ruth-8k_20200303.htm
false 0001324272 0001324272 2020-03-03 2020-03-03

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 3, 2020

 

RUTH’S HOSPITALITY GROUP, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

000-51485

72-1060618

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

1030 W. Canton Avenue, Ste. 100

Winter Park, FL

 

32789

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (407) 333-7440

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. 

 

 

 

 


Item 7.01. Regulation FD Disclosure

Ruth’s Hospitality Group, Inc. will present and meet with investors and analysts at the Raymond James 41st Annual Institutional Investors Conference on March 3rd in Orlando, FL.  During these meetings, management expects to present a corporate overview and financial highlights.  A copy of the presentation, substantially in the form expected to be used in such meetings, is furnished herewith as Exhibit 99.1. Also, a copy of the reconciliations of non-GAAP financial measures used in the presentation is furnished herewith as Exhibit 99.2.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

Exhibit 99.1  Investor Update – March 2020.

Exhibit 99.2  Reconciliations of Non-GAAP Financial Measures used in the Investor Update – March 2020.

 

 

 


Exhibit Index

 

Exhibit

Number

 

Description

99.1

 

Investor Update – March 2020.

99.2

 

Reconciliations of Non-GAAP Financial Measures used in the Investor Update – March 2020.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

RUTH’S HOSPITALITY GROUP, INC.

 

 

 

 

Date:  March 3, 2020

 

By:

/s/ Arne G. Haak

 

 

 

Arne G. Haak

 

 

 

Executive Vice President and Chief Executive Officer

 

 

ruth-ex991_121.pptx.htm

Slide 1

RUTH’S HOSPITALITY GROUP March 2020 NASDAQ: RUTH Exhibit 99.1

Slide 2

This presentation contains “forward-looking statements” that reflect, when made, the Company’s expectations or beliefs concerning future events that involve risks and uncertainties. Forward-looking statements frequently are identified by the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “targeting,” “will be,” “will continue,” “will likely result,” or other similar words and phrases. Similarly, statements herein that describe the Company’s objectives, plans or goals, including with respect to new restaurant openings, capital expenditures, strategy, financial outlook, our effective tax rate and the impact of healthcare inflation and recent accounting pronouncements, also are forward-looking statements. Actual results could differ materially from those projected, implied or anticipated by the Company’s forward-looking statements. Some of the factors that could cause actual results to differ include: reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; changes in economic conditions and general trends; the loss of key management personnel; the effect of market volatility on the Company’s stock price; health concerns about beef or other food products; the effect of competition in the restaurant industry; changes in consumer preferences or discretionary spending; labor shortages or increases in labor costs; the impact of federal, state or local government regulations relating to income taxes, unclaimed property, Company employees, the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; harmful actions taken by the Company’s franchisees; the inability to successfully integrate franchisee acquisitions into the Company’s business operations; a material failure, interruption or security breach of the Company’s information technology network; the Company’s indemnification obligations in connection with its sale of the Mitchell’s Restaurants; the Company’s ability to protect its name and logo and other proprietary information; an impairment in the financial statement carrying value of our goodwill, other intangible assets or property; the impact of litigation; the restrictions imposed by the Company’s credit agreement; and changes in, or the discontinuation of, the Company’s quarterly cash dividend payments or share repurchase program. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2019, which is available on the SEC’s website at www.sec.gov. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this presentation have not occurred.   Unless the context otherwise indicates, all references in this presentation to the “Company,” “Ruth’s,” “we,” “us”, “our” or similar words are to Ruth’s Hospitality Group, Inc. and its subsidiaries. Ruth’s Hospitality Group, Inc. is a Delaware corporation formerly known as Ruth’s Chris Steak House, Inc., and was founded in 1965. Non-GAAP Financial Measures We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Within these investor presentation materials, we make reference to “Adjusted EBITDA,” a non-GAAP financial measure, calculated on the basis of net income, excluding interest, taxes, depreciation, amortization, gain/loss on assets, losses on impairment, restructuring benefits/expenses, loss/income on discontinued operations and additional items. We believe that this measurement represents a useful internal measure of performance. Accordingly, where we provide a non-GAAP measure like Adjusted EBITDA, it is done so that investors have the same financial data that management uses in evaluating performance with the belief that it will assist the investment community in assessing our underlying performance. However, because Adjusted EBITDA is not determined in accordance with GAAP, it is susceptible to varying calculations and not all companies calculate the measure in the same manner. As a result, Adjusted EBITDA as presented may not be directly comparable to a similarly titled measure presented by other companies. Adjusted EBITDA is presented as supplemental information and not as an alternative to any GAAP measurements. For a reconciliation of Adjusted EBITDA to net income, see the reconciliation table furnished as Exhibit 99.2 to our Current Report on Form 8-K. DISCLAIMER: THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

