UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
11-K
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x
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended:
December 31, 2007
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
Commission file number
1-12454
A.
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Full title of the plan and the address of the plan, if different from that of the issuer named below:
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RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
B.
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Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
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RUBY TUESDAY, INC.
150 West Church Avenue
Maryville, TN 37801
Exhibit index appears at page 15. This report contains a total of 16 pages.
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Financial Statements
and Supplemental Schedule
December 31, 2007 and 2006
(With Report of Independent Registered Public Accounting Firm Thereon)
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Table of Contents
Report of Independent Registered Public Accounting Firm
Participants and Plan Committee of the Ruby Tuesday, Inc. Salary Deferral Plan:
We have audited the accompanying statements of net assets available for benefits of the Ruby Tuesday, Inc. Salary Deferral Plan (the Plan) as of December 31, 2007 and 2006, and the related statement of changes in net assets available for benefits for the year ended December 31, 2007. These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Ruby Tuesday, Inc. Salary Deferral Plan as of December 31, 2007 and 2006, and the changes in net assets available for benefits for the year ended December 31, 2007 in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plans management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Louisville, Kentucky
June 27, 2008
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Statements of Net Assets Available for Benefits
December 31, 2007 and 2006
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2007
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2006
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Assets:
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Investment at fair value:
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Company stock fund
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$
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1,904,895
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$
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5,198,505
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Mutual funds
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19,696,819
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15,753,930
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Common/collective trust
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2,991,998
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2,561,642
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Loans to participants
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913,018
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725,209
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Total investments at fair value
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25,506,730
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24,239,286
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Contributions receivable:
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Participants
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__
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7,584
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Employer
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__
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902
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__
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8,486
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Net assets available for benefits at fair value
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25,506,730
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24,247,772
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Adjustment to contract value:
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Adjustment from fair value to contract value for fully benefit-responsive investment contracts
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9,003
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36,372
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Net assets available for benefits
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$
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25,515,733
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$
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24,284,144
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See accompanying notes to financial statements.
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RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Statement of Changes in Net Assets Available for Benefits
December 31, 2007
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Additions:
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Contributions:
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Participants
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$
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3,624,180
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Employer
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892,001
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Total additions
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4,516,181
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Deductions:
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Investment income (loss):
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Net depreciation in fair value of investments
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(2,299,221)
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Dividends and interest income
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433,136
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Total investment loss
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(1,866,085)
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Distributions to participants
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(2,177,941)
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Administrative expenses
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(66,310)
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Total deductions
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(4,110,336)
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Net increase in net assets before transfers from other plans
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405,845
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Net transfers from other plans
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825,744
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Net increase
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1,231,589
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Net assets available for benefits at beginning of year
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24,284,144
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Net assets available for benefits at end of year
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$
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25,515,733
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See accompanying notes to financial statements.
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RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
(1)
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Description of the Plan
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The following description of the Ruby Tuesday, Inc. Salary Deferral Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan document for a more complete description of the Plans provisions.
The Plan is a voluntary, defined contribution plan covering all employees of Ruby Tuesday, Inc. (the Company). Employees are eligible to participate in the Plan at six months of service and age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The general administration of the Plan is the responsibility of the Plan Committee (the Committee) which consists of at least two persons and not more than seven persons appointed by the Companys Board of Directors.
Participants may contribute between 2% and 50% of their annual pre-tax compensation as defined in the Plan subject to certain limits. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans and between 1% and 10% of their annual compensation as after-tax contributions. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers a Company stock fund, seventeen mutual funds and one stable return fund as investment options for participants. Prior to January 1, 2007 the Company matched 20% of the participants pre-tax contribution for those employees who had completed at least 3 years of service but fewer than 10 years of service; 30% of the participants pre-tax contribution for those employees who had completed at
least 10 years of service but fewer than 20 years; and 40% of the participants pre-tax contribution for those employees who had completed at least 20 years of service.
On December 14, 2006, the Plan was amended whereby the Company will match, up to the first six percent of annual pre-tax compensation, 20% of the participants pre-tax contribution for those employees who have completed less than 5 years of service; 40% of the participants pre-tax contribution for those employees who have completed at least 5 years of service but fewer than 10 years of service; and 50% of the participants pre-tax contribution for those employees who have completed at least 10 years of service, for all contributions made after January 1, 2007. The maximum employee contribution to the Plan and the maximum contribution to which an employer match would be credited for the 2007 plan year was $15,500.
