Announces Fresh Start Initiative Including
Asset Rationalization Plan to Close Approximately 95
Restaurants
Fiscal Year 2017 Outlook Reflects Expectation
of Improved Financial Performance
Ruby Tuesday, Inc. (NYSE: RT) today announced fourth quarter and
fiscal year 2016 financial results for the periods ended
May 31, 2016 and provided a fiscal year 2017 outlook. The
Company also announced plans to streamline the organization,
improve financial profitability, and create long-term value for
shareholders through its Fresh Start initiative.
The Fresh Start initiative will be achieved through the
execution of several key strategies including an Asset
Rationalization Plan along with programs to improve the food and
beverage offering, dining environment and service at its namesake
brand through a Fresh New Menu, Fresh New Garden Bar, and Fresh
Experience. These initiatives will be rolled out in phases across
multiple markets throughout the coming quarters.
JJ Buettgen, Chairman of the Board, President, and Chief
Executive Officer, commented, “Our fourth quarter was impacted by
softness in the casual dining industry and increased promotional
activity by our peers. Given that we expect the macro environment
to remain challenging for some time, we are taking the necessary
steps to change the trajectory of our business.”
Buettgen continued, “Our Fresh Start Initiative has been
designed to streamline our organization through asset
rationalization, improve financial profitability, and ultimately
create long-term value for shareholders. Our Fresh New Menu, Fresh
New Garden Bar, and Fresh Experience initiatives will position us
to accelerate traffic and will be supported by better in-restaurant
execution, refining our media and targeting plans, and
incorporating the insights from our Garden Bar and remodel tests
into our go forward strategy. Through our goal of attracting more
women and young families as well as increasing visits from our
current Ruby Tuesday guests, we believe we can return to positive
same-restaurant sales, expand restaurant level margins, and
increase operating profit.”
Ruby Tuesday recently completed a comprehensive review of its
corporate-owned restaurant portfolio and determined that it was in
the Company’s best interest to close approximately 95
underperforming restaurants. These locations will cease operations
by September 2016. As of May 31, 2016, Ruby Tuesday’s system
included 724 restaurants, of which 646 were company-operated. This
conclusion, followed a rigorous unit-level analysis of sales, cash
flows and other key performance metrics, as well as site location,
market positioning and lease status.
Buettgen concluded, "The decision to close restaurants is a
difficult but necessary step as we take aggressive actions to
strengthen our organization. Performance at each of these
locations, despite the loyalty of valued guests and the efforts of
our dedicated employees, was not meeting expectations. Full-time
and part-time employees impacted by closures will be offered
positions in nearby restaurants where possible.”
Fiscal Fourth Quarter 2016 Highlights (13 weeks ended May 31,
2016, compared to the 13 weeks ended June 2, 2015):
- Total revenue declined 5.9% to $279.3
million, which included a net reduction of 12 corporate-owned Ruby
Tuesday restaurants and 17 corporate-owned Lime Fresh Mexican Grill
restaurants during fiscal year 2016.
- Same-restaurant sales declined 3.7%
following a 1.7% decline in the fourth quarter of the prior fiscal
year.
- Restaurant level margin* held steady at
18.7%.
- Closure and Impairment expense was
$43.8 million primarily due to the announced restaurant closures,
compared to $4.0 million last year
- Net Loss was $27.6 million, or ($0.46)
per diluted share, compared to Net Income of $4.3 million, or $0.07
per diluted share in last fiscal year’s fourth quarter.
- Adjusted Net Income* was $6.3 million,
or $0.10 per diluted share, flat to the prior-year fiscal
quarter.
- Adjusted EBITDA* was $28.3 million
compared to $28.7 million in the fourth quarter of the prior fiscal
year.
- The Company prepaid $5.1 million of
mortgage debt, unencumbering 18 corporate-owned restaurants.
- The Company recognized a $5.9 million
gain on sales of Lime Fresh Mexican Grill assets.
- As of May 31, 2016, the Company had
cash on hand of $67.3 million.
Fiscal Year 2016 Highlights (52 weeks ended May 31, 2016,
compared to the 52 weeks ended June 2, 2015):
- Total revenue declined 3.1% to $1.1
billion, which included a net reduction of 12 corporate-owned Ruby
Tuesday restaurants and 17 corporate-owned Lime Fresh Mexican Grill
restaurants during fiscal year 2016.