Slide 3

RUTH’S HOSPITALITY GROUP March 2020 NASDAQ: RUTH

Slide 4

A COMPELLING, LONG-TERM INVESTMENT OPPORTUNITY Company Overview Evolution Initiatives Investment Overview

Slide 5

NASDAQ: RUTH YEAR HISTORY INTERNATIONAL FRANCHISE LOCATIONS START UP LOCATIONS GLOBALLY 55 20 $22K 159 MORE THAN

Slide 6

CONSECUTIVE YEARS OF SSS GROWTH 10 MILLION CAPITAL RETURNED SINCE 2011 $270 NASDAQ: RUTH MILLION  COMPANY & FRANCHISE  RESTAURANT SALES (2019) $750 MILLION AUV $5.6 MORE THAN MORE THAN

Slide 7

Maintain Healthy Core Continue Disciplined Growth Return Excess Capital NASDAQ: RUTH NASDAQ: RUTH NASDAQ: RUTH The Secret Behind The Sizzle

Slide 8

Expert, Tenured Restaurant Team USDA Prime Steaks House-made Desserts Handcrafted Bar Uniquely Designed Locations Healthy Core Our People, Our Food, Our Atmosphere

Slide 9

+9 Company Locations 2018 +5 Company Locations 2019 +8 Leases Signed 2020-2021 Disciplined Growth Target 3-5 New Company Restaurants Per Year 1. 2018 locations include Jersey City, NJ, Paramus, NJ, Reno, NV (operating agreement) and 6 stores in Hawaii previously acquired from a former franchisee.  2. 2019 locations include Columbus, OH, Somerville, MA and 3 locations (Garden City, NY, King of Prussia, PA and Philadelphia, PA) acquired from a former franchisee. 3. Leases signed includes Aventura, FL, Lake Grove, NY, Long Beach, CA, Melville, NY, Oklahoma City, OK, Short Hills, NJ, Washington, DC and Worcester, MA. 

Slide 10

FRANCHISE-OWNED GROWTH Allows system growth without additional company capital FT. WAYNE, IN NEW RESTAURANT OPENINGS 2019: Chongqing, China 2020-2021: Manila, Philippines, St. George, UT Disciplined Growth Franchise-Owned

Slide 11

WE ARE AN EVOLVING ICONIC BRAND NASDAQ: RUTH

Slide 12

Broad Appeal Across Multiple Customer Groups Special Occasion Holiday Offerings Birthdays Anniversaries Business Extensive Private Dining Options Off-site Catering Just Because Sizzle, Swizzle & Swirl TasteMaker Wine Dinners

Slide 13

2007 2009 2011 2013 2003 2005 CORE TARGET 35-64 2001 NASDAQ: RUTH NASDAQ: RUTH GREATEST BOOMERS GENERATION X SILENT MILLENNIAL AGE: 40 50 60 70 80 90 30 20 Ruth's Core Target Then

Slide 14

2020 2022 2024 2026 2016 2018 CORE TARGET 35-64 2014 NASDAQ: RUTH NASDAQ: RUTH GREATEST BOOMERS GENERATION X MILLENNIAL AGE: 40 50 60 70 80 90 30 20 Gen Z ON THE HORIZON ENTERING PEAK EARNING YEARS CREATE LOYALTY NOW Maintain Core While Continuing Evolution For New Guest ENTERING RETIREMENT FIXED INCOME

