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Ruth’s Hospitality Group, Inc. Reports First Quarter 2016 Financial Results

  • Orlando, FL
  • Ruth's Hospitality Group
  • 4/28/16

Ruth’s Hospitality Group, Inc. Reports First Quarter 2016 Financial Results

-Company-owned Comparable Restaurant Sales Increase 3.1%-

-Board Authorizes New $60 Million Share Repurchase Program and Declares $0.07 Per Share Quarterly Dividend-

WINTER PARK, Fla.--(BUSINESS WIRE)--Apr. 28, 2016-- Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) today reported unaudited financial results for its first quarter ended March 27, 2016 and announced a new $60 million share repurchase program and a quarterly cash dividend of $0.07 per share to be paid in the second quarter.

Highlights for the first quarter of 2016 compared to the first quarter of 2015 were as follows:

The Company reported net income of $10.8 million, or $0.33 per diluted share, in the first quarter of 2016 compared to net income of $10.4 million, or $0.30 per diluted share, in the first quarter of 2015.

Total restaurant sales in the first quarter of 2016 increased 4.2% to $95.9 million compared to the first quarter of 2015.

Michael P. O'Donnell, Chairman, President and Chief Executive Officer of Ruth's Hospitality Group, Inc., noted, “Our first quarter results were highlighted by solid top line growth and a favorable commodity environment. The quarter also included positive comparable sales and a return to positive traffic growth. Additionally, in keeping with our total return strategy, we are pleased to announce the recently approved $60 million share repurchase program. We believe that our ability to supplement organic growth initiatives with the consistent return of capital to shareholders is a testament to the strength and stability of our operations."

Review of First Quarter 2016 Operating Results

Total revenues in the first quarter of 2016 were $101.9 million, an increase of 4.7% compared to $97.3 million in the first quarter of 2015.

Company-owned Sales

Franchise Income

Operating income in the first quarter of 2016 increased 1.4% to $16.4 million, compared to $16.2 million in the first quarter of 2015. As a percentage of total revenues, operating margin decreased 52 basis points to 16.1% year-over-year.

Share Repurchase Program

During the first quarter of 2016, the Company repurchased 732 thousand shares of common stock under the Company’s share repurchase program, for approximately $11.7 million or an average price of $15.92 per share.

On April 20, 2016, subsequent to the end of the first quarter, the Company’s Board of Directors approved a new share repurchase program under which it has authorized the Company to repurchase up to $60 million of its common shares outstanding. The new authorization replaces the Company’s previous $50 million share repurchase program announced in October 2014, which has now been retired. Share repurchases may be made from time to time in the open market, through negotiated transactions or otherwise (including, without limitation, the use of Rule 10b5-1 plans), depending on share price, market conditions and other factors. The Company intends to continue to conduct any open market share repurchase activities in compliance with the safe harbor provisions of Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of its common shares.

At the end of the first quarter of 2016, the Company had $8 million in debt outstanding under its senior credit facility.

Quarterly Cash Dividend

Subsequent to the end of the first quarter of 2016, 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 May 26, 2016 to shareholders of record as of the close of business on May 12, 2016, and represents a 17% increase year-over-year.

Development Update

The Company currently expects to open four new restaurants during 2016, including Albuquerque, NM in the second quarter; El Paso, TX in the third quarter; and Cleveland, OH and Waltham, MA in the fourth quarter. As previously disclosed, the Company closed its Columbus, OH restaurant during the first quarter after 17 years in the marketplace due to changing marketplace dynamics.

Ruth’s Chris Steak House franchisees opened a restaurant in Jakarta, Indonesia during the first quarter and have signed leases for two more new restaurant openings in 2016, with Odenton, MD expected in the third quarter and Greenville, SC in the fourth quarter. This year, we also expect the relocation of two franchise locations. Philadelphia, Pennsylvania is currently scheduled for late in the second quarter while Huntsville, Alabama is currently expected to occur in the fourth quarter. The relocation of our Mississauga, Canada restaurant has now been moved to the first half of 2017.

Financial Outlook

Based on current information, Ruth's Hospitality Group, Inc. is reaffirming 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 first quarter 2016 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 719-325-2354. A replay will be available one hour after the call and can be accessed by dialing 858-384-5517; the password is 7976461. The replay will be available until May 5, 2016. The call will also be webcast live from the Company’s website at http://www.rhgi.com under the “Investor Relations” section.

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 http://www.RuthsChris.com. For more information about Ruth’s Hospitality Group, Inc., please visit http://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, plans and goals. 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 http://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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