8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549
FORM 8-KCURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 2015
RUTH’S HOSPITALITY GROUP, INC. (Exact name of Registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation)	000-51485 (Commission File Number)	72-1060618 (IRS Employer Identification No.)
1030 W. Canton Avenue, Ste. 100, Winter Park, FL 32789 (Address of Principal executive offices, including Zip Code)
(407) 333-7440 (Registrant’s telephone number, including area code)
(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: [ ] 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))

Item 2.01. Completion of Acquisition or Disposition of Assets.

As previously reported, on November 16, 2014, Ruth’s Hospitality Group, Inc. and certain of its affiliates (collectively, the “Company”) and Landry’s, Inc. and Mitchell’s Entertainment, Inc., an affiliate of Landry’s Inc. (together with Landry’s Inc., “Landry’s”), entered into an asset purchase agreement pursuant to which the Company agreed to sell its Mitchell’s Fish Market and Mitchell’s/Cameron’s Steakhouse restaurants (collectively, the “Mitchell’s Restaurants”) and related assets to Landry’s.

On January 21, 2015, the Company closed the sale of the Mitchell’s Restaurants and related assets for a purchase price of $10 million. The assets sold consist primarily of leasehold interests, leasehold improvements, restaurant equipment and furnishings, inventory, and related intangible assets, including brand names and trademarks associated with the 21 Mitchell’s Restaurants.

Item 2.02. Results of Operations and Financial Condition.

On January 27, 2015, the Company released preliminary and unaudited quarterly condensed consolidated financial statements for the thirty-nine weeks ended September 28, 2014 and the fiscal year ended December 29, 2013, which have been revised to reclassify the Mitchell’s Restaurants’ operating results as discontinued operations. The unaudited quarterly condensed consolidated financial statements, along with reconciliations of non-GAAP measures used therein, are attached hereto as Exhibit 99.1 and furnished herewith.

The information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 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 2.02 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 (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective January 21, 2015 and in connection with the closing of the sale of the Mitchell’s Restaurants and related assets, Peter J. Beaudrault ceased to serve as President and Chief Operating Officer of Mitchell’s Fish Market. Mr. Beaudrault remains employed with the Company in a non-executive officer capacity.

The Company expects to provide Mr. Beaudrault with compensation and benefits consistent with the severance provisions governing resignation with good reason and termination without cause set forth in his employment agreement. A copy of Mr. Beaudrault’s employment agreement was attached as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on April 30, 2012.

Item 7.01. Regulation FD Disclosure.

On January 21, 2015, the Company issued a press release announcing the closing of the sale of the Mitchell’s Restaurants and related assets. A copy of the press release is attached hereto as Exhibit 99.2 and furnished herewith.

The information set forth in the attached Exhibit 99.2 shall not be deemed “filed” for the purpose of Section 18 of the Exchange Act, shall not be subject to liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

Item 9.01.     Financial Statements and Exhibits.

(b) Pro forma financial information

Unaudited pro forma consolidated financial statements and accompanying notes of the Company giving effect to the sale of the Mitchell’s Restaurants and related assets are attached hereto as Exhibit 99.3, filed herewith and incorporated by reference into this Item 9.01.

(d) Exhibits.
Exhibit No.	Description
99.1	Preliminary and Unaudited Quarterly Condensed Consolidated Statements of Income (Loss) and Non-GAAP Financial Measures.
99.2	Press release dated January 21, 2015.
99.3	Unaudited Pro Forma Consolidated Financial Information of the Company.

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 hereunto duly authorized.

	RUTH’S HOSPITALITY GROUP, INC.
	/s/ John F. McDonald, III
Date: January 27, 2015	John F. McDonald, III
	Title: Vice President - General Counsel Chief Compliance Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Preliminary and Unaudited Quarterly Condensed Consolidated Statements of Income (Loss) and Non-GAAP Financial Measures.
99.2	Press release dated January 21, 2015.
99.3	Unaudited Pro Forma Consolidated Financial Information of the Company.

