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RUTH’S HOSPITALITY GROUP, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2015 FINANCIAL RESULTS

  • Winter Park, FL
  • Ruth's Hospitality Group
  • 2/12/16
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.

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

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.

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.

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

Franchise Income

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%.

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:

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.

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