- Same-restaurant sales declined 1.4%
following a 0.5% decline in the prior fiscal year.
- Restaurant level margin* contracted 10
basis points to 16.8%.
- Net Loss was $50.7 million, or ($0.83)
per diluted share, compared to Net Loss of $3.2 million, or ($0.05)
per diluted share in the last fiscal year.
- Closure and Impairment expense was
$62.7 million, compared to $10.5 million in the prior fiscal
year.
- Adjusted Net Income* was $3.9 million,
or $0.06 per diluted share, compared to Adjusted Net Income of $4.1
million, or $0.07 per diluted share in the last fiscal year.
- Adjusted EBITDA* was $77.7 million
compared to $80.6 million in the prior fiscal year.
* Restaurant Level Margin, Adjusted EBITDA, Adjusted Net Income
and Adjusted Net Income per share are non-GAAP measures.
Reconciliations of Restaurant Level Margin, Adjusted EBITDA,
Adjusted Net Income and Adjusted Net Income per share to the most
directly comparable financial measures presented in accordance with
United States Generally Accepted Accounting Principles (GAAP) are
set forth in the schedules accompanying this release. See “Non-GAAP
Financial Measures” and “Condensed Consolidated Statements of
Operations.”
Fiscal Fourth Quarter 2016 Financial
Results
Total revenue was $279.3 million, a decrease of 5.9% or $17.5
million from the fourth quarter of the prior fiscal year. This was
due to a net reduction of 12 corporate-owned Ruby Tuesday
restaurants and 17 corporate-owned Lime Fresh Mexican Grill
restaurants during fiscal year 2016 and a same-restaurant sales
decline of 3.7% at corporate-owned Ruby Tuesday restaurants.
The fourth quarter same-restaurant sales decrease was driven in
part by traffic declines resulting from a challenging and
competitive external environment. Year-over-year guest counts fell
4.6% while average check rose 0.9%.
Restaurant level margin*, excluding franchise revenue, decreased
to $51.9 million from $55.2 million in the last fiscal year’s
fourth quarter. As a percentage of corporate-owned restaurant
sales, restaurant level margin held steady at 18.7% as increases in
cost of goods sold along with payroll and related costs were offset
by a reduction in other restaurant operating costs.
Selling, general & administrative expenses (SG&A)
decreased to $25.0 million from $28.2 million in the prior fiscal
year’s fourth quarter. As a percentage of total revenue, SG&A
expenses declined 50 basis points to 9.0% from 9.5%. The decrease
in SG&A was primarily due to lower incentive compensation
expense and a slight decline in marketing spend.
Net Loss was $27.6 million, or ($0.46) per diluted share,
compared to Net Income of $4.3 million, or $0.07 per diluted share
in the last fiscal year’s fourth quarter.
Adjusted Net Income* was $6.3 million, or $0.10 per diluted
share, in line with last fiscal year’s fourth quarter. Adjusted Net
Income for the fourth quarter of fiscal year 2016 excluded
after-tax adjustments of $33.9 million, primarily related to
closure and impairment charges partially offset by the gain on
sales of Lime Fresh Mexican Grill assets. Adjusted Net Income for
the fourth quarter of fiscal year 2015 excluded after-tax
adjustments of $2.1 million, primarily related to closure and
impairment charges. A reconciliation between Net (Loss)/Income and
Adjusted Net Income is included in the accompanying financial
data.
Fiscal Year 2016 Financial
Results
Total revenue was $1.1 billion, a decrease of 3.1% or $35.3
million from last fiscal year, primarily due to a net reduction of
12 corporate-owned Ruby Tuesday restaurants and 17 corporate-owned
Lime Fresh Mexican Grill restaurants and a same-restaurant sales
decline of 1.4% at corporate-owned Ruby Tuesday restaurants.
Year-over-year guest counts fell 3.9% for fiscal year 2016 while
average check rose 2.5%.
Restaurant level margin*, excluding franchise revenue, decreased
to $182.4 million from $189.5 million in the prior fiscal year. As
a percentage of corporate-owned restaurant sales, restaurant level
margin declined approximately 10 basis points to 16.8% from 16.9%.
The decrease in margin rate was primarily driven by increases in
cost of goods sold and payroll and related costs offset in part by
improvement in other restaurant operating costs.
