Exhibit 99.1
Ruth's Chris Steak House, Inc. Reports
Third Quarter 2007 Financial Results
HEATHROW, Fla.--(BUSINESS WIRE)--Nov. 6, 2007--Ruth's Chris Steak
House, Inc. (Nasdaq: RUTH) today reported unaudited results for its
third quarter ended September 30, 2007. Highlights for the 13-week
third quarter 2007 compared to the 13-week third quarter 2006 were as
follows:
-- Total revenue increased 20.5% to $70.2 million from $58.3
million.
-- Net income of $1.8 million, or $0.08 per diluted share,
compared to $2.3 million, or $0.10 per diluted share, in the
prior year period. The year-ago quarter included $0.9 million
in pre-tax net hurricane-related insurance proceeds, or $0.02
per diluted share, after-tax.
-- Company-owned comparable restaurant sales decreased 0.4%.
Franchised-owned comparable restaurant sales decreased 0.5%.
-- Food and beverage costs, as a percentage of restaurant sales,
decreased approximately 100 basis points to 32.0% versus the
prior year quarter, primarily driven by sales mix initiatives,
favorable beef costs, and modest price increases. These were
partially offset by higher lobster, produce and dairy costs.
-- Restaurant operating expenses, as a percentage of restaurant
sales, were approximately 170 basis points higher due to
increased restaurant management staffing and occupancy related
to new restaurant activity.
-- Marketing and advertising expenditures, as a percentage of
total revenues, were approximately 70 basis points lower due
to reduced utilization of television in select markets in the
third quarter of fiscal 2007 versus the third quarter of
fiscal 2006.
-- General and administrative expenses, as a percentage of total
revenues, were approximately 120 basis points lower due to
leverage from strong revenue gains and reduced incentive
compensation.
-- Depreciation and amortization expenses, as a percentage of
total revenues, were approximately 50 basis points higher due
to investments in newer restaurants.
-- Preopening costs increased by $0.4 million from a year ago due
to increased new restaurant development activity.
-- Operating income of $3.9 million versus $4.2 million. The
year-ago quarter included $0.9 million in pre-tax net
hurricane-related insurance proceeds.
-- Two new franchised restaurants were opened in Columbia, South
Carolina; and Mishawaka, Indiana.
-- The Company completed its acquisition of three formerly
franchised restaurants in Bellevue and Seattle, Washington,
and Portland, Oregon.
Craig S. Miller, Chairman of the Board, President and Chief
Executive Officer, stated, "In absolute terms, our top-line
performance facilitated margin improvement in both food and beverage
costs as well as general and administrative expenses. Operating income
(adjusting for the benefit of insurance proceeds from 2006) grew by
18.9%, which is consistent with our long term growth objectives.
Excluding prior year non-reoccurring items, we were pleased to have
maintained our operating income margins year over year, and we expect
to be able to deliver similar margin stability in the coming quarter,
despite fire related sales challenges in selective Southern California
markets, as well as some sales interruption in two restaurants that
are undergoing expansion."
Miller continued, "Our third quarter comparable sales reflect a
continuation of the trends we've experienced for the past several
quarters, as the challenging consumer environment resulted in slower
dining traffic in our restaurants. We have several initiatives under
way, including our Power Lunch test and the introduction of an updated
menu layout, that enables us to quickly introduce specials, including
a new 'Chef Selections' list, as well as additional major remodels,
that will result in expanded seating and enhanced lounges in older
restaurants. While we anticipate certain of our guests will continue
to face economic challenges that may impact their discretionary
spending patterns, we expect continued growth in our private dining
business to help mitigate this softness."
Review of Operating Results
Total revenues from continuing operations, which includes
company-owned restaurant sales, franchise income, and other operating
income, increased 20.5% to $70.2 million in the third quarter of 2007
compared to $58.3 million in the third quarter of 2006.
Company-owned restaurant sales from continuing operations grew
20.9% to $67.0 million in the third quarter of 2007 from $55.5 million
in the same period last year, primarily as a result of a 20.9%
increase in company restaurant operating weeks to 711 from 588
(including eight additional restaurants in operation) as well as a
slight increase in average weekly sales to $94,312 from $94,295.
For the third quarter of 2007, company-owned comparable restaurant
sales decreased 0.4% from the third quarter of 2006. Comparable sales
growth consisted of an average check increase of 3.2% driven by
non-entree increases in bar and lounge traffic, menu selection shifts,
and year over year effective menu pricing of approximately 1.9%. This
was partially offset by an entree reduction of 3.6%. Company-owned
comparable restaurant sales lapped last year's third quarter growth of
4.3%.
