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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to                      

Commission File Number 000-51485

 

Ruth’s Hospitality Group, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

72-1060618

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

1030 W. Canton Avenue, Suite 100,

Winter Park, FL

32789

(Address of principal executive offices)

(Zip code)

(407) 333-7440

Registrant’s telephone number, including area code

None

Former name, former address and former fiscal year, if changed since last report

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

RUTH

Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated Filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No  

The number of shares outstanding of the registrant’s common stock as of October 25, 2021 was 34,316,618, which includes 557,995 shares of unvested restricted stock.

 

 

 

 

 


 

TABLE OF CONTENTS

 

 

 

 

Page

Part I — Financial Information

 

3

 

 

 

 

Item 1

Financial Statements:

 

3

 

 

 

 

 

Condensed Consolidated Balance Sheets as of September 26, 2021 and December 27, 2020

 

3

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Thirteen and Thirty-nine Week Periods ended September 26, 2021 and September 27, 2020

 

4

 

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the Thirteen and Thirty-nine Week Periods ended September 26, 2021 and September 27, 2020

 

5

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Thirty-nine Week Periods ended September 26, 2021 and September 27, 2020

 

6

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

 

 

 

 

Item 3

Quantitative and Qualitative Disclosures about Market Risk

 

24

 

 

 

 

Item 4

Controls and Procedures

 

25

 

 

 

Part II — Other Information

 

25

 

 

 

 

Item 1

Legal Proceedings

 

25

 

 

 

 

Item 1A

Risk Factors

 

26

 

 

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

26

 

 

 

 

Item 3

Defaults Upon Senior Securities

 

26

 

 

 

 

Item 4

Mine Safety Disclosures

 

26

 

 

 

 

Item 5

Other Information

 

26

 

 

 

 

Item 6

Exhibits

 

27

 

 

 

 

Signatures

 

28

 

2


 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets—Unaudited

(Amounts in thousands, except share and per share data)

 

 

 

September 26,

 

 

December 27,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

83,779

 

 

$

95,402

 

Accounts receivable, less allowance for doubtful accounts 2021 - $108; 2020 - $322

 

 

16,833

 

 

 

24,309

 

Inventory

 

 

7,541

 

 

 

6,930

 

Prepaid expenses and other

 

 

3,253

 

 

 

3,653

 

Total current assets

 

 

111,406

 

 

 

130,294

 

Property and equipment, net of accumulated depreciation 2021 - $190,345; 2020 -

   $177,277

 

 

118,162

 

 

 

119,887

 

Operating lease right of use assets

 

 

170,217

 

 

 

188,386

 

Goodwill

 

 

45,549

 

 

 

45,549

 

Franchise rights, net of accumulated amortization 2021 - $8,218; 2020 - $6,534

 

 

42,800

 

 

 

44,484

 

Other intangibles, net of accumulated amortization 2021 - $1,666; 2020 - $1,569

 

 

5,022

 

 

 

4,114

 

Deferred income taxes

 

 

7,105

 

 

 

8,616

 

Other assets

 

 

1,077

 

 

 

1,344

 

Total assets

 

$

501,338

 

 

$

542,674

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,568

 

 

$

4,101

 

Accrued payroll

 

 

13,193

 

 

 

15,344

 

Accrued expenses

 

 

10,677

 

 

 

6,449

 

Deferred revenue

 

 

52,184

 

 

 

59,030

 

Current operating lease liabilities

 

 

18,852

 

 

 

20,854

 

Other current liabilities

 

 

4,174

 

 

 

2,543

 

Total current liabilities

 

 

106,648

 

 

 

108,321

 

Long-term debt

 

 

70,000

 

 

 

115,000

 

Operating lease liabilities

 

 

189,330

 

 

 

209,654

 

Unearned franchise fees

 

 

2,177

 

 

 

2,186

 

Other liabilities

 

 

69

 

 

 

69

 

Total liabilities

 

 

368,224

 

 

 