Selling, general & administrative expenses (SG&A)
decreased to $109.6 million from $115.3 million in the prior fiscal
year. As a percentage of total revenue, SG&A expenses declined
20 basis points to 10.0% from 10.2%. The decrease in SG&A was
primarily due to lower incentive compensation expense, partially
offset by increased marketing spend to support new initiatives.
Net Loss was $50.7 million, or ($0.83) per diluted share,
compared to Net Loss of $3.2 million, or ($0.05) per diluted share
in the last fiscal year.
Adjusted Net Income* was $3.9 million, or $0.06 per diluted
share, a decline of $0.2 million compared to Adjusted Net Income of
$4.1 million, or $0.07 per diluted share, in the prior fiscal year.
Adjusted Net Income for fiscal year 2016 excluded after-tax
adjustments of $54.6 million, primarily related to closure and
impairment charges partially offset by a gain on sales of Lime
Fresh Mexican Grill. Adjusted Net Income for fiscal year 2015
excluded after-tax adjustments of $7.2 million, primarily related
to closure and impairment charges. A reconciliation between Net
Loss and Adjusted Net Income is included in the accompanying
financial data.
Balance Sheet
The Company ended fiscal year 2016 with cash and cash
equivalents totaling $67.3 million and book debt of $223.7 million.
This compares to cash and cash equivalents totaling $52.5 million
and book debt of $229.1 million as of March 1, 2016.
Restaurant Activity
As of May 31, 2016, there were 724 Ruby Tuesday restaurants
system-wide, of which 646 were corporate-owned. During the fourth
quarter, four corporate-owned Ruby Tuesday restaurants were closed
and one was opened. Additionally, one domestic franchised Ruby
Tuesday restaurant was closed. The Company also opened one and
closed two international franchised Ruby Tuesday restaurants.
Fiscal Year 2017 Financial
Outlook
The Company is providing full-year Adjusted Net Income per
share guidance of $0.05 to $0.09. Pre-tax charges related to
the Asset Rationalization Plan and as outlined in this release are
excluded from Adjusted Net Income per share guidance. The Company
notes that fiscal year 2017 is a fifty-three week period ending
June 6, 2017 compared to a fifty-two week period in fiscal year
2016 and expects the fifty-third week impact on Adjusted Net Income
per share to be approximately $0.02. Fiscal year 2017 guidance is
based on the following assumptions:
- Same-Restaurant Sales – Fiscal
year 2017 same-restaurant sales of flat to up 2% for the comparable
fifty-two week period ending May 30, 2017.
- Unit Development – A net
reduction of 95 corporate-owned Ruby Tuesday restaurants as part of
the Asset Rationalization Plan with the potential of an additional
5 to 10 closures as leases expire.
- Restaurant Level Margin* –
Fiscal year 2017 restaurant level margin of 17.8% to 18.4%.
- Selling, General, and Administrative
Expense – Fiscal year 2017 SG&A ranging from $108 million
to $112 million.
- Tax Rate – Adjusted Net Income
is calculated using the statutory tax rate of 39.69%. This provides
a more consistent tax rate to facilitate review and analysis of the
Company’s financial performance. The Company is limited in the
amount of tax credits that can be utilized each year based upon
taxable income for that year and cannot recognize a full benefit of
any year’s currently generated tax credits or tax credit
carry-forwards due to the Company’s tax valuation allowance.
- Capital Expenditures – Fiscal
year 2017 capital expenditures ranging from $38 million to $42
million.
The forward-looking restaurant level margin and estimated impact
to EBITDA related to the Asset Rationalization Plan included in the
Fiscal Year 2017 Financial Outlook cannot be reconciled to the most
comparable GAAP measure of net (loss)/income. Providing net
(loss)/income guidance is potentially misleading and not practical
given the difficulty of projecting event driven transactions and
other operating items that are included in net (loss)/income.
