Ryan's Announces First Quarter 2005 Results GREER, S.C., April 20
/PRNewswire-FirstCall/ -- Ryan's Restaurant Group, Inc.
(NASDAQ:RYAN) reported first quarter 2005 results today. First
quarter restaurant sales were $209,639,000 in 2005 compared to
$211,657,000 for the comparable quarter in 2004. Net earnings for
the quarter amounted to $11,813,000 in 2005 and $15,360,000 in
2004. Earnings per share (diluted) amounted to 28 cents in 2005
compared to 35 cents in 2004. Commenting on the quarter, Charles D.
Way, CEO of the Company, said, "Our first quarter's financial
results were impacted by what one might call a 'perfect storm' ...
a difficult sales environment and higher cost of sales. Our sales
levels were disappointing, with a same-store sales decline of 3.1%
for the quarter. Even though we were comparing against a record
quarter in 2004, we believe that, more importantly, our sales were
impacted by economic conditions that affect our customers. The
first quarter of 2005 saw highly publicized increases in both
energy costs and interest rates. Lead articles concerning higher
gasoline prices were run frequently in many newspapers. Our
customers certainly experienced higher prices at the gas pumps as
well as higher utility bills during the quarter. Reports of
increasing mortgage rates were also common, and this news had to be
of concern to customers with adjustable rate mortgages. We believe
that these issues affected our customers' disposable income
spending decisions, resulting in reduced dining- out expenditures."
Cost of sales was impacted by a combination of higher costs and our
efforts to build and retain sales. Food costs were higher due to
higher beef, pork and dairy prices. Payroll costs increased
principally due to a tactical decision to increase hourly staffing
levels in order to provide a better dining experience for our
customers and consequently build and retain sales. Store-level
profits were also affected by higher maintenance, utility and
insurance costs." Looking forward, we are cautiously optimistic
that we will see improved sales levels during the second half of
2005. Our operations leadership has been focusing on improved
execution at our display grills and on increasing the visibility
and curb appeal of our restaurants. As noted above, staffing levels
have also been increased as part of our sales-building efforts. We
have implemented food theme nights at many of our restaurants, and
our restaurant personnel are actively involved in various local
marketing programs. However, high energy costs continue to be very
present, and, as noted above, we are concerned about the impact of
these higher costs on our customers' spending patterns. From a cost
standpoint, we believe that we must adapt to a generally higher
cost environment. However, food costs could be favorably affected
if live cattle imports are again allowed from Canada." At March 30,
2005, the Company owned and operated 344 restaurants and was
franchiser of 4 restaurants. In connection with this press release,
members of Ryan's executive management will be holding a conference
call with investment analysts today at 4:00 p.m. EDT. The public
can listen to a live webcast of this call by logging on to the web
at http://www.ryans.com/ and following the appropriate links.
Certain matters discussed in this press release are forward-looking
statements within the meaning of the federal securities laws and
are subject to uncertainties and risks, including, but not limited
to, general economic conditions, including consumer confidence
levels; competition; developments affecting the public's perception
of buffet-style restaurants; real estate availability; food and
labor supply costs; food and labor availability; an adverse food
safety event; weather fluctuations; interest rate fluctuations;
stock market conditions; political environment (including acts of
terrorism and wars); and other such risks described from time to
time in the Company's reports filed with the Securities and
Exchange Commission. RYAN'S RESTAURANT GROUP, INC. CONSOLIDATED
STATEMENTS OF EARNINGS (Unaudited) Quarter Ended March 30, March
31, 2005 2004 Restaurant sales $209,639,000 211,657,000 Cost of
