– Company
Announces Short-term Measures to Enhance Financial Strength &
Flexibility –
Ruth’s Hospitality Group, Inc. (the “Company”) (NASDAQ: RUTH)
today announced steps that the Company has taken to implement
conservative cash management strategies designed to increase
available liquidity and maximize financial flexibility until the
COVID-19 pandemic abates and market conditions stabilize.
“The safety and well-being of our team members and guests is our
priority in these challenging times. Our brand has a rich history
of rising to the occasion and I am proud of our team’s response to
this unprecedented situation,” said Cheryl Henry, President and
Chief Executive Officer of Ruth’s Hospitality Group, Inc. “Our
management team and Board of Directors have taken significant
measures to enhance our financial flexibility during this time
which includes drawing down and expanding our credit facility,
suspending our dividend, and materially reducing capital
expenditures as we weather the challenges related to COVID-19.”
Borrowings Under Senior Credit Facility
As previously announced, on March 16th, 2020, the Company
increased its cash position by drawing down its remaining
availability under its $120 million revolving credit facility.
Additionally, on March 26, 2020, the Company exercised the $30.0
million accordion feature in the existing facility and, as a
precautionary measure, drew down that balance. As of March 27,
2020, the Company had approximately $71.5 million of cash on
hand.
Actions Taken To Improve Liquidity
Additional measures to enhance the Company’s financial
flexibility include suspending all new restaurant construction and
non-essential capital expenditures which are expected to lower
annual capital expenditures by over $35 million. The Company has
also suspended its quarterly dividend. Ruth’s Chris has also made
significant reductions in ongoing operating expenses, including
curtailing operations in 23 restaurants locations where take-out
and delivery is not viable, furloughing a significant number of
field and home office team members, reducing base salaries of all
non-furloughed team members and reevaluating other operating costs
as opportunities arise. Certain operational team members have been
re-deployed to support the take-out and delivery operations of
restaurants which are still operating.
Lastly, Ms. Henry and the other members of the executive team
have elected to reduce their 2020 base salaries effective March 30,
2020. Non-employee directors of the Company have also elected to
suspend payment of their annual cash retainer fees for service on
the board.
Ruth’s Anywhere
Due to the state mandates regarding limited or no in-restaurant
dining due to COVID-19, the Company is leveraging its Ruth’s
Anywhere program in markets where take-out and delivery sales are
sufficient to cover the costs of management staffing those
locations. At this time, Ruth’s Chris is currently operating many
of its domestic restaurants in take-out or delivery mode, with no
dining rooms currently open for operation. Delivery is available in
all of those locations via third-party delivery networks and those
partners vary by location. The Ruth’s Anywhere Program will offer a
streamlined menu available on its website here, featuring many
guest favorites.
Financial Guidance
Lastly, due to the ongoing uncertainty around the duration and
severity of the COVID-19 pandemic, the company has withdrawn its
financial guidance for fiscal year 2020.
Further details regarding the credit agreement and financial
actions described in this release may be found in the Company’s
Current Report on Form 8-K filed today. The Company currently
expects to provide additional updates on the business when it
announces its first quarter 2020 financial results.
About Ruth’s Hospitality Group, Inc.
Ruth's Chris Steak House was founded by Ruth Fertel over 50
years ago in New Orleans, Louisiana. Ruth had a recipe for
everything – from how to prepare her signature sizzling steaks to
how to treat her guests. This timeless formula is a testament to
how one neighborhood eatery has become the largest collection of
upscale steak houses in the world, with over 150 restaurant
locations around the globe. Ruth's Chris remains true to its
heritage, helping guests make their best memories on 500-degree
sizzling plates. This is how it's done.
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
actions to be taken in response to the novel strain of coronavirus
(COVID-19) that has spread globally, capital expenditures,
strategy, and financial outlook, 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, including the
impact the COVID-19 pandemic; the impact of actions taken to
address the COVID-19 pandemic, including additional borrowings
under our credit facility; 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 income taxes, unclaimed property, 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 inability to successfully
integrate franchisee acquisitions into the Company’s business
operations; a material failure, interruption or security breach of
the Company’s information technology network; the Company’s
indemnification obligations in connection with its 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 29, 2019, 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 presentation to reflect events or circumstances after
the date hereof. You should not assume that material events
subsequent to the date of this presentation 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200330005197/en/
Investor Relations Fitzhugh
Taylor (203) 682-8261 ftaylor@icrinc.com
Ruths Hospitality (NASDAQ:RUTH)
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