– Fourth Quarter Total Revenues Grow 5.9% to $104.7 Million –
–Fourth Quarter GAAP Earnings Per Share Up 23.0% to $0.28 –
–Fourth Quarter Non – GAAP Earnings Per Share Up 10.7% to $0.26 –
–Company Announces 16.7% Increase in Quarterly Dividend to $0.07
per Share –
WINTER PARK, Fla. -- (Business Wire)
Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) today reported unaudited
financial results for its fourth quarter and full year ended December
27, 2015.
Highlights for the fourth quarter of 2015 compared to the fourth
quarter of 2014 were as follows:
Net income was $9.5 million, or $0.28 per diluted share, in the fourth
quarter of 2015 compared to net income of $8.0 million, or $0.23 per
diluted share, in the fourth quarter of 2014.
-
Income from continuing operations was $9.1 million, or $0.27 per
diluted share, in the fourth quarter of 2015 compared to income from
continuing operations of $8.9 million, or $0.26 per diluted share in
the fourth quarter of 2014.
-
Net income in the fourth quarter of 2015 included a $0.3 million
income tax benefit and net income in the fourth quarter of 2014
included a $0.7 million income tax benefit, both primarily relating to
non-recurring state tax benefits.
-
Excluding these income tax benefits and earnings from discontinued
operations, non-GAAP diluted earnings per common share increased 10.7%
to $0.26, compared to $0.23 in the fourth quarter of 2014. The Company
believes that non-GAAP diluted earnings per common share provides a
useful alternative measure of financial performance. Investors are
advised to see the attached Reconciliation of Non-GAAP Financial
Measure table for additional information.
Michael P. O'Donnell, Chairman, President and Chief Executive Officer of
Ruth's Hospitality Group, Inc., noted, “I’m extremely proud of our
Ruth’s Chris Steak House team members and franchise partners for
delivering another year of strong operating results. During the fourth
quarter, solid top-line growth combined with excellent execution and a
favorable commodity environment enabled us to drive operating margin
improvement. This impressive operating performance along with our
balanced shareholder return plan drove strong earnings growth.”
O'Donnell continued, “We are very pleased with the progress we’ve made
on our Ruth’s 2.0 initiatives, which we continue to roll out across the
system to enthusiastic customer reviews. We look forward to another year
of making memories on 500 degree sizzling plates.”
Review of Fourth Quarter 2015 Operating Results
Total revenues in the fourth quarter of 2015 were $104.7 million, an
increase of 5.9% compared to $98.9 million in the fourth quarter of 2014.
Company-owned Sales
-
For the fourth quarter of 2015, Company-owned comparable restaurant
sales increased 3.2%, which consisted of an average check increase of
3.5%, partially offset by a slight traffic decrease of 0.3%.
-
Average unit weekly sales were $114.2 thousand in the fourth quarter
of 2015, an increase of 2.6% compared to $111.4 thousand in the fourth
quarter of 2014.
-
67 Company-owned Ruth’s Chris Steak House restaurants were open at the
end of the fourth quarter of 2015 compared to 65 Company-owned Ruth’s
Chris Steak House restaurants at the end of the fourth quarter of
2014. Total operating weeks for the fourth quarter of 2015 increased
to 865 from 836 in the fourth quarter of 2014. Total operating weeks
exclude discontinued operations.
Franchise Income
-
Franchise income in the fourth quarter of 2015 was up 3.5% to $4.6
million compared to $4.4 million in the fourth quarter of 2014. The
increase in franchise income was due to new franchise restaurant
openings during the last 12 months and a 0.5% increase in comparable
franchise restaurant sales.
-
80 franchisee-owned restaurants were open at the end of the fourth
quarter of 2015 compared to 77 at the end of the prior year fourth
quarter.
Operating income in the fourth quarter of 2015 increased 9.1% to $13.0
million, compared to $11.9 million in the fourth quarter of 2014. As a
percentage of total revenues, operating margin increased 37 basis points
to 12.4% year-over-year.
-
Food and beverage costs, as a percentage of restaurant sales,
decreased 129 basis points in the fourth quarter of 2015 to 30.5%,
primarily due to a 3.5% increase in the average check and a 8%
decrease in total beef costs.
-
Restaurant operating expenses, as a percentage of restaurant sales,
decreased 46 basis points in the fourth quarter of 2015 to 45.1%,
primarily due to lower healthcare claims experience in the quarter and
the effects of higher sales on fixed costs.
