Ryans Restaurant (NASDAQ:RYAN)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Ryans Restaurant Charts. Click Here for more Ryans Restaurant Charts.](/p.php?pid=staticchart&s=N%5ERYAN&p=8&t=15)
Ryan's Announces Second Quarter 2005 Results
GREER, S.C., July 20 /PRNewswire-FirstCall/ -- - Ryan's Restaurant Group, Inc.
(NASDAQ:RYAN) reported second quarter 2005 results today.
Second quarter restaurant sales were $215,510,000 in 2005 compared to
$216,546,000 for the comparable quarter in 2004. Net earnings for the quarter
amounted to $6,260,000 in 2005 and $14,170,000 in 2004. Earnings per share
(diluted) amounted to 15 cents in 2005 compared to 33 cents in 2004.
For the six months ended June 29, 2005, restaurant sales amounted to
$425,149,000 compared to $428,203,000 for the comparable period in 2004. Net
earnings were $18,073,000 in 2005 and $29,530,000 in 2004. Earnings per share
(diluted) were 42 cents in 2005 compared to 68 cents in 2004.
Commenting on the quarter, Charles D. Way, CEO of the Company, said, "Our
financial results for the second quarter were affected by weak sales and higher
costs. During the quarter, we also took a $5 million charge to reflect the
estimated minimum settlement of ongoing wage/hour litigation. In spite of
promising sales results during the second quarter's holiday periods, we were
disappointed with our same-store sales, which decreased by 4% for the quarter.
While we believe that our customers' discretionary spending continues to be
adversely impacted by high energy costs, we also understand that we must
continually examine our strategies in order to attract and retain customers.
Accordingly, our operations leadership team has held numerous meetings to re-
focus on our restaurant operations standards, particularly those concerning
staffing and exterior appearance. We continue to implement "theme nights" at
our restaurants and are testing a buffet breakfast on Saturdays and Sundays at
selected locations. We believe that breakfast represents an excellent way to
increase sales that produce good margins without a significant investment, and
we are excited about its potential impact on sales and profits."
Restaurant-level margins for the second quarter were impacted by higher hourly
labor charges as well as by higher energy and general liability insurance
costs. We continue to believe that higher staffing levels, which we
implemented at the beginning of 2005, contribute to better customer service,
which is obviously important for customer retention. Just like our customers,
Ryan's is also impacted by higher electricity and natural gas costs. General
liability insurance costs, which are based largely on the estimated future
costs of claims, increased due to higher cost projections and by a $750,000
favorable adjustment in the second quarter of 2004. Restaurant-level costs
were also affected by an $838,000 impairment charge related to an under-
performing restaurant, which we have decided to close and sell. This charge is
included in other restaurant expenses in the accompanying consolidated
financial statements. Food costs increased slightly from the second quarter of
2004. Beef costs decreased slightly during the quarter, and we are very
encouraged by the recent U.S. Circuit Court decision that may allow Canadian
beef imports in the future. This development could potentially increase beef
supplies and therefore lower our operating costs."
General and administrative expenses increased principally due to a $5 million
charge to reflect the estimated minimum settlement for a wage/hour lawsuit that
was filed in November 2002. Additional information about this case can be
found in our reports filed with the Securities and Exchange Commission. At
this time, we are negotiating a potential settlement with the plantiffs'
attorney in order to avoid lengthy and costly court proceedings and will soon
enter into a mediation process in hopes of reaching a mutually acceptable
settlement. However, there can be no assurance that we will reach an agreement
as a result of the mediation process, and it is not possible to predict this
case's ultimate outcome."
Regarding our balance sheet, as a result of lower net earnings in this and
prior quarters, we have not met the fixed charge coverage ratio covenants in
our various debt agreements. At June 29, 2005, our fixed charge coverage
ratio, which is defined consistently in all of our debt agreements, was 2.05
times compared to the minimum requirement of 2.25 times. We have been in
contact with our lenders throughout the quarter regarding this possibility and
have been informed that they intend to grant us a waiver for this covenant
violation. Based on our projections, it appears likely that we will not be
able to meet the 2.25 times requirement for the next several quarters. We met
all other debt covenants at June 29, 2005 and do not anticipate having any
trouble complying with the other covenants in our debt agreements in the
foreseeable future. Our lenders have indicated that they will work with us to
amend the minimum fixed charge coverage ratio requirement and possibly other
requirements and limitations for our third quarter and forward. Until the
credit agreements are amended, our debt will be classified as current on our
balance sheet."
So far in 2005 we have opened nine restaurants, including two relocations, and
plan to open another six restaurants, including two potential relocations,
during the remainder of the year for a total of 15 new restaurants during 2005.
All six restaurants planned for the remainder of 2005 are currently under
construction. For 2006, we plan to build nine new restaurants, including three
potential relocations. We believe that this reduction in new store
expenditures will not only conserve cash flow, but will also allow us to spend
more time to focus on building same-store sales at our existing restaurants."
At June 29, 2005, the Company owned and operated 346 restaurants. As disclosed
in the Company's reports filed with the Securities and Exchange Commission, the
franchise relationship with the Company's remaining franchisee terminated on
June 30, 2005. Accordingly, there will be no franchised restaurants operating
after the second quarter of 2005.
In connection with this press release, members of Ryan's executive management
will be holding a conference call with investment analysts today at 4:00 p.m.
EDT. The public can listen to a live webcast of this call by logging on to the
web at http://www.ryans.com/ and following the appropriate links.