Fresh Start Initiative: Impact of Asset
Rationalization Plan
Preliminary Estimated Impacts related to the Asset
Rationalization Plan: (in millions, or as otherwise
indicated) Estimated Annualized
FY17 Impact Increase EBITDA $6 - $8 $12 - $14
Decrease in
Depreciation expense
$3 - $4 $4 - $5 Pre-Tax Income $9 - 12
$16 - $19
Estimated Estimated Pre-Tax
Charges (1) FY17 Total Asset Write-off
& Impairment Charges (2) $3 - $5 $42 - $44 Lease Reserves (3)
$19 - $21 $19 - $21
Closing,
Restructuring and Other
$11 - $16 $11 - $16 Pre-Tax Expenses $33
- $42 $72 - $81 (1) With the exception of impairment charges which
were substantially booked in FY16 Q4, the majority of pre-tax
charges are expected to be realized in FY17. (2) $39.2 million of
non-cash impairment charges related to the Asset Rationalization
Plan were recorded in Q4 FY16. (3) Lease reserves estimate is
stated net of deferred rent liability recorded as of 5/31/16. The
actual amount of any cash payments made by the Company for lease
contract termination costs will be dependent upon ongoing
negotiations with the landlords of the leased restaurant properties
and could be higher or lower than the amounts currently estimated.
The Company estimates that it will incur $72 million to $81
million in pre-tax charges related to the restaurant closures; with
approximately $30 million to $37 million expected to be cash
charges related to closing expenses, corporate restructuring, lease
termination, holding and other costs. Additionally, the Company
expects to receive cash proceeds of approximately $35 million to
$45 million from the sale of corporate-owned properties closed as a
part of the Asset Rationalization Plan. Proceeds from the sale of
corporate-owned properties will be used to pay down debt and
reinvest in the business.
Conference Call &
Webcast
The Company will host a conference call today to discuss fourth
quarter and fiscal year 2016 financial results at 5:00 PM Eastern
Time. The conference call can be accessed live by dialing
888-466-4462 or for international callers by dialing 719-325-2463.
A replay will be available after the call and can be accessed by
dialing 877-870-5176 or for international callers by dialing
858-384-5517; the passcode is 8485790. The replay will be available
through Sunday, September 11, 2016.
The conference call will also be webcast live and later archived
on the Investor Relations page of Ruby Tuesday’s corporate website
at www.rubytuesday.com under the ‘Events & Presentations’
section.
About Ruby Tuesday, Inc.
Ruby Tuesday, Inc. owns and franchises Ruby Tuesday brand
restaurants. As of May 31, 2016, there were 724 Ruby Tuesday
restaurants in 44 states, 14 foreign countries, and Guam. Of those
restaurants, we owned and operated 646 Ruby Tuesday restaurants and
franchised 78 Ruby Tuesday restaurants, comprised of 27 domestic
and 51 international restaurants. We also owned and operated two
Lime Fresh Mexican Grill restaurants as of May 31, 2016. Our
corporate-owned and operated restaurants are concentrated primarily
in the Southeast, Northeast, Mid-Atlantic, and Midwest of the
United States, which we consider to be our core markets. For more
information about Ruby Tuesday, please visit www.rubytuesday.com.
Ruby Tuesday, Inc. is traded on the New York Stock Exchange
(Symbol: RT).
Forward-looking Information
This press release contains various forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements represent our expectations or
beliefs concerning future events, including one or more of the
following: future financial performance (including our estimates of
changes in same-restaurant sales, average unit volumes, operating
margins, expenses, and other items), future capital expenditures,
the effect of strategic initiatives (including statements relating
to cost savings initiatives and the benefits of our marketing), the
opening or closing of restaurants by us or our franchisees, sales
of our real estate or purchases of new real estate, future
borrowings and repayments of debt, availability of financing on
terms attractive to the Company, compliance with financial
covenants in our debt instruments, payment of dividends, stock and
bond repurchases, restaurant acquisitions and dispositions, and
changes in senior management and in the Board of Directors. We
caution the reader that a number of important factors and
uncertainties could, individually or in the aggregate, cause our
actual results to differ materially from those included in the
forward-looking statements, including, without limitation, the
risks and uncertainties described in the Risk Factors included in
Part I, Item A of our Annual Report on Form 10-K for the year ended
June 2, 2015.
Non-GAAP Financial
Measures
The Company believes excluding certain items from its financial
results provides investors with a clearer understanding of the
Company’s operating performance and comparison to prior-period
results. In addition, management uses these non-GAAP financial
measures and ratios to assess the results of the Company’s
operations.
