UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended NOVEMBER 29, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12454
RUBY TUESDAY, INC.
(Exact name of registrant as specified in charter)
GEORGIA 63-0475239
(State of incorporation or (I.R.S. Employer identifi-
organization) cation no.)
4721 Morrison Drive
P.O. Box 160266
Mobile, AL 36625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (334)344-3000
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
16,496,549
(Number of shares of $0.01 par value common stock outstanding as of January 3,
1998)
Exhibit Index appears on page 15
INDEX
PAGE
NUMBER
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS AS OF
NOVEMBER 29, 1997 AND MAY 31, 1997............. 3
CONSOLIDATED STATEMENTS OF INCOME FOR
THE THIRTEEN AND TWENTY-SIX WEEKS ENDED
NOVEMBER 29, 1997 AND NOVEMBER 30, 1996........ 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED
NOVEMBER 29, 1997 AND NOVEMBER 30, 1996........ 5
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS..................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS........................... 7-12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK............................. N/A
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS........................ 12-13
ITEM 2. CHANGES IN SECURITIES.................... NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.......... NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS......................... 13
ITEM 5. OTHER INFORMATION........................ NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......... 13-14
SIGNATURES....................................... 14
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1
RUBY TUESDAY, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER-SHARE DATA)
<CAPTION>
Nov. 29, May 31,
1997 1997
(UNAUDITED) (AUDITED)
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments.................. $ 12,908 $ 7,608
Accounts and notes receivable.................... 7,552 4,621
Inventories...................................... 10,355 9,650
Prepaid expenses................................. 11,128 9,225
Deferred income tax benefits..................... 4,626 4,388
Total current assets........................... 46,569 35,492
Property and equipment - at cost....................... 497,462 512,404
Less accumulated depreciation and amortization... (165,435) (165,640)
332,027 346,764
Costs in excess of net assets acquired................. 20,061 20,396
Other assets........................................... 23,519 16,219
Total assets................................. $422,176 $418,871
Liabilities & shareholders' equity
Current liabilities:
Accounts payable................................. $ 35,382 $ 28,828
Short-term borrowings............................ 8,610 534
Accrued liabilities:
Taxes, other than income taxes................. 10,958 11,425
Payroll and related costs...................... 8,169 8,982
Insurance...................................... 9,311 8,800
Rent and other................................. 12,144 10,393
Current portion of long-term debt................ 105 102
Total current liabilities.................... 84,679 69,064
Long-term debt......................................... 80,456 78,006
Deferred income taxes.................................. 12,532 13,552
Other deferred liabilities............................. 36,478 34,609
Shareholders' equity:
Common stock, $0.01 par value;(authorized 100,000
shares; issued 16,659 @ 11/30/97; 17,720 @ 5/31/97) 167 177
Capital in excess of par value................... 1,095 2,729
Retained earnings................................ 209,459 223,399
210,721 226,305
Less cost of Company stock held by deferred
compensation plan............................... (2,690) (2,665)
208,031 223,640
Total liabilities & shareholders' equity..... $422,176 $418,871
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>
RUBY TUESDAY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER-SHARE DATA)
(UNAUDITED)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
Nov. 29, 1997 Nov. 30, 1996 Nov. 29, 1997 Nov. 30, 1996
<S> <C> <C> <C> <C>
Revenues............................. $170,283 $156,318 $344,382 $313,600
Operating costs and expenses:
Cost of merchandise................ 46,668 42,940 94,139 85,265
Payroll and related costs.......... 55,526 51,226 111,822 103,060
Other, net......................... 36,687 34,196 73,559 69,058
Selling, general and administrative 13,042 11,255 25,422 20,738
Depreciation and amortization...... 10,093 9,558 20,325 18,685
Interest expense, net.............. 934 1,027 1,928 2,169
162,950 150,202 327,195 298,975
Income before income taxes........... 7,333 6,116 17,187 14,625
Provision for income taxes........... 2,612 2,170 6,086 5,190
Net income........................... $ 4,721 $ 3,946 $ 11,101 $ 9,435
Earnings per common and common equivalent
share (primary and fully diluted).. $ 0.27 $ 0.22 $ 0.63 $ 0.53
Weighted average common and common
equivalent shares:
Primary........................... 17,575 17,853 17,577 17,897
Fully Diluted..................... 17,576 17,853 17,646 17,897
The accompanying notes are an integral part of the consolidated financial statements
</TABLE>
<TABLE>
RUBY TUESDAY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Twenty-Six Weeks Ended
