GREER, S.C., Feb. 1 /PRNewswire-FirstCall/ -- Ryan's Restaurant
Group, Inc. (NASDAQ:RYAN) today reported financial results for the
fourth quarter and fiscal year 2005. Fourth quarter restaurant
sales amounted to $196.9 million compared to $193.5 million during
the comparable quarter of 2004. Net earnings were $4,143,000 for
the fourth quarter of 2005 and $8,170,000 for the fourth quarter of
2004. Earnings per share (diluted) were 10 cents and 19 cents for
the fourth quarters of 2005 and 2004, respectively. For the year
ended December 28, 2005, restaurant sales amounted to $825.0
million compared to $827.0 million during 2004. Net earnings were
$26.4 million in 2005 and $46.9 million in 2004. Earnings per share
(diluted) were $0.62 in 2005 compared to $1.09 in 2004. Commenting
on the quarter, Charles D. Way, Chairman and CEO of the Company,
said, "The fourth quarter of 2005 concludes a very difficult year
for Ryan's. Our sales were adversely affected throughout much of
2005 by high gasoline and utility costs which impacted our
customers' discretionary spending. During the fourth quarter, our
sales results improved with same- store sales up by 0.6% for the
quarter compared to a 3.6% decrease for the first nine months of
the year. We believe that this improvement resulted from lower
gasoline prices and affordable utility costs, resulting from the
moderate winter temperatures experienced during the quarter. Our
breakfast program also had significant impact as we implemented
breakfast in 119 restaurants during the quarter. For example,
breakfast sales added 1.0% to December's reported same-store sales
decrease of 0.7%. At year-end, breakfast was in 157 restaurants.
All new restaurants will open with breakfast, and we plan to add
breakfast to our remaining 181 restaurants throughout 2006. We look
forward to improved sales results during 2006. So far, our
same-store sales for January 2006 have been consistently positive.
"Our fourth quarter's cost of sales was impacted primarily by
higher electricity and natural gas costs, which increased by a
combined 1.1% of sales, and by higher impairment charges, which
were also up 1.1% of sales. During the fourth quarter we impaired
one and closed three underperforming units. Our hourly labor costs
also increased during the quarter (+0.3% of sales) due to our
year-long efforts to improve customer service through increased
staffing levels. Absent an increase in the minimum wage rate, we
expect our hourly labor costs to stabilize in 2006 as we
implemented the higher staffing in late-2004. "General and
administrative costs increased principally during the quarter due
to an additional $1 million accrual towards the settlement of a
wage and hour collective-action lawsuit in Tennessee, which, as
disclosed in our SEC filings, has been proceeding since November
2002. At year-end, we had accrued $6 million in total for this
case, representing our estimate of the minimum settlement amount.
We have been in negotiation with the plaintiffs' attorney
throughout the fourth quarter and currently cannot estimate either
the settlement date or the ultimate effect on the Company's
financial results or cash flow. "Regarding 2006, in addition to
implementing breakfast throughout our restaurants, we also plan to
open four new restaurants, including one potential relocation. We
are currently re-evaluating our remodeling program in order to
develop a more cost-efficient prototype that can produce a higher
return-on-investment. We have developed a lower-cost prototype and
are encouraged with its early results, but intend to proceed slowly
with future conversions until we are confident that they will
consistently produce the desired returns. Until then, our plans are
focused on the paydown of debt in order to position us in a strong
financial condition for future growth." At December 28, 2005, the
Company owned and operated 338 restaurants. In connection with this
press release, members of Ryan's executive management will be
holding a conference call with investment analysts today at 4:00
p.m. ET. The public can listen to a live webcast of this call by
logging on to the web at http://www.ryansinc.com/ following the
appropriate links. Certain matters discussed in this press release
are forward-looking statements within the meaning of the federal
securities laws and are subject to uncertainties and risks,
including, but not limited to, general economic conditions,
including consumer confidence levels; competition; developments
affecting the public's perception of buffet-style restaurants; real
estate availability; food and labor supply costs; food and labor
availability; weather fluctuations; interest rate fluctuations;
stock market conditions; political environment (including acts of
terrorism and wars); legislative decisions involving tax issues by
both federal and state governments; and other such risks described
from time to time in the Company's reports filed with the
