Press Release 405 Lancaster Avenue
Greer, South Carolina 29650
(864) 879-1000
Contact: Fred T. Grant, Jr. For Immediate Release
Senior Vice President - Finance July 23, 2003
RYAN'S ANNOUNCES SECOND QUARTER 2003 RESULTS
______________________
GREER, SOUTH CAROLINA - - Ryan's Family Steak Houses, Inc.
(NASDAQ:RYAN) reported its second quarter 2003 results today.
Second quarter restaurant sales were $208,504,000 in 2003
compared to $201,027,000 for the second quarter of 2002. Net
earnings for the quarter amounted to $14,329,000 in 2003 compared
to $15,426,000 in 2002. Earnings per share amounted to 33 cents
in 2003 compared to 34 cents in 2002.
For the six months ended July 2, 2003, restaurant sales
increased to $401,696,000 compared to $394,597,000 for the first
six months of 2002. Net earnings for the six months amounted to
$26,427,000 in 2003 compared to $28,847,000 in 2002. Earnings
per share amounted to 60 cents in 2003 compared to 62 cents in
2002.
Commenting on the quarter, Charles D. Way said, "Our second
quarter results were affected by a weak retail environment and
higher costs. Same-store sales decreased by 0.7% during the
quarter. We are proceeding with our new remodeling plan that
features display cooking and a new exterior lodge-look and are
encouraged by the results at the remodeled restaurants.
Customers like the new look and really enjoy the enhanced value
and variety provided by display cooking. However, at July 2,
2003, only 14 restaurants in the same-store sales base were part
of the new remodeling plan, and their impact on overall sales was
limited. During the remainder of 2003, we plan to remodel
another 15 to 20 restaurants. We are also encouraged by our
local store marketing program, which was implemented in all
stores during the first quarter of this year. Our store managers
have worked hard to get the Ryan's name out in front of many new
potential customers, and we feel that over time this program will
increase sales at our restaurants.
During the quarter, we saw cost increases affecting several
areas at our restaurants, resulting in a 1.1% of sales decrease
in margins at the restaurant level. Food and beverage costs were
impacted by significant increases in beef prices, and payroll and
benefits costs were impacted principally by higher store
management salaries and state unemployment taxes. Finally, as in
the first quarter, natural gas prices continued to be high,
increasing other restaurant expenses by 0.3% of sales.
Looking forward, we are optimistic that restaurant sales
will strengthen as we continue our sales-building initiatives.
Also, beef costs have moderated over the past two weeks. Ryan's
has a long history of sales and profit increases, and we are very
focused on increasing store-level profits through sales-building
and cost controls."
At July 2, 2003, the Company owned and operated 330 and was
franchiser of 20 restaurants.
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
either www.ryansinc.com or www.prnewswire.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; 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.
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RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Quarter Ended
July 2, July 3,
2003 2002
<s> <c> <c>
Restaurant sales $208,504,000 201,027,000
Cost of sales:
Food and beverage 73,801,000 71,480,000
Payroll and benefits 64,361,000 60,952,000
Depreciation 8,049,000 7,351,000
Other restaurant expenses 28,092,000 26,089,000
Total cost of sales 174,303,000 165,872,000
General and administrative expenses 10,299,000 9,578,000
Interest expense 2,322,000 2,326,000
Revenues from franchised restaurants (404,000) (463,000)
Other income, net (475,000) (530,000)
Earnings before income taxes 22,459,000 24,244,000
Income taxes 8,130,000 8,818,000
Net earnings $14,329,000 15,426,000
Net earnings per common share:
Basic $ .34 .35
Diluted .33 .34
Weighted-average shares:
Basic 42,143,000 43,733,000
Diluted 43,670,000 45,977,000
</table>
<table>
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Six Months Ended
