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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 |
– Company-owned Comparable Restaurant Sales Increased 2.1% –
Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) today reported unaudited financial results for its third quarter ended September 25, 2016 and announced a quarterly cash dividend of $0.07 per share to be paid in the fourth quarter.
Highlights for the third quarter of 2016 compared to the third quarter of 2015 were as follows:
Michael P. O'Donnell, Chairman and Chief Executive Officer of Ruth's Hospitality Group, Inc., noted, “I am pleased to report earnings per share of $0.11 in the quarter driven by top line growth, a favorable commodity environment, and our balanced shareholder return strategy. We have also seen improvement in our restaurant level margins driven by favorable food costs and the hard work of our team members to control operating costs. We believe our operational focus, along with our strategy of reinvesting in our core operations, driving disciplined growth, and returning excess capital, continues to be a formula for delivering long term value to our shareholders.”
O’Donnell added, “During the third quarter, we opened our newest Ruth’s Chris Steak House, in El Paso, TX. The restaurant’s comfortably elegant atmosphere is enhanced by a large open bar and an outdoor patio with beautiful city views. I am pleased with the early success of this restaurant and the focus of our team members as they were profitable in their very first month of operation.”
Review of Third Quarter 2016 Operating Results
Total revenues in the third quarter of 2016 were $83.8 million, an increase of 4.3% compared to $80.3 million in the third quarter of 2015.
Company-owned Sales
Franchise Income
Operating income in the third quarter of 2016 increased 34.8% to $5.6 million, compared to $4.2 million in the third quarter of 2015. As a percentage of total revenues, operating margin increased 150 basis points year-over-year to 6.7%. Third quarter 2016 results included a non-recurring $335 thousand benefit related to the settlement of the disputed rent charges from 2006 through 2015 for a leased Company restaurant, which were incurred in the second quarter of 2016 for $465 thousand.
Share Repurchase Program and Debt
During the third quarter of 2016, the Company repurchased 553 thousand shares of common stock under its current share repurchase program for approximately $8.3 million, or an average price of $15.01 per share. Since the beginning of 2014, the Company has repurchased an aggregate of 5.2 million shares for approximately $79.1 million under the current and prior share repurchase programs.
At the end of the third quarter of 2016, the Company had $38 million in debt outstanding under its senior credit facility.
Quarterly Cash Dividend
Subsequent to the end of the third quarter of 2016, the Company’s Board of Directors approved the payment of a quarterly cash dividend to shareholders of $0.07 per share. This dividend will be paid on November 23, 2016 to shareholders of record as of the close of business on November 10, 2016, and represents a 17% increase from the quarterly cash dividend paid in November of 2015.
Development Update
During the third quarter, the Company opened one new Ruth’s Chris Steak House restaurant in El Paso, TX. Subsequent to the end of the third quarter of 2016, the Company signed an agreement to operate a new restaurant in Tulsa, OK which is expected to open in the first quarter of 2017. This restaurant will be located in the River Spirit Casino and is under an operating agreement, similar to our Cherokee, NC restaurant. New Ruth’s Chris Steak House restaurants in Cleveland, OH and Waltham, MA are expected to open during the first quarter of 2017. As a result of early 2017 restaurant openings, we expect higher year over year pre-opening costs in the fourth quarter of 2016.
Subsequent to the end of the third quarter of 2016, new franchised restaurants opened in Odenton, MD and Greenville, SC. As a result of the opening of the new Odenton, MD restaurant, one of the franchised locations in downtown Baltimore, MD is expected to close in the fourth quarter of 2016. Franchisees are currently expected to complete the relocation of restaurants in Huntsville, AL in the fourth quarter of 2016, and Mississauga, Canada during the first half of 2017.