EX-99

Exhibit 99.1

PRELIMINARY AND UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND NON-GAAP FINANCIAL MEASURES

The preliminary and unaudited quarterly condensed consolidated statements of income (loss) and the non-GAAP financial measures have been prepared as a supplement to the pro forma financial statements to illustrate the quarterly impact of the reclassification of the Mitchell’s Restaurants’ operating results to discontinued operations for fiscal years 2014 and 2013. The fiscal year 2013 operating results of three additional locations closed in fiscal year 2014 have also been reclassified to the discontinued operations line of the quarterly condensed consolidated statements of income. Therefore, the quarterly condensed consolidated statements of income do not agree to the pro forma financial statements presented in Exhibit 99.3 for fiscal year 2013.

RUTH'S HOSPITALITY GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Loss) - Preliminary and Unaudited

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

	Quarter Ended															Quarter Ended
	March 31,			June 30,			September 29,			December 29,			Fiscal Year			March 30,			June 29,			September 28,			Year to Date
	2013			2013			2013			2013			2013			2014			2014			2014			Q3 2014
Revenues:
Restaurant sales	$	81,325		$	73,744		$	64,432		$	84,699		$	304,200		$	85,070		$	77,989		$	69,283		$	232,342
Franchise income		3,663			3,647			3,498			4,203			15,011			4,036			3,807			3,517			11,360
Other operating income		891			2,802			721			(1,271	)		3,143			1,248			1,210			995			3,453
Total revenues		85,879			80,193			68,651			87,631			322,354			90,354			83,006			73,795			247,155
Costs and expenses:
Food and beverage costs		25,104			22,097			19,867			26,318			93,386			26,667			24,828			22,165			73,661
Restaurant operating expenses		37,083			35,624			34,668			38,289			145,664			38,843			37,741			37,238			113,821
Marketing and advertising		1,579			3,087			1,362			3,312			9,340			1,746			1,923			1,990			5,658
General and administrative costs		6,635			6,695			6,642			7,836			27,808			6,225			5,847			5,352			17,424
Depreciation and amortization expenses		2,689			2,539			2,452			2,550			10,230			2,510			2,714			2,693			7,918
Pre-opening costs		1			142			316			232			691			409			119			395			924
Gain on settlements, net		-			-			(1,719	)		-			(1,719	)		-			-			-			-
Total costs and expenses		73,091			70,184			63,588			78,537			285,400			76,400			73,172			69,833			219,406
Operating income		12,788			10,009			5,063			9,094			36,954			13,954			9,834			3,962			27,749
Other income (expense):
Interest expense		(516	)		(415	)		(414	)		(295	)		(1,640	)		(287	)		(298	)		(297	)		(881	)
Other		25			(1	)		(101	)		(1	)		(77	)		9			12			5			25
Income from continuing operations before income tax expense		12,297			9,593			4,548			8,798			35,237			13,676			9,548			3,670			26,893
Income tax expense		3,881			2,452			1,623			2,787			10,744			4,686			2,880			1,472			9,038
Income from continuing operations		8,416			7,141			2,925			6,011			24,493			8,990			6,668			2,198			17,855
Discontinued operations:
Income (loss) from discontinued operations, net of income taxes		(755	)		626			(38	)		(1,836	)		(2,004	)		(125	)		236			(9,496	)		(9,385	)
Net income (loss)	$	7,661		$	7,767		$	2,887		$	4,175		$	22,489		$	8,865		$	6,904		$	(7,298	)	$	8,470
Basic earnings (loss) per common share:
Continuing operations	$	0.24		$	0.20		$	0.08		$	0.17		$	0.71		$	0.25		$	0.19		$	0.06		$	0.51
Discontinued operations		(0.02	)	$	0.02			(0.00	)		(0.05	)		(0.06	)		(0.00	)		0.01			(0.27	)		(0.27	)
Basic earnings (loss) per share	$	0.22		$	0.22		$	0.08		$	0.12		$	0.65		$	0.25		$	0.20		$	(0.21	)	$	0.24
Diluted earnings (loss) per common share:
Continuing operations	$	0.24		$	0.20		$	0.08		$	0.17		$	0.69		$	0.25		$	0.18		$	0.06		$	0.51
Discontinued operations		(0.02	)		0.02			(0.00	)		(0.05	)		(0.06	)		(0.00	)	$	0.01			(0.27	)	$	(0.27	)
Diluted earnings (loss) per share	$	0.22		$	0.22		$	0.08		$	0.12		$	0.63		$	0.25		$	0.19		$	(0.21	)	$	0.24
Shares used in computing earnings (loss) per common share:
Basic		34,456,380			34,660,149			34,956,353			34,978,903			34,761,160			35,094,652			35,122,131			34,925,592			35,047,458
Diluted		35,505,778			35,681,077			35,795,508			35,858,859			35,784,430			35,822,458			35,587,975			34,925,592			35,567,738
Dividends declared per common share	$	-		$	0.04		$	0.04		$	0.04		$	0.12		$	0.05		$	0.05		$	0.05		$	0.15

