Press Release 405 Lancaster Avenue
Greer, South Carolina 29650
(864) 879-1000
Contact: Fred T. Grant, Jr. For Immediate Release
Senior Vice President - Finance April 21, 2004
RYAN'S ANNOUNCES RECORD FIRST QUARTER 2004 RESULTS
______________________
GREER, SOUTH CAROLINA - - Ryan's Family Steak Houses, Inc.
(NASDAQ:RYAN) today reported that its first quarter 2004 results
reflected new first quarter records for sales, net earnings and
earnings per share (diluted).
First quarter restaurant sales were $211,657,000 in 2004
compared to $193,192,000 for the first quarter of 2003. Net
earnings for the quarter increased by 27%, amounting to
$15,360,000 in 2004 and $12,098,000 in 2003. Earnings per share
(diluted) increased by 25% to 35 cents in 2004 from 28 cents in
2003.
Commenting on the quarter, Charles D. Way, President and CEO
of the Company, said, "Our restaurants showed strong sales gains
during the first quarter with same-store sales up 4.8%. Our Fire
Mountain conversions continued to perform very well with average
same-store sales gains in excess of 15% during the quarter, and
we believe that our local marketing program continues to be
effective in attracting new customers to experience our great
food and service. We converted one restaurant during the quarter
to our new lower-cost conversion design and have been very
pleased with its sales results. Our current plans call for seven
of these conversions during the second quarter."
Costs were very well controlled during the quarter.
Although we experienced higher beef, natural gas and various
performance-based bonus costs, the leveraging effect from higher
unit sales volumes completely offset these higher expenses,
resulting in lower cost of sales (down 1.4% of sales) and higher
net earnings (up 1.0% of sales) margins. Our effective income
tax rate for the quarter benefited from certain federal income
tax credit hiring programs, such as the Work Opportunity Tax
Credit program, and from lower state income tax expense, but will
gradually increase relative to 2003 during subsequent quarters if
these tax credit hiring programs are not re-enacted by the U.S.
Congress."
We are very grateful to all of our 23,000 hard-working team
members for these excellent first quarter results. Their efforts
in providing great dining experiences to our customers every day
are truly the key to our success."
At March 31, 2004, the Company owned and operated 335 and
was franchiser of 14 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; 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.
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RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Quarter Ended
March 31, April 2,
2004 2003
<s> <c> <c>
Restaurant sales $211,657,000 193,192,000
Cost of sales:
Food and beverage 72,500,000 68,005,000
Payroll and benefits (1) 66,870,000 60,948,000
Depreciation 8,557,000 7,948,000
Other restaurant expenses 28,812,000 27,212,000
Total cost of sales 176,739,000 164,113,000
General and administrative
expenses (1) 10,322,000 9,062,000
Interest expense 2,685,000 2,406,000
Royalties from franchised
restaurants (363,000) (403,000)
Other income, net (928,000) (949,000)
Earnings before income taxes 23,202,000 18,963,000
Income taxes 7,842,000 6,865,000
Net earnings $15,360,000 12,098,000
Net earnings per common share:
Basic $ .37 .28
Diluted .35 .28
Weighted-average shares:
Basic 42,081,000 42,483,000
Diluted 43,910,000 43,707,000
</table>
(1) Certain 2003 incentive bonus amounts for store
management and hourly team members have been
reclassified to store-level payroll and benefits from
general and administrative expenses to conform to the
2004 presentation. These costs amounted to
$1,603,000 in 2004 and $752,000 in 2003. This
reclassification does not change either net earnings
or shareholders' equity for 2003.
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RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2004 2003
ASSETS (Unaudited)
Current assets:
<s> <c> <c>
Cash and cash equivalents $22,395,000 8,617,000
Receivables 4,568,000 4,293,000
Inventories 6,406,000 5,648,000
Prepaid expenses 1,305,000 1,758,000
Deferred income taxes 5,150,000 5,150,000
Total current assets 39,824,000 25,466,000
Property and equipment:
Land and improvements 157,504,000 154,528,000
Buildings 458,434,000 449,561,000
Equipment 257,926,000 252,611,000
Construction in progress 21,178,000 25,789,000
895,042,000 882,489,000
Less accumulated depreciation 271,289,000 264,339,000
Net property and equipment 623,753,000 618,150,000
Other assets 8,307,000 8,073,000
Total assets $671,884,000 651,689,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 8,548,000 6,580,000
Current portion of long-term
debt 34,750,000 -
Income taxes payable 7,283,000 1,288,000
Accrued liabilities 44,074,000 42,590,000
Total current liabilities 94,655,000 50,458,000
Long-term debt 156,250,000 196,000,000
Deferred income taxes 43,019,000 42,824,000
Other long-term liabilities 5,694,000 5,467,000
Total liabilities 299,618,000 294,749,000
Shareholders' equity:
Common stock of $1.00 par
value; authorized 100,000,000
shares; issued 42,057,000 shares
in 2004 and 41,843,000
shares in 2003 42,057,000 41,843,000
Additional paid-in capital 1,462,000 1,412,000
Retained earnings 328,747,000 313,685,000
Total shareholders' equity 372,266,000 356,940,000
Commitments and contingencies
Total liabilities and
shareholders' equity $671,884,000 651,689,000
</table>
<table>
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31, April 2,
2004 2003
Cash flows from operating
activities:
<s> <c> <c>
Net earnings $15,360,000 12,098,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 9,020,000 8,364,000
Loss (gain) on sale of property
and equipment 657,000 (556,000)
Tax benefit from exercise
of stock options 1,462,000 62,000
Deferred income taxes 195,000 69,000
Decrease (increase) in:
Receivables (275,000) 16,000
Inventories (758,000) (345,000)
Prepaid expenses 453,000 34,000
Income taxes receivable - 2,739,000
Other assets (289,000) (550,000)
Increase (decrease) in:
Accounts payable 1,968,000 3,049,000
Income taxes payable 5,995,000 3,634,000
Accrued liabilities 1,484,000 (1,214,000)
Other long-term liabilities 227,000 387,000
Net cash provided by operating
activities 35,499,000 27,787,000
Cash flows from investing
activities:
Proceeds from sale of property
and equipment 1,657,000 2,493,000
Capital expenditures (16,882,000)(18,471,000)
Net cash used in investing
activities (15,225,000)(15,978,000)
Cash flows from financing activities:
Net proceeds from (repayment of)
revolving credit facility (5,000,000) 10,000,000
Proceeds from stock options
exercised 3,014,000 502,000
Purchase of common stock (4,510,000) (7,084,000)
Net cash provided by (used in)
financing activities
(6,496,000) 3,418,000
Net increase in cash and cash
equivalents 13,778,000 15,227,000
Cash and cash equivalents -
beginning of period 8,617,000 2,654,000
Cash and cash equivalents -
end of period $22,395,000 17,881,000
Supplemental disclosures
Cash paid during period for:
Interest, net of amount
capitalized $ 4,459,000 4,477,000
Income taxes 190,000 362,000
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