We have included Restaurant Level Margin, EBITDA, Adjusted
EBITDA, Adjusted Net Income and Adjusted Net Income per share to
provide investors with supplemental measures of our operating
performance. We believe these are important supplemental measures
of operating performance because they eliminate items that have
less bearing on our Company-wide operating performance and thus
highlight trends in our core business that may not otherwise be
apparent when relying solely on financial measures in accordance
with GAAP. We also believe that securities analysts, investors and
other interested parties frequently use Restaurant Level Margin,
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net
Income per share in evaluating issuers. Because other companies in
some cases calculate Restaurant Level Margin, EBITDA, Adjusted
EBITDA, Adjusted Net Income, or Adjusted Net Income per share
differently from the way we calculate such measures, these metrics
may not be comparable to similarly titled measures reported by
other companies. Additionally, supplemental non-GAAP financial
measures should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP.
The use of these measures permits a comparative assessment of
the Company's operating performance relative to its performance
based on GAAP results, while isolating the effects of certain items
that vary from period to period without correlation to core
operating performance and certain items that vary widely among
similar companies. However, the inclusion of these adjusted
measures should not be construed as an indication that future
results will be unaffected by unusual or infrequent items or that
the items for which the adjustments have been made are necessarily
unusual or infrequent.
Available in this release is the reconciliation of Net
(Loss)/Income, the most directly comparable GAAP measure, to
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net
Income per share, all of which are non-GAAP financial measures. A
reconciliation of Restaurant Level Margin, which is also a non-GAAP
measure, to Net (Loss)/Income is presented in the Condensed
Consolidated Statements of Operations. The Company defines
Restaurant Level Margin as Restaurant Sales and Operating Revenue
less Cost of Goods Sold, Payroll and Related Costs, and Other
Restaurant Operating Costs. EBITDA is defined as Net (Loss)/Income
before interest, taxes, and depreciation and amortization and
Adjusted EBITDA as EBITDA, excluding certain non-cash and/or
non-recurring expenses/ (income) including, but not limited to,
Closures and Impairments, Net, Trademark Impairment, Executive
Transition, and the Gain on the Sales of the Lime Fresh Mexican
Grill assets. Adjusted Net Income is defined as Net (Loss)/Income,
excluding certain non-cash and/or non-recurring expenses/(income)
as detailed in Adjusted EBITDA as well as adjustments related to
Debt Prepayment Penalties, Deferred Financing Fees, Income Tax
Benefit from Adjustments, and Income Tax Provision (Benefit)
Adjusted to the Statutory Rate. Adjusted Net Income per share is
defined as Adjusted Net Income divided by diluted shares
outstanding.
Financial Results For the Fourth Quarter and Year Ended May 31,
2016 (Amounts in thousands except per share amounts)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
13 Weeks 13 Weeks 52 Weeks 52 Weeks Ended Ended Ended
Ended May 31, Percent June 2, Percent May 31, Percent June 2,
Percent 2016 of Revenue 2015 of Revenue 2016 of Revenue 2015 of
Revenue
Revenue: Restaurant sales and operating
revenue $ 277,929 99.5 $ 295,087 99.4 $ 1,085,034 99.4 $ 1,120,142
99.4 Franchise revenue 1,393 0.5 1,725 0.6
6,194 0.6 6,424 0.6
Total
Revenue 279,322 100.0
296,812 100.0
1,091,228 100.0
1,126,566 100.0 Operating Costs and Expenses:
(as a percent of Restaurant sales and operating revenue) Cost of
goods sold (excluding depreciation and amortization shown below)
76,840 27.6 80,717 27.4 298,529 27.5 305,306 27.3 Payroll and
related costs 93,585 33.7 96,775 32.8 374,561 34.5 383,261 34.2
Other restaurant operating costs (1) 55,615 20.0
62,403 21.1 229,518 21.2 242,109
21.6
Restaurant Level Margin (excludes
franchise revenue) (1)
51,889 18.7
55,192 18.7
182,426 16.8
189,466 16.9
Depreciation and amortization (1) 12,884 4.6 13,072 4.4 51,358 4.7
52,391 4.7 (as a percent of Total revenue) Selling, general and
administrative, net 25,005 9.0 28,186 9.5 109,627 10.0 115,327 10.2
Closures and impairments, net 43,773 15.7 3,994 1.3 62,681 5.7
10,542 0.9 Trademark impairment - - - - 1,999 0.2 - - Gain on sales
of Lime Fresh Mexican Grill assets (5,937 ) (2.1 ) -
- (5,937 ) (0.5 ) - - Total operating costs
and expenses 301,765 285,147 1,122,336
1,108,936
(Loss)/Earnings From
Operations (22,443 ) (8.0 )
11,665 3.9
(31,108 ) (2.9 )
17,630 1.6 Interest
expense, net 5,654 2.0 5,952 2.0 21,764 2.0 22,735 2.0 Gain on
extinguishment of debt - - - - (10 ) -
- - (Loss)/Income before income taxes (28,097
) (10.1 ) 5,713 1.9 (52,862 ) (4.8 ) (5,105 ) (0.5 )
(Benefit)/Provision for income taxes (494 ) (0.2 )
1,430 0.5 (2,180 ) (0.2 ) (1,911 ) (0.2 )
Net (Loss)/Income $ (27,603 )
(9.9 ) $ 4,283 1.4 $
(50,682 ) (4.6 ) $ (3,194
) (0.3 ) Net (Loss)/Income
Per Share: Basic $ (0.46 ) $ 0.07 $ (0.83 ) $ (0.05 ) Diluted $
(0.46 ) $ 0.07 $ (0.83 ) $ (0.05 )
Shares: Basic
59,765 60,725
60,871 60,580 Diluted
59,765 61,709 60,871
60,580
(1) Beginning in the first quarter of
2016, the Company reclassified its Amortization of intangible
assets from Other restaurant operating costs to Depreciation and
amortization. While the reclassification had no impact on Net
(Loss)/Income, it did impact the Company's Other restaurant
operating costs, Restaurant-level margin and Depreciation and
amortization.