435,230

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock, par value $.01 per share; 100,000,000 shares authorized, 34,260,713

   shares issued and outstanding at September 26, 2021, 34,256,921 shares issued and

   outstanding at December 27, 2020

 

 

343

 

 

 

343

 

Additional paid-in capital

 

 

80,619

 

 

 

83,424

 

Retained earnings

 

 

52,152

 

 

 

23,677

 

Treasury stock, at cost; 71,950 shares at September 26, 2021 and December 27, 2020

 

 

 

 

 

 

Total shareholders' equity

 

 

133,114

 

 

 

107,444

 

Total liabilities and shareholders' equity

 

$

501,338

 

 

$

542,674

 

 

See accompanying notes to condensed consolidated financial statements.

 

3


 

RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations—Unaudited

(Amounts in thousands, except share and per share data)

 

 

 

13 Weeks Ended

 

 

39 Weeks Ended

 

 

 

September 26,

 

 

September 27,

 

 

September 26,

 

 

September 27,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurant sales

 

$

97,537

 

 

$

58,594

 

 

$

283,339

 

 

$

188,611

 

Franchise income

 

 

4,742

 

 

 

3,511

 

 

 

13,062

 

 

 

8,094

 

Other operating income

 

 

1,908

 

 

 

1,318

 

 

 

5,980

 

 

 

3,671

 

Total revenues

 

 

104,187

 

 

 

63,423

 

 

 

302,381

 

 

 

200,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and beverage costs

 

 

33,401

 

 

 

15,908

 

 

 

87,929

 

 

 

54,563

 

Restaurant operating expenses

 

 

46,030

 

 

 

34,868

 

 

 

129,013

 

 

 

117,224

 

Marketing and advertising

 

 

2,436

 

 

 

889

 

 

 

7,661

 

 

 

5,285

 

General and administrative costs

 

 

7,721

 

 

 

7,572

 

 

 

23,691

 

 

 

22,668

 

Depreciation and amortization expenses

 

 

4,985

 

 

 

5,316

 

 

 

15,131

 

 

 

16,660

 

Pre-opening costs

 

 

581

 

 

 

403

 

 

 

1,185

 

 

 

1,185

 

Loss/(Gain) on lease modifications

 

 

 

 

 

310

 

 

 

 

 

 

(178

)

Loss on impairment

 

 

 

 

 

3,272

 

 

 

394

 

 

 

16,253

 

Total costs and expenses

 

 

95,154

 

 

 

68,538

 

 

 

265,004

 

 

 

233,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

9,033

 

 

 

(5,115

)

 

 

37,377

 

 

 

(33,284

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(678

)

 

 

(1,422

)

 

 

(3,109

)

 

 

(3,341

)

Other

 

 

(18

)

 

 

(48

)

 

 

61

 

 

 

(12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

8,337

 

 

 

(6,585

)

 

 

34,329

 

 

 

(36,637

)

Income tax expense (benefit)

 

 

1,398

 

 

 

(1,284

)

 

 

5,854

 

 

 

(9,920

)

Net income (loss)

 

$

6,939

 

 

$

(5,301

)

 

$

28,475

 

 

$

(26,717

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

0.20

 

 

$

(0.15

)

 

$

0.83

 

 

$

(0.87

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

$

0.20

 

 

$

(0.15

)

 

$

0.82

 

 

$

(0.87

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

34,421,570

 

 

 

34,240,318

 

 

 

34,367,518

 

 

 

30,826,304

 

Diluted

 

 

34,592,930

 

 

 

34,240,318

 

 

 

34,606,611

 

 

 

30,826,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

 

 

$

 

 

$

 

 

$

0.15

 

 

See accompanying notes to condensed consolidated financial statements.