Each participants account is credited with the participants contribution and allocations of the Companys contribution and Plan earnings (losses), and charged with an allocation of administrative expenses. Allocations are based on participant earnings (losses) or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participants vested account.
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
Prior to January 1, 2007, participants were 100% vested in their contributions and respective matching Company contributions plus actual earnings thereon.
On December 14, 2006, the Plan was amended to establish new vesting provisions effective January 1, 2007 whereby participants are 100% vested in the matching Company contributions plus actual earnings thereon after the completion of 3 years of service.
On termination of service due to death, disability, or retirement, the participant or the beneficiary of the participant shall receive a lump-sum payment in cash.
Participants may borrow from their fund accounts a minimum of $500 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance at an interest rate of prime +1%. The loans are secured by the balance in the participants account. Loans outstanding at December 31, 2007 and 2006 had interest rates ranging from 4.75% to 10.50% and 4.50% to 10.50%, respectively.
At December 31, 2007 and 2006, forfeited nonvested accounts totaled $12,178 and $0, respectively. These accounts will be used to reduce future employer contributions. Also in 2007, employer contributions were reduced by $2,955 from forfeited nonvested accounts.
(2)
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Summary of Significant Accounting Policies
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The financial statements of the Plan are prepared under the accrual method of accounting.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of net assets available for benefits and the reported changes in such net assets available for benefits during the reported period. Actual results may differ from those estimates.
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(c)
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Investment Valuation and Income Recognition
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Investments in mutual funds are stated at fair value based on quoted market prices on the last business day of the Plan year. Ruby Tuesday, Inc. common stock is traded on the New York Stock Exchange and is valued at the quoted market price on the last business day of the Plan year. Participant loans are valued at their outstanding balances, which approximates fair value.
As described in Financial Accounting Standards Board (FASB) Staff Positions, FSP AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (FSP),
investment contracts held in a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under terms of the Plan. The Plan invests in fully benefit-responsive investment contracts held in the common/collective trust. The Plan adopted the FSP as of December 31, 2006. The Statement of Net Assets Available for Benefits presents the fair value of these investment contracts as well as their adjustment from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual method. Dividends are recorded on the ex-dividend date.
Administrative expenses of the Plan are paid by the Company to the extent not paid with Plan assets.
Benefits are recorded when paid.
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(f)
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New Accounting Pronouncements
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In September 2007, the FASB issued Statement of Financial Accounting Standards No. 157 (SFAS 157),
Fair Value Measurements
. SFAS 157 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurement. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Plan is currently evaluating the impact SFAS 157 will have on the financial statements.
In June 2006, the FASB issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes
,
an interpretation of FASB Statement No. 109
(FIN 48). FIN 48 permits an entity to recognize the benefits of uncertain tax positions only where the position is more likely than not to be sustained in the event of examination by tax authorities. The maximum tax benefit recognized is limited to the amount that is more than 50% likely to be realized upon ultimate settlement. The Plan adopted FIN 48 effective January 1, 2007. The adoption of FIN 48 did not have a material impact on the Plans financial statements.
The Plans investments are held by a trust fund that is administered by Wells Fargo Bank N.A., who has served as trustee since January 2005.
The fair value of individual investments that represent 5% or more of the Plans net assets at December 31, 2007 and 2006 are as follows:
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
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2007
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2006
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Investments at fair value as determined by quoted market prices:
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Company stock fund:
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Ruby Tuesday, Inc. common stock pool
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$ 1,904,895
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$ 5,198,505
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Mutual funds:
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Wells Fargo Advantage Small Cap Value Fund
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3,774,638
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3,383,729
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Oppenheimer Global Fund
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2,477,858
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2,224,399
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Putnam Asset Allocation Balanced Portfolio Class A Fund
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1,708,482
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*
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Davis NY Venture Fund A
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1,684,483
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1,524,185
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Wells Fargo Advantage Index Fund
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1,594,969
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1,404,829
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Dodge & Cox International Stock Fund
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1,430,924
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*
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Wells Fargo Advantage Total Return Bond Fund
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1,348,998
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1,269,971
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Investments at estimated fair value:
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Common/collective trust:
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Wells Fargo Stable Return Fund S
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2,991,998
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2,561,642
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* Less than 5% of plans net assets in applicable year
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During the year ended December 31, 2007, the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $2,299,221 as follows:
Company stock fund
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$ (3,261,629)
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Mutual funds
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827,820
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Common/collective trust
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134,588
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Total
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$ (2,299,221)
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Although it has not expressed any intent to do so, the Plan may be terminated at any time by the Companys Board of Directors. Upon termination, all assets are to be distributed to Plan participants or their beneficiaries. Each participant would become 100% vested in their employer contributions and would receive a proportionate share of the remaining assets, as determined by the individual account balances, on the date of termination.