-
Marketing and advertising, as a percentage of total revenues,
decreased 10 basis points in the fourth quarter of 2015 to 4.4%.
-
General and administrative expenses, as a percentage of total
revenues, increased 154 basis points in the fourth quarter of 2015 to
8.5%, driven by a year over year increase in performance based
compensation and increased stock based compensation.
During the fourth quarter of 2015, the Company repurchased 730,647
shares of common stock under the Company’s previously announced $50
million share repurchase program, for approximately $12.1 million or an
average price of $16.49 per share.
At the end of the fourth quarter of 2015, the Company had no funded debt
outstanding under its senior credit facility, a decrease from $5.0
million in debt outstanding at the end of the third quarter of 2015.
Quarterly Cash Dividend
Subsequent to the end of the fourth quarter of 2015, the Company’s Board
of Directors, as part of the Company’s focus on long-term shareholder
returns, approved the payment of a quarterly cash dividend to
shareholders of $0.07 per share. This dividend will be paid on March 10,
2016 to shareholders of record as of the close of business on February
25, 2016.
Review of Full Year 2015 Operating Results
Net income was $30.0 million, or $0.87 per diluted share, for the full
year of 2015 compared to net income of $16.5 million, or $0.46 per
diluted share for the full year of 2014.
-
Income from continuing operations was $30.2 million, or $0.87 per
diluted share, for the full year of 2015 compared to income from
continuing operations of $26.7 million, or $0.75 per diluted share,
for the full year of 2014.
-
Net income in 2015 included a $0.4 million income tax benefit and net
income in 2014 included a $0.5 million income tax benefit, both
primarily related to non-recurring state tax benefits.
-
Excluding these income tax benefits and earnings from discontinued
operations, non-GAAP diluted earnings per common share increased 17.2%
to $0.87 for the full year of 2015, compared to $0.74 in the full year
of 2014. The Company believes that non-GAAP diluted earnings per
common share provides a useful alternative measure of financial
performance. Investors are advised to see the attached Reconciliation
of Non-GAAP Financial Measure table for additional information.
Total revenues in 2015 increased 7.9% to $373.4 million compared to
$346.1 million in the prior year. The increase in revenues was due to
additional Company and franchise restaurant development and an increase
in comparable restaurant sales.
Company-owned Sales
-
For the full year 2015, Company-owned comparable restaurant sales
increased 3.4%, which consisted of an average check increase of 3.5%,
partially offset by a slight traffic decrease of 0.2%.
-
Average unit weekly sales were $102.5 thousand for the full year 2015,
an increase of 3.4% compared to $99.1 thousand in the full year 2014.
-
67 Company-owned Ruth’s Chris Steak House restaurants were open at the
end of 2015 compared to 65 Company-owned Ruth’s Chris Steak House
restaurants at the end of the 2014. Total operating weeks for the full
year 2015 increased to 3,433 from 3,283 in the full year of 2014.
Total operating weeks exclude discontinued operations.
Franchise Income
-
Franchise income in the full year of 2015 was up 5.7% to $16.7 million
compared to $15.8 million in the full year of 2014. The increase in
franchise income was due to new franchise restaurant openings during
the last 12 months and a 0.7% increase in comparable franchise
restaurant sales.
-
80 franchisee-owned restaurants were open at the end of 2015 compared
to 77 at the end of 2014.
Operating income in 2015 increased 12.9% to $44.8 million, compared to
$39.7 million in 2014. As a percentage of total revenues, operating
margin increased 53 basis points year-over-year to 12.0%.
-
Food and beverage costs, as a percentage of restaurant sales,
decreased 101 basis points in 2015 to 30.7%, primarily due to a 3.5%
increase in average check and lower beef costs.
-
Restaurant operating expenses as a percentage of restaurant sales
decreased 88 basis points to 47.1% primarily due to lower healthcare
claims.
-
Marketing and advertising costs, as a percentage of total revenues,
remained flat year over year at 2.9%.
-
General and administrative expenses as a percentage of total revenues
increased 107 basis points to 8.1%, driven by a year over year
increase in performance based compensation and increased stock based
compensation.
During 2015, the Company repurchased 1.5 million shares of common stock
under the Company’s previously announced $50 million share repurchase
program, for approximately $23.8 million or an average price of $15.99
per share. Since the beginning of 2014, the Company has repurchased 2.7
million shares for approximately $39.2 million, at an average price of
$14.33. As of the end of 2015, the Company had $21.1 million remaining
under its current authorization.
