88.6 million, which primarily consisted of closures
and impairments charges and costs related to executive transition,
corporate restructuring, and review of strategic alternatives.
Adjusted Net Income for fiscal year 2016 excluded after-tax
adjustments of $54.6 million, primarily related to closures and
impairments charges. A reconciliation between Net Loss and Adjusted
Net (Loss)/Income is included in the accompanying financial
data.
Balance Sheet
On May 26, 2017, Ruby Tuesday entered into a
$20.0 million 364-day senior secured revolving credit agreement
with UBS to replace its previously-disclosed four-year revolving
credit agreement with its prior lenders. The New Credit Facility is
extended to the Company on substantially the same terms as the
Prior Credit Facility and is secured substantially by mortgages
over certain of the Company’s real estate assets. Ruby Tuesday’s
$15.0 million sublimit for standby letters of credit remains
unchanged.
Aside from $14.8 million of letters of credit
outstanding, as of June 6, 2017 the Company had no borrowings under
the New Credit Facility.
Ruby Tuesday also received net cash proceeds of
$12.3 million related to the sale of eight properties during the
fourth quarter at an average per unit of $1.5 million.
The Company ended the fiscal 2017 fourth quarter
with cash and cash equivalents totaling $41.7 million and debt of
$213.7 million.
Restaurant Activity
As of June 6, 2017, there were 605 Ruby Tuesday
restaurants system-wide, of which 543 were Company-owned. During
the fourth quarter, one Company-owned Ruby Tuesday restaurant and
one international franchised Ruby Tuesday restaurant were
closed.
Conference Call &
Webcast
The Company will host a conference call today to
discuss fiscal fourth quarter 2017 financial results at 5:00 PM
Eastern Time. The conference call can be accessed live by dialing
719-325-4886. A replay will be available after the call and can be
accessed by dialing 412-317-6671. The passcode is 7450235. The
replay will be available through Thursday, September 21, 2017.
The conference call will also be webcast live
and later archived on the Investor Relations page of Ruby Tuesday’s
corporate website at www.rubytuesday.com under the ‘Events &
Presentations’ section.
About Ruby Tuesday, Inc.
Ruby Tuesday, Inc. owns and franchises Ruby
Tuesday brand restaurants. As of June 6, 2017, there were 605 Ruby
Tuesday restaurants in 41 states, 14 foreign countries, and Guam.
Of those restaurants, we owned and operated 543 Ruby Tuesday
restaurants and franchised 62 Ruby Tuesday restaurants, comprised
of 17 domestic and 45 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. For more
information about Ruby Tuesday, please visit www.rubytuesday.com.
Ruby Tuesday, Inc. is traded on the New York Stock Exchange
(Symbol: RT).
Forward-looking Information
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 changes 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 review of strategic
alternatives, our asset rationalization project, 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 dispositions, 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 following: general
economic conditions; changes in promotional, couponing and
advertising strategies; changes in our customers’ disposable
income; consumer spending trends and habits; increased competition
in the restaurant market; laws and regulations, including those
affecting labor and employee benefit costs, such as further
potential increases in state and federally mandated minimum wages
and healthcare reform; changes in senior management or in the Board
of Directors; the results of our ongoing exploration of strategic
alternatives to maximize shareholder value; the impact of pending
litigation; customers’ acceptance of changes in menu items; changes
in the availability and cost of capital; potential limitations
imposed by debt covenants under our debt instruments; weather
conditions in the regions in which Company-owned and franchised
restaurants are operated; costs and availability of food and
beverage inventory, including supply and delivery shortages or
interruptions; significant fluctuations in energy prices; security
breaches of our customers’ or employees’ confidential information
or personal data or the failure of our information technology and
computer systems; 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 one of our restaurants or other competing
restaurant concepts; effects of actual or threatened future
terrorist attacks in the United States; prevailing conditions in
the real estate market that may affect expected results under our
Asset Rationalization Plan, our ability to obtain waivers under, or
amendments to, certain of our credit facilities by the lenders
under such facilities, and other 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 6, 2017.
