Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (12757)	1/9/2008 4:42:39 PM
From: Smiling Bob	Respond to of 19256

Ruby Tuesday, Inc. Reports Second Quarter Results Wednesday January 9, 4:38 pm ET MARYVILLE, Tenn.--(BUSINESS WIRE)--Ruby Tuesday, Inc. (NYSE: RT - News) today reported a diluted loss per share of $0.20 on a net loss of $10.4 million for the Company’s second quarter of fiscal 2008, which ended on December 4, 2007. This compares to diluted earnings per share of $0.28 on net income of $16.7 million for the second quarter of the prior year. The diluted per share impact of costs associated with the Company’s remodel initiative in the second quarter of fiscal 2008 was $0.07. Quarterly Highlights As previously reported, second quarter fiscal 2008 same-restaurant sales at Company-owned Ruby Tuesday restaurants decreased 10.8%, while same-restaurant sales at domestic franchise Ruby Tuesday restaurants decreased 8.7%, as compared to a decrease of 0.2% and an increase of 4.0% at Company-owned and domestic franchise Ruby Tuesday restaurants, respectively, in the second quarter of the prior year. Second quarter fiscal 2008 same-restaurant sales: September October November Second Quarter Company-Owned -10.4% -10.8% -11.3% -10.8% Domestic Franchise -8.0% -7.5% -10.7% -8.7% Other highlights for the 13-week second quarter: * Total revenue decreased 4.7% over the same period of the prior year. * Average restaurant volumes at Company-owned Ruby Tuesday restaurants decreased 10.2% from the same period of the prior year. * The Company opened five new Ruby Tuesday restaurants during the quarter and acquired twenty-five restaurants from two Michigan franchisees. No restaurants were closed during the quarter. * Aside from the restaurants sold to the Company, domestic and international franchisees opened four new Ruby Tuesday restaurants during the quarter and none were closed. * Sales at domestic and international franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise income on the Company’s operating statement) totaled $98,173,000 and $114,791,000 for the second quarter of fiscal 2008 and 2007, respectively. Fiscal 2008 sales at franchise restaurants were reduced due to the acquisitions of the Michigan franchisees in the second quarter of fiscal 2008, and the prior acquisitions of the West Palm Beach franchisee on the first day of fiscal 2008, and the South Florida franchisee in the third quarter of fiscal 2007. * Capital expenditures for new restaurants and routine capitalized improvements at existing restaurants were $20.0 million for the quarter. * Capital expenditures related to the Company’s remodel initiative were $20.6 million for the quarter. * The Company had 51.7 million shares of common stock outstanding at the end of the quarter. * Based on the uncertainty of sales, our current models reflect that we may be in violation of debt covenants in the next 12 months. We are not currently in default but, because of accounting rules, we have reclassified much of our long-term debt as current. We will be working with our lenders to obtain a modification of covenants for future periods and expect a favorable outcome. Dividend Policy The Board of Director’s revised the Company’s dividend policy to provide for an annual dividend payment which the Board will review for payment in August 2008. The Board remains committed to a dividend policy as previously stated but believes moving to an annual payment to be prudent based on current operating performance and the economic outlook. Sandy Beall, Founder and CEO, commented, “We do believe we have the right plans and strategies in place to build a much stronger concept and brand for the long-term. We do not think this is a brand issue and our guest research confirms that our food, service, and restaurants are better than they have ever been and improving. We do have a segment and sales issue, and we also have an earnings issue which we will get corrected. We do not believe we have an operations or free cash flow issue. While timing has not been perfect considering the industry, we will have the majority of our investments in our food and service initiatives as well as the reimaging of over 650 restaurants behind us after this year. We believe we will be very well positioned for solid earnings, free cash flow, and performance in the future.” Fiscal 2008 Guidance For fiscal 2008, the Company is now targeting diluted earnings per share of $0.40 to $0.60 based on same-restaurant sales of down 6.0% to 8.5% at Company-owned restaurants. The estimate for fiscal 2008 diluted earnings per share includes projected expenses incurred in our remodel initiative of $0.16 to $0.18, of which $0.13 to $0.15 is related to the accelerated depreciation of existing assets and approximately $0.03 is related to incremental depreciation on new assets net of the reduction from the related write-offs. Year to date through the Company’s second fiscal quarter, approximately $0.12 has been expensed for the remodel initiative. Additional assumptions used to determine the targeted range include the following: * Approximately 20 Company-owned openings for the year; * 15 to 20 franchise openings for the year; * Investments in labor and food cost; * $65-$75 million in capital expenditures for the year for new restaurants and routine capitalized improvements at existing restaurants; and * $50-$55 million in capital expenditures for the above-mentioned remodeling of Company restaurants during the fiscal year. Ruby Tuesday, Inc. has Company-owned and/or franchise Ruby Tuesday brand restaurants in 45 states, the District of Columbia, Puerto Rico, and 12 foreign countries. As of December 4, 2007, the Company owned and operated 721 Ruby Tuesday restaurants, while domestic and international franchisees (including Hawaii) operated 169 and 54 restaurants, respectively. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RT). The Company will host a conference call, which will be a live web-cast, this afternoon at 5:00 p.m. Eastern Time. The call will be available live at the following websites: rubytuesday.com fulldisclosure.com Special Note Regarding Forward-Looking Information