NON-GAAP FINANCIAL MEASURES

We prepare our financial statements in accordance with generally accepted accounting principles (GAAP). Within our press releases announcing quarterly earnings, we have made reference to non-GAAP net income and non-GAAP diluted earnings per common share. These non-GAAP measurements were calculated by excluding certain non-recurring items and losses from discontinued operations. These non-GAAP measurements have been included as supplemental information. We believe that this measure represents a useful internal measure of performance. Accordingly, where these non-GAAP measures are provided, 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 on a quarter-over-quarter basis. However, because these measures are not determined in accordance with accounting principles generally accepted in the United States, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, the aforementioned measures as presented may not be directly comparable to similarly titled measures presented by other companies. These non-GAAP financial measure are presented as supplemental information and not as an alternative to any GAAP measurements.

Reconciliation of Non-GAAP Financial Measure - Unaudited

(Amounts in thousands, except share data)

	Quarter Ended													Quarter Ended
	March 31,		June 30,			September 29,			December 29,		Fiscal Year			March 30,		June 29,			September 28,			Year to Date
	2013		2013			2013			2013		2013			2014		2014			2014			Q3 2014
GAAP net income	$	7,661	$	7,767		$	2,887		$	4,175	$	22,489		$	8,865	$	6,904			(7,298	)	$	8,470
Net of tax impact of excluding a cumulative adjustment from a change in accounting estimate related to gift card breakage revenue		-		-			-			1,306		1,306			-		-			-			-
Net of tax impact of excluding gain on settlements		-		-			(1,049	)		-		(1,049	)		-		-			-			-
Impact of excluding certain income tax items		-		(616	)		-			-		(784	)		-		-			-			-
Net of tax impact of excluding loss (income) on discontinued operations		755		(626	)		38			1,836		2,004			125		(236	)		9,496			9,385
Non-GAAP net income	$	8,416	$	6,525		$	1,876		$	7,317	$	23,966		$	8,990	$	6,668		$	2,198		$	17,855
Non-GAAP diluted earnings per share	$	0.24	$	0.18		$	0.05		$	0.20	$	0.67		$	0.25	$	0.19		$	0.06		$	0.50
Shares:
Weighted average number of common shares outstanding - basic		34,456,380		34,660,149			34,956,353			34,978,903		34,761,160			35,094,652		35,122,131			34,925,592			35,047,458
Dilutive shares		1,049,398		1,020,928			839,155			879,956		1,023,270			727,806		465,844			379,814			520,280
Weighted-average number of common shares outstanding - diluted		35,505,778		35,681,077			35,795,508			35,858,859		35,784,430			35,822,458		35,587,975			35,305,406			35,567,738

EX-99

Exhibit 99.2

For Immediate Release

Ruth’s Hospitality Group, Inc. Completes Sale of

Mitchell’s Restaurants to Landry’s, Inc.