The Internal Revenue Service has determined and informed the Company by a letter dated March 13, 2002, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (the IRC). Although the Plan has been amended since receiving the determination letter, the Committee and the Plans tax counsel believe that the Plan is designed and currently being operated in compliance with the applicable requirements of the IRC.
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
(6)
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Transactions with Parties-In-Interest
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The Company stock fund invests in Company stock. At December 31, 2007 and 2006, this fund held 187,009 and 182,309 shares of Company stock, respectively, with market values of $1,823,338 or $9.75 per share and $5,002,559 or $27.44 per share, respectively. The Company stock fund also held $81,557 and $195,946 in the Wells Fargo Advantage Money Market Fund as of December 31, 2007 and 2006, respectively.
Certain Plan investments are shares of mutual funds, a common/collective trust, and a money market fund managed by Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. is the trustee as defined by the Plan and, therefore, transactions involving these investments qualify as party-in-interest transactions. Fees paid by the Plan for investment management services amounted to $66,310 for the year ended December 31, 2007.
(7)
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Net Transfers From Other Plans
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In December 2006, the Company, through its subsidiaries, acquired the remaining partnership interests in RT South Florida Franchise, LP (RT South Florida). Participant balances held by the RTI Franchise Management Association, Inc. 401(k) Plan for RT South Florida employees were transferred into the Plan in April 2007
.
In June 2007, the Company, through its subsidiaries, acquired the remaining partnership interests in RT West Palm Beach Franchise, LP (RT West Palm Beach). Participant balances held by the RTI Franchise Management Association, Inc. 401(k) Plan for RT West Palm Beach employees were transferred into the Plan in July 2007.
Plan asset transfers are as follows:
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Net assets transferred from RT West Palm Beach
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$490,467
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Net assets transferred from RT South Florida
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335,277
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$825,744
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(8)
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Reconciliation of Financial Statements to Form 5500
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The following is a reconciliation of net assets available for benefits according to the financial statements to the Form 5500 as of December 31, 2007:
Net assets available for benefits per the financial statements
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$
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25,515,733
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Less adjustment from fair value to contract value for fully benefit-
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responsive investments contracts
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(9,003)
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Net assets available for benefits per the Form 5500
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$
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25,506,730
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RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
Notes to Financial Statements
December 31, 2007 and December 31, 2006
The following is a reconciliation of investment loss per the financial statements to the Form 5500:
Total investment loss per the financial statements
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$
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(1,866,085)
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Less adjustment from fair value to contract value for fully benefit-
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responsive investment contracts
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(9,003)
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Total investment loss per the Form 5500
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$
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(1,875,088)
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(9)
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Risks and Uncertainties
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The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate and market risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants account balances and the amounts reported in the statements of net assets available for benefits.
In October 2007, the Company, through its subsidiaries, acquired the remaining partnership interest in RT Michigan Franchise, LLC (RT Michigan) and RT Detroit Franchise, LLC (RT Detroit). In January 2008, participant balances held by the RTI Franchise Management Association, Inc. 401(k) Plan for RT Michigan and RT Detroit employees totaling approximately $379,000 were transferred into the Plan.