Development Update
The Company opened its second Dallas, TX restaurant on November 9, 2015
marking the second and final Company restaurant opening for 2015. As
previously announced, the Company has signed leases for new restaurant
openings in 2016. Albuquerque, NM is currently expected to open in the
second quarter, Cleveland, OH and El Paso, TX in the third quarter, and
Waltham, MA in the fourth quarter. Also, subsequent to the end of the
fourth quarter of 2015, the Company announced that after 17 years in the
marketplace, the Columbus, OH restaurant will be closing on February 15,
2016 due to changing marketplace dynamics.
Ruth’s Chris Steak House franchisees opened a third restaurant in San
Antonio, TX on November 16, 2015. Subsequent to the end of the fourth
quarter of 2015, one franchise location closed in San Salvador, El
Salvador. Franchisees currently have signed leases for three new
restaurant openings in 2016, with Jakarta, Indonesia opening in the
first quarter, Odenton, MD in the third quarter and Greenville, SC in
the fourth quarter. Additionally, franchise partners in Philadelphia, PA
and Mississauga, Canada are expected to relocate their existing
restaurants in the second half of 2016.
Financial Outlook
Based on current information, Ruth's Hospitality Group, Inc. is
announcing its full year 2016 outlook as follows:
-
Cost of goods sold of 29.5% to 31.5% of restaurant sales
-
Restaurant operating expenses of 47.0% to 49.0% of restaurant sales
-
Marketing and advertising costs of 2.9% to 3.1% of total revenues
-
General and administrative expenses of $29.0 million to $31.0 million
-
Effective tax rate of 32% to 34%
-
Capital expenditures of $28 million to $30 million
-
Fully diluted shares outstanding of 33.8 million to 34.5 million
(exclusive of any future share repurchases under the Company's share
repurchase program)
The foregoing statements are not guarantees of future performance, and
therefore, undue reliance should not be placed upon them. We refer you
to our recent filings with the Securities and Exchange Commission for
more detailed discussions of the risks that could impact our financial
outlook and our future operating results and financial condition.
Conference Call
The Company will host a conference call to discuss fourth quarter and
full year 2015 financial results today at 8:30 AM Eastern Time. Hosting
the call will be Michael P. O’Donnell, Chairman, President and Chief
Executive Officer, and Arne G. Haak, Executive Vice President and Chief
Financial Officer.
The conference call can be accessed live over the phone by dialing
719-325-2472. The call will also be webcast live from the Company's
website at www.rhgi.com
under the investor relations section. A replay will be available one
hour after the call and can be accessed by dialing 858-384-5517; the
password is 4622110. The replay will be available until February 19,
2016.
About Ruth’s Hospitality Group, Inc.
Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida,
is the largest fine dining steakhouse company in the U.S. as measured by
the total number of Company-owned and franchisee-owned restaurants, with
over 145 Ruth’s Chris Steak House locations worldwide specializing in
USDA Prime grade steaks served in Ruth’s Chris’ signature fashion –
“sizzling.”
For information about our restaurants, to make reservations, or to
purchase gift cards, please visit www.RuthsChris.com.
For more information about Ruth’s Hospitality Group, Inc., please visit www.rhgi.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” that reflect,
when made, the Company’s expectations or beliefs concerning future
events that involve risks and uncertainties. These forward-looking
statements include all statements other than those made solely with
respect to historical facts and include, but are not limited to,
statements regarding the Company’s financial outlook, objectives, goals
and plans, including with respect to new restaurant openings.
Forward-looking statements frequently are identified by the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,”
“will be,” “will continue,” “will likely result,” or other similar words
and phrases. Actual results could differ materially from those
projected, implied or anticipated by these forward-looking statements.
Some of the factors that could cause actual results to differ include:
reductions in the availability of, or increases in the cost of, USDA
Prime grade beef, fish and other food items; changes in economic
conditions and general trends; the loss of key management personnel; the
effect of market volatility on the Company’s stock price; health
concerns about beef or other food products; the effect of competition in
the restaurant industry; changes in consumer preferences or
discretionary spending; labor shortages or increases in labor costs; the
impact of federal, state or local government regulations relating to
Company employees, the sale or preparation of food, the sale of
alcoholic beverages and the opening of new restaurants; harmful actions
taken by the Company’s franchisees; the Company’s ability to protect its
name and logo and other proprietary information; the impact of
litigation; the restrictions imposed by the Company’s Amended and
Restated Credit Agreement; changes in, or the discontinuation of, the
Company’s share repurchase program or dividend payments; and the risk
factors or uncertainties identified in the reports the Company files
with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended December 28, 2014 and
subsequently filed Quarterly Reports on Form 10-Q, all of which are
available on the Securities and Exchange Commission’s website at www.sec.gov.