WINTER PARK, Fla. — (BUSINESS WIRE) — January 21, 2015-- Ruth’s Hospitality Group, Inc. (NASDAQ: RUTH) today announced that it has completed its previously announced sale of substantially all of the assets related to the Mitchell’s Fish Market and Mitchell’s/Cameron’s Steakhouse businesses.

The Company expects to file a Current Report on Form 8-K within four business days containing unaudited pro forma consolidated financial statements giving effect to the sale of substantially all of the assets related to the Mitchell’s Fish Market and Mitchell’s/Cameron’s Steakhouse businesses.Excluding customary transaction-related costs, the transaction is not expected to have a material impact on the Company’s previously stated fiscal 2014 guidance.

ABOUT RUTH’S HOSPITALITY GROUP, INC.

Ruth's Hospitality Group, Inc. (NASDAQ: RUTH) is a leading restaurant company, uniquely focused on the upscale dining segment and owns the Ruth's Chris Steak House concept. Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida, was founded in 1965 and currently has more than 140 Company-owned and franchisee-owned restaurants worldwide.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release 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 “anticipate,” “believe,” “estimate,” “expect,” “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 also are forward-looking statements. Actual results could differ materially from those projected, implied or anticipated by the Company’s forward-looking statements. For a discussion of 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, 2013, which is available on the Securities and Exchange Commission’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 press release to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this press release have not occurred.

Contacts:

Media

Alecia Pulman

(646) 277-1220

apulman@icrinc.com

Investor Relations

Fitzhugh Taylor

(203) 682-8261

ftaylor@icrinc.com

EX-99

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On November 16, 2014, Ruth’s Hospitality Group, Inc. and certain of its affiliates (collectively, the “Company”) and Landry’s, Inc. and Mitchell’s Entertainment, Inc., an affiliate of Landry’s Inc. (together with Landry’s Inc., “Landry’s”), entered into an asset purchase agreement (the “Agreement”). Pursuant to the Agreement, the Company agreed to sell its Mitchell’s Fish Market and Mitchell’s/Cameron’s Steakhouse restaurants (collectively, the “Mitchell’s Restaurants”) and related assets to Landry’s for $10 million. The sale of the Mitchell’s Restaurants closed on January 21, 2015. The assets sold consist primarily of leasehold interests, leasehold improvements, restaurant equipment and furnishings, inventory, and related intangible assets, including brand names and trademarks associated with the 21 Mitchell’s Restaurants. Under the terms of the Agreement, Landry’s assumed the Mitchell’s Restaurants’ facility lease obligations and the Company will reimburse Landry’s for gift cards that are sold prior to the closing date and used at the Mitchell’s Restaurants during the 18 months following the closing date. In the Agreement, the Company and Landry’s have made customary representations and warranties and have agreed to customary covenants relating to the sale of the Mitchell’s Restaurants. Specifically, (i) before the closing date, the Company was subject to certain business conduct restrictions with respect to its operation of the Mitchell’s Restaurants, and (ii) for 18 months following the closing date, neither the Company nor Landry’s will knowingly solicit or employ, or seek to solicit or employ, certain key employees of the other party, subject to certain limited exceptions. It is anticipated that Landry’s will offer employment to substantially all of the employees of the Mitchell’s Restaurants. The Company and Landry’s have agreed to indemnify each other for losses arising from certain breaches of the Agreement and for certain other liabilities.

The unaudited pro forma condensed consolidated financial information has been prepared to illustrate the effect of the sale of the Mitchell’s Restaurants. The historical financial information has been adjusted to give effect to matters that are (1) directly attributable to the sale of the Mitchell’s Restaurants, (2) factually supportable, and (3) with respect to the statements of income, expected to have a continuing impact on the operating results of the Company. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the accompanying Notes to the unaudited pro forma condensed consolidated financial information and the historical unaudited consolidated financial statements of the Company included in our Quarterly Report on Form 10-Q for the period ended September 28, 2014 and the historical audited consolidated financial statements of the Company included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2013, and filed with the Securities and Exchange Commission (SEC).

