10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 10-Q

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

For the Quarterly Period Ended:  September 2, 2014

OR

o	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 1-12454

______________

RUBY TUESDAY, INC.

(Exact name of registrant as specified in its charter)

GEORGIA	63-0475239
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

150 West Church Avenue, Maryville, Tennessee 37801

(Address of principal executive offices)  (Zip Code)

        Registrant’s telephone number, including area code: (865) 379-5700

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  x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No o

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

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

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

61,923,945

(Number of shares of common stock, $0.01 par value, outstanding as of October 6, 2014)

RUBY TUESDAY, INC.

INDEX

	Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 2, 2014 AND JUNE 3, 2014	4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME/(LOSS) FOR THE THIRTEEN WEEKS
ENDED SEPTEMBER 2, 2014 AND SEPTEMBER 3, 2013	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE THIRTEEN WEEKS ENDED
SEPTEMBER 2, 2014 AND SEPTEMBER 3, 2013	6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS	7-28
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS	29-43
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK	43
ITEM 4. CONTROLS AND PROCEDURES	44
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	44
ITEM 1A. RISK FACTORS	44
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	45
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	45
ITEM 4. MINE SAFETY DISCLOSURES	45
ITEM 5. OTHER INFORMATION	45
ITEM 6. EXHIBITS	46
SIGNATURES	47

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Special Note Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q contains various forward-looking statements, which represent our expectations or beliefs concerning future events, including one or more of the following:  future financial performance (including our estimates of annual growth in same-restaurant sales, average annual sales per restaurant, operating margins, expenses, and other items), future capital expenditures, the effect of strategic initiatives (including statements relating to cost savings initiatives and the benefits of our television marketing), the opening or closing of restaurants by us or our franchisees, sales of our real estate or purchases of new real estate, future borrowings and repayments of debt, availability of financing on terms attractive to the Company, compliance with financial covenants in our debt instruments, payment of dividends, stock and bond repurchases, restaurant acquisitions, and changes in senior management and in the Board of Directors.  We caution the reader that a number of important factors and uncertainties could, individually or in the aggregate, cause our actual results to differ materially from those included in the forward-looking statements, including, without limitation, the following:

·   general economic conditions;

·   changes in promotional, couponing and advertising strategies;

·   changes in our customers’ disposable income;

·   consumer spending trends and habits;

·   increased competition in the restaurant market;

·   laws and regulations affecting labor and employee benefit costs, including further potential increases in state and federally mandated minimum wages, and healthcare reform;

·   the impact of pending litigation;

·   customers’ acceptance of changes in menu items;

·   changes in the availability and cost of capital;

·   potential limitations imposed by debt covenants under our debt instruments;

·   weather conditions in the regions in which Company-owned and franchised restaurants are operated;

·   costs and availability of food and beverage inventory;

·   significant fluctuations in energy prices;

·   security breaches of our customers’ or employees’ confidential information or personal data or the failure of our information technology and computer systems;

·   our ability to attract and retain qualified managers, franchisees and team members;

·   impact of adoption of new accounting standards;

·   impact of food-borne illnesses resulting from an outbreak at either one of our restaurant concepts or other competing restaurant concepts; and

·   effects of actual or threatened future terrorist attacks in the United States.

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PART I — FINANCIAL INFORMATION

ITEM 1.

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT PER-SHARE DATA)

(UNAUDITED)