All forward-looking statements are qualified in their entirety by this
cautionary statement, and the Company undertakes no obligation to revise
or update this press release after the date hereof, whether as a result
of new information, future events or otherwise.
|
RUTH'S HOSPITALITY GROUP, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of Operations - Preliminary and
Unaudited |
(Amounts in thousands, except share and per share data) |
|
|
|
|
| 13 Weeks Ended |
|
| 52 Weeks Ended |
| | | | December 27, |
|
| December 28, | | | December 27, |
|
| December 28, |
| | | | 2015 | | | 2014 | | | 2015 | | | 2014 |
| | | | | | | | | | | | |
|
Revenues:
| | | | | | | | | | | | | |
Restaurant sales
| | | |
$
|
98,790
| | | |
$
|
93,095
| | | |
$
|
351,875
| | | |
$
|
325,437
| |
Franchise income
| | | | |
4,558
| | | | |
4,402
| | | | |
16,661
| | | | |
15,763
| |
Other operating income
| | | |
|
1,399
|
| | |
|
1,444
|
| | |
|
4,897
|
| | |
|
4,897
|
|
| | | | | | | | | | | | |
|
Total revenues
| | | | |
104,747
| | | | |
98,941
| | | | |
373,433
| | | | |
346,097
| |
| | | | | | | | | | | | |
|
Costs and expenses:
| | | | | | | | | | | | | |
Food and beverage costs
| | | | |
30,130
| | | | |
29,598
| | | | |
108,101
| | | | |
103,259
| |
Restaurant operating expenses
| | | | |
44,561
| | | | |
42,420
| | | | |
165,847
| | | | |
156,242
| |
Marketing and advertising
| | | | |
4,573
| | | | |
4,418
| | | | |
10,925
| | | | |
10,076
| |
General and administrative costs
| | | | |
8,908
| | | | |
6,887
| | | | |
30,242
| | | | |
24,311
| |
Depreciation and amortization expenses
| | | | |
3,173
| | | | |
2,999
| | | | |
12,520
| | | | |
10,917
| |
Pre-opening costs
| | | |
|
405
|
| | |
|
707
|
| | |
|
1,032
|
| | |
|
1,630
|
|
| | | | | | | | | | | | |
|
Total costs and expenses
| | | | |
91,750
| | | | |
87,029
| | | | |
328,667
| | | | |
306,435
| |
| | | | | | | | | | | | |
|
Operating income
| | | | |
12,997
| | | | |
11,912
| | | | |
44,766
| | | | |
39,662
| |
| | | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | | | | |
Interest expense, net
| | | | |
(202
|
)
| | | |
(278
|
)
| | | |
(790
|
)
| | | |
(1,159
|
)
|
Other
| | | |
|
319
|
| | |
|
12
|
| | |
|
358
|
| | |
|
37
|
|
| | | | | | | | | | | | |
|
Income from continuing operations before income tax expense
| | | | |
13,114
| | | | |
11,646
| | | | |
44,334
| | | | |
38,540
| |
Income tax expense
| | | |
|
4,024
|
| | |
|
2,791
|
| | |
|
14,168
|
| | |
|
11,830
|
|
| | | | | | | | | | | | |
|
Income from continuing operations
| | | | |
9,090
| | | | |
8,855
| | | | |
30,166
| | | | |
26,710
| |
Income (loss) from discontinued operations, net of income taxes
| | | |
|
421
|
| | |
|
(870
|
)
| | |
|
(162
|
)
| | |
|
(10,255
|
)
|
Net income
| | | |
$
|
9,511
|
| | |
$
|
7,985
|
| | |
$
|
30,004
|
| | |
$
|
16,455
|
|
| | | | | | | | | | | | |
|
Basic earnings (loss) per common share:
| | | | | | | | | | | | | |
Continuing operations
| | | |
$
|
0.27
| | | |
$
|
0.26
| | | |
$
|
0.88
| | | |
$
|
0.76
| |
Discontinued operations
| | | |
|
0.01
|
| | |
|
(0.03
|
)
| | |
$
|
0.00
|
| | |
|
(0.29
|
)
|
Basic earnings per share
| | | |
$
|
0.28
|
| | |
$
|
0.23
|
| | |
$
|
0.88
|
| | |
$
|
0.47
|
|
| | | | | | | | | | | | |
|
Diluted earnings (loss) per common share:
| | | | | | | | | | | | | |
Continuing operations
| | | |
$
|
0.27
| | | |
$
|
0.26
| | | |
$
|
0.87
| | | |
$
|
0.75
| |
Discontinued operations
| | | |
|
0.01
|
| | |
|
(0.03
|
)
| | |
$
|
0.00
|
| | |
|
(0.29
|
)
|