The unaudited pro forma condensed consolidated financial information is presented for informational purposes only. It has been prepared in accordance with the regulations of the SEC and is not necessarily indicative of what our financial position or results of operations actually would have been had we completed the sale of the Mitchell’s Restaurants at the dates indicated, nor does it purport to project the future financial position or operating results of the Company.

1

Ruth’s Hospitality Group, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of Income

For the Thirty-nine Weeks Ended September 28, 2014

(Dollars amounts in thousands, except share and per share data)

	Historical Ruth's Hospitality Group, Inc.			Less: Sale of the Mitchell's Restaurants (1)			Pro Forma Ruth's Hospitality Group, Inc.
Revenues:
Restaurant sales	$	287,675		$	55,333		$	232,342
Franchise income		11,360			-			11,360
Other operating income		3,664			211			3,453
Total revenues		302,699			55,544			247,155
Costs and expenses:
Food and beverage costs		91,631			17,970			73,661
Restaurant operating expenses		146,233			32,412			113,821
Marketing and advertising		7,352			1,694			5,658
General and administrative costs		19,445			2,021			17,424
Depreciation and amortization expenses		9,813			1,895			7,918
Pre-opening costs		924			-			924
Loss on impairment		15,295			15,295			-
Total costs and expenses		290,693			71,287			219,406
Operating income (loss)		12,006			(15,743	)		27,749
Other income (expense):
Interest expense, net		(881	)		-			(881	)
Other		47			22			25
Income (loss) from continuing operations before income tax expense		11,172			(15,721	)		26,893
Income tax expense (benefit)		2,376			(6,662	)		9,038
Income (loss) from continuing operations	$	8,796		$	(9,059	)	$	17,855
Basic earnings (loss) per common share:
Continuing operations	$	0.25		$	(0.26	)	$	0.51
Diluted earnings (loss) per common share:
Continuing operations	$	0.25		$	(0.26	)	$	0.51
Shares used in computing earnings (loss) per common share:
Basic		35,047,458			35,047,458			35,047,458
Diluted		35,567,738			35,567,738			35,567,738
Dividends declared per common share	$	0.15					$	0.15

See accompanying notes to the unaudited pro forma condensed consolidated financial information.

2

Ruth’s Hospitality Group, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of Income

Year Ended December 29, 2013

(Dollars amounts in thousands, except share and per share data)

	Historical Ruth's Hospitality Group, Inc.			Less: Sale of the Mitchell's Restaurants (1)			Pro Forma Ruth's Hospitality Group, Inc.
Revenues:
Restaurant sales	$	388,083		$	78,109		$	309,974
Franchise income		15,012			-			15,012
Other operating income		3,554			348			3,206
Total revenues		406,649			78,457			328,192
Costs and expenses:
Food and beverage costs		120,612			25,391			95,221
Restaurant operating expenses		194,515			45,360			149,155
Marketing and advertising		11,673			2,216			9,457
General and administrative costs		30,404			2,596			27,808
Depreciation and amortization expenses		13,060			2,795			10,265
Pre-opening costs		692			-			692
Loss on impairment and asset disposals, net		3,262			3,262			-
Gain on settlements, net		(2,156	)		(437	)		(1,719	)
Total costs and expenses		372,062			81,183			290,879
Operating income (loss)		34,587			(2,726	)		37,313
Other income (expense):
Interest expense, net		(1,640	)		-			(1,640	)
Other		(50	)		22			(72	)
Income (loss) from continuing operations before income tax expense		32,897			(2,704	)		35,601
Income tax expense (benefit)		9,102			(1,679	)		10,781
Income (loss) from continuing operations	$	23,795		$	(1,025	)	$	24,820
Basic earnings (loss) per common share:
Continuing operations	$	0.69		$	(0.03	)	$	0.71
Diluted earnings (loss) per common share:
Continuing operations	$	0.67		$	(0.03	)	$	0.69
Shares used in computing earnings (loss) per common share:
Basic		34,761,160			34,761,160			34,761,160
Diluted		35,784,430			35,784,430			35,784,430
Dividends declared per common share	$	0.12					$	0.12

See accompanying notes to the unaudited pro forma condensed consolidated financial information.