	SEPTEMBER 2,			JUNE 3,
	2014			2014
Assets	(NOTE A)
Current assets:
Cash and cash equivalents	$	56,889		$	51,326
Accounts receivable		4,531			4,861
Inventories:
Merchandise		12,029			12,924
China, silver and supplies		7,965			8,250
Income tax receivable		1,731			2,133
Deferred income taxes		1,324			3,397
Prepaid rent and other expenses		13,251			12,216
Assets held for sale		7,097			4,683
Total current assets		104,817			99,790
Property and equipment, net		785,056			794,846
Other assets		60,875			61,791
Total assets	$	950,748		$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	23,121		$	26,201
Accrued liabilities:
Taxes, other than income and payroll		11,928			11,221
Payroll and related costs		20,646			22,637
Insurance		6,156			5,962
Deferred revenue – gift cards		15,023			16,584
Rent and other		29,616			26,402
Current portion of long-term debt, including capital leases		4,851			4,816
Total current liabilities		111,341			113,823
Long-term debt and capital leases, less current maturities		252,661			253,875
Deferred income taxes		3,578			3,500
Deferred escalating minimum rent		49,060			48,827
Other deferred liabilities		68,175			75,193
Total liabilities		484,815			495,218
Commitments and contingencies (Note N)
Shareholders’ equity:
Common stock, $0.01 par value; (authorized: 100,000 shares;
issued: 61,882 shares at 9/02/14; 61,442 shares at 6/03/14)		619			614
Capital in excess of par value		77,960			76,269
Retained earnings		397,791			395,226
Deferred compensation liability payable in
Company stock		455			622
Company stock held by Deferred Compensation Plan		(455	)		(622	)
Accumulated other comprehensive loss		(10,437	)		(10,900	)
Total shareholders’ equity		465,933			461,209
Total liabilities & shareholders’ equity	$	950,748		$	956,427

                   The accompanying notes are an integral part of the condensed consolidated financial statements.

4

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

     COMPREHENSIVE INCOME/(LOSS)

(IN THOUSANDS EXCEPT PER-SHARE DATA)

(UNAUDITED)

	THIRTEEN WEEKS ENDED
	SEPTEMBER 2, 2014		SEPTEMBER 3, 2013
	(NOTE A)
Revenue:
Restaurant sales and operating revenue	$    279,457		$    288,092
Franchise revenue	1,725		1,582
	281,182		289,674
Operating costs and expenses:
Cost of goods sold	75,147		79,938
Payroll and related costs	95,842		102,733
Other restaurant operating costs	59,799		67,534
Depreciation	12,658		14,209
Selling, general and administrative, net	30,901		37,015
Closures and impairments	1,482		8,033
Interest expense, net	5,422		6,753
Loss on extinguishment of debt	–		511
	281,251		316,726
Loss from continuing operations before income taxes	(69	)	(27,052	)
Benefit for income taxes from continuing operations	(2,634	)	(5,153	)
Income/(loss) from continuing operations	2,565		(21,899	)
Loss from discontinued operations, net of tax	–		(343	)
Net income/(loss)	$        2,565		$   (22,242	)
Other comprehensive income:
Pension liability reclassification, net of tax	463		478
Total comprehensive income/(loss)	$        3,028		$   (21,764	)
Basic income/(loss) per share:
Income/(loss) from continuing operations	$          0.04		$       (0.36	)
Loss from discontinued operations	–		(0.01	)
Net income/(loss) per share	$          0.04		$       (0.37	)
Diluted income/(loss) per share:
Income/(loss) from continuing operations	$          0.04		$       (0.36	)
Loss from discontinued operations	–		(0.01	)
Net income/(loss) per share	$          0.04		$       (0.37	)
Weighted average shares:
Basic	60,419		60,026
Diluted	61,053		60,026

                 The accompanying notes are an integral part of the condensed consolidated financial statements.

