Ruth’s Hospitality Group, Inc. Reports Full Year And Fourth Quarter 2011 Financial Results

Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH) today reported unaudited financial results for the full year and fourth quarter ended December 25, 2011.

Highlights for the fourth quarter and full year 2011 compared to the fourth quarter and full year 2010 were as follows:

Revenues: Total revenues in the fourth quarter rose 7.1% to $99.6 million compared to $93.0 million in the prior year. Total revenues in full year 2011 rose 4.7% to $369.6 million compared to $353.0 million in the prior year.

• Company-owned comparable restaurant sales for Ruth’s Chris Steak House accelerated in the fourth quarter increasing 7.7%.
• Company-owned comparable restaurant sales for Mitchell’s Fish Market increased 0.4% in the fourth quarter.

Operating expenses: Operating expenses increased by $9 million or 10.3% in the fourth quarter of 2011 compared to the fourth quarter of 2010.

• Expenses in the fourth quarter of 2011 were adversely impacted by a $3.0 million non-cash charge for the impairment of an intangible asset (Mitchell’s Fish Market trade name) and a $0.4 million non-cash loss on the disposal of property and equipment related to restaurant renovations.
• The fourth quarter of 2010 was negatively impacted by a $0.8 million non-cash charge for the impairment of certain property and equipment.

Net income: Net income available to preferred and common shareholders in the fourth quarter decreased to $1.9 million, or diluted earnings per common share of $0.04, compared to net income of $3.9 million, or diluted earnings per common share of $0.09, in the fourth quarter of 2010.

• Excluding the non-cash charges and income from discontinued operations, non-GAAP diluted earnings per common share was $0.11 compared to $0.09 in the prior year. See the attached Reconciliation of Non-GAAP Financial Measure table for supporting details.
• Balance Sheet: At the end of the fourth quarter of 2011, the Company had $22.0 million in debt outstanding under its senior credit agreement, a decrease of $17.4 million from $39.4 million at the end of the third quarter.
• Development: During the quarter, the Company opened a franchise location in Asheville, NC.
• Full year 2011 results: Revenue and net income available to preferred and common shareholders for full year 2011 were up 4.7% and 24.0%, respectively. Diluted earnings per common share increased 14.7% to $0.39.

Michael P. O'Donnell, Chairman, President and Chief Executive Officer of Ruth's Hospitality Group, Inc., stated, “We’re extremely pleased with the continued momentum of the Ruth’s Chris brand. Our same store sales growth of 7.7% at Ruth’s, on top of last year’s 9.2% increase, demonstrates our ongoing focus on exemplary service and distinctive, high-quality offerings. It also marks the seventh consecutive quarter of comparable sales growth and our eighth consecutive quarter of traffic gains in the Ruth’s Chris brand. We’re also encouraged that Mitchell’s same store sales continued its upward trajectory and returned to positive territory during the quarter. As we announced earlier this week, we are transitioning the leadership at Mitchell’s from Sam Tancredi to Pete Beadrault. Pete brings to Mitchell’s a broad multi-unit operator history and a record of positioning concepts for growth and profitability. We are thankful for Sam’s efforts over the last three years and look forward to Pete’s future contributions. Looking ahead to 2012, while food inflation is expected to provide continued cost challenges, we believe that through the efforts of our entire team, we have further strengthened our brand during the past year and believe we are well positioned to take advantage of continued improvement in the upscale dining segment during 2012.”