sales: Food and beverage 72,613,000 72,500,000 Payroll and benefits
67,991,000 66,870,000 Depreciation 8,453,000 8,557,000 Other
restaurant expenses 31,520,000 28,812,000 Total cost of sales
180,577,000 176,739,000 General and administrative expenses
10,470,000 10,322,000 Interest expense 2,360,000 2,685,000
Royalties from franchised restaurants (174,000) (363,000) Other
income, net (1,200,000) (928,000) Earnings before income taxes
17,606,000 23,202,000 Income taxes 5,793,000 7,842,000 Net earnings
$11,813,000 15,360,000 Net earnings per common share: Basic $.28
.37 Diluted .28 .35 Weighted-average shares: Basic 41,938,000
42,081,000 Diluted 42,870,000 43,910,000 RYAN'S RESTAURANT GROUP,
INC. CONSOLIDATED BALANCE SHEETS March 30, December 29, 2005 2004
ASSETS (Unaudited) Current assets: Cash and cash equivalents
$22,999,000 7,354,000 Receivables 4,044,000 4,639,000 Inventories
6,776,000 5,611,000 Prepaid expenses 937,000 1,016,000 Deferred
income taxes 5,165,000 5,110,000 Total current assets 39,921,000
23,730,000 Property and equipment: Land and improvements
163,761,000 162,082,000 Buildings 490,024,000 480,781,000 Equipment
275,670,000 271,431,000 Construction in progress 36,277,000
31,531,000 965,732,000 945,825,000 Less accumulated depreciation
303,748,000 295,852,000 Net property and equipment 661,984,000
649,973,000 Other assets 10,790,000 10,643,000 Total assets
$712,695,000 684,346,000 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable 9,437,000 5,963,000 Current
portion of long-term debt 18,750,000 18,750,000 Income taxes
payable 6,921,000 1,842,000 Accrued liabilities 43,307,000
42,569,000 Total current liabilities 78,415,000 69,124,000
Long-term debt 170,000,000 164,250,000 Deferred income taxes
47,925,000 47,674,000 Other long-term liabilities 7,960,000
7,692,000 Total liabilities 304,300,000 288,740,000 Shareholders'
equity: Common stock of $1.00 par value; authorized 100,000,000
shares; issued 41,985,000 shares in 2005 and 41,890,000 shares in
2004 41,985,000 41,890,000 Additional paid-in capital 4,759,000
3,878,000 Retained earnings 361,651,000 349,838,000 Total
shareholders' equity 408,395,000 395,606,000 Commitments and
contingencies Total liabilities and shareholders' equity
$712,695,000 684,346,000 RYAN'S RESTAURANT GROUP, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 30,
March 31, 2005 2004 Cash flows from operating activities: Net
earnings $11,813,000 15,360,000 Adjustments to reconcile net
earnings to net cash provided by operating activities: Depreciation
and amortization 8,931,000 9,020,000 Loss (gain) on sale of
property and equipment (119,000) 657,000 Tax benefit from exercise
of stock options 216,000 1,462,000 Deferred income taxes 196,000
195,000 Decrease (increase) in: Receivables 595,000 (275,000)
Inventories (1,165,000) (758,000) Prepaid expenses 79,000 453,000
Other assets (237,000) (289,000) Increase in: Accounts payable
3,474,000 1,968,000 Income taxes payable 5,079,000 5,995,000
Accrued liabilities 738,000 1,484,000 Other long-term liabilities
268,000 227,000 Net cash provided by operating activities
29,868,000 35,499,000 Cash flows from investing activities:
Proceeds from sale of property and equipment 1,955,000 1,657,000
Capital expenditures (22,688,000) (16,882,000) Net cash used in
investing activities (20,733,000) (15,225,000) Cash flows from
financing activities: Net borrowings from (repayment of) revolving
credit facility 5,750,000 (5,000,000) Proceeds from stock options
exercised 783,000 3,014,000 Purchase of common stock (23,000)
(4,510,000) Net cash provided by (used in) financing activities
6,510,000 (6,496,000) Net increase in cash and cash equivalents
15,645,000 13,778,000 Cash and cash equivalents - beginning of
period 7,354,000 8,617,000 Cash and cash equivalents - end of
period $22,999,000 22,395,000 Supplemental disclosures Cash paid
during period for: Interest, net of amount capitalized $4,226,000
4,459,000 Income taxes 302,000 190,000 DATASOURCE: Ryan's
Restaurant Group CONTACT: Fred T. Grant, Jr., Senior Vice President
- Finance of Ryan's Restaurant Group, +1-864-879-1000 Web site:
http://www.ryansrg.com/
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