Securities and Exchange Commission. RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Quarter Ended Year
Ended December 28, December 29, December 28, December 29, 2005 2004
2005 2004 Restaurant sales $196,870,000 193,481,000 824,986,000
827,015,000 Cost of sales: Food and beverage 67,700,000 66,430,000
286,833,000 288,083,000 Payroll and benefits 66,128,000 64,198,000
272,043,000 267,698,000 Depreciation 8,517,000 8,223,000 33,651,000
32,685,000 Impairment charges 2,463,000 371,000 6,527,000 1,539,000
Other restaurant expenses 33,799,000 29,181,000 132,916,000
117,199,000 Total cost of sales 178,607,000 168,403,000 731,970,000
707,204,000 General and administrative expenses 11,868,000
10,654,000 49,369,000 41,416,000 Interest expense 2,553,000
2,608,000 9,696,000 10,640,000 Revenues from franchised restaurants
- (210,000) (344,000) (1,161,000) Other income, net (1,541,000)
(905,000) (4,430,000) (2,602,000) Earnings before income taxes
5,383,000 12,931,000 38,725,000 71,518,000 Income taxes 1,240,000
4,761,000 12,345,000 24,592,000 Net earnings $4,143,000 8,170,000
26,380,000 46,926,000 Earnings per common share: Basic $.10 .20 .63
1.12 Diluted $.10 .19 .62 1.09 Weighted-average shares: Basic
42,051,000 41,811,000 41,969,000 41,803,000 Diluted 42,530,000
42,923,000 42,689,000 43,235,000 RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED BALANCE SHEETS December 28, December 29, 2005 2004
ASSETS (Unaudited) Current assets: Cash and cash equivalents
$5,120,000 7,354,000 Receivables 5,007,000 4,639,000 Inventories
5,176,000 5,611,000 Prepaid expenses 985,000 1,016,000 Deferred
income taxes 7,417,000 5,110,000 Total current assets 23,705,000
23,730,000 Property and equipment: Land and improvements
170,424,000 162,082,000 Buildings 513,932,000 480,781,000 Equipment
287,581,000 271,431,000 Construction in progress 23,405,000
31,531,000 995,342,000 945,825,000 Less accumulated depreciation
323,012,000 295,852,000 Net property and equipment 672,330,000
649,973,000 Other assets 10,793,000 10,643,000 $706,828,000
684,346,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable 6,468,000 5,963,000 Current portion
of long-term debt 18,750,000 18,750,000 Income taxes payable
4,118,000 1,842,000 Accrued liabilities 46,691,000 42,569,000 Total
current liabilities 76,027,000 69,124,000 Long-term debt
154,500,000 164,250,000 Deferred income taxes 46,768,000 47,674,000
Other long-term liabilities 5,899,000 7,692,000 Total liabilities
283,194,000 288,740,000 Shareholders' equity: Common stock of $1.00
par value; authorized 100,000,000 shares; issued 42,122,000 shares
in 2005 and 41,890,000 shares in 2004 42,122,000 41,890,000
Additional paid-in capital 5,294,000 3,878,000 Retained earnings
376,218,000 349,838,000 Total shareholders' equity 423,634,000
395,606,000 Commitments and contingencies $706,828,000 684,346,000
RYAN'S RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Year Ended December 28, December 29, 2005 2004 Cash
flows from operating activities: Net earnings $26,380,000
46,926,000 Adjustments to reconcile net earnings to net cash
provided by operating activities: Depreciation and amortization
35,610,000 34,459,000 Impairment charges 6,527,000 1,539,000 Gain
on sale of property and equipment (1,022,000) (1,706,000) Tax
benefit related to stock option programs 1,082,000 3,337,000
Deferred income taxes (3,213,000) 4,890,000 Decrease (increase) in:
Receivables (368,000) (346,000) Inventories 435,000 37,000 Prepaid
expenses 31,000 742,000 Other assets (258,000) (2,206,000) Increase
(decrease) in: Accounts payable 505,000 (617,000) Income taxes
payable 2,276,000 554,000 Accrued liabilities 4,122,000 643,000
Other long-term liabilities (1,793,000) 1,561,000 Net cash provided
by operating activities 70,314,000 89,813,000 Cash flows from
investing activities: Proceeds from sale of property and equipment
14,078,000 9,877,000 Capital expenditures (77,236,000) (75,754,000)
Net cash used in investing activities (63,158,000) (65,877,000)
Cash flows from financing activities: Net borrowings (repayment) of
revolving credit facility 9,000,000 (13,000,000) Repayment of
senior notes (18,750,000) - Debt issuance costs (206,000) (602,000)
Proceeds from stock options exercised 2,418,000 6,611,000
Repurchases of common stock (1,852,000) (18,208,000) Net cash used
in financing activities (9,390,000) (25,199,000) Net decrease in
cash and cash equivalents (2,234,000) (1,263,000) Cash and cash
equivalents - beginning of period 7,354,000 8,617,000 Cash and cash
equivalents - end of period $5,120,000 7,354,000 Supplemental
disclosures Cash paid during period for: Interest, net of amount
capitalized $10,333,000 10,760,000 Income taxes 12,767,000
16,488,000 First Call Analyst: FCMN Contact: DATASOURCE: Ryan's
Restaurant Group, Inc. CONTACT: Fred T. Grant, Jr., Senior Vice
President - Finance of Ryan's Restaurant Group, Inc.,
+1-864-879-1000 Web site: http://www.ryansinc.com/
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