Director F. Lane Cardwell, Jr. Appointed
Interim President and Chief Executive Officer
Ruby Tuesday, Inc. (NYSE:RT) today announced that effective
immediately, the Board of Directors has appointed F. Lane Cardwell,
Jr. as Interim President and Chief Executive Officer following the
resignation of James J. “JJ” Buettgen. Additionally, Mr. Buettgen,
who had also served as Board Chairman, will not stand for
reelection at the upcoming Annual Meeting of Shareholders on
October 5, 2016 and Lead Director Stephen Sadove has been named
non-executive Board Chairman. The Company’s Board of Directors has
retained Heidrick & Struggles to begin a search for a permanent
President and Chief Executive Officer.
Stephen Sadove, Board Chairman and Lead Director, stated, “We
would like to thank JJ for his dedicated service to Ruby Tuesday.
During his leadership, JJ built a strong team, improved the health
of the organization, and positioned the Company to execute against
its Fresh Start initiatives including the recent completion of the
asset rationalization program. We wish him well in his future
endeavors.” Mr. Sadove added, “We appreciate Lane stepping into the
President and CEO roles. Lane possesses decades of restaurant and
management expertise which is ideal for ensuring a smooth and
orderly transition during this interim period. His tenure on our
Board will help facilitate leadership continuity until we can
complete the process of identifying a suitable permanent
replacement.”
The Company also announced the appointment of Sue Briley as
Chief Financial Officer. Ms. Briley has been serving as interim
Chief Financial Officer since June 2016 and prior to that, had been
Vice President of Finance since joining Ruby Tuesday in July 2014.
Mr. Sadove commented, “Sue has done an exceptional job since taking
on the responsibilities of interim Chief Financial Officer and has
proven to be the right candidate for the position to lead our
strong financial team going forward.”
Mr. Cardwell has been a Director of the Company since October
2012 and member of the Executive Compensation and Audit Committees.
Since June 2012, Mr. Cardwell has served as the President of
Cardwell Hospitality Advisory. Before that, he held several
positions including President of P.F. Chang’s China Bistro, as well
as board member, and President and Chief Executive Officer of
Boston Market. Previously, he served on the board of Famous Dave’s
of America prior to becoming interim President and Chief Executive
Officer and also served as President and Chief Executive Officer of
Eatzi’s Market and Bakery. Prior to joining Eatzi’s, Mr. Cardwell
was Executive Vice President and Chief Administrative Officer and
board member of Brinker International.
F. Lane Cardwell, Jr., Interim President and Chief Executive
Officer, added, “I appreciate the opportunity to accept this
expanded role and look forward to working with the Board and the
talented management team as we move toward restoring Ruby Tuesday
to sustained profitable growth.”
Preliminary Fiscal First Quarter 2017 Results
The Company also announced the following preliminary financial
results for the fiscal first quarter ended August 30, 2016:
- Total revenue, including franchise
revenue, of approximately $256.7 million.
- Same restaurant sales declined
approximately 2.7%.
- Net Loss per diluted share to range
from $0.67 to $0.74. Adjusted Net Loss* per diluted share to range
from $0.10 to $0.12.
* Estimated EBITDA, Adjusted EBITDA, Adjusted Net Loss and
Adjusted Net Loss per share are non-GAAP measures. Reconciliations
of estimated EBITDA, Adjusted EBITDA, Adjusted Net Loss and
Adjusted Net Loss per share to the most directly comparable
financial measures presented in accordance with United States
Generally Accepted Accounting Principles (GAAP) are set forth in
the schedule accompanying this release. See “Non-GAAP Financial
Measures.”
As of today, all 95 restaurants have closed under the Company’s
asset rationalization plan announced on August 11, 2016.
Additionally, these locations have been excluded from the
calculation of the Company’s same restaurant sales performance for
the fiscal first quarter and will be excluded on a go-forward
basis.