Financial Outlook
Based on current information, Ruth's Hospitality Group, Inc. is reaffirming its full year 2016 outlook, and revising expectations of the full year share count for recent repurchases, 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 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 third quarter 2016 financial results today at 8:00 AM Eastern Time. Hosting the call will be Michael P. O’Donnell, Chairman 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 719-325-2330. A replay will be available one hour after the call and can be accessed by dialing 858-384-5517; the password is 1595138. The replay will be available until November 4, 2016. 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 145 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, capital expenditures and the impact of healthcare inflation and minimum wage 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 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; a material failure, interruption or security breach of the Company’s information technology network; repeal or reduction of the federal FICA tip credit; unexpected expenses incurred as a result of the 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 Amended and Restated 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 27, 2015, 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 press release to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this press release 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 39 Weeks Ended September 25, September 27, September 25, September 27, 2016 2015 2016 2015 Revenues: Restaurant sales $ 78,760 $ 75,249 $ 261,941 $ 253,085 Franchise income 3,928 3,965 12,463 12,103 Other operating income 1,086 1,078 3,914 3,497 Total revenues 83,774 80,292 278,318 268,685 Costs and expenses: Food and beverage costs 23,723 23,709 78,022 77,971 Restaurant operating expenses 40,549 39,321 127,026 121,286 Marketing and advertising 2,546 2,312 7,134 6,352 General and administrative costs 7,346 7,442 22,068 21,334 Depreciation and amortization expenses 3,435 3,241 9,907 9,347 Pre-opening costs 574 112 1,665 627 Total costs and expenses 78,173 76,137 245,822 236,917 Operating income 5,601 4,155 32,496 31,768 Other income (expense): Interest expense, net (333 ) (188 ) (799 ) (588 ) Other (92 ) 9 60 40 Income from continuing operations before income tax expense 5,176 3,976 31,757 31,220 Income tax expense 1,668 1,338 10,410 10,145 Income from continuing operations 3,508 2,638 21,347 21,075 Income (loss) from discontinued operations, net of income taxes 75 (73 ) (94 ) (582 ) Net income $ 3,583 $ 2,565 $ 21,253 $ 20,493 Basic earnings (loss) per common share: Continuing operations $ 0.11 $ 0.08 $ 0.67 $ 0.62 Discontinued operations - - - (0.02 ) Basic earnings per share $ 0.11 $ 0.08 $ 0.67 $ 0.60 Diluted earnings (loss) per common share: Continuing operations $ 0.11 $ 0.08 $ 0.66 $ 0.61 Discontinued operations - - - (0.02 ) Diluted earnings per share $ 0.11 $ 0.08 $ 0.66 $ 0.59 Shares used in computing net income (loss) per common share: Basic 31,305,952 33,989,364 32,023,814 34,183,137 Diluted 31,737,036 34,338,440 32,437,142 34,537,553 Dividends declared per common share $ 0.07 $ 0.06 $ 0.21 $ 0.18RECONCILIATION 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 losses from discontinued operations. We exclude the impact of the loss from discontinued operations and restaurant closing costs because these items are not reflective of the ongoing operations of our business, and we exclude the impact of rent dispute costs because the accrual and the benefit from the favorable settlement was taken as a result of a dispute with a landlord related to rent costs in prior years and we do not expect to take similar accruals or benefits in the future. 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 39 Weeks Ended September 25, September 27, September 25, September 27, 2016 2015 2016 2015 GAAP net income $ 3,583 $ 2,565 $ 21,253 $ 20,493 GAAP Income tax expense 1,668 1,338 10,410 10,145 GAAP Income (loss) from discontinued operations (75 ) 73 94 582 GAAP Income from continuing operations before income tax expense 5,176 3,976 31,757 31,220 Adjustments: Restaurant closing costs - - 148 - Accrual of prior years' rent dispute costs (335 ) - 130 - Adjusted net income from continuing operations before income taxes 4,841 3,976 32,035 31,220 Adjusted income tax expense (1) 1,537 1,338 10,519 10,145 Non-GAAP net income $ 3,304 $ 2,638 $ 21,516 $ 21,075 GAAP diluted earnings per common share 0.11 0.08 0.66 0.59 Non-GAAP diluted earnings per common share 0.10 0.08 0.66 0.61 Weighted-average number of common shares outstanding - diluted 31,737,036 34,338,440 32,437,142 34,537,553 (1) Adjusted income tax is calculated by multiplying the Non-GAAP adjustments by our marginal federal and state income tax rates and adding or subtracting the result to/from our GAAP income tax expense.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161028005060/en/
Investor RelationsFor Ruth’s Hospitality Group, Inc.Fitzhugh Taylor, 203-682-8261ftaylor@icrinc.com
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