Financial Results For the Fourth Quarter of Fiscal Year 2016
(Amounts in thousands)
(Unaudited) May 31, June 2,
CONDENSED CONSOLIDATED
BALANCE SHEETS 2016 2015 Assets Cash and Cash
Equivalents $ 67,341 $ 75,331 Accounts Receivable 12,827 5,287
Inventories 21,595 20,411 Income Tax Receivable 3,003 - Prepaid
Rent and Other Expenses 11,508 12,398 Assets Held for Sale
4,642 5,453 Total Current Assets 120,916 118,880
Property and Equipment, Net 671,250 752,174 Other Assets
45,751 54,398 Total Assets $ 837,917 $ 925,452
Liabilities Current Portion of Long-Term Debt, including
Capital Leases $ 9,934 $ 10,078 Income Tax Payable - 1,069 Deferred
Income Taxes, Net - 7 Other Current Liabilities 87,772
99,227 Total Current Liabilities 97,706 110,381
Long-Term Debt and Capital Leases 213,803 231,017 Deferred
Income Taxes, Net - 1,442 Deferred Escalating Minimum Rents 51,535
50,768 Other Deferred Liabilities 67,093 66,261
Total Liabilities 430,137 459,869 Shareholders'
Equity 407,780 465,583 Total Liabilities and
Shareholders' Equity $ 837,917 $ 925,452
Non-GAAP Reconciliation
Table Reconciliation of EBITDA, Adjusted EBITDA, Adjusted
Net Income, and Adjusted Net Income Per Share (Amounts in
thousands except per share amounts) (Unaudited)
13 Weeks 13 Weeks 52 Weeks 52 Weeks Ended
Ended Ended Ended May 31, June 2, May 31, June 2, 2016 2015
2016
2015
Net (Loss)/Income $ (27,603
) $ 4,283 $ (50,682 )
$ (3,194 ) Depreciation and
Amortization 12,884 13,072 51,358 52,391 Interest Expense, net of
Gain on Extinguishment of Debt 5,654 5,952 21,754 22,735 Provision
(Benefit) for Income Taxes (494 ) 1,430
(2,180 ) (1,911 )
EBITDA $ (9,559
) $ 24,737 $ 20,250 $
70,021 Closures and Impairments, Net (1) 43,773 3,994 62,681
10,542 Trademark Impairment (2) - - 1,999 - Executive Transition
(3) - - (1,274 ) - Gain on Sales of Lime Fresh Mexican Grill Assets
(4) (5,937 ) - (5,937 ) -
Adjusted EBITDA $ 28,277 $
28,731 $ 77,719 $
80,563 Net (Loss)/Income $
(27,603 ) $ 4,283 $
(50,682 ) $ (3,194 )
Closures and Impairments, Net (1) 43,773 3,994 62,681 10,542
Trademark Impairment (2) - - 1,999 - Executive Transition (3) - -
(1,274 ) - Gain on Sales of Lime Fresh Mexican Grill Assets (4)
(5,937 ) - (5,937 ) - Debt Prepayment Penalties & Deferred
Financing Fees (5) 695 799 1,840 1,284 Income Tax Benefit from
Adjustments (6) (15,293 ) (1,902 ) (23,540 ) (4,694 ) Income Tax
Provision (Benefit) Adjusted to Statutory Rate (7) 10,659
(837 ) 18,801 115
Adjusted Net Income $ 6,294 $
6,337 $ 3,888 $
4,053
Net (Loss)/Income Per Share
$ (0.46 ) $ 0.07 $
(0.83 ) $ (0.05 )
Adjusted Net Income Per Share $ 0.10 $
0.10 $ 0.06 $ 0.07
Basic Shares Outstanding (8) 59,765
60,725 60,871 60,580 Diluted Shares
Outstanding (8) 60,091 61,709
61,222 61,390 (1) Includes property impairments,
restaurant lease reserves, closing cost adjustments, and gain on
the sale of surplus properties. (2) In connection with the sale and
closures of our Company-owned Lime Fresh restaurants, we recorded a
$2.0 million trademark impairment charge representing a partial
impairment of the Lime Fresh trademark during the second quarter of
fiscal year 2016. (3) On July 25, 2015, our then President Ruby
Tuesday Concept and Chief Operations Officer left the Company.