Preliminary results remain subject to the completion of normal
quarter-end accounting procedures and adjustments and are subject
to change. Specifically, the charges for closed restaurant lease
reserves reflected within Closures and Impairments, Net associated
with the Company’s asset rationalization plan are subject to change
pending the conclusion of the first quarter evaluation.
The Company will release full fiscal first quarter 2017 results
and update Fiscal 2017 guidance, if necessary, on Thursday, October
6, 2016 following the close of the financial markets and will hold
a conference call at 5:00 p.m. Eastern time. The regular quarterly
conference call can be accessed live by dialing 888-670-2260 or for
international callers by dialing 913-312-0686. A replay will be
available after the call and can be accessed by dialing
877-870-5176 or for international callers by dialing 858-384-5517.
The passcode is 9127398. The replay will be available through
Sunday, November 6, 2016. A live webcast of the call can be
accessed on the Investor Relations page of the Company’s website at
www.rubytuesday.com and will be archived on the Company’s
website.
About Ruby Tuesday, Inc.
Ruby Tuesday, Inc. owns and franchises Ruby Tuesday brand
restaurants. As of August 30, 2016, there were 615 Ruby Tuesday
restaurants in 42 states, 14 foreign countries, and Guam. Of those
restaurants, we owned and operated 547 Ruby Tuesday restaurants and
franchised 68 Ruby Tuesday restaurants, comprised of 18 domestic
and 50 international restaurants. Our corporate-owned and operated
restaurants are concentrated primarily in the Southeast, Northeast,
Mid-Atlantic, and Midwest of the United States, which we consider
to be our core markets. For more information about Ruby Tuesday,
please visit www.rubytuesday.com. Ruby Tuesday, Inc. is traded on
the New York Stock Exchange (Symbol: RT).
Forward-looking Information
This press release contains various forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements represent our expectations or
beliefs concerning future events, including one or more of the
following: future financial performance (including our estimates of
changes in same-restaurant sales, average unit volumes, operating
margins, expenses, and other items), future capital expenditures,
the effect of strategic initiatives (including statements relating
to cost savings initiatives and the benefits of our marketing), the
opening or closing of restaurants by us or our franchisees, sales
of our real estate or purchases of new real estate, future
borrowings and repayments of debt, availability of financing on
terms attractive to the Company, compliance with financial
covenants in our debt instruments, payment of dividends, stock and
bond repurchases, restaurant acquisitions and dispositions, and
changes in senior management and in the Board of Directors. We
caution the reader that a number of important factors and
uncertainties could, individually or in the aggregate, cause our
actual results to differ materially from those included in the
forward-looking statements, including, without limitation, the
following: general economic conditions; changes in promotional,
couponing and advertising strategies; changes in our customers’
disposable income; consumer spending trends and habits; increased
competition in the restaurant market; laws and regulations,
including those affecting labor and employee benefit costs, such as
further potential increases in state and federally mandated minimum
wages and healthcare reform; the impact of pending litigation;
customers’ acceptance of changes in menu items; changes in the
availability and cost of capital; potential limitations imposed by
debt covenants under our debt instruments; weather conditions in
the regions in which Company-owned and franchised restaurants are
operated; costs and availability of food and beverage inventory,
including supply and delivery shortages or interruptions;
significant fluctuations in energy prices; security breaches of our
customers’ or employees’ confidential information or personal data
or the failure of our information technology and computer systems;
our ability to attract and retain qualified managers, franchisees
and team members; impact of adoption of new accounting standards;
impact of food-borne illnesses resulting from an outbreak at either
one of our restaurant concepts or other competing restaurant
concepts; effects of actual or threatened future terrorist attacks
in the United States; and other risks and uncertainties described
in the Risk Factors included in Part I, Item A of our Annual Report
on Form 10-K for the year ended May 31, 2016.
Non-GAAP Financial
Measures
The Company believes excluding certain items from its financial
results provides investors with a clearer understanding of the
Company’s operating performance and comparison to prior-period
results. In addition, management uses these non-GAAP financial
measures to assess the results of the Company’s operations.
