GREER, S.C., April 26 /PRNewswire-FirstCall/ -- Ryan's Restaurant
Group, Inc. (NASDAQ:RYAN) reported first quarter 2006 results
today. First quarter restaurant sales were $213,717,000 in 2006
compared to $209,639,000 for the comparable quarter in 2005. Net
earnings for the quarter amounted to $10,796,000 in 2006 and
$11,813,000 in 2005. Earnings per share (diluted) amounted to 25
cents in 2006 compared to 28 cents in 2005. Commenting on the
quarter, Charles D. Way, CEO of the Company, said, "Our restaurants
achieved good sales improvements during the first quarter, with
average weekly sales up 3.4% and same-store sales up 1.7%. These
higher sales occurred in spite of an unfavorable mismatch in 2006
with the timing of Easter, which took place during the first
quarter of 2005 but falls in the second quarter (April) of 2006. In
addition, our average weekly sales during the quarter set a new
first quarter record. Weekend breakfast was being served in 197
restaurants at the end of the quarter, and we continue to be
pleased with this program. We are starting breakfast at about 20
restaurants per month and plan to complete the roll-out by the end
of the year." "Costs were well-controlled during the quarter, and,
despite a $1.7 million increase in utility costs, we saw a slight
increase in store operating margin. Our operations staff focused on
strong food and hourly payroll controls, resulting in a combined 60
basis point decrease in these costs as a percent of sales. We also
incurred lower pre-opening, repairs and maintenance and general
liability insurance costs. These cost decreases were very important
to the quarter's results because they effectively offset a 90 basis
point increase in utility costs." "Other notable first quarter
items include a $516,000 pre-tax charge for stock option
compensation, resulting from a newly effective accounting rule and
largely included in general and administrative expenses, and a 2.9%
increase in our effective tax rate due to higher state income taxes
and the expiration of the federal Work Opportunity Tax Credit
("WOTC") program. Although Congress is considering the extension of
the WOTC program and we expect the extension to occur, we can only
recognize expected future WOTC benefits when the program is
officially reimplemented. In 2005, credits from the WOTC program
reduced our income taxes by approximately $700,000." "We opened two
new restaurants and closed four locations during the quarter. We
also re-opened two other restaurants in the New Orleans metro area
that closed as a result of Hurricane Katrina. Our current plans
call for two new restaurants during the second half of the year.
This reduced level of new store activity is consistent with our
previously disclosed plans to reduce capital expenditures in 2006
and apply the resulting excess cash to debt reduction. Although our
balance sheets only indicate a $1.5 million debt reduction during
the first quarter, we repaid $13.3 million in debt on March 30 (the
first day of our second fiscal quarter) and expect to see other
significant repayments during the second quarter. Finally, we
continue to see good results from the two cost-effective display
cooking conversions that were completed in October 2005 and January
2006. We believe that future similar conversions will cost between
$100,000 and $350,000, depending on the layout and age of the
restaurant, and we currently plan to convert another five locations
during the first half of 2006 as we further evaluate and adjust
this program." At March 29, 2006, the Company owned and operated
337 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. EDT. The public can listen
to a live webcast of this call by logging on to the web at
http://www.ryans.com/ and 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; an adverse food
safety event; weather fluctuations; interest rate fluctuations;
stock market conditions; political environment (including acts of
terrorism and wars); 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 March 29, March
30, 2006 2005 Restaurant sales $213,717,000 209,639,000 Cost of
sales: Food and beverage 73,512,000 72,613,000 Payroll and benefits