Accordingly, included within our share-based compensation expense
for the first quarter is a forfeiture credit of $1.3 million in
connection with the forfeiture of 333,000 unvested stock options
and 137,000 unvested shares of restricted stock. (4) In Q4 FY16,
the Company sold various Company-owned Lime Fresh restaurants to
Rubio's Restaurants Inc. and sold the Lime Fresh Mexican Grill
brand to EverFresh Endeavors. (5) Debt prepayment penalties and the
write-off of deferred financing fees are classified within Interest
Expense, net of Gain on Extinguishment of Debt, which are already
included in EBITDA calculation and therefore not a separate
add-back for Adjusted EBITDA. (6) Represents the tax impact of the
adjustments to Net Income (Loss) at the statutory rate (39.69%).
(7) Represents the Company's Income Tax Provision (Benefit)
adjusted to the Company's statutory tax rate. (8) Net Income and
Adjusted Net Income per share figures are calculated based on
diluted shares outstanding whereas Net Loss per share figures are
calculated based on basic shares outstanding.
Reconciliation of
2017 Estimated GAAP Pre-Tax (Loss)/Income to Adjusted Net
(Loss)/Income 53 Weeks ending June 6, 2017 (Amounts in
millions except per share amounts) Low High Pre-Tax
(Loss)/Income $ (37.0) $ (24.1) Adjustments: Asset Write-off &
Impairment Charges (1) 5.0 3.0 Lease Reserves (2) 21.0 19.0
Closing,
Restructuring, Other (3)
16.0 11.0 Adjusted Pre-Tax
Income $ 5.0 $ 8.9
Tax at Statutory
Rate (4)
2.0 3.5 Adjusted Net
(Loss)/Income $ 3.0 $ 5.4 Adjusted EPS (4) $ 0.05 $ 0.09 Diluted
Shares 59.9 59.9 (1) Estimated non-cash property impairments and
asset write-offs. (2) Estimated non-cash lease reserve charges net
of deferred rent liability. The actual amount of any cash payments
made by the company for lease contract termination costs will be
dependent upon ongoing negotiations with the landlords of the
leased restaurant properties and could be higher or lower than the
amounts currently estimated. (3) Estimated restaurant closing
expenses, corporate restructuring and other costs related to the
Asset Rationalization Plan. (4) Represents tax calculated at the
statutory rate of 39.69%. Ruby Tuesday, Inc. Number of Restaurants
at End of Period May 31, June 2, 2016 2015
Ruby Tuesday: Company-Owned 646 * 658 Domestic Franchised 27
29 International Franchised 51 49 Total 724 736
Lime
Fresh: Company-Owned 2 19 Domestic Franchised 0 7 Total 2 26
Total Restaurants: Company-Owned 648 677 Domestic
Franchised 27 36 International Franchised 51 49
System-wide
total 726 762 *On August 11, 2016, we announced a
plan to close approximately 95 Company-Owned restaurants by
September 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160811006123/en/
Investor RelationsICRMelissa Calandruccio,
646-277-1273RubyTuesdayIR@icrinc.comorMedia
RelationsICRChristine Beggan,
203-682-8329RubyTuesday@icrinc.com
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