Ruby Tuesday, Inc. Reports First Quarter Fiscal 2010 Results

Ruby Tuesday, Inc. today reported diluted earnings per share of $0.11 on net income of $6.1 million for the Company's first quarter of fiscal 2010, which ended on September 1, 2009. This compares to diluted earnings per share of $0.01 on net income of $285 thousand for the first quarter of the prior year.

Same-restaurant sales for the first quarter decreased 3.1% and 6.5% at Company-owned and domestic franchise Ruby Tuesday restaurants, respectively, compared to the same quarter of the prior year. Guest traffic at Company-owned same-restaurants was up in the quarter and built on the positive momentum of the fiscal 2009 fourth quarter.

Sandy Beall, Founder and CEO, commented on the results, saying, 'Although the environment remains challenging, we are pleased that the momentum we established in the second half of fiscal 2009 through our marketing strategies and cost savings initiatives continued in the first quarter. Highlights from our first quarter results include:

• Same-restaurant guest counts increased for the second consecutive quarter;

• Same-restaurant sales and guest counts continued to outperform our peers as measured by Knapp-TrackTM;

• Same-restaurant sales were down 3.1%;

• Solid profitability improvement;

• We paid down $107.0 million of debt during the quarter, boosted by applying the net proceeds of approximately $73 million from our equity offering in July to debt retirement.

'Our top priorities for the remainder of the year remain unchanged. First, get guests in seats, thereby increasing restaurant traffic and ultimately sales. Our guests are responding to our strategic focus on Compelling Value as evidenced by our positive traffic. Second, we remain highly focused on maximizing our cash flow and reducing debt. Our third priority is to further strengthen and differentiate our brand through quality and remaining true to our core operating strategies: Uncompromising Freshness and Quality of our food; service with Gracious Hospitality; a Fresh New Look for our restaurants; and offering Compelling Value. We are confident in these strategies and believe that our team's unwavering focus on them is contributing to our momentum.'

Highlights for the 13-week first quarter included:

• Total revenue decreased 7.2% from the same period of the prior year primarily because of 45 fewer restaurants in operation and the decrease in same-restaurant sales.

• The Company closed two restaurants and did not open any.

• Domestic and international franchisees closed three restaurants and did not open any.

• Sales at domestic and international franchise Ruby Tuesday restaurants (which is the basis for determining royalty fees included in franchise revenue on the Company's statement of operations) totaled $94.8 million and $99.7 million for the first quarter of fiscal 2010 and 2009, respectively.

• Total capital expenditures were $3.8 million.

• Debt was reduced by $107.0 million.

• The Company sold 11.5 million common shares, raising a net of approximately $73 million which was used to pay down debt.

• The Company had approximately 64 million shares of common stock outstanding at the end of the quarter.

Fiscal Year 2010 Guidance

• New restaurant development - No new Company-owned Ruby Tuesday restaurants will be opened in fiscal 2010 and a total of 15 are projected to close as part of our previously announced plan to close 30 restaurants over time when their leases expire. We project our franchisees will open 6 restaurants, 3 of which will be international.

• Same-restaurant sales - We estimate same-restaurant sales for the year for Company-owned restaurants will be in the range of down 1% to down 3%.

• Restaurant operating margins are anticipated to be down primarily reflecting the impact of our marketing strategy to emphasize Compelling Value and its impact on food costs as a percentage of sales and some loss of leverage from the anticipated decline in same-restaurant sales. The cost of our food products is expected to remain favorable compared with the prior year.

• Other expenses - Depreciation is projected in the $62-65 million range and selling, general, and administrative expenses are targeted to be down approximately 10% from a year earlier. Interest expense is projected to be $18-20 million and the tax rate is estimated to be 10-20%. Fully diluted weighted average shares outstanding are estimated to be approximately 62 million for the year.

• Diluted earnings per share for the year are projected to be in the $0.50-0.60 range.

• Capital expenditures for the year are estimated to be $18-20 million.

In closing, Mr. Beall said, 'While we are pleased with our results in the first quarter, our team is determined to work harder and smarter with a continued focus on our restaurant operations and our core operating strategies I mentioned earlier. We will continue to differentiate the Ruby Tuesday brand and execute on our mission statement: to consistently deliver a memorable, high-quality casual dining experience with compelling value. We continue to have challenges ahead, but our recent trends are encouraging and I believe the worst is behind us. We believe the decisions we have made over the last year have clearly resulted in positive momentum and we believe they have positioned us well for the long term.'

Ruby Tuesday, Inc. has Company-owned and/or franchise Ruby Tuesday brand restaurants in 46 states, the District of Columbia, Guam, and 13 foreign countries. As of September 1, 2009, the Company owned and operated 670 Ruby Tuesday restaurants, while domestic and international franchisees (including Hawaii) operated 171 and 55 restaurants, respectively. For more information on Ruby Tuesday, please visit our company website at www.rubytuesday.com. Ruby Tuesday, Inc. is traded on the New York Stock Exchange (Symbol: RT).

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