- Company-owned comparable restaurant sales for Ruth’s Chris Steak House increased 5.9%.
- Company-owned comparable restaurant sales for Mitchell’s Fish Market increased 4.6%.
- Food and beverage costs, as a percentage of restaurant sales, increased 70 basis points in the third quarter to 31.8% and continue to be driven by unfavorable beef costs.
- Restaurant operating expenses, as a percentage of restaurant sales, decreased 80 basis points in the third quarter to 55.5% due to cost management and the effect of higher sales on fixed costs.
- Marketing and advertising costs, as a percentage of total revenues, increased 60 basis points to 2.6% in the third quarter largely due to a timing shift in advertising from the second quarter to the third and fourth quarters of 2012.
- General and administrative expenses increased $0.2 million to $6.0 million in the quarter.
Michael P. O'Donnell, Chairman, President and Chief Executive Officer of Ruth's Hospitality Group, Inc., stated, “Our third quarter results reflect a combination of comparable traffic and sales growth along with a continued high-level-execution of the business. Our Ruth’s Chris brand generated its 10 th straight quarter of positive comparable sales and we remain pleased with the significant progress at Mitchell’s that resulted in a second straight quarter of top-line improvement. Additionally, with an attention to thoughtful expense management, our teams generated meaningful leverage of our restaurant-level expenses during our seasonally slowest quarter of the year. Our development activity continues to bear fruit and we expect new unit activity to increasingly contribute to our growth going forward and our ability to create value for our shareholders.”Development Update To date in 2012, five new Ruth’s Chris Steak Houses have opened. A Company-owned Ruth’s Chris Steak House opened in Cincinnati, OH on October 15, 2012. In August 2012, franchisees opened new Ruth’s Chris Steak Houses in Singapore and El Salvador. As previously announced, a new Ruth's Chris Steak House located at Harrah's casino in Cherokee, NC opened in May 2012 and a second franchise-owned restaurant located in Dubai was opened in April 2012. The Company continues to work towards developing new Ruth’s Chris Steak Houses in the future. Currently, the Company expects one additional franchise restaurant to open in late 2012. In 2013, the Company’s development plans include opening a new company-owned restaurant in Denver, CO, relocating its Houston, TX location, and opening a new location at Harrah’s casino in Las Vegas under a licensing agreement. The company also expects its franchise partners to open an additional 4-5 restaurants in 2013. Review of Third Quarter 2012 Operating Results Total revenues, which include Company-owned restaurant sales, franchise income, and other operating income, were $84.8 million in the third quarter of 2012 compared to $80.2 million in the same quarter last year.
Company-owned restaurant sales increased 5.5% to $81.4 million for the third quarter of 2012 from $77.1 million in the same quarter last year. Excluding discontinued operations, total operating weeks for all brands during the third quarter increased to 1,105 from 1,103.Ruth’s Chris Steak House Sales
- 63 Company-owned Ruth’s Chris Steak House restaurants were open at the end of the third quarter of 2012 compared to 63 at the end of the prior year third quarter.
- Total operating weeks for the quarter increased to 819 from 817.
- Average weekly sales for Ruth’s Chris Steak House were $76.4 thousand in the third quarter of 2012, an increase of 5.8% compared to $72.2 thousand in the third quarter of 2011.
- For the third quarter of 2012, Company-owned comparable restaurant sales at Ruth’s Chris Steak House increased 5.9%, which consisted of a traffic increase of 3.6% along with an average check increase of 2.2%.
- 19 Company-owned Mitchell’s Fish Market restaurants were open at the end of the third quarter of 2012 compared to 19 at the end of the prior year third quarter.
- Total operating weeks for the quarter were flat year-over-year at 247, and exclude discontinued operations.
- Average weekly sales at Mitchell’s Fish Market were $68.6 thousand in the third quarter of 2012, an increase of 4.6% compared to $65.5 thousand in the third quarter of 2011.
- Comparable restaurant sales at Mitchell’s Fish Market increased 4.6%, which consisted of a traffic increase of 5.2% and an average check decrease of 0.6%.
- 71 franchise-owned Ruth’s Chris Steak House restaurants were open at the end of the third quarter of 2012 compared to 67 at the end of the prior year third quarter.
- Franchise income increased 11.2% to $3.3 million in the third quarter of 2012 from $2.9 million in the prior year period, driven by the increase in comparable franchise restaurant sales and new franchised unit development during the last 12 months.
- Comparable franchise-owned restaurant sales increased 3.1% in the third quarter of 2012, which included a 2.9% increase in domestic comparable franchise-owned restaurant sales and a 3.9% increase in international comparable franchise-owned restaurant sales.
Based on current information, Ruth's Hospitality Group, Inc. is reiterating its full year 2012 outlook:
- Cost of goods sold of 31.5% to 32.5% of restaurant sales
- Restaurant operating expenses of 51.0% to 52.0% of restaurant sales
- Marketing and advertising of 3.0% to 3.5% of total revenues
- General and administrative expenses of $25 million to $26 million
- Effective tax rate of 28% to 32%
- Capital expenditures of $10 to $12 million
- Basic shares outstanding of 34.0 million to 34.5 million
- Fully-diluted shares outstanding of 35.0 million to 36.0 million
|RUTH'S HOSPITALITY GROUP, INC AND SUBSIDIARIES|
|Condensed Consolidated Statements of Income (Loss) - Unaudited|
|(Amounts in thousands, except share and per share data)|
|13 Weeks Ended||39 Weeks Ended|
|September 23,||September 25,||September 23,||September 25,|
|Other operating income||179||171||3,089||2,868|
|Costs and expenses:|
|Food and beverage costs||25,883||23,953||86,546||79,396|
|Restaurant operating expenses||45,182||43,419||139,614||134,770|
|Marketing and advertising||2,214||1,605||6,373||7,701|
|General and administrative costs||5,969||5,783||19,082||17,013|
|Depreciation and amortization expenses||3,577||3,616||10,923||10,976|
|Total costs and expenses||82,970||78,526||262,804||249,546|
|Interest expense, net||(680||)||(719||)||(1,759||)||(2,289||)|
|Debt issuance costs written-off||-||-||(807||)||-|
|Income from continuing operations before income tax expense||1,094||883||18,030||17,655|
|Income tax expense (benefit)||285||114||5,268||1,145|
|Income from continuing operations||809||769||12,762||16,510|
|Loss (income) from discontinued operations, net of income tax benefit (expense)||7||(28||)||32||(425||)|
|Preferred stock dividends||-||623||514||1,870|
|Accretion of preferred stock redemption value||-||89||73||265|
|Excess of redemption value over carrying value of preferred shares redeemed||-||-||35,776||-|
|Net income (loss) applicable to preferred and common shareholders||$||802||$||85||$||(23,633||)||$||14,800|
|Basic earnings (loss) per common share:|
|Basic earnings (loss) per share||$||0.02||$||0.00||$||(0.69||)||$||0.35|
|Diluted earnings (loss) per common share:|
|Diluted earnings (loss) per share||$||0.02||$||0.00||$||(0.69||)||$||0.34|
|Shares used in computing net income (loss) per common share:|
|RUTH'S HOSPITALITY GROUP, INC|
|Selected Balance Sheet Data|
|(dollar amounts in thousands)|
|September 23,||December 25,|
|Cash and cash equivalents||$||3,912||$||3,925|
|Total shareholders' equity||77,968||99,640|