5

RUBY TUESDAY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	THIRTEEN WEEKS ENDED
	SEPTEMBER 2, 2014		SEPTEMBER 3, 2013
	(NOTE A)
Operating activities:
Net income/(loss)	$       2,565		$    (22,242	)
Adjustments to reconcile net income/(loss) to net cash
provided by operating activities:
Depreciation	12,658		14,209
Amortization of intangibles	581		665
Deferred income taxes	(2,840	)	(79	)
Loss on impairments, including disposition of assets	1,462		5,494
Loss on extinguishment of debt	–		511
Share-based compensation expense	1,749		1,704
Excess tax benefits from share-based compensation	–		(256	)
Lease reserve adjustments	466		2,792
Deferred escalating minimum rent	617		705
Other, net	(225	)	1,193
Changes in operating assets and liabilities:
Receivables	227		428
Inventories	1,180		2,104
Income taxes	402		(1,434	)
Prepaid and other assets	(978	)	(22	)
Accounts payable, accrued and other liabilities	(4,782	)	3,092
Net cash provided by operating activities	13,082		8,864
Investing activities:
Purchases of property and equipment	(6,977	)	(11,159	)
Proceeds from sale-leaseback transactions, net	–		5,637
Proceeds from disposal of assets	273		2,548
Insurance proceeds from property claims	135		218
Reductions in Deferred Compensation Plan assets	370		130
Other, net	–		(143	)
Net cash used by investing activities	(6,199	)	(2,769	)
Financing activities:
Principal payments on long-term debt and capital leases	(1,205	)	(24,284	)
Stock repurchases	(55	)	(540	)
Payments for debt issuance costs	(60	)	–
Proceeds from exercise of stock options	–		1,419
Excess tax benefits from share-based compensation	–		256
Net cash used by financing activities	(1,320	)	(23,149	)
Increase/(decrease) in cash and cash equivalents	5,563		(17,054	)
Cash and cash equivalents:
Beginning of year	51,326		52,907
End of quarter	$   56,889		$     35,853
Supplemental disclosure of cash flow information:
Cash paid for:
Interest, net of amount capitalized	$        919		$       2,176
Income taxes, net	$          25		$            74
Significant non-cash investing and financing activities:
Retirement of fully depreciated assets	$     5,115		$       6,101
Reclassification of properties to assets held for sale	$     2,967		$       1,643

                 The accompanying notes are an integral part of the condensed consolidated financial statements.

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – BASIS OF PRESENTATION

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we,” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants.  We also franchise the Ruby Tuesday and Lime Fresh concepts in selected domestic and international markets.  The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do notinclude all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation have been included.  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.  Operating results for the 13-week period ended September 2, 2014 are not necessarily indicative of results that may be expected for the 52-week year ending June 2, 2015.

The Condensed Consolidated Balance Sheet at June 3, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.  We have made certain reclassifications to prior year amounts in our Condensed Consolidated Statements of Cash Flows to conform to the current period presentation (all reclassifications were within operating activities).

For further information, refer to the consolidated financial statements and footnotes thereto included in RTI’s Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

NOTE B – INCOME/(LOSS) PER SHARE AND STOCK REPURCHASES

Basic income/(loss) per share is computed by dividing net income/(loss) by the weighted average number of common shares outstanding during each period presented.  Diluted income/(loss) per share gives effect to stock options and restricted stock outstanding during the applicable periods, if dilutive.  The following table reflects the calculation of weighted-average common and dilutive potential common shares outstanding as presented in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (in thousands, except per share data):

		Thirteen weeks ended
		September 2,  2014		September 3,  2013
Income/(loss) from continuing operations	$	2,565	$	(21,899)
Loss from discontinued operations		–		(343)
Net income/(loss)	$	2,565	$	(22,242)
Weighted-average common shares outstanding		60,419		60,026
Dilutive effect of stock options and restricted stock		634		–
Weighted average common and dilutive potential
common shares outstanding		61,053		60,026
Income/(loss) per share – Basic
Income/(loss) from continuing operations	$	0.04	$	(0.36)
Loss from discontinued operations		–		(0.01)
Net income/(loss) per share	$	0.04	$	(0.37)
Income/(loss) per share – Diluted
Income/(loss) from continuing operations	$	0.04	$	(0.36)
Loss from discontinued operations		–		(0.01)
Net income/(loss) per share	$	0.04	$	(0.37)

7

Stock options with an exercise price greater than the average market price of our common stock and certain options and restricted shares with unrecognized compensation expense do not impact the computation of diluted income/(loss) per share because the effect would be anti-dilutive.  The following table summarizes stock options and restricted shares that did not impact the computation of diluted income/(loss) per share because their inclusion would have had an anti-dilutive effect (in thousands):

	Thirteen weeks ended
	September 2, 2014	September 3,  2013
Stock options	2,826	3,114*
Restricted shares	8	1,246*
Total	2,834	4,360*

*Due to a net loss from continuing operations for the 13 weeks ended September 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

During the first quarter of fiscal 2015, we repurchased an insignificant number of shares of our common stock at a cost of $0.1 million.  As of September 2, 2014, the total number of remaining shares authorized by our Board of Directors to be repurchased was 11.8 million.  All shares repurchased during the current quarter were cancelled as of September 2, 2014.

