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Ruby Tuesday Management Discusses Q4 2012 Results - Earnings Call Transcript

Fiscal '12 was a challenging year for us as the environment remained competitive, with a focus on value supported by heavy media levels by most of our competitors. However, we did make some key strategic decisions, which we believe have put our company in a better position going forward. First of all, we made good progress on our upgraded and focused brand position with television test, leveraging our free fresh-baked bread and our Garden Bar free with select entrées, which is a unique differentiator for us among our peers. We completed our marketing program testing in the fourth quarter, with the first quarter fiscal 2013 rollout of our -- what we think is a very good television marketing plan at spending levels more competitive with our peer group, coupled with a more balanced level of promotional spending.

While we still have more work to do on the marketing front, we are happy to report that our advertising continues to gain traction, and we estimate that our first quarter fiscal 2013 same-restaurant sales should be up approximately 2%. Dan will provide more details on this later in the call.

Second, we recently updated our annualized cost savings range to $40 million to $45 million or approximately $5 million higher than the previous quarters estimate. Approximately $8 million of these savings were realized in '12, and the remaining $32 million to $37 million will be realized in this fiscal year.

We plan to reinvest the majority of these total savings into our marketing programs, and we will continue to search for additional savings that do not erode the overall guest experience.

In addition to the cost savings noted above, we also closed 23 underperforming restaurants during the fourth quarter, which is expected to add $1.5 million to $2 million to EBITDA annually and slightly improve same-store sales also.

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