 

4


 

RUTH’S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity—Unaudited  

(Amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Treasury Stock

 

 

Shareholders'

 

 

 

Shares

 

 

Value

 

 

Capital

 

 

Earnings

 

 

Shares

 

 

Value

 

 

Equity

 

Balance at December 27, 2020

 

 

34,257

 

 

$

343

 

 

$

83,424

 

 

$

23,677

 

 

 

72

 

 

$

 

 

$

107,444

 

Net income

 

 

 

 

 

 

 

 

 

 

 

9,125

 

 

 

 

 

 

 

 

 

9,125

 

Shares issued under stock compensation plan net of shares withheld for tax effects

 

 

128

 

 

 

1

 

 

 

(1,802

)

 

 

 

 

 

 

 

 

 

 

 

(1,801

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,564

 

 

 

 

 

 

 

 

 

 

 

 

1,564

 

Balance at March 28, 2021

 

 

34,385

 

 

$

344

 

 

$

83,186

 

 

$

32,802

 

 

 

72

 

 

$

 

 

$

116,332

 

Net income

 

 

 

 

 

 

 

 

 

 

 

12,411

 

 

 

 

 

 

 

 

 

12,411

 

Shares issued under stock compensation plan net of shares withheld for tax effects

 

 

42

 

 

 

 

 

 

(618

)

 

 

 

 

 

 

 

 

 

 

 

(618

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,184

 

 

 

 

 

 

 

 

 

 

 

 

1,184

 

Balance at June 27, 2021

 

 

34,427

 

 

$

344

 

 

$

83,752

 

 

$

45,213

 

 

 

72

 

 

$

 

 

$

129,309

 

Net income

 

 

 

 

 

 

 

 

 

 

 

6,939

 

 

 

 

 

 

 

 

 

6,939

 

Shares issued under stock compensation plan net of shares withheld for tax effects

 

 

26

 

 

 

 

 

 

(334

)

 

 

 

 

 

 

 

 

 

 

 

(334

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,028

 

 

 

 

 

 

 

 

 

 

 

 

1,028

 

Repurchase of common stock

 

 

(192

)

 

 

(1

)

 

 

(3,827

)

 

 

 

 

 

 

 

 

 

 

 

(3,828

)

Balance at September 26, 2021

 

 

34,261

 

 

$

343

 

 

$

80,619

 

 

$

52,152

 

 

 

72

 

 

$

 

 

$

133,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Treasury Stock

 

 

Shareholders'

 

 

 

Shares

 

 

Value

 

 

Capital

 

 

Earnings

 

 

Shares

 

 

Value

 

 

Equity

 

Balance at December 29, 2019

 

 

28,419

 

 

$

284

 

 

$

40,462

 

 

$

53,399

 

 

 

72

 

 

$

 

 

$

94,145

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,818

)

 

 

 

 

 

 

 

 

(3,818

)

Cash dividends, $0.15 per common share

 

 

 

 

 

 

 

 

 

 

 

(4,428

)

 

 

 

 

 

 

 

 

(4,428

)

Repurchase of common stock

 

 

(902

)

 

 

(9

)

 

 

(13,217

)

 

 

 

 

 

 

 

 

 

 

 

(13,226

)

Shares issued under stock compensation plan net of shares withheld for tax effects

 

 

100

 

 

 

1

 

 

 

(659

)

 

 

 

 

 

 

 

 

 

 

 

(658

)

Stock-based compensation

 

 

 

 

 

 

 

 

2,065

 

 

 

 

 

 

 

 

 

 

 

 

2,065

 

Balance at March 29, 2020

 

 

27,617

 

 

$

276

 

 

$

28,652

 

 

$

45,153

 

 

 

72

 

 

$

 

 

$

74,081

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(17,598

)

 

 

 

 

 

 

 

 

 

 

(17,598

)

Stock issuance

 

 

6,455

 

 

 

65

 

 

 

49,517

 

 

 

 

 

 

 

 

 

 

 

 

49,582

 

Shares issued under stock compensation plan net of shares withheld for tax effects

 

 

72

 

 

 

1

 

 

 

(395

)

 

 

 

 

 

 

 

 

 

 

 

(394

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,958

 

 

 

 

 

 

 

 

 

 

 

 

1,958

 

Balance at June 28, 2020

 

 

34,144

 

 

$

341

 

 

$

79,732

 

 

$

27,555

 

 

 

72

 

 

$

 

 

$

107,628

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(5,301

)