NOTE C – FRANCHISE PROGRAMS

As of September 2, 2014, our domestic and international franchisees collectively operated 83 Ruby Tuesday restaurants and seven Lime Fresh restaurants.  We do not own any equity interest in our franchisees.

Under the terms of the franchise operating agreements, we charge a royalty fee (generally 4.0% of monthly gross sales for our Ruby Tuesday concept franchisees and 5.25% of monthly gross sales for our Lime Fresh concept franchisees) and require all domestic franchisees to contribute a percentage, 1.5% as of September 2, 2014, of monthly gross sales to a national advertising fund formed to cover their pro rata portion of the production and airing costs associated with our national advertising campaign.  Under the terms of those agreements, we can charge up to 3.0% of monthly gross sales for this national advertising fund.

Advertising amounts received from domestic franchisees are considered by RTI to be reimbursements, recorded on an accrual basis as earned, and have been netted against selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

In addition to the advertising fee discussed above, our Ruby Tuesday concept franchise agreements allow us to charge up to a 2.0% support service fee and a 1.5% marketing and purchasing fee.  For the 13 weeks ended September 2, 2014 and September 3, 2013, we recorded $0.5 million and $0.3 million, respectively, in support service and marketing and purchasing fees, which were an offset to Selling, general and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

NOTE D – DISCONTINUED OPERATIONS

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we closed all of our Marlin & Ray’s, Wok Hay, and Truffles restaurants during the fourth quarter of fiscal 2013.  We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 weeks ended September 3, 2013.  The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen weeks  ended
	September 3, 2013
Restaurant sales and operating revenue	$           –
Loss before income taxes	$       (528)
Benefit for income taxes	(185)
Loss from discontinued operations	$       (343)

8

NOTE E – ACCOUNTS RECEIVABLE

Accounts receivable – current consist of the following (in thousands):

	September 2, 2014		June 3, 2014
Rebates receivable	$	895	$	930
Amounts due from franchisees		1,820		1,281
Third-party gift card sales		1,041		1,636
Other receivables		775		1,014
	$	4,531	$	4,861

We negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of us and our franchise system.  We receive various volume discounts and rebates based on purchases for our Company-owned restaurants from numerous suppliers.

Amounts due from franchisees consist of royalties, license and other miscellaneous fees, a substantial portion of which represents current and recently-invoiced billings.

As of September 2, 2014 and June 3, 2014, Other receivables consisted primarily of amounts due from our distributor ($0.3 million and $0.4 million, respectively) and sales and other miscellaneous tax refunds ($0.2 million for both periods).

NOTE F – INVENTORIES

Our merchandise inventory was $12.0 million and $12.9 million as of September 2, 2014 and June 3, 2014, respectively.  In order to ensure adequate supply and competitive pricing, we sometimes purchase lobster in advance of our needs and store it in third-party facilities prior to our distributor taking possession of the inventory.  In anticipation of lower promotional levels, we have utilized substantially all of the lobster on hand as of September 2, 2014 and June 3, 2014.

NOTE G – PROPERTY, EQUIPMENT, ASSETS HELD FOR SALE, OPERATING LEASES, AND SALE-LEASEBACK TRANSACTIONS

Property and equipment, net, is comprised of the following (in thousands):

	September 2, 2014		June 3, 2014
Land	$	214,217	$	214,277
Buildings		429,217		430,988
Improvements		364,780		365,599
Restaurant equipment		249,569		248,852
Other equipment		85,233		84,876
Construction in progress and other*		22,281		22,246
		1,365,297		1,366,838
Less accumulated depreciation		580,241		571,992
	$	785,056	$	794,846

* Included in Construction in progress and other as of September 2, 2014 and June 3, 2014 are $16.6 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months.  These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

