Ruth’s Hospitality Group, Inc. Reports First Quarter 2017 Financial Results
- Orlando, FL
- Ruth’s Hospitality Group
First Quarter GAAP Earnings Per Share Up 8.6% to $0.35
First Quarter Non-GAAP Earnings Per Share Up 4.0% to $0.35
Winter Park, FL--(May 5, 2017)-- Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) today reported unaudited financial results for its first quarter ended March 26, 2017 and announced a quarterly cash dividend of $0.09 per share to be paid in the second quarter.
Highlights for the first quarter of 2017 compared to the first quarter of 2016 were as follows:
Michael P. O'Donnell, Chairman and Chief Executive Officer of Ruth's Hospitality Group, Inc., noted, “We delivered a solid start to the year, achieving both sales and earnings growth during the first quarter. Our results continue to be driven by execution against our total return strategy, through which we strive to maintain a healthy core of restaurants, grow our base in a disciplined fashion, and return excess capital to shareholders. Our ability to execute against this strategy is a testament to the dedication of our team members, who are committed to remaining the fine dining steakhouse leaders, and our franchise partners, who are the heart and soul of our business.”
O’Donnell added, “I would also like to offer my sincere thanks to Kevin Toomy for his exemplary contributions in operational leadership. Kevin has expertly led the consistency in execution within our restaurants. His efforts and dedication over these past nine years have been instrumental in the delivery of the best steak house experience to our guests and the success of the Ruth’s Chris Steak House brand.
It speaks to the strength of this organization that we announce the internal promotions of Susan, Rik and Pete as we continue to identify, educate and promote from within. It is with great enthusiasm that I look forward to working with this management team with a continued focus on the execution of our total return strategy.”
Review of First Quarter 2017 Operating Results
Total revenues in the first quarter of 2017 were $105.5 million, an increase of 3.6% compared to $101.9 million in the first quarter of 2016.
Operating income in the first quarter of 2017 decreased 1.2% to $16.2 million, compared to $16.4 million in the first quarter of 2016. As a percentage of total revenues, operating margin decreased 70 basis points year-over-year to 15.4%.
During the first quarter of 2017, the Company opened two new Company-owned Ruth’s Chris Steak House restaurants, in Waltham, MA, and Cleveland, OH as well as one restaurant operating under a contractual agreement in Tulsa, OK. The Company expects to open its third new Company-owned restaurant of the year in suburban Denver, CO during the fourth quarter of 2017.
Franchise partners are expected to open their second restaurant in China, a restaurant in Kauai, HI and relocate the restaurant in Mississauga, Canada during the second half of 2017. In addition, a new franchised restaurant is expected to open in Fort Wayne, IN in 2018.
Quarterly Cash Dividend
Subsequent to the end of the first quarter of 2017, the Company’s Board of Directors approved the payment of a quarterly cash dividend to shareholders of $0.09 per share. This dividend will be paid on June 1, 2017 to shareholders of record as of the close of business on May 18, 2017, and represents a 29% increase from the quarterly cash dividend paid in May of 2016.
Share Repurchase Program and Debt
The Company did not repurchase any shares during the first quarter of 2017. The Company has approximately $26.6 million remaining under its share repurchase authorization.
At the end of the first quarter of 2017, the Company had $14 million in debt outstanding under its senior credit facility.
Based on current information, Ruth's Hospitality Group, Inc. is reaffirming its full year 2017 outlook based on a 53 week year ending December 31, 2017, 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.
Update on Organizational Development
The Company also announced that Kevin Toomy, President and Chief Operating Officer of Ruth’s Chris Steak House, plans to retire at the end of June 2018. Mr. Toomy, a nine-year veteran of the Company, will remain in his current position until September 2017, after which he will remain actively engaged with the Company on special projects until he retires in 2018.
Susan Mirdamadi has been promoted to Senior Vice President and Chief Services Officer, responsible for IT, Brand Development, Brand Marketing, and Beverage and Culinary Development. Rik Jenkins has been promoted to Vice President of Operations and will be responsible for the day to day operational oversight of the Ruth’s Chris Steak House company-owned restaurants. Pete Beaudrault has been named Vice President of Franchise Operations and Development and will be responsible for the Ruth’s Chris Steak House franchise-operated restaurants. Mirdamadi, Jenkins and Beaudrault will continue in their close working partnership with Toomy as they transition into their new roles and will report to Cheryl Henry, President and Chief Operating Officer of RHGI.
The Company will host a conference call to discuss first quarter 2017 financial results today at 8:30 AM Eastern Time. Hosting the call will be Michael P. O’Donnell, Chairman and Chief Executive Officer, Arne G. Haak, Executive Vice President and Chief Financial Officer and Cheryl Henry President and Chief Operating Officer.
The conference call can be accessed live over the phone by dialing 719-325-4810. A replay will be available one hour after the call and can be accessed by dialing 412-317-6671; the password is 6271823. The replay will be available until May 12, 2017. The call will also be webcast live from the Company's website at www.rhgi.com under the investor relations section.
About Ruth’s Hospitality Group
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 150 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. Forward-looking statements frequently are identified by the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “targeting,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Similarly, statements herein that describe the Company’s objectives, plans or goals, including with respect to new restaurant openings, strategy, financial outlook and capital expenditures also are forward-looking statements. Actual results could differ materially from those projected, implied or anticipated by the Company’s 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; a material failure, interruption or security breach of the Company’s information technology network; repeal or reduction of the federal FICA tip credit; unexpected expenses incurred as a result of the sale of the Mitchell’s Restaurants; the Company’s ability to protect its name and logo and other proprietary information; an impairment in the financial statement carrying value of our goodwill, other intangible assets or property; the impact of litigation; the restrictions imposed by the Company’s Credit Agreement; and changes in, or the discontinuation of, the Company’s quarterly cash dividend payments or share repurchase program. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2016, which is available on the SEC’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 to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this press release have not occurred.
Unless the context otherwise indicates, all references in this report to the “Company,” “Ruth’s,” “we,” “us”, “our” or similar words are to Ruth’s Hospitality Group, Inc. and its subsidiaries. Ruth’s Hospitality Group, Inc. is a Delaware corporation formerly known as Ruth’s Chris Steak House, Inc., and was founded in 1965.