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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ruths Hospitality Group Inc | NASDAQ:RUTH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.49 | 21.49 | 21.47 | 0 | 01:00:00 |
– Second Quarter GAAP EPS of $0.31 –
– Declares $0.13 Per Share Quarterly Dividend –
Ruth’s Hospitality Group, Inc. (the “Company”) (NASDAQ: RUTH) today reported unaudited financial results for its second quarter ended June 30, 2019.
Highlights for the second quarter of 2019 were as follows:
- Net income in the second quarter of 2019 included $71 thousand in acquisition-related expenses associated with the acquisition of the three restaurants from our Philadelphia and Long Island franchisee, and a $122 thousand income tax benefit related to the impact of discrete income tax items. Net income in the second quarter of 2018 included $409 thousand in acquisition-related expenses associated with the acquisition of our Hawaiian franchisee, and a $273 thousand income tax benefit related to the impact of discrete income tax items.
- Excluding these adjustments, as well as the results from discontinued operations, non-GAAP diluted earnings per common share were $0.31 in the second quarter of 2019, compared to $0.32 in the second quarter of 2018. The Company believes that non-GAAP diluted earnings per common share provides a useful alternative measure of financial performance to improve comparability of diluted earnings per common share between periods. Investors are advised to see the attached Reconciliation of non-GAAP Financial Measure table for additional information.During the second quarter of 2019, the Company announced the acquisition of three franchised restaurants with two in the Philadelphia, PA area and one on Long Island, NY as well as development rights for this territory.
Cheryl Henry, President and Chief Executive Officer of Ruth's Hospitality Group, Inc., stated, “I’m pleased with the work of our team. After seeing slower sales in April, our comparable restaurant sales saw sequential improvement throughout the quarter including positive comparable sales during our June period.”
Henry added, “We continue to lay the foundation for long-term growth within the framework of our total return strategy. Earlier this week, we closed on the previously announced acquisition of development territory and three restaurants in Philadelphia, PA and Long Island, NY from a long-time franchise partner. Additionally, we have recently signed two new leases for Company-owned restaurants in Short Hills, NJ and Worcester, MA. We remain excited about our opportunities to grow and evolve the iconic Ruth’s Chris Steak House brand.”
Review of Second Quarter 2019 Operating Results
Total revenues in the second quarter of 2019 were $110.2 million, an increase of 0.6% compared to $109.6 million in the second quarter of 2018.
Company-owned Sales
Franchise Income
Operating Expenses
Development Update
As previously reported, the Company has signed leases for new Company-owned restaurants in Columbus, OH, Washington DC, Somerville, MA and Oklahoma City, OK. The Columbus, Washington DC and Somerville restaurants are on track to open in the second half of 2019, while the Oklahoma City restaurant is expected to open in 2020.
In addition, the Company recently signed two new leases to open restaurants in Short Hills, NJ, and Worcester, MA which we expect to open in the second half of 2020.
Our franchise partners are currently expected to open a new restaurant in St. George, UT, now in the first half of 2020.
Share Repurchase and Debt
During the second quarter, the Company repurchased approximately 251 thousand shares for $6.6 million, at an average price of $26.23 per share. Year to date, the Company has repurchased 276 thousand shares for $7.1 million, at an average price of $25.84 per share. The Company has approximately $25.0 million remaining under its share repurchase authorization.
At the end of the second quarter, the Company had $45.0 million in debt outstanding under its senior credit facility.
Quarterly Cash Dividend
Subsequent to the end of the quarter, the Company’s Board of Directors approved the payment of a quarterly cash dividend to shareholders of $0.13 per share. The dividend will be paid on September 5, 2019 to shareholders of record as of the close of business on August 22, 2019 and represents an 18% increase from the quarterly cash dividend paid in September of 2018.
