Our second quarter earnings were released today after the market closed and a copy of our press release can be found on the Investor Relations section of our website at rubytuesday.com, and is also available on Business Wire, First Call, and other financial media outlets.As usual our format today includes an overview of our second quarter financial results, our fiscal 2011 outlook and a review of our plans and strategies. At the conclusion of our prepared remarks we will respond to your questions. I will now turn the call over to Sandy Beall. Sandy Beall Thanks, Greg. I’d like to welcome all of you listening in this afternoon. Thank you for joining us. We’re pleased to report another good quarter overall highlighted by strong positive same-store sales and profitability. This was our best sales quarter in almost five years. We had solid year-over-year improvement in restaurant margins and our net income for the quarter was up sizeably over the prior year. We believe the impact of our Game Changers coupled with our tight cost -- cost control management is providing attractive, incremental flow through of our topline sales numbers. Always be better but it’s pretty good. Our same-restaurant sales for the second quarter were positive, 4.2% beating Knapp-Track on a one year basis by almost 3 points and on a two year basis by more than 6 points. Our same-restaurant sales have shown sequential quarterly improvement for the last eight quarters, including three successive quarters of positive results. Our balance sheet is in good shape, in particular given our new five year $320 million revolving credit facility which closed in early December and Margie will give you details on that later in the call. But this was really the last key component to our long range plan that we talked to you all about although here in the second again.
We are very comfortable in compliance relative to our debt covenants and our book to EBITDA ratio of 2.03 at the end of the quarter that represents a very good improvement over the prior year ratio of 2.57. Additionally our guest satisfaction index topped box scores are all time highs. Overall our business we feel is in good shape and we have momentum as we move forward.As we discussed in our last call, our sales and earnings growth and strong balance sheet and now our new credit facility are allowing us to begin executing on our three year strategic plan to create value in the following areas. First and foremost, we’re focused on continuing to enhance the sales margins and overall strength of the Ruby Tuesday brand, the brand that creates all the cash flow for us to do other things with. Our goal is to provide the ultimate $25 high-quality casual dining experience for $15, which Kimberly will provide more details on later on. We believe the continuing to invest in the brand both in new innovative products and promotions in a various self-service relate initiatives will enhance overall dining experience further. Our second strategy focuses on generating incremental revenue, more sales and more cash flow, more EBITDA, through converting some underperforming company-owned restaurants to other high-quality casual dining concepts and through selective franchise partnership acquisitions. We opened our first Jim ‘N Nick’s conversion in Knoxville on September 21st, and opened our first Truffles conversion in the Buckhead area of Atlanta on December 8th, and our seafood concept the first unit there will open by the end of the third quarter. We believe the value creation opportunity is high for our conversion strategy given the nominal capital investment of approximately $4 to $500 and the potential average restaurant volume increases of $1 million each, which creates a nice EBITDA flow through $300,000 or so, on each deal we hope.
On the franchise side, while we did acquire three additional franchise restaurants during the second quarter, we did not acquire any franchise partners but will continue to evaluate our options. We would like to exit the franchise partner program primarily by acquiring them and/or converting some of them to traditional Z’s.Read the rest of this transcript for free on seekingalpha.com