Non-GAAP Financial Measures
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 Restaurant Level Margin,
EBITDA, Adjusted EBITDA, Adjusted Net Income/(Loss) and Adjusted
Net Income/(Loss) 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 GAAP. We also believe that
securities analysts, investors and other interested parties
frequently use Restaurant Level Margin, EBITDA, Adjusted EBITDA,
Adjusted Net Income/(Loss) and Adjusted Net Income/(Loss) per share
in evaluating issuers. Because other companies in some cases
calculate Restaurant Level Margin, EBITDA, Adjusted EBITDA,
Adjusted Net Income/(Loss), or Adjusted Net Income/(Loss) 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.
Available in this release is the reconciliation
of Net Loss, the most directly comparable GAAP measure, to EBITDA,
Adjusted EBITDA, Adjusted Net Income/(Loss) and Adjusted Net
Income/(Loss) per share, all of which are non-GAAP financial
measures. Reconciliation of Restaurant Level Margin, which is also
a non-GAAP measure, to Net Loss are presented in the Condensed
Consolidated Statements of Operations. The Company defines
Restaurant Level Margin as Restaurant Sales and Operating Revenue
less Cost of Goods Sold, which excludes Depreciation and
Amortization, Payroll and Related Costs, and Other Restaurant
Operating Costs. EBITDA is defined as Net Loss before interest,
taxes, and depreciation and amortization and Adjusted EBITDA as
EBITDA, excluding certain expenses/(income) including, but not
limited to, Closures and Impairments, Net, Executive Transition,
and Strategic Alternatives. Adjusted Net Income/(Loss) is defined
as Net Loss, excluding certain expenses/(income) as detailed in
Adjusted EBITDA as well as adjustments related to Debt Prepayment
Penalties, Deferred Financing Fees, Gain on Extinguishment of Debt,
Income Tax Benefit from Adjustments, and Income Tax Benefit
Adjusted to the Statutory Rate. Adjusted Net Income/(Loss) per
share is defined as Adjusted Net Income/(Loss) divided by diluted
shares outstanding.
|
|
|
|
|
Financial Results For the Fourth Quarter of Fiscal Year
2017 |
|
|
(Amounts in thousands) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
June 6, |
|
May 31, |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
2017 |
|
2016 |
Assets |
|
|
|
|
|
|
|
|
|
Cash and
Cash Equivalents |
|
$ |
41,714 |
|
$ |
66,964 |
Restricted Cash |
|
|
6,445 |
|
|
377 |
Accounts
and Other Receivables |
|
|
7,315 |
|
|
12,827 |
Inventories |
|
|
17,178 |
|
|
21,595 |
Income
Tax Receivable |
|
|
3,061 |
|
|
3,003 |
Prepaid
Rent and Other Expenses |
|
|
10,499 |
|
|
11,508 |
Assets
Held for Sale |
|
|
12,825 |
|
|
4,642 |
|
|
|
|
|
Total
Current Assets |
|
|
99,037 |
|
|
120,916 |
|
|
|
|
|
Property
and Equipment, Net |
|
|
583,097 |
|
|
671,250 |
Other
Assets |
|
|
41,508 |
|
|
45,751 |
|
|
|
|
|
Total
Assets |
|
$ |
723,642 |
|
$ |
837,917 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
Portion of Long-Term Debt, including |
|
|
|
|
Capital
Leases |
|
$ |
368 |
|
$ |
9,934 |
Deferred
Revenue - Gift Cards |
|
|
15,051 |
