Ruby Tuesday, Inc. (RT)

RT 
$7.41
*  
0.12
1.59%
Get RT Alerts
*Delayed - data as of Oct. 23, 2014 13:40 ET  -  Find a broker to begin trading RT now
Exchange: NYSE
Industry: Consumer Services
Community Rating:
View:    RT Real Time
 
 
Symbol List Views
FlashQuotes InfoQuotes
Stock Details
Summary Quote Real-Time Quote After Hours Quote Pre-market Quote Historical Quote Option Chain
CHARTS
Basic Chart Interactive Chart
COMPANY NEWS
Company Headlines Press Releases Market Stream
STOCK ANALYSIS
Analyst Research Guru Analysis Stock Report Competitors Stock Consultant Stock Comparison
FUNDAMENTALS
Call Transcripts Annual Report Income Statement Revenue/EPS SEC Filings Short Interest Dividend History
HOLDINGS
Ownership Summary Institutional Holdings Insiders
(SEC Form 4)
 Save stocks for next time

Ruby Tuesday (RT)

Q4 2011 Earnings Call

July 21, 2011 5:00 pm ET

Executives

Dan Dillon - Senior Vice President of Brand Development

Greg Ashley - Vice President - Finance

Kimberly Grant - Chief Operations Officer and Executive Vice President

Marguerite Duffy - Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Assistant Secretary

Samuel Beall - Co-Founder, Executive Chairman, Chief Executive Officer and President

Analysts

Robert Derrington - Morgan Keegan & Company, Inc.

Brad Ludington - KeyBanc Capital Markets Inc.

Keith Siegner - Crédit Suisse AG

Jeffrey Omohundro - Wells Fargo Securities, LLC

Christopher O'Cull - SunTrust Robinson Humphrey, Inc.

Michael Wolleben - Sidoti & Company, LLC

Joseph Buckley - BofA Merrill Lynch

Peter Saleh - Telsey Advisory Group

Presentation

Operator

Greetings, and welcome to the Ruby Tuesday, Inc. Fourth Quarter Fiscal Year 2011 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Greg Ashley, VP of Finance for Ruby Tuesday.

Greg Ashley

Thank you, Bob, and thanks to all of you for joining us this evening. With me today are Sandy Beall, Ruby Tuesday Chairman and CEO; Margie Duffy, Chief Financial Officer; Dan Dillon, Senior Vice President, Brand Development; and Kimberly Grant, Executive Vice President.

I would like to remind you that there are likely to be forward-looking statements in our comments, and I refer you to the note regarding forward-looking information in our press release and most recently filed Form 8-K . We plan to release first quarter fiscal '12 earnings in early October.

Our fourth quarter earnings were released today after the market closed. A copy of our press release can be found on the Investor Relations section of our website at rubytuesday.com and is also available on Business Wire, FirstCall and other financial media outlets.

Our format today includes an overview of our fourth quarter and fiscal 2011 financial results, our fiscal 2012 outlook and a review of our plans and strategies. At the conclusion, as usual, we will respond to your questions. I will now turn the call over to Sandy.

Samuel Beall

Thank you, Greg. I'd like to welcome all of you listening in this afternoon. Thank you for joining us. Our fourth quarter is marked by several accomplishments, including the completion of our franchise partner acquisitions, the opening of our second Marlin & Ray's restaurant on June 1, and the launch of several exciting limited time offers.

We're glad to have closed this year with positive same-store sales of 0.9%, our first positive same-restaurant sales results in 5 years. However, the quarter was very challenging as you've seen from both the sales and profitability standpoint.

We saw a very aggressive promotional environment within the casual dining bar grill segment, especially at the lower end of casual dining during the quarter, which was also supported by very heavy media TV levels. We began the first month of the quarter with negative sales, as March showed sequential monthly improvement, which included positive same-restaurant sales in May, and we ended the quarter with the nearly flat same-restaurant sales. These results trailed KNAPP-TRACK on a one-year basis by approximately 2 points, and we're approximately in line with KNAPP-TRACK on a 2-year basis.

Although we did have success with our promotional strategies during the fourth quarter, the competitive promotions had recently become even more aggressive. and our current promotional programs do not compete as well versus high-value, heavy TV advertisements in this type of environment. While we were slow to react, we believe we have a better plan beginning in August and more so in September to drive traffic and sales.

Our diluted earnings per share of $0.21 trailed our prior results of $0.33 per share in part due to basically flat same-restaurant sales, not providing any cost leverage on the various investments we've made this year. Higher levels of advertising expense and various charges we incurred during the quarter, which resulted in earnings per share dilution of $0.04 per share. Margie will comment on those later.

While investments we made this year on a new bread program, additional labor hand service and a marketing research will benefit our brand longer term, we're very disappointed with our financial results of the year and believe me, we're actively working on it. We expect the competitive pressures that impacted our results in the fourth quarter will remain for the near term.

To combat this environment, our efforts in energy in fiscal year '12 will be sharply focused on 4 primary goals; first one is increasing our same-restaurant sales; second, lowering our cost; third, enhancing our margins; and fourth, maximizing our strong free cash flow position, 4 critically important directional points. Executing on each of these goals is key to getting ourselves and earnings back to stronger levels and building shareholder value.

Our balance sheet is in good shape, and we're very comfortable with compliance of our debt covenants. Our book debt-to-EBITDA ratio was 2.66 at the end of the quarter. It's an increase over the prior year, which was 2.1, but that's due to the assumption of debt from the franchise partner acquisitions. And Margie will provide more details in the call regarding our balance sheet, including our revolver credit facility which we just raised.

I'd like to briefly review our 3-year strategic plan, which we still believe very much in to create shareholder value and increase our returns. First and foremost, we're focused on many ways. We just spent 2 days with our board, reviewing all of our business plans for this year, which all support our 3-year plan, and we feel very good about those.

Read the rest of this transcript for free on seekingalpha.com