Nov. 29, Nov. 30,
1997 1996
Operating activities:
<S> <C> <C>
Net Income........................................ $ 11,101 $ 9,435
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................... 20,325 18,685
Amortization of intangibles..................... 363 367
Deferred income taxes........................... (1,364) 970
Loss on disposition of assets................... 687 620
Changes in operating assets and liabilities:
Increase in receivables...................... (3,232) (1,501)
Increase in inventories...................... (1,419) (1,216)
(Increase)/decrease in prepaid and other
assets...................................... (2,223) 1,620
Increase in accounts payable,
accrued and other liabilities............... 8,428 7,996
Increase/(decrease) in income taxes payable.. (845) 1,698
Net cash provided by operating activities....... 31,821 38,674
Investing activities:
Purchases of property and equipment............... (27,730) (41,054)
Proceeds from disposal of assets.................. 138 54
Proceeds from sale of Florida units............... 12,769
Proceeds from sale of home office building........ 5,450
Other, net........................................ (967) (1,262)
Net cash used by investing activities........... (10,340) (42,262)
Financing activities:
Proceeds from long-term debt...................... 2,500
Net change in short-term borrowings............... 8,076 7,949
Principal payments on long-term debt.............. (47) (5,047)
Proceeds from issuance of stock, including
treasury stock.................................. 3,634 2,802
Stock repurchases................................. (30,344)
Net cash provided (used) by financing activities (16,181) 5,704
Increase in cash and short-term investments....... 5,300 2,116
Cash and short-term investments:
Beginning of year............................... 7,608 7,139
End of quarter.................................. $ 12,908 $ 9,255
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
statements should be read in conjunction with the notes to the
consolidated financial statements included in Ruby Tuesday, Inc.'s annual
report for the fiscal year ended May 31, 1997. The accompanying unaudited
consolidated financial statements reflect all adjustments for normal
recurring accruals. These adjustments are necessary, in the opinion of
management, for a fair presentation of the financial position, the
results of operations and the cash flows for the interim periods
presented. The results of operations for the interim periods reported
herein are not necessarily indicative of results to be expected for the
full year.
NOTE B - SALE AND FRANCHISE OF FLORIDA UNITS
As described in Note 11 to the 1997 Audited Financial Statements, the
Company entered into a series of agreements to sell 29 Company-owned
units in Florida to three limited partnerships. During the quarter ended
November 29, 1997, the Company completed the sales of these units which
now operate as Ruby Tuesday restaurants under separate franchising
agreements. The Company was paid a purchase price of $17.9 million of
which $12.8 million was paid in cash. The remaining $5.1 million was paid
in the form of subordinated promissory notes bearing interest at a rate
of 10.0% per year. The sale of these units resulted in a minimal pre-tax
gain.
NOTE C - SALE OF HOME OFFICE BUILDING
On September 30, 1997, the Company sold its home office building in
Mobile, Alabama for a cash purchase price of $5.5 million. Concurrent
with the sale of the building, the Company signed a 10 year lease with
the new owner. The book gain on the sale of the building ($0.8 million)
has been deferred and will be amortized over the lease life as a
reduction to rent expense. The proceeds have been placed into a trust
with an intermediary to purchase replacement property. This was done for
the sale and subsequent construction of restaurant units to qualify as a
"like-kind" exchange for tax purposes, thereby deferring the tax gain
into the future. As of November 29, 1997, approximately $3.8 million of
cash remained in trust with the intermediary. Under the Internal Revenue
Service requirements for "like-kind" exchanges, the Company must spend
these funds by March 31, 1998. The Company anticipates that it will do
so within the required timeframe.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General:
The Company reported net income of $4.7 million for the thirteen weeks
ended November 29, 1997 compared to $3.9 million for the corresponding
period of the prior year. Earnings per share for the second quarter was
$0.27, a 22.7% increase compared to earnings per share for the second
quarter of fiscal 1997. Contributing to the increase was a 2.5% increase
in same-store sales for the Ruby Tuesday concept. The Company also
reported net income of $11.1 million for the twenty-six weeks ended
November 29, 1997 compared to $9.4 million for the corresponding period
of the prior year. Earnings per share for the year-to-date period was
$0.63, a 18.9% increase compared to earnings per share for the same
period of fiscal 1997. As of November 29, 1997, the Company owned and
operated 382 restaurants, including 314 Ruby Tuesdays, 47 Mozzarella's,
and 21 Tia's Tex-Mex restaurants. Franchised operations included 31
domestic units and four international units.