|
|
16,354 |
Other
Current Liabilities |
|
|
83,655 |
|
|
71,418 |
|
|
|
|
|
Total
Current Liabilities |
|
|
99,074 |
|
|
97,706 |
|
|
|
|
|
Long-Term
Debt and Capital Leases, less |
|
|
213,341 |
|
|
213,803 |
Current
Maturities |
|
|
|
|
Deferred
Escalating Minimum Rents |
|
|
43,464 |
|
|
51,535 |
Other
Deferred Liabilities |
|
|
60,397 |
|
|
67,093 |
|
|
|
|
|
Total
Liabilities |
|
|
416,276 |
|
|
430,137 |
|
|
|
|
|
Shareholders' Equity |
|
|
307,366 |
|
|
407,780 |
|
|
|
|
|
Total
Liabilities and |
|
|
|
|
Shareholders' Equity |
|
$ |
723,642 |
|
$ |
837,917 |
|
|
|
|
|
Financial Results For the Fourth Quarter and Year Ended
June 6, 2017 |
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 Weeks |
|
|
13 Weeks |
|
|
53 Weeks |
|
|
52 Weeks |
|
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
Ended |
|
|
|
June 6, |
Percent |
|
May 31, |
Percent |
|
June 6, |
Percent |
|
May 31, |
Percent |
|
|
2017 |
of Revenue |
|
2016 |
of Revenue |
|
2017 |
of Revenue |
|
2016 |
of Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant sales and operating revenue |
|
$ |
253,886 |
|
99.6 |
|
|
$ |
277,929 |
|
99.5 |
|
|
$ |
948,403 |
|
99.6 |
|
|
$ |
1,085,034 |
|
99.4 |
|
Franchise
revenue |
|
|
977 |
|
0.4 |
|
|
|
1,393 |
|
0.5 |
|
|
|
3,568 |
|
0.4 |
|
|
|
6,194 |
|
0.6 |
|
Total Revenue |
|
|
254,863 |
|
100.0 |
|
|
|
279,322 |
|
100.0 |
|
|
|
951,971 |
|
100.0 |
|
|
|
1,091,228 |
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
(as a
percent of Restaurant sales and operating revenue) |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
69,950 |
|
27.6 |
|
|
|
76,840 |
|
27.6 |
|
|
|
268,622 |
|
28.3 |
|
|
|
298,529 |
|
27.5 |
|
Payroll
and related costs |
|
|
87,813 |
|
34.6 |
|
|
|
93,585 |
|
33.7 |
|
|
|
338,918 |
|
35.7 |
|
|
|
374,561 |
|
34.5 |
|
Other
restaurant operating costs |
|
|
49,627 |
|
19.5 |
|
|
|
55,615 |
|
20.0 |
|
|
|
198,696 |
|
21.0 |
|
|
|
229,518 |
|
21.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant Level Margin (excludes franchise
revenue) |
|
46,496 |
|
18.3 |
|
|
|
51,889 |
|
18.7 |
|
|
|
142,167 |
|
15.0 |
|
|
|
182,426 |
|
16.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,941 |
|
3.9 |
|
|
|
12,884 |
|
4.6 |
|
|
|
41,779 |
|
4.4 |
|
|
|
51,358 |
|
4.7 |
|
(as a
percent of Total revenue) |
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative, net |
|
|
18,650 |
|
7.3 |
|
|
|
13,965 |
|
5.0 |
|
|
|
67,009 |
|
7.0 |
|
|
|
58,191 |
|
5.3 |
|
Marketing
Expenses, net |
|
|
10,812 |
|
4.2 |
|
|
|
11,040 |
|
4.0 |
|
|
|
54,140 |
|
5.7 |
|
|
|
51,436 |
|
4.7 |
|
Closures
and impairments, net |
|
|
10,467 |
|
4.1 |
|
|
|
43,773 |
|
15.7 |
|
|
|
69,808 |
|
7.3 |
|
|
|
64,680 |
|
5.9 |
|
Gain on
sales of Lime Fresh Mexican Grill assets |
|
|
- |
|
- |
|
|
|
(5,937 |
) |
(2.1 |
) |
|
|
- |
|
0.0 |
|
|
|
(5,937 |
) |
(0.5 |
) |
Total
operating costs and expenses |
|
|
257,260 |
|
|
|
|
301,765 |
|
|
|
|
1,038,972 |
|
|
|
|
1,122,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss From Operations |
|
|
(2,397 |
) |
(0.9 |
) |
|
|
(22,443 |
) |
(8.0 |
) |
|
|