Certain matters discussed in this press release are forward-looking statements
within the meaning of the federal securities laws and are subject to
uncertainties and risks, including, but not limited to, general economic
conditions, including consumer confidence levels; competition; developments
affecting the public's perception of buffet-style restaurants; real estate
availability; food and labor supply costs; food and labor availability; an
adverse food safety event; weather fluctuations; interest rate fluctuations;
stock market conditions; political environment (including acts of terrorism and
wars); and other such risks described from time to time in the Company's
reports filed with the Securities and Exchange Commission.
RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Quarter Ended
June 29, June 30,
2005 2004
Restaurant sales $215,510,000 216,546,000
Cost of sales:
Food and beverage 76,351,000 76,273,000
Payroll and benefits 69,737,000 69,175,000
Depreciation 8,684,000 8,188,000
Other restaurant expenses 33,944,000 29,355,000
Total cost of sales 188,716,000 182,991,000
General and administrative expenses 15,761,000 10,255,000
Interest expense 2,405,000 2,749,000
Royalties from franchised restaurants (135,000) (323,000)
Other income, net (562,000) (531,000)
Earnings before income taxes 9,325,000 21,405,000
Income taxes 3,065,000 7,235,000
Net earnings $6,260,000 14,170,000
Net earnings per common share:
Basic $.15 .34
Diluted .15 .33
Weighted-average shares:
Basic 41,952,000 41,639,000
Diluted 42,770,000 43,258,000
RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Six Months Ended
June 29, June 30,
2005 2004
Restaurant sales $425,149,000 428,203,000
Cost of sales:
Food and beverage 148,964,000 148,773,000
Payroll and benefits 137,728,000 136,045,000
Depreciation 17,137,000 16,745,000
Other restaurant expenses 65,464,000 58,167,000
Total cost of sales 369,293,000 359,730,000
General and administrative expenses 26,231,000 20,577,000
Interest expense 4,765,000 5,434,000
Royalties from franchised restaurants (309,000) (686,000)
Other income, net (1,762,000) (1,459,000)
Earnings before income taxes 26,931,000 44,607,000
Income taxes 8,858,000 15,077,000
Net earnings $18,073,000 29,530,000
Net earnings per common share:
Basic $.43 .71
Diluted .42 .68
Weighted-average shares:
Basic 41,945,000 41,860,000
Diluted 42,818,000 43,584,000
RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
June 29, December 29,
2005 2004
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $16,508,000 7,354,000
Receivables 4,633,000 4,639,000
Inventories 6,558,000 5,611,000
Prepaid expenses 1,403,000 1,016,000
Deferred income taxes 5,580,000 5,110,000
Total current assets 34,682,000 23,730,000
Property and equipment:
Land and improvements 169,193,000 162,082,000
Buildings 501,437,000 480,781,000
Equipment 281,236,000 271,431,000
Construction in progress 27,303,000 31,531,000
979,169,000 945,825,000
Less accumulated depreciation 311,082,000 295,852,000
Net property and equipment 668,087,000 649,973,000
Other assets 10,535,000 10,643,000
Total assets $713,304,000 684,346,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 8,932,000 5,963,000
Current portion of long-term debt 180,250,000 18,750,000
Income taxes payable 2,403,000 1,842,000
Accrued liabilities 52,460,000 42,569,000
Total current liabilities 244,045,000 69,124,000
Long-term debt - 164,250,000
Deferred income taxes 47,661,000 47,674,000
Other long-term liabilities 8,105,000 7,692,000
Total liabilities 299,811,000 288,740,000
Shareholders' equity:
Common stock of $1.00 par value; authorized
100,000,000 shares; issued
41,911,000 shares in 2005 and
41,890,000 shares in 2004 41,911,000 41,890,000
Additional paid-in capital 3,671,000 3,878,000
Retained earnings 367,911,000 349,838,000
Total shareholders' equity 413,493,000 395,606,000
Commitments and contingencies
Total liabilities and
shareholders' equity $713,304,000 684,346,000
RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 29, June 30,
2005 2004
Cash flows from operating activities:
Net earnings $18,073,000 29,530,000
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 18,413,000 17,635,000
Loss (gain) on sale of property
and equipment (78,000) 502,000
Tax benefit from exercise of
stock options 292,000 2,679,000
Deferred income taxes (483,000) 107,000
Decrease (increase) in:
Receivables 6,000 (80,000)
Inventories (947,000) (913,000)
Prepaid expenses (387,000) 71,000
Other assets 12,000 (410,000)
Increase (decrease) in:
Accounts payable 2,969,000 3,048,000
Income taxes payable 561,000 (446,000)
Accrued liabilities 9,891,000 6,215,000
Other long-term liabilities 413,000 434,000
Net cash provided by operating activities 48,735,000 58,372,000
Cash flows from investing activities:
Proceeds from sale of property and equipment 4,099,000 3,302,000
Capital expenditures (40,452,000) (35,055,000)
Net cash used in investing activities (36,353,000) (31,753,000)
Cash flows from financing activities:
Repayment of senior notes (18,750,000) -
Net borrowings from (repayment of) revolving
credit facility 16,000,000 (5,000,000)
Proceeds from stock options exercised 1,074,000 5,008,000
Purchase of common stock (1,552,000) (18,207,000)
Net cash used in financing activities (3,228,000) (18,199,000)
Net increase in cash and cash equivalents 9,154,000 8,420,000
Cash and cash equivalents - beginning
of period 7,354,000 8,617,000
Cash and cash equivalents - end of period $16,508,000 17,037,000
Supplemental disclosures
Cash paid during period for:
Interest, net of amount capitalized $5,481,000 5,488,000
Income taxes 8,488,000 12,737,000
DATASOURCE: Ryan's Restaurant Group
CONTACT: Fred T. Grant, Jr., Senior Vice President - Finance of Ryan's
Restaurant Group, Inc., +1-864-879-1000
Web site: http://www.ryansrg.com/