68,166,000 67,991,000 Depreciation 8,458,000 8,285,000 Impairment
charges 244,000 167,000 Other restaurant expenses 33,474,000
31,521,000 Total cost of sales 183,854,000 180,577,000 General and
administrative expenses 11,465,000 10,470,000 Interest expense
2,399,000 2,360,000 Royalties from franchised restaurants -
(174,000) Other income, net (829,000) (1,200,000) Earnings before
income taxes 16,828,000 17,606,000 Income taxes 6,032,000 5,793,000
Net earnings $10,796,000 11,813,000 Net earnings per common share:
Basic $.26 .28 Diluted .25 .28 Weighted-average shares: Basic
42,153,000 41,938,000 Diluted 42,576,000 42,634,000 RYAN'S
RESTAURANT GROUP, INC. CONSOLIDATED BALANCE SHEETS March 29,
December 28, 2006 2005 ASSETS (Unaudited) Current assets: Cash and
cash equivalents $33,770,000 5,120,000 Receivables 5,198,000
5,007,000 Inventories 5,856,000 5,176,000 Prepaid expenses
1,042,000 985,000 Deferred income taxes 7,951,000 7,417,000 Total
current assets 53,817,000 23,705,000 Property and equipment: Land
and improvements 169,247,000 170,424,000 Buildings 510,610,000
513,932,000 Equipment 284,733,000 287,581,000 Construction in
progress 15,130,000 23,405,000 979,720,000 995,342,000 Less
accumulated depreciation 318,747,000 323,012,000 Net property and
equipment 660,973,000 672,330,000 Other assets 11,102,000
10,793,000 Total assets $725,892,000 706,828,000 LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable
7,834,000 6,468,000 Current portion of long-term debt 18,750,000
18,750,000 Income taxes payable 8,493,000 4,118,000 Accrued
liabilities 49,469,000 46,691,000 Total current liabilities
84,546,000 76,027,000 Long-term debt 153,050,000 154,500,000
Deferred income taxes 46,936,000 46,768,000 Other long-term
liabilities 5,878,000 5,899,000 Total liabilities 290,410,000
283,194,000 Shareholders' equity: Common stock of $1.00 par value;
authorized 100,000,000 shares; issued 42,182,000 shares in 2006 and
42,122,000 shares in 2005 42,182,000 42,122,000 Additional paid-in
capital 6,286,000 5,294,000 Retained earnings 387,014,000
376,218,000 Total shareholders' equity 435,482,000 423,634,000
Commitments and contingencies Total liabilities and shareholders'
equity $725,892,000 706,828,000 RYAN'S RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months
Ended March 29, March 30, 2006 2005 Cash flows from operating
activities: Net earnings $ 10,796,000 11,813,000 Adjustments to
reconcile net earnings to net cash provided by operating
activities: Depreciation and amortization 8,929,000 8,763,000
Impairment charges 244,000 167,000 Gain on sale of property and
equipment (1,253,000) (629,000) Stock option compensation 516,000 -
Deferred income taxes (366,000) 196,000 Decrease (increase) in:
Receivables (191,000) 595,000 Inventories (680,000) (1,165,000)
Prepaid expenses (57,000) 79,000 Other assets (363,000) (237,000)
Increase (decrease) in: Accounts payable 1,366,000 3,474,000 Income
taxes payable 4,375,000 5,079,000 Accrued liabilities 2,778,000
738,000 Other long-term liabilities (21,000) 268,000 Net cash
provided by operating activities 26,073,000 29,141,000 Cash flows
from investing activities: Proceeds from sale of property and
equipment 8,884,000 1,955,000 Capital expenditures (5,393,000)
(22,177,000) Net cash provided by (used in) investing activities
3,491,000 (20,222,000) Cash flows from financing activities: Net
borrowings from revolving credit facility 17,300,000 24,500,000
Repayment of senior notes (18,750,000) (18,750,000) Proceeds from
stock options exercised 439,000 783,000 Tax benefit from exercise
of stock options 97,000 216,000 Purchase of common stock - (23,000)
Net cash provided by (used in) financing activities (914,000)
6,726,000 Net increase in cash and cash equivalents 28,650,000
15,645,000 Cash and cash equivalents - beginning of period
5,120,000 7,354,000 Cash and cash equivalents - end of period $
33,770,000 22,999,000 Supplemental disclosures Cash paid during
period for: Interest, net of amount capitalized $ 3,793,000
4,226,000 Income taxes 1,926,000 302,000 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.ryansrg.com/
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