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 20, 2005
RYAN'S ANNOUNCES FIRST QUARTER 2005 RESULTS
______________________
GREER, SOUTH CAROLINA - - Ryan's Restaurant Group, Inc.
(NASDAQ:RYAN) reported first quarter 2005 results today.
First quarter restaurant sales were $209,639,000 in 2005
compared to $211,657,000 for the comparable quarter in 2004. Net
earnings for the quarter amounted to $11,813,000 in 2005 and
$15,360,000 in 2004. Earnings per share (diluted) amounted to 28
cents in 2005 compared to 35 cents in 2004.
Commenting on the quarter, Charles D. Way, CEO of the
Company, said, "Our first quarter's financial results were
impacted by what one might call a "perfect storm".a difficult
sales environment and higher cost of sales. Our sales levels
were disappointing, with a same-store sales decline of 3.1% for
the quarter. Even though we were comparing against a record
quarter in 2004, we believe that, more importantly, our sales
were impacted by economic conditions that affect our customers.
The first quarter of 2005 saw highly publicized increases in both
energy costs and interest rates. Lead articles concerning higher
gasoline prices were run frequently in many newspapers. Our
customers certainly experienced higher prices at the gas pumps as
well as higher utility bills during the quarter. Reports of
increasing mortgage rates were also common, and this news had to
be of concern to customers with adjustable rate mortgages. We
believe that these issues affected our customers' disposable
income spending decisions, resulting in reduced dining-out
expenditures."
Cost of sales was impacted by a combination of higher costs
and our efforts to build and retain sales. Food costs were
higher due to higher beef, pork and dairy prices. Payroll costs
increased principally due to a tactical decision to increase
hourly staffing levels in order to provide a better dining
experience for our customers and consequently build and retain
sales. Store-level profits were also affected by higher
maintenance, utility and insurance costs."
Looking forward, we are cautiously optimistic that we will
see improved sales levels during the second half of 2005. Our
operations leadership has been focusing on improved execution at
our display grills and on increasing the visibility and curb
appeal of our restaurants. As noted above, staffing levels have
also been increased as part of our sales-building efforts. We
have implemented food theme nights at many of our restaurants,
and our restaurant personnel are actively involved in various
local marketing programs. However, high energy costs continue to
be very present, and, as noted above, we are concerned about the
impact of these higher costs on our customers' spending patterns.
From a cost standpoint, we believe that we must adapt to a
generally higher cost environment. However, food costs could be
favorably affected if live cattle imports are again allowed from
Canada."
At March 30, 2005, the Company owned and operated 344
restaurants and was franchiser of 4 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
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.
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RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Quarter Ended
March 30, March 31,
2005 2004
<s> <c> <c>
Restaurant sales $209,639,000 211,657,000
Cost of sales:
Food and beverage 72,613,000 72,500,000
Payroll and benefits 67,991,000 66,870,000
Depreciation 8,453,000 8,557,000
Other restaurant expenses 31,520,000 28,812,000
Total cost of sales 180,577,000 176,739,000
General and administrative
expenses 10,470,000 10,322,000
Interest expense 2,360,000 2,685,000
Royalties from franchised
restaurants (174,000) (363,000)
Other income, net (1,200,000) (928,000)
Earnings before income taxes 17,606,000 23,202,000
Income taxes 5,793,000 7,842,000
Net earnings $11,813,000 15,360,000
Net earnings per common share:
Basic $ .28 .37
Diluted .28 .35
Weighted-average shares:
Basic 41,938,000 42,081,000
Diluted 42,870,000 43,910,000
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RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
March 30, December 29,
2005 2004
ASSETS (Unaudited)
<s> <c> <c>
Current assets:
Cash and cash equivalents $ 22,999,000 7,354,000
Receivables 4,044,000 4,639,000
Inventories 6,776,000 5,611,000
Prepaid expenses 937,000 1,016,000
Deferred income taxes 5,165,000 5,110,000
Total current assets 39,921,000 23,730,000
Property and equipment:
Land and improvements 163,761,000 162,082,000
Buildings 490,024,000 480,781,000
Equipment 275,670,000 271,431,000
Construction in progress 36,277,000 31,531,000
965,732,000 945,825,000
Less accumulated depreciation 303,748,000 295,852,000
Net property and equipment 661,984,000 649,973,000
Other assets 10,790,000 10,643,000
Total assets $712,695,000 684,346,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 9,437,000 5,963,000
Current portion of long-term
debt 18,750,000 18,750,000
Income taxes payable 6,921,000 1,842,000
Accrued liabilities 43,307,000 42,569,000
Total current liabilities 78,415,000 69,124,000
Long-term debt 170,000,000 164,250,000
Deferred income taxes 47,925,000 47,674,000
Other long-term liabilities 7,960,000 7,692,000
Total liabilities 304,300,000 288,740,000
Shareholders' equity:
Common stock of $1.00 par
value; authorized 100,000,000
shares; issued 41,985,000
shares in 2005 and 41,890,000
shares in 2004 41,985,000 41,890,000
Additional paid-in capital 4,759,000 3,878,000
Retained earnings 361,651,000 349,838,000
Total shareholders' equity 408,395,000 395,606,000
Commitments and contingencies
Total liabilities and
shareholders' equity $712,695,000 684,346,000
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RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 30, March 31,
2005 2004
Cash flows from operating activities:
<s> <c> <c>
Net earnings $11,813,000 15,360,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 8,931,000 9,020,000
Loss (gain) on sale of property
and equipment (119,000) 657,000
Tax benefit from exercise of
stock options 216,000 1,462,000
Deferred income taxes 196,000 195,000
Decrease (increase) in:
Receivables 595,000 (275,000)
Inventories (1,165,000) (758,000)
Prepaid expenses 79,000 453,000
Other assets (237,000) (289,000)
Increase in:
Accounts payable 3,474,000 1,968,000
Income taxes payable 5,079,000 5,995,000
Accrued liabilities 738,000 1,484,000
Other long-term liabilities 268,000 227,000
Net cash provided by operating
activities 29,868,000 35,499,000
Cash flows from investing activities:
Proceeds from sale of property and
equipment 1,955,000 1,657,000
Capital expenditures (22,688,000)(16,882,000)
Net cash used in investing
activities (20,733,000)(15,225,000)
Cash flows from financing activities:
Net borrowings from (repayment of)
revolving credit facility 5,750,000 (5,000,000)
Proceeds from stock options
exercised 783,000 3,014,000
Purchase of common stock (23,000) (4,510,000)
Net cash provided by (used in)
financing activities 6,510,000 (6,496,000)
Net increase in cash and cash
equivalents 15,645,000 13,778,000
Cash and cash equivalents -
beginning of period 7,354,000 8,617,000
Cash and cash equivalents -
end of period $ 22,999,000 22,395,000
Supplemental disclosures
Cash paid during period for:
Interest, net of amount
capitalized $ 4,226,000 4,459,000
Income taxes 302,000 190,000
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