3

Ruth’s Hospitality Group, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of Income

Year Ended December 30, 2012

(Dollars amounts in thousands, except share and per share data)

	Historical Ruth's Hospitality Group, Inc.			Less: Sale of the Mitchell's Restaurants (1)			Pro Forma Ruth's Hospitality Group, Inc.
Revenues:
Restaurant sales	$	378,445		$	80,033		$	298,412
Franchise income		13,836			-			13,836
Other operating income		3,774			177			3,597
Total revenues		396,055			80,210			315,845
Costs and expenses:
Food and beverage costs		120,215			25,837			94,378
Restaurant operating expenses		190,742			45,982			144,760
Marketing and advertising		11,178			1,901			9,276
General and administrative costs		28,299			2,687			25,612
Depreciation and amortization expenses		14,556			3,486			11,070
Pre-opening costs		540			0			540
Loss on impairment and asset disposals, net		4,955			1,693			3,262
Gain on settlements, net		(683	)		-			(683	)
Total costs and expenses		369,802			81,587			288,215
Operating income (loss)		26,253			(1,377	)		27,630
Other income (expense):
Interest expense, net		(2,365	)		-			(2,365	)
Debt issuance costs written-off		(807	)		-			(807	)
Other		4			24			(20	)
Income (loss) from continuing operations before income tax expense		23,085			(1,353	)		24,438
Income tax expense (benefit)		6,687			(1,198	)		7,885
Income (loss) from continuing operations	$	16,398		$	(155	)	$	16,553
Basic earnings (loss) per common share:
Continuing operations	$	(0.58	)	$	-		$	(0.58	)
Diluted earnings (loss) per common share:
Continuing operations	$	(0.58	)	$	-		$	(0.58	)
Shares used in computing earnings (loss) per common share:
Basic		34,313,636			34,313,636			34,313,636
Diluted		34,313,636			34,313,636			34,313,636

See accompanying notes to the unaudited pro forma condensed consolidated financial information.

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Ruth’s Hospitality Group, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Statement of Income

Year Ended December 25, 2011

(Dollars amounts in thousands, except share and per share data)

	Historical Ruth's Hospitality Group, Inc.			Less: Sale of the Mitchell's Restaurants (1)			Pro Forma Ruth's Hospitality Group, Inc.
Revenues:
Restaurant sales	$	351,380		$	76,491		$	274,889
Franchise income		12,464			-			12,464
Other operating income		3,493			222			3,271
Total revenues		367,337			76,713			290,624
Costs and expenses:
Food and beverage costs		108,880			24,718			84,162
Restaurant operating expenses		181,683			43,572			138,111
Marketing and advertising		11,748			2,268			9,480
General and administrative costs		22,803			1,726			21,077
Depreciation and amortization expenses		14,859			3,329			11,530
Pre-opening costs		192			-			192
Loss on impairment and asset disposals, net		3,478			3,042			436
Restructuring benefit		(502	)		(502	)		-
Total costs and expenses		343,141			78,153			264,988
Operating income (loss)		24,196			(1,440	)		25,636
Other income (expense):
Interest expense, net		(2,892	)		-			(2,892	)
Debt issuance costs written-off		-			-			-
Other		(488	)		(27	)		(461	)
Income (loss) from continuing operations before income tax expense		20,816			(1,467	)		22,283
Income tax expense (benefit)		1,663			(1,223	)		2,886
Income (loss) from continuing operations	$	19,153		$	(244	)	$	19,397
Basic earnings (loss) per common share:
Continuing operations	$	0.38		$	(0.01	)	$	0.39
Diluted earnings (loss) per common share:
Continuing operations	$	0.38		$	(0.01	)	$	0.39
Shares used in computing earnings (loss) per common share:
Basic		34,093,104			34,093,104			34,093,104
Diluted		43,252,101			43,252,101			43,252,101

See accompanying notes to the unaudited pro forma condensed consolidated financial information.