Results of Operations:
The following table sets forth selected restaurant operating data as a
percentage of revenues for the periods indicated. All information is
derived from the unaudited consolidated financial statements of the
Company included herein.
Twenty-Six Weeks Ended
November 29, November 30,
1997 1996
Revenues................................ 100.0% 100.0%
Operating costs and expenses:
Cost of merchandise................ 27.3 27.2
Payroll and related costs.......... 32.5 32.9
Other.............................. 21.3 22.0
Selling, general and administrative 7.4 6.6
Depreciation and amortization...... 5.9 5.9
Interest expense, net.............. 0.6 0.7
95.0 95.3
Income before income taxes.............. 5.0 4.7
Provision for income taxes.............. 1.8 1.7
Net income.............................. 3.2% 3.0%
The following table shows year-to-date restaurant openings, closings, and
total restaurants as of the end of the second quarter.
Year-to-date Year-to-date Total Open at End
Openings Closings of Second Quarter
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
1998 1997 1998 1997 1998 1997
Ruby Tuesday 19 17 30 4 314 314
Mozzarella's 1 1 2 0 47 47
Tia's 1 2 0 0 21 20
The Company estimates that approximately 18-22 additional Company-owned
Ruby Tuesdays will be opened during the remainder of fiscal 1998. In
addition, the Company anticipates the opening of one domestic and two
international franchise units during the remainder of the fiscal year.
Revenues:
Company revenues increased $14.0 million or 8.9% to $170.3 million for
the quarter ended November 29, 1997 compared to the same quarter of the
prior year. Revenues increased $30.8 million or 9.8% to $344.4 million
for the twenty-six weeks ended November 29, 1997. Included in Company
revenues are franchise fees of $0.3 million and $0.4 million for the
thirteen and twenty-six week periods ending November 29, 1997,
respectively. These increases are the result of positive same-store
sales for the Ruby Tuesday concept and an increase in operating weeks
caused by the net addition of 30 units over the previous year prior to
the sale of 29 units which occurred during the quarter ended November 29,
1997.
Cost of Merchandise, Payroll and Related Costs and Other Operating Costs:
Cost of merchandise increased $3.7 million or 8.7% to $46.7 million for
the quarter ended November 29, 1997 compared to the same quarter of the
prior year and $8.9 million or 10.4% to $94.1 million for the twenty-six
weeks ended November 29, 1997 compared to the same period of the prior
year. The increase is primarily attributable to higher food prices,
primarily shrimp and ribs, and an increase in the average number of
units. As a percentage of revenues, cost of merchandise remained
relatively constant for both the quarter and year-to-date periods when
compared to the same periods of the prior year.
Payroll and related costs increased $4.3 million (8.4%) and $8.8 million
(8.5%) for the thirteen and twenty-six weeks ended November 29, 1997,
respectively, as compared to the same periods of the prior year. However,
these expenses decreased as a percentage of revenues for both periods.
The decrease is primarily attributable to higher average unit volumes,
reductions in hourly labor costs resulting from lower turnover, continued
focus on accurately matching the number of managers needed for each unit
to unit volume levels, as well as decreased workers' compensation rates
compared to the same periods of the prior year.
While other operating costs increased $2.5 million (7.3%) and $4.5
million (6.5%) for the thirteen and twenty-six weeks ended November 29,
1997, respectively, as compared to the same periods of the prior year,
these costs decreased as a percentage of revenues. This decrease is
attributable to a continued focus on controlling supplies expense, a
decrease in repairs expense resulting from continued savings due to the
Company's efforts to reevaluate and renegotiate unit level maintenance
contracts, and a reduction in rent expense during the quarter due to the
sale of the Florida units which averaged a higher occupancy rate than
other units.
Selling, general and administrative expenses increased $1.8 million
(15.9%) and $4.7 million (22.6%) for the thirteen and twenty-six weeks
ended November 29, 1997, respectively, as compared to the same periods of
the prior year. General and administrative costs increased due to
additional management training payroll and start-up costs related to the
Company's franchising program. Advertising expense in the first two
quarters of fiscal 1998 was higher due the "Neighborhood Introduction
Program", a couponing promotion which began in the third quarter of
fiscal 1997.