Included within the current assets section of our Condensed Consolidated Balance Sheets at September 2, 2014 and June 3, 2014 are amounts classified as held for sale totaling $7.1 million and $4.7 million, respectively. Assets held for sale primarily consist of parcels of land upon which we have no intention to

9

build restaurants, land and buildings of closed restaurants, and various liquor licenses.  During the 13 weeks ended September 2, 2014, we sold liquor licenses with no carrying value at a gain of $0.3 million.  During the 13 weeks ended September 3, 2013, we sold surplus properties with carrying values of $2.6 million at a loss of $0.1 million.  Cash proceeds, net of broker fees, from these sales totaled $0.3 million and $2.5 million for the 13 weeks ended September 2, 2014 and September 3, 2013, respectively.

Approximately 55% of our 686 Company-owned restaurants are located on leased properties.  Of these, approximately 68% are land leases only; the other 32% are for both land and building.  The initial terms of these leases expire at various dates over the next 22 years.  These leases may also contain required increases in minimum rent at varying times during the lease term and have options to extend the terms of the leases at a rate that is included in the original lease agreement.  Most of our leases require the payment of additional (contingent) rent that is based upon a percentage of restaurant sales above agreed upon sales levels for the year.  These sales levels vary for each restaurant and are established in the lease agreements.  We recognize contingent rental expense (in annual as well as interim periods) prior to the achievement of the specified target that triggers the contingent rental expense, provided that achievement of that target is considered probable.

During the 13 weeks ended September 3, 2013, we completed sale-leaseback transactions of the land and building for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million.  Equipment was not included.  The carrying value of the properties sold was $4.8 million.  The leases have been classified as operating leases and have initial terms of 15 years, with renewal options of up to 20 years following a rent reset based on fair market value at the end of the initial term.  Net proceeds from fiscal 2014’s sale-leaseback transactions were used for general corporate purposes, including debt payments and the repurchase of shares of our common stock.

We realized gains on these transactions during the 13 weeks ended September 3, 2013 of $0.8 million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases.  The current portion of the deferred gains on all sale-leaseback transactions was $1.1 million as of both September 2, 2014 and June 3, 2014, and is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The long-term portion of the deferred gains on all sale-leaseback transactions was $12.7 million and $13.0 million as of September 2, 2014 and June 3, 2014, respectively, and is included in Other deferred liabilities in our Condensed Consolidated Balance Sheets.  Amortization of the deferred gains of $0.3 million is included within Other restaurant operating costs in our Condensed Consolidated Statement of Operations and Comprehensive Income/(Loss) for both of the 13-week periods ended September 2, 2014 and September 3, 2013.

NOTE H – LONG-TERM DEBT AND CAPITAL LEASES

Long-term debt and capital lease obligations consist of the following (in thousands):

	September 2, 2014		June 3, 2014
Senior unsecured notes	$	215,000	$	215,000
Unamortized discount		(2,420)		(2,503)
Senior unsecured notes less unamortized discount		212,580		212,497
Revolving credit facility		–		–
Mortgage loan obligations		44,720		45,993
Capital lease obligations		212		201
		257,512		258,691
Less current maturities		4,851		4,816
	$	252,661	$	253,875

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”).  The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

10

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions.  They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness.  The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date.  Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest.  At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest.  At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings.  There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets.  These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture.  The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement (the “Senior Credit Facility” discussed below) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year.  We did not repurchase any Senior Notes during the quarter ended September 2, 2014.  The balance on the Senior Notes was $215.0 million at September 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million.  The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015.  The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize.  Our options for the rate are a Base Rate or LIBOR, plus an applicable margin.  The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%.  The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%.  We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants.  The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a September 2, 2014 net book value of $80.8 million.