RUBY TUESDAY, INC. SALARY DEFERRAL PLAN
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Schedule of Assets (Held at End of Year)
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Form 5500 Schedule H Part IV 4i
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EIN: 63-0475239
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Plan Number 001
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December 31, 2007
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Identity of Issuer, Borrower,
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Current
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Lessor or Similar Party
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Description of investment
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Cost
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Value
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Investments:
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Company Stock Fund **:
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Ruby Tuesday, Inc. common stock pool*
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187,009 shares of common stock
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$
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2,432,846
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$
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1,904,895
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Mutual Funds:
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Wells Fargo Advantage Small Cap Value Fund*
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128,273 shares of mutual fund
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3,515,168
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|
3,774,638
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Oppenheimer Global Fund
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34,081 shares of mutual fund
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2,050,386
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2,477,858
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Putnam Asset Allocation Balanced Portfolio Class A Fund
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138,243 shares of mutual fund
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1,649,361
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|
1,708,482
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Davis NY Venture Fund A
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42,020 shares of mutual fund
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|
1,457,049
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|
1,684,483
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Wells Fargo Advantage Index Fund*
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28,608 shares of mutual fund
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1,308,844
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|
1,594,969
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Dodge & Cox International Stock Fund
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29,375 shares of mutual fund
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|
1,338,805
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|
1,430,924
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Wells Fargo Advantage Total Return Bond Fund*
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109,761 shares of mutual fund
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|
1,369,894
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|
1,348,998
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Putnam Asset Allocation Growth Portfolio Class A Fund
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85,821 shares of mutual fund
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|
1,165,088
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|
1,233,252
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Calamos Growth
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12,835 shares of mutual fund
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|
710,729
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|
750,420
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American Funds Fundamental Investors
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|
16,049 shares of mutual funds
|
|
739,384
|
|
712,596
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DWS Dreman High Return Equity Fund
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|
11,853 shares of mutual fund
|
|
567,820
|
|
551,405
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|
Wells Fargo Advantage Mid Cap Disciplined Fund*
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|
28,182 shares of mutual fund
|
|
623,744
|
|
551,237
|
|
Oppenheimer Capital Appreciation
|
|
10,525 shares of mutual fund
|
|
465,580
|
|
543,452
|
|
Putnam Asset Allocation Conservative Class A Fund
|
|
44,222 shares of mutual fund
|
|
421,575
|
|
429,394
|
|
Pimco Total Return
|
|
37,694 shares of mutual fund
|
|
396,622
|
|
400,719
|
|
Pimco High Yield
|
|
38,249 shares of mutual fund
|
|
374,710
|
|
366,307
|
|
American Growth Fund of America Class
|
|
4,078 shares of mutual fund
|
|
144,419
|
|
137,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Mutual Funds
|
|
|
|
18,299,178
|
|
19,696,819
|
Common/collective trust:
|
|
|
|
|
|
|
|
Wells Fargo Stable Return Fund S*
|
|
71,944 shares of fund
|
|
2,820,503
|
|
2,991,998
|
Participant Loans
|
|
Interest rates ranging from
4.75% to 10.50%
|
|
|
|
913,018
|
|
|
|
|
|
|
Total Investments
|
$
|
23,552,527
|
$
|
25,506,730
|
* Represents a party-in-interest
|
|
|
|
|
|
|
** Includes Wells Fargo Advantage Money Market balance of $81,557.
|
|
|
|
|
See accompanying report of independent registered public accounting firm.
|
|
|
|
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SIGNATURES
Ruby Tuesday, Inc. Salary Deferral Plan. Pursuant to the requirements of the Securities and Exchange Act of 1934, the Plan Committee of the Ruby Tuesday, Inc. Salary Deferral Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
RUBY TUESDAY, INC SALARY DEFERRAL PLAN
|
Date: 6/27/08
|
/s/ Marguerite N. Duffy
|
|
Chair, Plan Committee of the Ruby Tuesday, Inc. Salary Deferral Plan
|
Exhibit Index
Exhibit Number
|
Description
|
Page Number
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|
23
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm,
|
16
|
|
dated June 27, 2008
|
|
Exhibit 23
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Ruby Tuesday, Inc.:
We consent to the incorporation by reference in the registration statements (Nos. 033-20585 and 333-03153) on Form S-8 of Ruby Tuesday, Inc. of our report dated June 27, 2008, with respect to the financial statements and supplemental schedule of the Ruby Tuesday, Inc. Salary Deferral Plan as of December 31, 2007 and 2006 and for the year ended December 31, 2007, which report appears in the December 31, 2007 annual report on Form 11-K of the Ruby Tuesday, Inc. Salary Deferral Plan.
/s/ KPMG LLP
Louisville, Kentucky
June 27, 2008
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