Financial Outlook
Based on current information and the aforementioned franchise acquisition, Ruth's Hospitality Group, Inc. is revising its full year 2019 outlook based on a 52-week year ending December 29, 2019, as follows:
The foregoing statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you to the “Cautionary Note Regarding Forward-Looking Statements” section in this earnings press release and to our recent filings with the Securities and Exchange Commission for more detailed discussions of the risks that could impact our financial outlook and our future operating results and financial condition.
Conference Call
The Company will host a conference call to discuss second quarter 2019 financial results today at 8:30 AM Eastern Time. Hosting the call will be Cheryl Henry, President and Chief Executive Officer, and Arne G. Haak, Executive Vice President and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 323-794-2590. A replay will be available one hour after the call and can be accessed by dialing 412-317-6671; the password is 4017610. The replay will be available until Friday, August 9, 2019. The call will also be webcast live from the Company's website at www.rhgi.com under the Investor Relations section.
About Ruth’s Hospitality Group, Inc.
Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida, is the largest fine dining steakhouse company in the U.S. as measured by the total number of Company-owned and franchisee-owned restaurants, with over 150 Ruth’s Chris Steak House locations worldwide specializing in USDA Prime grade steaks served in Ruth’s Chris’ signature fashion – “sizzling.”
For information about our restaurants, to make reservations, or to purchase gift cards, please visit www.RuthsChris.com. For more information about Ruth’s Hospitality Group, Inc., please visit www.rhgi.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” that reflect, when made, the Company’s expectations or beliefs concerning future events that involve risks and uncertainties. Forward-looking statements frequently are identified by the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “targeting,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Similarly, statements herein that describe the Company’s objectives, plans or goals, including with respect to new restaurant openings and acquisitions, capital expenditures, strategy, financial outlook, our effective tax rate and the impact of healthcare inflation, recent accounting pronouncements and tax reform legislation, also are forward-looking statements. Actual results could differ materially from those projected, implied or anticipated by the Company’s forward-looking statements. Some of the factors that could cause actual results to differ include: reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; changes in economic conditions and general trends; the loss of key management personnel; the effect of market volatility on the Company’s stock price; health concerns about beef or other food products; the effect of competition in the restaurant industry; changes in consumer preferences or discretionary spending; labor shortages or increases in labor costs; the impact of federal, state or local government regulations relating to income taxes, unclaimed property, Company employees, the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; harmful actions taken by the Company’s franchisees; the inability to successfully integrate franchisee acquisitions into the Company’s business operations; a material failure, interruption or security breach of the Company’s information technology network; the Company’s indemnification obligations in connection with its sale of the Mitchell’s Restaurants; the Company’s ability to protect its name and logo and other proprietary information; an impairment in the financial statement carrying value of our goodwill, other intangible assets or property; the impact of litigation; the restrictions imposed by the Company’s credit agreement; and changes in, or the discontinuation of, the Company’s quarterly cash dividend payments or share repurchase program. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2018, which is available on the SEC’s website at www.sec.gov. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this presentation have not occurred.
Unless the context otherwise indicates, all references in this report to the “Company,” “Ruth’s,” “we,” “us”, “our” or similar words are to Ruth’s Hospitality Group, Inc. and its subsidiaries. Ruth’s Hospitality Group, Inc. is a Delaware corporation formerly known as Ruth’s Chris Steak House, Inc., and was founded in 1965.