(87,001 |
) |
(9.1 |
) |
|
|
(31,108 |
) |
(2.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
6,264 |
|
2.5 |
|
|
|
5,654 |
|
2.0 |
|
|
|
20,855 |
|
2.2 |
|
|
|
21,754 |
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes |
|
|
(8,661 |
) |
(3.4 |
) |
|
|
(28,097 |
) |
(10.1 |
) |
|
|
(107,856 |
) |
(11.3 |
) |
|
|
(52,862 |
) |
(4.8 |
) |
Provision
/ (Benefit) for income taxes |
|
|
26 |
|
0.0 |
|
|
|
(494 |
) |
(0.2 |
) |
|
|
(1,716 |
) |
(0.2 |
) |
|
|
(2,180 |
) |
(0.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
$ |
(8,687 |
) |
(3.4 |
) |
|
$ |
(27,603 |
) |
(9.9 |
) |
|
$ |
(106,140 |
) |
(11.1 |
) |
|
$ |
(50,682 |
) |
(4.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.14 |
) |
|
|
$ |
(0.46 |
) |
|
|
$ |
(1.76 |
) |
|
|
$ |
(0.83 |
) |
|
Diluted |
|
$ |
(0.14 |
) |
|
|
$ |
(0.46 |
) |
|
|
$ |
(1.76 |
) |
|
|
$ |
(0.83 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,333 |
|
|
|
|
59,765 |
|
|
|
|
60,139 |
|
|
|
|
60,871 |
|
|
Diluted |
|
|
60,333 |
|
|
|
|
59,765 |
|
|
|
|
60,139 |
|
|
|
|
60,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation Table |
|
|
|
|
|
|
|
|
Reconciliation of EBITDA, Adjusted EBITDA,
Adjusted Net Income / (Loss), and Adjusted Net Income / (Loss) Per
Share |
|
|
(Amounts in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
14 Weeks |
|
13 Weeks |
|
53 Weeks |
|
52 Weeks |
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
June 6, |
|
May 31, |
|
June 6, |
|
May 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(8,687 |
) |
|
$ |
(27,603 |
) |
|
$ |
(106,140 |
) |
|
$ |
(50,682 |
) |
|
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
|
9,941 |
|
|
|
12,884 |
|
|
|
41,779 |
|
|
|
51,358 |
|
Interest Expense, net |
|
|
6,264 |
|
|
|
5,654 |
|
|
|
20,855 |
|
|
|
21,754 |
|
Expense / (Benefit) for Income Taxes |
|
|
26 |
|
|
|
(494 |
) |
|
|
(1,716 |
) |
|
|
(2,180 |
) |
EBITDA |
|
$ |
7,544 |
|
|
$ |
(9,559 |
) |
|
$ |
(45,222 |
) |
|
$ |
20,250 |
|
Closures and Impairments, Net (1) |
|
|
10,467 |
|
|
|
43,773 |
|
|
|
69,808 |
|
|
|
64,680 |
|
Executive Transition and Corporate Restructuring (2) |
|
|
1,286 |
|
|
|
- |
|
|
|
5,627 |
|
|
|
(1,274 |
) |
Costs Related to Review of Strategic Alternatives (3) |
|
|
3,347 |
|
|
|
- |
|
|
|
3,347 |
|
|
|
- |
|
Gain on Sales of Lime Fresh Mexican Grill Assets (4) |
|
|
- |
|
|
|
(5,937 |
) |
|
|
- |
|
|
|
(5,937 |
) |
Adjusted EBITDA |
|
$ |
22,644 |
|
|
$ |
28,277 |
|
|
$ |
33,560 |
|
|
$ |
77,719 |
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(8,687 |
) |
|
$ |
(27,603 |
) |
|
$ |
(106,140 |
) |
|
$ |
(50,682 |
) |
|
|
|
|
|
|
|
|
|
Closures and Impairments, Net (1) |
|
|
10,467 |
|
|
|
43,773 |
|
|
|
69,808 |
|
|
|
64,680 |
|
Executive Transition and Corporate Restructuring (2) |
|
|
1,286 |
|
|
|
- |
|
|
|
5,627 |
|
|
|
(1,274 |
) |
Costs Related to Review of Strategic Alternatives (3) |
|
|
3,347 |
|
|
|
- |
|
|
|
3,347 |
|
|
|
- |
|
Gain on Sales of Lime Fresh Mexican Grill Assets (4) |
|
|
- |
|
|
|
(5,937 |
) |
|
|
- |
|
|
|
(5,937 |
) |
Debt Prepayment Penalties & Deferred Financing Fees (5) |