July 2, July 3,
2003 2002
<s> <c> <c>
Restaurant sales $401,696,000 394,597,000
Cost of sales:
Food and beverage 141,806,000 142,202,000
Payroll and benefits 124,557,000 119,278,000
Depreciation 15,997,000 14,703,000
Other restaurant expenses 55,304,000 52,377,000
Total cost of sales 337,664,000 328,560,000
General and administrative expenses20,113,000 18,787,000
Interest expense 4,728,000 4,601,000
Revenues from franchised restaurants (807,000) (895,000)
Other income, net (1,424,000) (1,671,000)
Earnings before income taxes 41,422,000 45,215,000
Income taxes 14,995,000 16,368,000
Net earnings $26,427,000 28,847,000
Net earnings per common share:
Basic $ .62 .65
Diluted .60 .62
Weighted-average shares:
Basic 42,313,000 44,284,000
Diluted 43,689,000 46,557,000
</table>
<table>
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED BALANCE SHEETS
July 2, January 1,
2003 2003
ASSETS (Unaudited)
Current assets:
<s> <c> <c>
Cash and cash equivalents $20,177,000 2,654,000
Receivables 5,641,000 5,010,000
Inventories 5,811,000 5,119,000
Prepaid expenses 776,000 1,266,000
Income taxes receivable - 2,739,000
Deferred income taxes 4,676,000 4,676,000
Total current assets 37,081,000 21,464,000
Property and equipment:
Land and improvements 149,271,000 144,859,000
Buildings 429,363,000 413,700,000
Equipment 243,076,000 231,244,000
Construction in progress 28,866,000 29,245,000
850,576,000 819,048,000
Less accumulated depreciation 249,923,000 234,627,000
Net property and equipment 600,653,000 584,421,000
Other assets 7,698,000 7,194,000
$645,432,000 613,079,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 8,937,000 10,896,000
Income taxes payable 6,993,000 -
Accrued liabilities 42,751,000 35,748,000
Total current liabilities 58,681,000 46,644,000
Long-term debt 202,000,000 202,000,000
Deferred income taxes 39,525,000 39,375,000
Other long-term liabilities 5,043,000 4,579,000
Total liabilities 305,249,000 292,598,000
Shareholders' equity:
Common stock of $1.00 par value;
authorized 100,000,000 shares;
issued 42,123,000 shares in 2003
and 42,745,000 shares in 2002 42,123,000 42,745,000
Additional paid-in capital - 2,066,000
Retained earnings 298,060,000 275,670,000
Total shareholders' equity 340,183,000 320,481,000
Commitments and contingencies
$645,432,000 613,079,000
</table>
<table>
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
July 2, July 3,
2003 2002
Cash flows from operating activities:
<s> <c> <c>
Net earnings $26,427,000 28,847,000
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 16,858,000 15,385,000
Gain on sale of property and
equipment (395,000) (8,000)
Tax benefit from exercise of
stock options 284,000 1,686,000
Deferred income taxes 150,000 164,000
Decrease (increase) in:
Receivables (631,000) 294,000
Inventories (692,000) 365,000
Prepaid expenses 490,000 (1,451,000)
Income taxes receivable 2,739,000 -
Other assets (639,000) (681,000)
Increase (decrease) in:
Accounts payable (1,959,000) (659,000)
Income taxes payable 6,993,000 1,498,000
Accrued liabilities 7,003,000 3,283,000
Other long-term liabilities 464,000 766,000
Net cash provided by operating
activities 57,092,000 49,489,000
Cash flows from investing activities:
Proceeds from sale of property
and equipment 3,774,000 3,697,000
Capital expenditures (36,334,000) (34,600,000)
Net cash used in investing activities (32,560,000) (30,903,000)
Cash flows from financing activities:
Net proceeds from revolving credit facility - 17,000,000
Proceeds from stock options exercised 832,000 4,438,000
Purchase of common stock (7,841,000) (42,514,000)
Net cash used in financing activities (7,009,000) (21,076,000)
Net increase (decrease) in cash and
cash equivalents 17,523,000 (2,490,000)
Cash and cash equivalents -
beginning of period 2,654,000 13,323,000
Cash and cash equivalents -
end of period $ 20,177,000 10,833,000
Supplemental disclosures
Cash paid during period for:
Interest, net of amount capitalized $ 9,372,000 $ 9,573,000
Income taxes 18,495,000 27,057,000
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