5

Ruth’s Hospitality Group, Inc. and Subsidiaries

Unaudited Pro Forma Condensed Balance Sheet

September 28, 2014

(Dollars amounts in thousands, except share and per share data)

	Historical Ruth's Hospitality Group, Inc.			Less Mitchell's Restaurants (2)			Proforma Ruth's Hospitality Group, Inc.
Assets
Current assets:
Cash and cash equivalents	$	3,486		$	10,000		$	13,486
Accounts receivable, less allowance for doubtful accounts		13,617			-			13,617
Inventory		7,506			(859	)		6,647
Prepaid expenses and other		1,891			-			1,891
Deferred income taxes		5,628			379			6,007
Total current assets		32,128			9,520			41,648
Property and equipment, net of accumulated depreciation		87,173			(8,884	)		78,289
Goodwill		24,293			-			24,293
Franchise rights, net of accumulated amortization		32,288			-			32,288
Trademarks		2,965			(2,847	)		118
Other intangibles, net of accumulated amortization		5,631			(2,328	)		3,303
Deferred income taxes		26,421			-			26,421
Other assets		1,955			-			1,955
Total assets	$	212,854		$	(4,539	)	$	208,315
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	9,202		$	-		$	9,202
Accrued payroll		11,849			-			11,849
Accrued expenses		9,357			961			10,318
Deferred revenue		24,797			-			24,797
Other current liabilities		5,923			(127	)		5,796
Total current liabilities		61,128			834			61,962
Long-term debt		30,000			-			30,000
Deferred rent		22,999			(3,326	)		19,673
Other liabilities		4,310			(1,466	)		2,844
Total liabilities		118,437			(3,958	)		114,479
Commitments and contingencies		-			-			-
Shareholders' equity:
Common stock, par value $.01 per share; 100,000,000 shares authorized, 34,668,049 shares issued and outstanding at September 28, 2014		347			-			347
Additional paid-in capital		159,778			-			159,778
Accumulated deficit		(65,708	)		(581	)		(66,289	)
Treasury stock, at cost; 71,950 shares at September 28, 2014		-			-			-
Total shareholders' equity		94,417			(581	)		93,836
Total liabilities and shareholders' equity	$	212,854		$	(4,539	)	$	208,315

See accompanying notes to the unaudited pro forma condensed consolidated financial information.

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Basis of Presentation

The unaudited pro forma condensed consolidated financial information has been prepared to illustrate the effect of the sale of the Mitchell’s Restaurants. The unaudited pro forma condensed consolidated statements of income for the thirty-nine week period ended September 28, 2014 and fiscal years 2013, 2012 and 2011, and the unaudited pro forma condensed consolidated balance sheet as of September 28, 2014, have been derived from the historical consolidated financial statements of the Company, which are included in its Quarterly Report on Form 10-Q for the period ended September 28, 2014 and its Annual Report on Form 10-K for the year ended December 29, 2013. The unaudited pro forma condensed consolidated statements of income reflect the Company's results as if the sale of the Mitchell’s Restaurants had occurred as of December 27, 2010. The unaudited pro forma condensed consolidated balance sheet as of September 28, 2014 reflects the Company's position as if the sale of the Mitchell’s Restaurants had occurred on that date.

Future income statements of the Company will treat the results of the Mitchell’s Restaurants as a discontinued operation.

Historical Ruth's Hospitality Group, Inc.

This column reflects the Company’s historical unaudited financial position as of September 28, 2014, the historical audited operating results for the fiscal years 2013, 2012 and 2011, and the unaudited historical operating results for the thirty-nine week period ended September 28, 2014, prior to any adjustment for the sale of the Mitchell’s Restaurants and the other adjustments described below.