|
|
- |
|
|
|
695 |
|
|
|
- |
|
|
|
1,840 |
|
Income Tax Benefit from Adjustments (6) |
|
|
(5,993 |
) |
|
|
(15,293 |
) |
|
|
(31,269 |
) |
|
|
(23,540 |
) |
Income Tax Expense / (Benefit) Adjusted to Statutory Rate (7) |
|
|
3,464 |
|
|
|
10,659 |
|
|
|
41,092 |
|
|
|
18,801 |
|
Adjusted Net Income / (Loss) |
|
$ |
3,884 |
|
|
$ |
6,294 |
|
|
$ |
(17,535 |
) |
|
$ |
3,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share |
|
$ |
(0.14 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.76 |
) |
|
$ |
(0.83 |
) |
|
|
|
|
|
|
|
|
|
Adjusted Net Income / (Loss) Per
Share |
|
$ |
0.06 |
|
|
$ |
0.10 |
|
|
$ |
(0.29 |
) |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
Basic Shares Outstanding (8) |
|
|
60,333 |
|
|
|
59,765 |
|
|
|
60,139 |
|
|
|
60,871 |
|
|
|
|
|
|
|
|
|
|
Diluted Shares Outstanding
(8) |
|
|
60,580 |
|
|
|
60,091 |
|
|
|
60,139 |
|
|
|
61,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes property impairments, closed
restaurant lease reserves, other closing expenses, losses / (gains)
on sales of properties, and a $2.0 million partial trademark
impairment charge of the Lime Fresh trademark during Q2 FY 16. |
(2) Primarily consists of severance, unused vacation,
and other benefit costs in connection with the departure of our
former Chief Executive Officer, President of the Ruby Tuesday
concept, and certain other former employees. |
(3) Includes costs associated with exploring strategic
alternatives in order to maximize shareholder value and position
the business for long-term success. |
(4) In Q4 FY 16, the Company sold various
Company-owned Lime Fresh restaurants to Rubio's Restaurants Inc.
and sold the Lime Fresh Mexican Grill brand to EverFresh
Endeavors. |
(5) Debt prepayment penalties and the write-off of
deferred financing fees are classified within Interest expense and
included in EBITDA calculation and therefore not a separate
add-back for Adjusted EBITDA. |
(6) Represents the tax impact of the adjustments to
Net Loss at the Company's statutory tax rate (39.69%). |
(7) Represents the Company's Income Tax Benefit
adjusted to the Company's statutory tax rate. |
(8) Net Loss and Adjusted Net Income / (Loss) per
share figures are calculated based on diluted shares
outstanding. |
|
Ruby Tuesday, Inc. |
Number of Restaurants at End of Period |
|
|
|
|
|
|
|
June
6, |
|
May
31, |
|
|
2017 |
|
2016 |
Ruby
Tuesday: |
|
|
|
|
Company-Owned |
|
543 |
|
646 |
Domestic
Franchised |
|
17 |
|
27 |
International Franchised |
|
45 |
|
51 |
Total |
|
605 |
|
724 |
|
|
|
|
|
Lime
Fresh: |
|
|
|
|
Company-Owned |
|
0 |
|
2 |
Domestic
Franchised |
|
0 |
|
0 |
Total |
|
0 |
|
2 |
|
|
|
|
|
Total
Restaurants: |
|
|
|
|
Company-Owned |
|
543 |
|
648 |
Domestic
Franchised |
|
17 |
|
27 |
International Franchised |
|
45 |
|
51 |
System-wide total |
|
605 |
|
726 |
|
|
|
|
|
Investor Relations
Melissa Calandruccio, CFA, ICR
(646) 277-1273
RubyTuesdayIR@icrinc.com
or
Media Relations
Christine Beggan, ICR
(203) 682-8329
RubyTuesday@icrinc.com
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