Franchise income increased 7.4% to $2.9 million from $2.7 million
in the third quarter of 2006, due to two additional franchise-owned
locations, net of acquisitions, year over year and was partially
offset by a decrease in comparable franchise-owned restaurant sales of
0.5%.
Operating income excluding prior year net hurricane insurance
proceeds increased 18.9% to $3.9 million versus $3.3 million in the
same period last year. Inclusive of proceeds, operating income
decreased to $3.9 million versus $4.2 million in the same period last
year.
Net income was $1.8 million in the third quarter of 2007, or $0.08
per diluted share, compared to $2.3 million, or $0.10 per diluted
share, in the third quarter of 2006. Net income for the third quarter
of 2006 included $0.9 million in pre-tax hurricane-related insurance
proceeds, or $0.02 per diluted share, after-tax.
Acquisition Announcement
Concurrent with the release of unaudited results for its third
quarter ended September 30, 2007, the Company also announced that it
has executed a definitive asset purchase agreement to acquire all of
the operating assets and intellectual property of Columbus, OH-based
Mitchell's Fish Market, operating under the names Mitchell's Fish
Market and Columbus Fish Market, and Cameron's Steakhouse, operating
under the names Cameron's Steakhouse and Mitchell's Steakhouse from
Cameron Mitchell Restaurants, LLC (CMR) for approximately $94.0
million. The acquisition will be funded through the Company's credit
facility and is expected to close in the first quarter of 2008,
subject to customary closing conditions. It is expected to be
accretive to the Company's shareholders in its first full year
post-acquisition.
Financial Guidance
For the 52-week fiscal year 2007, the Company estimates that
comparable restaurant sales will increase approximately 0.5% to 1.5%.
System-wide restaurant operating weeks will grow by greater than 20%
resulting in year over year increases in pre-opening expenses and
higher operating costs. The Company anticipates the opening of seven
Company-owned and eight franchised locations, of which six
Company-owned and seven franchised locations, respectively, have
opened through November 6, 2007.
As previously communicated, the Company has contracted 50% of all
beef needs for fiscal 2007 as well as has agreements in place on other
key commodities with suppliers. The Company expects annual food and
beverage costs as a percentage of restaurant sales to be between 31.8%
and 32.2%, representing a 10-50 basis point reduction versus fiscal
2006. Annual marketing and advertising expenses, as a percentage of
total revenue, are expected not to exceed 3.0%. The Company's
effective tax rate for 2007 is expected to be approximately 32.3%.
Inclusive of year-to-date financial results, the Company expects
fiscal year 2007 diluted earnings per share to be between $0.92 and
$0.95, including the impact of Statement of Financial Accounting
Standards No. 123R Share Based Compensation (SFAS No. 123R).
For the 52-week fiscal year 2008, the Company anticipates
increasing restaurant operating weeks by approximately 15%, which will
result in the opening of approximately six to seven Company-owned and
six to seven franchised Ruth's Chris Steak House locations, as well as
two to three Mitchell's Fish Market locations. The Company expects
2008 earnings per share growth (before the benefit from the proposed
acquisition) to be consistent with the Company's stated long term
target of 17.5% over 2007 GAAP EPS, excluding net insurance proceeds
of $0.07 per share received during the first quarter of 2007.
Additional guidance metrics will be released with the announcement of
the Company's fourth quarter and fiscal year 2007 results.
Conference Call
The Company will host a conference call to discuss third quarter
2007 financial results as well as its intended acquisition of
Mitchell's Fish Market and Cameron's Steakhouse on November 7, 2007 at
8:00 AM Eastern Time. Hosting the call will be Craig S. Miller,
Chairman of the Board, President and Chief Executive Officer, and
Thomas J. Pennison Jr., Senior Vice-President and Chief Financial
Officer.
The conference call can be accessed live over the phone by dialing
888-812-8522 or for international callers by dialing 913-312-6684. A
replay will be available one hour after the call and can be accessed
by dialing 888-203-1112 or 719-457-0820 for international callers; the
password is 5597748. The replay will be available until November 15,
2007. The call will also be webcast live from the Company's website at
www.ruthschris.com under the investor relations section.
About Ruth's Chris Steak House
Ruth's Chris Steak House, Inc. is the largest fine-dining company
in the U.S., as measured by the total number of company-owned and
franchise-owned restaurants, with 114 locations worldwide. Founded in
New Orleans by Ruth Fertel in 1965, Ruth's Chris specializes in USDA
Prime grade steaks served in Ruth's Chris signature fashion ...
"sizzling."