Slide 15

Experience Variety Leveraging Guest Research To Inform Evolution

Slide 16

Amplify Experiences ELEVATE TRADITIONAL STEAK HOUSE EXPERIENCE INCREASE Share Of Life THROUGH VARIETY CREATE NEW WAYS TO EXPERIENCE RUTH’S NASDAQ: RUTH NASDAQ: RUTH Ruth's Reimagined Summary

Slide 17

Ruth’s Reimagined: Amplify Experiences And Increase Share Of Life Leverage Strengths; Tastemaker Brand Elevated Hospitality and Ambiance New Campaign Approach A New Bar Experience Ruth’s Anywhere; Group Ordering & Delivery New Channels; Gifted Experiences

Slide 18

RHGI INVESTMENT SUMMARY TOTAL RETURN STRATEGY NASDAQ: RUTH Proven Business Model Consistent Performance Strong Cash Flow Returning Capital

Slide 19

Consistent Net Income And Adjusted EBITDA Growth +0.3% +11.4% +2.5% +9.8% +14.3% +8.4% +13.9% +6.3% +8.1% 1. FY 2012 and 2017 include a 53rd week. +8.1% 2009 2010 2011 20121 2013 2014 2015 2016 20171 2018 GAAP Net Income and Adjusted EBITDA ($MM) $33 $36 $37 $41 $47 $51 $58 $61 $66 $72 $2 $16 $20 $16 $22 $16 $30 $30 $30 $42 Adjusted EBITDA GAAP Net Income Adjusted EBITDA, a non-GAAP financial measure, excludes from net income interest, taxes, depreciation, amortization, gain/loss on assets, losses on impairment, restructuring benefits/expenses, loss/income on discontinued operations and additional items not listed here. For a reconciliation of adjusted EBITDA to net income, see the reconciliation table furnished as Exhibit 99.2 to our Current Report on Form 8-K. 2019 $75 +4.2% $42

Slide 20

Company-Owned Target Unit Economics TARGET UNITS 3– 5 units per year TARGET SIZE 8,000 – 10,000 square feet TYPICAL DEMOGRAPHICS Medium and large markets; DMA population > 1 million SALES TARGET $4MM – $6MM NET CASH INVESTMENT $2.5MM – $3.5 MM RESTAURANT LEVEL MARGINS > 20% Denver Tech, CO

Slide 21

Capital Allocation Methodology FINANCIAL PRINCIPLES: Focus on Organic Sales Growth Through Traffic Drive Margin Expansion Deploy Capital to Highest Return Opportunities Maintain a Healthy Balance Sheet Reasonable Debt of < 2X EBITDA Return Excess Capital Debt Paydown, Dividends and Share Repurchases

Slide 22

PROVEN BUSINESS MODEL WITH A LONG HISTORY OF SUCCESS High-end fine-dining steak experience remains timeless after more than 50 years RECORD OF CONSISTENT PERFORMANCE DRIVEN BY OPERATIONAL EXCELLENCE Consistent Revenue, Net Income, EBITDA and EPS Growth STRONG CASH FLOW SUPPORTS MULTIPLE LEVERS TO DRIVE SHAREHOLDER RETURN Focused on disciplined deployment of capital and augmenting returns to shareholders through dividends, share repurchases and debt repayment RHGI INVESTMENT SUMMARY Returned over $270MM to shareholders since 2011 through dividends and share repurchases NASDAQ: RUTH

Slide 23

THANK YOU

ruth-ex992_7.htm

Exhibit 99.2

Reconciliation of Non-GAAP Financial Measures

We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Within our investor presentation materials, we make reference to adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), a non-GAAP financial measure. We believe that this measurement represents a useful internal measure of performance. Accordingly, where we provide a non-GAAP measure like Adjusted EBITDA, it is done so that investors have the same financial data that management uses in evaluating performance with the belief that it will assist the investment community in assessing our underlying performance. However, because Adjusted EBITDA is not determined in accordance with GAAP, it is susceptible to varying calculations and not all companies calculate the measure in the same manner. As a result, Adjusted EBITDA as presented may not be directly comparable to a similarly titled measure presented by other companies. Adjusted EBITDA is presented as supplemental information and not as an alternative to any GAAP measurements.