Depreciation and amortization expense increased $0.5 million or 5.6% for
the second quarter of fiscal 1998 and $1.6 million or 8.8% for the
twenty-six weeks ended November 29, 1997. The increase is due to
additional units opened since second quarter of fiscal 1997, offset by a
reduction in depreciation resulting from the sale of 29 Florida units
during the quarter. As a percentage of revenues, depreciation expense
for the year-to-date period was flat compared to the same period of
fiscal 1997.
Interest Expense (net of Interest Income):
Net interest expense decreased slightly for both the thirteen weeks ($0.1
million) and twenty-six weeks ($0.2 million) ended November 29, 1997
compared to the same periods in the prior year.
Income Taxes:
The effective income tax rate was 35.6% and 35.4%, respectively, for the
thirteen and twenty-six weeks ended November 29, 1997 compared to 35.5%
for the same periods of the prior year.
Earnings per Share:
Earnings per share are based on the weighted average number of shares
outstanding during each quarter and are adjusted for the assumed
conversion of shares issuable upon exercise of options, after the assumed
repurchase of common shares with the related proceeds. The difference
between primary and fully diluted weighted average shares reflects the
maximum extent of potential dilution that conversions of shares could
create.
LIQUIDITY AND CAPITAL RESOURCES
Total assets at November 29, 1997 were $422.2 million, a $3.3 million
increase from $418.9 million as of the prior fiscal year end. The
significant changes noted since the end of the prior fiscal year are
primarily related to the sale of the 29 Florida units and the sale of the
home office building. (See Note B of Notes to Consolidated Financial
Statements.)
Cash has increased $5.3 million since the end of the prior fiscal year.
As noted in Note C of the Notes to Consolidated Financial Statements
above, the Company placed proceeds from the sale of the home office
building ($5.5 million) into trust with an intermediary to be used in the
construction of restaurant units. These proceeds account for the majority
of the increase in cash at November 29, 1997.
Accounts Receivable increased $2.9 million from May 31, 1997 primarily
due to the expansion of domestic franchising during the current year.
Accounts receivable from franchisees includes amounts due to the Company
for such items as reimbursement for amounts paid by the Company on behalf
of the franchisees, as well as royalties fees, support fees, and
marketing fees. A significant portion of the amounts due the Company at
November 29, 1997 was collected in December.
Net property and equipment decreased $14.7 million from May 31, 1997.
The decrease resulted primarily from the sale of 29 Company-owned units
in Florida ($15.7 million net book value) and the sale of the home office
building ($4.1 million net book value). In addition, there was $1.0
million in other retirements and $20.3 million in depreciation and
amortization expense which was offset by $27.7 million in capital
expenditures. The Company anticipates that during the remainder of fiscal
1998, capital expansion will be financed primarily from operating cash
flows, minimal incremental borrowings on bank lines of credit and the
five-year revolving credit facility and through operating leases.
Other assets has increased $7.3 million since the end of the prior fiscal
year. The majority of the increase resulted from the receipt of 10.0%
interest-bearing notes in connection with the Florida sale (see Note B of
Notes to Consolidated Financial Statements above), net of a $1.2 million
bad debt allowance established concurrently.
Total liabilities at November 29, 1997 were $214.1 million, a $18.9
million increase from $195.2 million as of the end of the prior fiscal
year. At November 29, 1997 the Company had $79.5 million in borrowings
outstanding under its five-year credit facility and $8.6 million
outstanding under committed lines of credit. Total debt increased $10.5
million from the end of the prior fiscal year primarily as a result of
additional borrowings to finance construction of new units and stock
repurchases during the first two quarters of fiscal 1998. The weighted
average interest rate on these borrowings and lines of credit was 6.15%
during the second quarter.
At November 29, 1997, the Company had committed lines of credit amounting
to $25.0 million ($16.4 million which remained available at November 29,
1997) and non-committed lines of credit amounting to $15.0 million with
several banks at varying interest rates. These lines are subject to
periodic review by each bank and may be canceled by the Company at any
time.
Accounts payable increased $6.6 million from the prior fiscal year end.
