Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH) today reported unaudited financial results for its first quarter ended March 27, 2011. Highlights for the first quarter of 2011 compared to the first quarter of 2010 were as follows:
- Total revenues were $98.8 million compared to $94.7 million in the prior year.
- Net income available to preferred and common shareholders of $5.9 million, or $0.14 per diluted share, compared to $6.5 million, or $0.20 per diluted share, in the first quarter of 2010. Excluding a one-time $0.3 million net benefit in discontinued operations, net income was $0.13 per diluted share in the current period. Net income available to preferred and common shareholders for the first quarter of 2010 included a $0.7 million income tax benefit for a correction of an immaterial error related to certain prior year tax credits and a one-time $0.4 million net restructuring benefit. Excluding the adjustments, net income was $0.16 per diluted share in the prior year comparable period.
- Company-owned comparable restaurant sales for Ruth’s Chris Steak House increased 5.2%. Company-owned comparable restaurant sales for Mitchell’s Fish Market decreased 2.7%.
- Food and beverage costs, as a percentage of restaurant sales, increased 140 basis points to 30.7%, primarily due to unfavorable beef costs.
- Restaurant operating expenses, as a percentage of restaurant sales, decreased 190 basis points to 49.4%, primarily due to sales leverage on fixed costs.
- General and administrative expenses increased $0.3 million to $5.9 million.
- Depreciation and amortization expenses, as a percentage of total revenues, decreased 30 basis points to 3.8%, primarily due to sales leverage.
- Interest expense decreased by $0.5 million to $0.8 million in the first quarter of 2011.
- At the end of the first quarter of 2011, the Company had $45 million in debt outstanding under its senior credit agreement. This represents a reduction of $6 million from the December 26, 2010 balance of $51 million.
Review of Operating ResultsTotal revenues, which include Company-owned restaurant sales, franchise income, and other operating income were $98.8 million compared to $94.7 million in the first quarter of 2010. Company-owned restaurant sales increased 4.5% to $95.3 million for the first quarter of 2011 from $91.2 million in the same quarter last year. Total operating weeks increased 1.2% to 1,131 from 1,118. Average weekly sales for Ruth’s Chris Steak House were $90 thousand in the first quarter of 2011 compared to $85.6 thousand in the first quarter of 2010. Average weekly sales at Mitchell’s Fish Market were $68.5 thousand compared to $70.5 thousand in the prior year first quarter. For the first quarter of 2011, Company-owned comparable restaurant sales at Ruth’s Chris Steak House increased 5.2%, which consisted of an entrée increase of 3.9% along with an average check increase of 1.2%. Comparable restaurant sales at Mitchell’s Fish Market decreased 2.7%, which consisted of an entrée decrease of 6.1% and an average check increase of 3.5%. Franchise income increased 4.3% to $3.1 million in the first quarter of 2011 from $2.9 million in the prior year first quarter. Comparable franchise-owned restaurant sales increased 9.3%. Operating income was $10.0 million in the first quarter of 2011 compared to $9.8 million in the prior year first quarter. The first quarter of 2010 included a one-time $0.6 million restructuring benefit for which there was no comparable benefit in the first quarter of 2011. Financial Outlook Based on current information, Ruth's Hospitality Group, Inc. is reiterating its previous 2011 outlook:
- Cost of goods sold of 30.5% to 31.5% of restaurant sales
- Marketing and advertising of 3.0% to 3.5% of total revenues
- General and administrative expenses of $23 million to $25 million
- Effective tax rate of 25% to 30%
- Capital expenditures of $10 million to $12 million
- Free cash flow of $21 million to $23 million
- Fully-diluted shares outstanding of 43.0 million to 44.0 million
The conference call can be accessed live over the phone by dialing 1-888-471-3836 or for international callers by dialing 1-719-325-2196. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers; the password is 5125500. The replay will be available until May 6, 2011. The call will also be webcast live from the Company's website at www.rhgi.com under the investor relations section.About Ruth’s Hospitality Group, Inc. Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH) is a leading restaurant company focused exclusively on the upscale dining segment. The Company owns the Ruth’s Chris Steak House, Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse concepts. With more than 150 Company- and franchisee-owned locations worldwide, Ruth’s Hospitality Group, Inc. was founded in 1965 and is headquartered in Heathrow, Fla. For further information about our restaurants, to make reservations, or to purchase gift cards, please visit: www.RuthsChris.com, www.MitchellsFishMarket.com, www.MitchellsSteakhouse.com and www.Camerons-Steakhouse.com. For more information about Ruth’s Hospitality Group, Inc., please visit www.rhgi.com.
|RUTH'S HOSPITALITY GROUP, INC|
|Condensed Consolidated Statements of Income - Unaudited|
|(dollar amounts in thousands, except share and per share data)|
|13 Weeks Ending|
|March 28,||March 27,|
|Other operating income||614||501|
|Costs and expenses:|
|Food and beverage costs||26,749||29,236|
|Restaurant operating expenses||46,780||47,048|
|Marketing and advertising||2,524||2,957|
|General and administrative costs||5,566||5,877|
|Depreciation and amortization expenses||3,887||3,711|
|Interest expense, net||(1,330||)||(831||)|
|Income from continuing operations before income tax||8,331||9,011|
|Income tax expense||1,407||2,670|
|Income from continuing operations||6,924||6,341|
|(Loss) income from discontinued operations, net of income tax (benefit) expense||(165||)||237|
|Preferred stock dividends||308||623|
|Accretion of preferred stock redemption value||-||88|
|Net income available to preferred and common shareholders||$||6,451||$||5,867|
|Basic earnings per common share:|
|Basic earnings per share||$||0.20||$||0.14|
|Diluted earnings per common share:|
|Diluted earnings per share||$||0.20||$||0.14|
|Shares used in computing net income per common share:|
|RUTH'S HOSPITALITY GROUP, INC|
|Selected Balance Sheet Data|
|(dollar amounts in thousands)|
|December 26,||March 27,|
|Cash and cash equivalents||5,018||2,590|
|Total shareholders' equity||80,361||86,949|