On January 21, 2015 the Company completed the previously announced sale of the Mitchell’s Restaurants to Landry’s. Pursuant to the terms of the Agreement, the total cash consideration for Mitchell’s Restaurants was $10 million.

The following are included in the unaudited pro forma condensed consolidated statements of income for the thirty-nine week period ended September 28, 2014 and fiscal years 2013, 2012 and 2011, and the unaudited pro forma condensed consolidated balance sheet as of September 28, 2014.

(1) Results of the Mitchell’s Restaurants

This column includes amounts representing the revenues, and expenses attributable to the Mitchell’s Restaurants which were included in the Company's historical financial statements. In accordance with generally accepted accounting principles in the United States, the amounts eliminated on the unaudited pro forma condensed consolidated statements of income do not include certain indirect corporate overhead included in general and administrative as such amounts would have been absorbed by the Company in the absence of the Mitchell’s Restaurants.

Income taxes are comprised of (a) taxes calculated at the composite federal and state statutory tax rate times the pre-tax loss plus (b) the FICA tip credit benefit attributable to the restaurant sales of the Mitchell’s Restaurants. A reconciliation of the U.S. statutory tax rate to the effective tax rate applicable to operations for the Mitchell’s Restaurants for the thirty-nine week period ended September 28, 2014 and fiscal years 2013, 2012 and 2011 follows:

	39 Weeks Ended			Fiscal Year Ended
	September 28,			December 29,			December 30,			December 25,
	2014			2013			2012			2011
Income tax benefit at statutory rates		35.0	%		35.0	%		35.0	%		35.0	%
Increase in income taxes resulting from:
State income taxes, net of federal benefit		4.5	%		4.1	%		5.1	%		5.0	%
Federal employment tax credits		2.9	%		23.0	%		48.4	%		43.4	%
Effective tax rate		42.4	%		62.1	%		88.5	%		83.4	%

In fiscal years 2013, 2012 and 2011, the federal employment tax credits had a disproportionate impact on the income tax rate due to the Mitchell’s Restaurants generating relatively small losses from operations before income taxes.

(2) Assets and liabilities of the Mitchell’s Restaurants

This column includes amounts representing the assets and liabilities of the Mitchell’s Restaurants which were included in the Company’s historical financial statements, and the proceeds, net of related transaction costs, and the resulting net loss from the sale of the Mitchell’s Restaurants.

7

The net loss from the sale of the Mitchell’s Restaurants has been summarized below (in thousands):

Proceeds from the sale of the Mitchell's Restaurants	$	10,000
Lease related liabilities extinguished		4,919
Estimated transaction expenses		(961	)
Net proceeds		13,958
Mitchell's assets sold		14,918
Loss on sale before taxes		(960	)
Income tax benefit		379
Net loss on sale	$	(581	)

The calculation of the loss on the sale of the Mitchell’s Restaurants includes estimated transaction costs that are directly attributable to the sale, but are not reflected in the accompanying unaudited pro forma condensed consolidated statements of income. Transaction costs include professional fees and other costs directly related to the sale of the Mitchell’s Restaurants.

The above amounts are preliminary and are subject to adjustments in future periods.

(3) Earning Per Share

Basic earnings per common share for fiscal years 2012 and 2011 is computed under the two-class method in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 260. Under the two-class method, a portion of net income is allocated to participating securities, such as the Company’s preferred stock, and therefore is excluded from the calculation of basic earnings per share allocated to common shares. Diluted earnings per common share for fiscal years 2012 and 2011 is computed by dividing the net income applicable to preferred and common shareholders for the period by the weighted average number of common and potential common shares outstanding during the period. Income from continuing operations for fiscal years 2012 and 2011, in both the basic and diluted earnings per common share calculations, is reduced by the Company’s preferred stock dividends ($514 thousand and $2.5 million, respectively), accretion of the Company’s preferred stock to its redemption value ($73 thousand and $353 thousand, respectively) and the excess of redemption value over carrying value of preferred shares redeemed ($35.8 million and $0, respectively).

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