As described in Note 6 to the 1997 Audited Financial Statements, the
Company entered into an operating lease agreement for the purpose of
leasing new free-standing units and a new corporate headquarters. Under
the agreement, the Company is forwarded funds to construct these new
units. As of November 29, 1997, the funds received exceeded amounts
spent for construction of these units. This excess is temporarily
included in accounts payable until it is invested in additional capital
expenditures and represents the majority of the increase noted since May
31, 1997.
KNOWN EVENTS, UNCERTAINTIES AND TRENDS
Financial Strategy and Stock Repurchase Plan
The Company employs a financial strategy which utilizes a prudent amount
of debt to minimize the weighted average cost of capital while allowing
the Company to maintain financial flexibility and the equivalent of an
investment-grade (BBB) bond rating. This financial strategy sets a target
debt-to-capital ratio of 60%, including operating leases. The strategy
also provides for repurchasing Company stock whenever cash flow exceeds
funding requirements while maintaining the target capital structure.
Pursuant to this strategy, the Company purchased 574,300 shares during the
quarter. After these repurchases, approximately 733,000 million shares
remain available for repurchase under the Company's stock repurchase
program.
Franchise Partner Program
The sale of 29 Company-owned Ruby Tuesday units in Florida is part of an
overall business strategy in which the Company will sell and franchise
units outside of its core growth markets. The Company anticipates
additional sales of Company-owned units as part of this strategy.
New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("FAS 128"), which the Company is required to adopt during its third
quarter ending on February 28, 1998. At that time, the Company will be
required to change the method currently used to compute earnings per share
and to restate all prior periods. Under the new requirements for
calculating primary earnings per share, the dilutive effect of stock
options will be excluded. The impact is expected to result in an increase
in primary earnings per share for the quarter ended November 29, 1997 of
$0.01 per share. The impact of FAS 128 on the calculation of fully
diluted earnings per share is not expected to be material.
Cash Dividend
During fiscal 1997, the Board of Directors approved a dividend policy as
a means of returning excess capital to its shareholders. This policy
calls for payment of semi-annual dividends of approximately $3.0 million
annually. On January 13, 1998, the Board of Directors declared a
dividend of $0.09 per share, payable at the close of business on February
12, 1998, to shareholders of record on January 30, 1998.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
The foregoing section contains various "forward-looking statements" which
represent the Company's expectations or beliefs concerning future events,
including the following: statements regarding unit growth, future
capital expenditures and future borrowings. The Company cautions that a
number of important factors could, individually or in the aggregate,
cause actual results to differ materially from those included in the
forward-looking statements including, without limitation, the following:
consumer spending trends and habits; mall-traffic trends; increased
competition in the casual dining restaurant market; weather conditions in
the regions in which the Company operates restaurants; consumers'
acceptance of the Company's development concepts; laws and regulations
affecting labor and employee benefit costs; the Company's ability to
attract qualified managers and franchisees; and changes in the
availability of capital.
PART II - OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
The Company is currently, and from time to time, subject to pending
claims and lawsuits arising in the ordinary course of its business. In
addition, the Company, as successor to Morrison Restaurants Inc.,
("Morrison") is a party to a case (Morrison Restaurants Inc. v. United
States of America, et al.), originally filed by Morrison in 1994 to claim
a refund of taxes paid in the amount of approximately $3,000 and
abatement of taxes assessed by the Internal Revenue Service ("IRS")
against Morrison on account of the employer's share of FICA taxes on
unreported tips allegedly received by employees. The IRS filed a
counterclaim for approximately $7,000 in additional taxes. The case was
decided by the U.S. District Court in favor of the Company in February
1996 on summary judgment. The IRS appealed the District Court's decision
and, on August 12, 1997, the U.S. Court of Appeals for the Eleventh
Circuit reversed the award of summary judgment and remanded the case to
the District Court for proceedings consistent with the Court's opinion.
In its reversal, the Eleventh Circuit upheld the IRS' enforcement policy
with respect to the employer's share of FICA taxes on allegedly
unreported tips. The Company subsequently petitioned the U.S. Court of
Appeals for a review of the matter by the full Court. Such petition was
denied. There are four additional lawsuits on this issue filed by other
restaurant companies pending in other U.S. federal courts. Although the
amount in dispute is not material, it is possible that the IRS will
attempt to assess taxes in additional units of the Company (as well as
other restaurant companies). In such event, the Company believes that a
business tax credit would be available to the Company to offset, over a
period of years, a majority of additional taxes determined to be due.