We have included estimated EBITDA, Adjusted EBITDA, Adjusted Net
Loss and Adjusted Net Loss per share to provide investors with
supplemental measures of our operating performance. We believe
these are important supplemental measures of operating performance
because they eliminate items that have less bearing on our
Company-wide operating performance and thus highlight trends in our
core business that may not otherwise be apparent when relying
solely on financial measures in accordance with GAAP. We also
believe that securities analysts, investors and other interested
parties frequently use EBITDA, Adjusted EBITDA, Adjusted Net Loss
and Adjusted Net Loss per share in evaluating issuers. Because
other companies in some cases calculate EBITDA, Adjusted EBITDA,
Adjusted Net Loss or Adjusted Net Loss per share differently from
the way we calculate such measures, these metrics may not be
comparable to similarly titled measures reported by other
companies. Additionally, supplemental non-GAAP financial measures
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
The use of these measures permits a comparative assessment of
the Company's operating performance relative to its performance
based on GAAP results, while isolating the effects of certain items
that vary from period to period without correlation to core
operating performance and certain items that vary widely among
similar companies. However, the inclusion of these adjusted
measures should not be construed as an indication that future
results will be unaffected by unusual or infrequent items or that
the items for which the adjustments have been made are necessarily
unusual or infrequent.
Available in this release is the reconciliation of estimated Net
Loss, the most directly comparable GAAP measure to estimated
EBITDA, Adjusted EBITDA, Adjusted Net Loss and Adjusted Net Loss
per share, all of which are non-GAAP financial measures. EBITDA is
defined as Net Loss before interest, taxes, and depreciation and
amortization. Adjusted EBITDA is defined as EBITDA, excluding
certain expenses including, but not limited to, Closures and
Impairments, Net. Adjusted Net Loss is defined as Net Loss
excluding certain expenses as defined in Adjusted EBITDA as well as
Income Tax Benefit from Adjustments and Income Tax Benefit Adjusted
to the Statutory Rate. Adjusted Net Loss per share is defined as
Adjusted Net Loss divided by diluted shares outstanding.
Non-GAAP Reconciliation Table
Reconciliation of Estimated EBITDA,
Adjusted EBITDA, Adjusted Net Loss, and Adjusted Net Loss Per
Share
(Amounts in thousands except per share amounts)
(Unaudited) Low High 13 Weeks 13
Weeks Ended Ended August 30, August 30, 2016 2016
Estimated Net Loss $ (40,212 ) $
(44,212 ) Depreciation and Amortization 11,229
11,229 Interest Expense, net 4,877 4,877 Benefit for Income Taxes
(1,615 ) (1,775 )
EBITDA $
(25,721 ) $ (29,881 ) Closures
and Impairments, Net (1) 31,712 33,712
Adjusted EBITDA $ 5,991 $
3,831 Estimated Net Loss $
(40,212 ) $ (44,212 )
Closures and Impairments, Net (1) 31,712 33,712 Income Tax Benefit
from Adjustments (2) (12,586 ) (13,380 ) Income Tax Benefit
Adjusted to Statutory Rate (3) 14,986 16,477
Adjusted Net Loss $ (6,100 )
$ (7,403 )
Net Loss Per Share $ (0.67 )
$ (0.74 ) Adjusted Net Loss Per
Share $ (0.10 ) $ (0.12
) Basic Shares Outstanding 59,790
59,790 Diluted Shares Outstanding
59,790 59,790
(1) Includes property impairments, closed restaurant lease
reserves, closing cost adjustments, and gain on the sale of surplus
properties. (2) Represents the tax impact of the adjustments to Net
Loss at the Company's statutory tax rate (39.69%). (3) Represents
the Company's Income Tax Benefit adjusted to the Company's
statutory tax rate.
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version on businesswire.com: http://www.businesswire.com/news/home/20160913006651/en/
Investor RelationsICRMelissa Calandruccio, (646)
277-1273RubyTuesdayIR@icrinc.comorMedia
RelationsICRChristine Beggan, (203)
682-8329RubyTuesday@icrinc.com
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