RUTH'S HOSPITALITY GROUP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income - Preliminary and Unaudited (Amounts in thousands, except share and per share data)13 Weeks Ended
26 Weeks Ended
June 30,
July 1,
June 30,
July 1,
2019
2018
2019
2018
Revenues: Restaurant sales$
104,017
$
103,538
$
217,003
$
213,902
Franchise income
4,421
4,457
8,979
8,874
Other operating income
1,805
1,640
4,002
3,384
Total revenues
110,243
109,635
229,984
226,160
Costs and expenses: Food and beverage costs
29,023
29,049
60,871
60,454
Restaurant operating expenses
51,156
50,022
104,759
101,702
Marketing and advertising
4,121
4,640
7,751
8,117
General and administrative costs
8,929
9,274
17,681
18,248
Depreciation and amortization expenses
5,124
4,673
10,092
9,134
Pre-opening costs
244
272
341
412
Total costs and expenses
98,597
97,930
201,495
198,067
Operating income
11,646
11,705
28,489
28,093
Other income (expense): Interest expense, net
(417
)
(403
)
(822
)
(783
)
Other
13
22
15
34
Income from continuing operations before income tax expense
11,242
11,324
27,682
27,344
Income tax expense
1,933
1,763
4,462
4,147
Income from continuing operations
9,309
9,561
23,220
23,197
Income (loss) from discontinued operations,net of income taxes
-
12
-
22
Net income
$
9,309
$
9,573
$
23,220
$
23,219
Basic earnings per common share: Continuing operations
$
0.32
$
0.32
$
0.79
$
0.78
Discontinued operations
-
-
-
-
Basic earnings per share
$
0.32
$
0.32
$
0.79
$
0.78
Diluted earnings per common share: Continuing operations
$
0.31
$
0.32
$
0.78
$
0.76
Discontinued operations
-
-
-
-
Diluted earnings per share
$
0.31
$
0.32
$
0.78
$
0.76
Shares used in computing net income per common share: Basic
29,252,651
29,713,825
29,264,076
29,701,847
Diluted
29,726,102
30,375,306
29,768,702
30,377,194
Dividends declared per common share
$
0.13
$
0.11
$
0.26
$
0.22
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Within our press release, we make reference to non-GAAP diluted earnings per common share. This non-GAAP measurement was calculated by excluding certain items and results from discontinued operations and certain discrete income tax items. We exclude the impact of the results from discontinued operations, the impact of acquisition related costs and the impact of certain discrete income tax items because these items are not reflective of the ongoing operations of our business. This non-GAAP measurement has been included as supplemental information. We believe that this measure represents a useful internal measure of performance. Accordingly, where this non-GAAP measure is provided, it is done so that investors have the same financial data that management uses in evaluating performance with the belief that it will assist the investment community in assessing our underlying performance on a quarter-over-quarter basis. However, because this measure is not determined in accordance with GAAP, such a measure is susceptible to varying calculations and not all companies calculate the measure in the same manner. As a result, the aforementioned measure as presented may not be directly comparable to a similarly titled measure presented by other companies. This non-GAAP financial measure is presented as supplemental information and not as an alternative to diluted earnings per share as calculated in accordance with GAAP.
Reconciliation of Non-GAAP Financial Measure - Unaudited (Amounts in thousands, except share data) 13 Weeks Ended 26 Weeks Ended June 30, July 1, June 30, July 1,2019
2018
2019
2018
GAAP Net income$
9,309
$
9,573
$
23,220
$
23,219
GAAP Income tax expense
1,933
1,763
4,462
4,147
GAAP (Income) loss from discontinued operations
-
(12
)
-
(22
)
GAAP Income from continuing operations before income tax expense
11,242
11,324
27,682
27,344
Adjustments: Franchisee acquisition costs
71
409
110
861
Adjusted net income from continuing operations before income taxes
11,313
11,733
27,792
28,205
Adjusted income tax expense (1)
(1,950
)
(1,863
)
(4,488
)
(4,355
)
Impact of excluding certain discrete income tax items
(122
)
(273
)
(605
)
(631
)
Non-GAAP net income$
9,241
$
9,597
$
22,699
$
23,219
GAAP diluted earnings per common share
$
0.31
$
0.32
$
0.78
$
0.76
Non-GAAP diluted earnings per common share
$
0.31
$
0.32
$
0.76
$
0.76
Weighted-average number of common shares outstanding - diluted
29,726,102
30,375,306
29,768,702
30,377,194
(1) Adjusted income tax is calculated by multiplying the Non-GAAP adjustments by our marginal federal and stateincome tax rates and adding or subtracting the result to/from our GAAP income tax expense.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190802005063/en/
Investor Relations Fitzhugh Taylor (203) 682-8261 ftaylor@icrinc.com
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