Moreover, the Company is a participant in an IRS enforcement program
which would reduce the risk of additional assessments by the IRS in
return for a restaurant employer's proactive role in encouraging employee
tip reporting. In light of the proactive role of the Company, the
protection against additional assessment afforded by the agreement should
be available to the Company. In the opinion of management, the ultimate
resolution of all pending legal proceedings will not have a material
adverse effect on the Company's operations or financial position.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on September 29, 1997, the
shareholders of the Company elected Class II Directors to serve a three
year term on the Board. The results of the voting were as follows:
Authority
Director Nominees For Withheld
Dr. Donald Ratajczak 14,752,003 104,236
Samuel E. Beall, III 14,754,316 101,923
Claire L. Arnold 14,750,347 105,892
The Directors continuing in office are: John B. McKinnon, Dolph W. von
Arx, Arthur R. Outlaw, and Dr. Benjamin F. Payton.
In addition to the above proposal, the shareholders also voted on a
proposal to amend the Company's 1996 Stock Incentive Plan to increase the
number of shares available for issuance by 250,000. The results of the
voting were as follows:
12,360,531 shares - FOR the Amendment
2,399,663 shares - AGAINST the Amendment
95,017 shares - ABSTAIN
There were 1,028 broker non-votes related to this proposal.
ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
The following exhibits are filed as part of this report:
Exhibit
No.
11 Computation of Primary and Fully Diluted Earnings Per Share
27 Financial Data Schedule
REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RUBY TUESDAY , INC.
(Registrant)
1/13/98 /s/ J. RUSSELL MOTHERSHED
DATE J. RUSSELL MOTHERSHED
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
11 Computation of Primary and Fully Diluted Earnings Per Share
27 Financial Data Schedule
ITEM 6.(a)
EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
NOV. 29 1997 NOV. 30,1996 NOV. 29 1997 NOV. 30,1996
PRIMARY EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
<S> <C> <C> <C> <C>
Average common shares outstanding...... 16,858 17,780 16,909 17,726
Average additional common shares
issuable on exercise of dilutive
stock options (computed by use of
the "treasury stock method", at the
average market price)................ 717 73 668 171
TOTALS.............. 17,575 17,853 17,577 17,897
Net Income............................. $ 4,721 $ 3,946 $ 11,101 $ 9,435
Primary earnings per common and
common equivalent share.............. $ 0.27 $ 0.22 $ 0.63 $ 0.53
</TABLE>
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
NOV. 29 1997 NOV. 30,1996 NOV. 29 1997 NOV. 30,1996
FULLY DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
<S> <C> <C> <C> <C>
Average common shares outstanding...... 16,858 17,780 16,909 17,726
Average additional common shares
issuable on exercise of dilutive
stock options (computed by use of
the "treasury stock method", at the
higher of period-end or average
market price)........................ 718 73 737 171
TOTALS.............. 17,576 17,853 17,646 17,897
Net Income............................. $ 4,721 $ 3,946 $ 11,101 $ 9,435
Fully diluted earnings per common and
common equivalent share.............. $ 0.27 $ 0.22 $ 0.63 $ 0.53
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RUBY
0TUESDAY, INC. FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED NOVEMBER
29, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-06-1998
<PERIOD-END> NOV-29-1997
<CASH> 12,908
<SECURITIES> 0
<RECEIVABLES> 7,552
<ALLOWANCES> 0
<INVENTORY> 10,355
<CURRENT-ASSETS> 46,569
<PP&E> 497,462
<DEPRECIATION> 165,435
<TOTAL-ASSETS> 422,176
<CURRENT-LIABILITIES> 84,679
<BONDS> 80,456
0
0
<COMMON> 167
<OTHER-SE> 207,864
<TOTAL-LIABILITY-AND-EQUITY> 422,176
<SALES> 344,009
<TOTAL-REVENUES> 344,382
<CGS> 94,139
<TOTAL-COSTS> 205,706
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,928
<INCOME-PRETAX> 17,187
<INCOME-TAX> 6,086
<INCOME-CONTINUING> 11,101
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,101
<EPS-PRIMARY> $0.63
<EPS-DILUTED> $0.63
</TABLE>