Reconciliation of Non-GAAP Financial Measures - Unaudited

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

 

 

2009 (1)

 

 

2010 (1)

 

 

2011

 

 

2012

 

 

2013

 

 

2014

 

Net income (loss)

 

 

$

2,419

 

 

$

15,957

 

 

$

19,549

 

 

$

16,379

 

 

$

22,489

 

 

$

16,455

 

Interest expense

 

 

 

7,756

 

 

 

4,244

 

 

 

2,892

 

 

 

3,171

 

 

 

1,640

 

 

 

1,159

 

Income tax expense (benefit)

 

 

 

99

 

 

 

5,026

 

 

 

2,963

 

 

 

7,855

 

 

 

10,744

 

 

 

11,830

 

Depreciation and amortization expenses

 

 

 

13,217

 

 

 

12,182

 

 

 

11,516

 

 

 

11,050

 

 

 

10,229

 

 

 

10,917

 

Impact of excluding a cumulative catch-up adjustment from a change in accounting estimate related to gift card breakage revenue

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,306

 

 

 

-

 

Loss on impairment and asset disposals, net

 

 

 

9,640

 

 

 

483

 

 

 

436

 

 

 

3,262

 

 

 

-

 

 

 

-

 

Restructuring expense (benefit)

 

 

 

56

 

 

 

(1,457

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Gain on settlements, net

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(683

)

 

 

(1,719

)

 

 

-

 

Loss (income) on discontinued operations, net of tax

 

 

 

(615

)

 

 

(160

)

 

 

(171

)

 

 

(187

)

 

 

2,004

 

 

 

10,255

 

Adjusted EBITDA

 

 

$

32,572

 

 

$

36,275

 

 

$

37,185

 

 

$

40,847

 

 

$

46,693

 

 

$

50,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

 

 

2015

 

 

2016

 

 

2017

 

 

2018

 

 

2019

 

Net income (loss)

 

 

$

30,004

 

 

$

30,465

 

 

$

30,137

 

 

$

41,680

 

 

$

42,206

 

Interest expense

 

 

 

790

 

 

 

1,154

 

 

 

821

 

 

 

1,739

 

 

 

2,197

 

Income tax expense (benefit)

 

 

 

14,168

 

 

 

15,660

 

 

 

15,669

 

 

 

8,247

 

 

 

8,173

 

Depreciation and amortization expenses

 

 

 

12,520

 

 

 

13,434

 

 

 

14,995

 

 

 

18,538

 

 

 

21,354

 

Loss on impairment and asset disposals, net

 

 

 

-

 

 

 

-

 

 

 

3,904

 

 

 

-

 

 

 

-

 

Certain restaurant closing and rent dispute costs

 

 

 

-

 

 

 

278

 

 

 

-

 

 

 

-

 

 

 

198

 

Cost related to the acquisition of franchisee-owned restaurants

 

 

 

-

 

 

 

-

 

 

 

619

 

 

 

1,525

 

 

 

536

 

Loss (income) on discontinued operations, net of tax

 

 

 

162

 

 

 

290

 

 

 

108

 

 

 

(80

)

 

 

-

 

Adjusted EBITDA

 

 

$

57,644

 

 

$

61,281

 

 

$

66,253

 

 

$

71,649

 

 

$

74,664

 

 

(1) The net income (loss) for fiscal years 2009 and 2010 were last reported on Form 10-K for the fiscal years 2013 and 2014, respectively. The operating results of eighteen Mitchell's Fish Market and three Cameron's/Mitchell's Steakhouse restaurants sold in January 2015 and three Ruth's Chris Steak House restaurants closed in 2014 have been reclassified to discontinued operations. These reclassifications had no effect on previously reported net income.