To experience fine dining at its prime ... just follow the sizzle
to Ruth's Chris Steak House. For information, reservations, or to
purchase gift cards, visit www.RuthsChris.com or call 1-800-544-0808.
Forward-Looking Statements
Some of the statements in this release that are not historical
facts and relate to future results and events, including, without
limitation, statements regarding annual guidance for 2007 and 2008,
projected new restaurant openings, the timing of the completion of the
acquisition and the accretion in the first full year post-acquisition
are "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current beliefs and expectations and involve risks and uncertainties.
Actual results may vary materially from those contained in
forward-looking statements based on a number of factors including,
without limitation, the risks identified as "risk factors" in our 2006
annual report filed on Form 10-K and the other factors identified from
time to time in our filings with the Securities and Exchange
Commission, all of which are available at www.sec.gov. Investors
should take these risks into account when making investment decisions.
Shareholders and other readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date on which they are made. We undertake no obligation to update
any forward-looking statements.
RUTH'S CHRIS STEAK HOUSE, INC AND SUBSIDIARIES
Consolidated Income Statements - Unaudited
(dollar amounts in thousands, except share and per share data)
13 Weeks Ending 39 Weeks Ending
------------------------- -------------------------
September September September September
24, 30, 24, 30,
2006 2007 2006 2007
------------ ------------ ------------ ------------
Revenues:
Restaurant sales $ 55,452 $ 67,046 $ 174,340 $ 218,827
Franchise income 2,660 2,942 8,732 9,019
Other operating
income 146 236 431 2,311
------------ ------------ ------------ ------------
Total revenues 58,258 70,224 183,503 230,157
Costs and
expenses:
Food and beverage
costs 18,301 21,485 56,014 70,324
Restaurant
operating
expenses 26,828 33,601 78,707 102,173
Marketing and
advertising 1,891 1,733 5,530 6,229
General and
administrative
costs 5,354 5,632 16,117 17,840
Depreciation and
amortization
expenses 2,202 3,035 6,318 8,812
Pre-opening costs 402 800 858 3,316
------------ ------------ ------------ ------------
Operating income
before net
hurricane,
insurance and
loss on disposal 3,280 3,938 19,959 21,463
Hurricane and
relocation costs,
net of insurance
proceeds (874) 12 (802) (3,478)
Loss on the
disposal of
property and
equipment, net (31) - 23 1,108
------------ ------------ ------------ ------------
Operating income 4,185 3,926 20,738 23,833
Other income
(expense):
Interest expense (730) (1,497) (1,671) (3,688)
Other 6 202 (19) 568
------------ ------------ ------------ ------------
Income from
continuing
operations
before income
tax expense 3,461 2,631 19,048 20,713
Income tax expense 1,108 850 5,862 6,690
------------ ------------ ------------ ------------
Income from
continuing
operations 2,353 1,781 13,186 14,023
Discontinued
operations, net
of income tax
benefit 22 1 71 17
------------ ------------ ------------ ------------
Net income
available to
common
shareholders $ 2,331 $ 1,780 $ 13,115 $ 14,006
============ ============ ============ ============
Basic earnings per
share:
Continuing
operations $ 0.10 $ 0.08 $ 0.57 $ 0.60
Discontinued
operations - - - -
------------ ------------ ------------ ------------
Basic earnings
per share $ 0.10 $ 0.08 $ 0.57 $ 0.60
------------ ------------ ------------ ------------
Diluted earnings
per share:
Continuing
operations $ 0.10 $ 0.08 $ 0.56 $ 0.60
Discontinued
operations - - - -
------------ ------------ ------------ ------------
Diluted earnings
per share $ 0.10 $ 0.08 $ 0.56 $ 0.60
------------ ------------ ------------ ------------
Shares used in
computing net
income per common
share:
Basic 23,208,716 23,201,221 23,157,445 23,204,845
============ ============ ============ ============
Diluted 23,439,470 23,390,296 23,431,704 23,401,981
============ ============ ============ ============
RUTH'S CHRIS STEAK HOUSE, INC AND SUBSIDIARIES
Selected Balance Sheet Data
(dollar amounts in thousands)
December 31, September 30,
2006 2007
------------ -------------
Cash and cash equivalents $ 4,690 $ 1,413
Total assets 209,720 242,797
Long-term debt 68,000 95,250
Total shareholders' equity 67,978 83,453
CONTACT: ICR
Investor Relations:
Tom Ryan, 203-682-8200
tryan@icrinc.com
or
Raphael Gross, 203-682-8200
rgross@icrinc.com
or
Media:
Alecia Pulman, 203-682-8259
alecia.pulman@icrinc.com