Diluted earnings per share
| | | |
$
|
0.28
|
| | |
$
|
0.23
|
| | |
$
|
0.87
|
| | |
$
|
0.46
|
|
| | | | | | | | | | | | |
|
Shares used in computing net income (loss) per common share:
| | | | | | | | | | | | | |
Basic
| | | | |
33,524,916
| | | | |
34,680,666
| | | | |
34,018,582
| | | | |
34,955,760
| |
Diluted
| | | | |
33,901,787
| | | | |
34,998,312
| | | | |
34,434,407
| | | | |
35,415,483
| |
| | | | | | | | | | | | |
|
Dividends declared per common share
| | | |
$
|
0.06
| | | |
$
|
0.05
| | | |
$
|
0.24
| | | |
$
|
0.20
| |
| | | | | | | | | | | | |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
We prepare our financial statements in accordance with U.S. generally
accepted accounting principles (GAAP). Within our press release, we make
reference to non-GAAP diluted earnings per common share. This non-GAAP
measurement was calculated by excluding certain non-recurring items and
losses from discontinued operations. This non-GAAP measurement has been
included as supplemental information. We believe that this measure
represents a useful internal measure of performance. Accordingly, where
this non-GAAP measure is provided, it is done so that investors have the
same financial data that management uses in evaluating performance with
the belief that it will assist the investment community in assessing our
underlying performance on a quarter-over-quarter basis. However, because
this measure is not determined in accordance with GAAP, such a measure
is susceptible to varying calculations and not all companies calculate
the measure in the same manner. As a result, the aforementioned measure
as presented may not be directly comparable to a similarly titled
measure presented by other companies. This non-GAAP financial measure is
presented as supplemental information and not as an alternative to
diluted earnings per share as calculated in accordance with GAAP.
|
Reconciliation of Non-GAAP Financial Measure - Unaudited |
(Amounts in thousands, except share data) |
|
|
|
|
| 13 Weeks Ended |
|
| 52 Weeks Ended |
| | | | December 27, |
|
| December 28, | | | December 27, |
|
| December 28, |
| | | | 2015 | | | 2014 | | | 2015 | | | 2014 |
GAAP net income | | | |
$
|
9,511
| | | |
$
|
7,985
| | | |
$
|
30,004
| | | |
$
|
16,455
| |
Impact of excluding certain non-recurring income tax items
| | | | |
(322
|
)
| | | |
(677
|
)
| | | |
(355
|
)
| | | |
(549
|
)
|
Net of tax impact of excluding loss from discontinued operations
| | | |
|
(421
|
)
| | |
|
870
|
| | |
|
162
|
| | |
|
10,255
|
|
Non-GAAP net income | | | | $ | 8,768 |
| | | $ | 8,178 |
| | | $ | 29,811 |
| | | $ | 26,161 |
|
| | | |
| | |
| | |
| | |
|
Non-GAAP diluted earnings per share | | | | $ | 0.26 |
| | | $ | 0.23 |
| | | $ | 0.87 |
| | | $ | 0.74 |
|
| | | | | | | | | | | | |
|
Shares:
| | | | | | | | | | | | | |
Weighted average number of common shares outstanding - basic
| | | | |
33,524,916
| | | | |
34,680,666
| | | | |
34,018,582
| | | | |
34,955,760
| |
Dilutive shares
| | | |
|
376,871
|
| | |
|
317,646
|
| | |
|
415,825
|
| | |
|
459,723
|
|
Weighted-average number of common shares outstanding - diluted
| | | |
|
33,901,787
|
| | |
|
34,998,312
|
| | |
|
34,434,407
|
| | |
|
35,415,483
|
|
| | | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160212005080/en/
Contacts:
Investor Relations
For Ruth’s
Hospitality Group, Inc.
Fitzhugh Taylor, 203-682-8261
ftaylor@icrinc.com
Source: Ruth’s Hospitality Group, Inc.
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