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Under the Senior Credit Facility, we had no borrowings outstanding at September 2, 2014.  After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of September 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness.  In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio.  The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 5.00 to 1.0 and a minimum fixed charge coverage ratio of 1.30 to 1.0 for the quarter ended September 2, 2014.  The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility.  The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

Our $44.7 million in mortgage loan obligations as of September 2, 2014 consists of various loans acquired upon franchise acquisitions.  These loans, which mature between January 2015 and November 2022, have balances which range from negligible to $7.6 million and interest rates of 7.60% to 10.92%.  Many of the properties acquired from franchisees collateralize the loans outstanding.

NOTE I – CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the thirteen weeks ended September 2, 2014 and September 3, 2013 (in thousands):

	September 2, 2014		September 3, 2013
Closures and impairments from continuing operations
Property impairments	$	1,056	$	4,930
Closed restaurant lease reserves		466		2,595
Other closing expense		233		468
(Gain)/loss on sale of surplus properties		(273)		40
Closures and impairments, net	$	1,482	$	8,033
Closures and impairments from discontinued operations			$	518

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		466
Payments		(1,326	)
Other adjustments		13
Balance at September 2, 2014	$	10,026

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease

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obligations.  Of the total future lease obligations included in the table above, $9.7 million and $10.5 million are included within the Accrued liabilities – Rent and other caption in our Consolidated Balance Sheets as of September 2, 2014 and June 3, 2014, respectively.  For the remainder of fiscal 2015 and beyond, our focus will be on obtaining settlements, or subleases as necessary, on as many of these leases as possible and these settlements could be higher or lower than the amounts recorded.  The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.

At September 2, 2014, we had 57 restaurants that had been open more than one year with rolling 12-month negative cash flows of which 36 have been impaired to salvage value.  Of the 21 which remained, we reviewed the plans to improve cash flows at each of the restaurants and determined that no impairment was necessary.  The remaining net book value of these 21 restaurants, eight of which are located on owned properties, was $24.1 million at September 2, 2014.  

Should cash flows at these restaurants not improve within a reasonable period of time, further impairment charges are possible.  Considerable management judgment is necessary to determine to estimate future cash flows, including cash flows from continuing use, terminal value, closure costs, salvage value, and sublease income.  Accordingly, actual results could vary significantly from our estimates.

NOTE J – EMPLOYEE POST-EMPLOYMENT BENEFITS

We sponsor three defined benefit pension plans for active employees and offer certain postretirement benefits for retirees.  A summary of each of these is presented below.

Retirement Plan

RTI sponsors the Morrison Restaurants Inc. Retirement Plan (the “Retirement Plan”).  Effective December 31, 1987, the Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the Retirement Plan after that date.  Participants receive benefits based upon salary and length of service.

Minimum funding for the Retirement Plan is determined in accordance with the guidelines set forth in employee benefit and tax laws.  From time to time we may contribute additional amounts as we deem appropriate.  We estimate that we will be required to make contributions totaling $0.4 million to the Retirement Plan during the remainder of fiscal 2015.

Executive Supplemental Pension Plan and Management Retirement Plan

Under these unfunded defined benefit pension plans, eligible employees earn supplemental retirement income based upon salary and length of service, reduced by social security benefits and amounts otherwise receivable under other specified Company retirement plans.  Effective June 1, 2001, the Management Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the plan after that date.

Included in our Condensed Consolidated Balance Sheets as of September 2, 2014 and June 3, 2014 are amounts within Accrued liabilities: Payroll and related costs of $3.3 million as of both dates and amounts within Other deferred liabilities of $32.4 million and $32.5 million, respectively, relating to our three defined benefit pension plans.

Postretirement Medical and Life Benefits

Our Postretirement Medical and Life Benefits plans provide medical and life insurance benefits to certain retirees.  The medical plan requires retiree cost sharing provisions that are more substantial for employees who retire after January 1, 1990.

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The following tables detail the components of net periodic benefit costs and the amounts recognized in our Condensed Consolidated Financial Statements for the Retirement Plan, Management Retirement Plan, and the Executive Supplemental Pension Plan (collectively, the “Pension Plans”) and the Postretirement Medical and Life Benefits plans (in thousands):

	Pension Benefits
	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Service cost	$         75		$         89
Interest cost	443		434
Expected return on plan assets	(124	)	(111	)
Recognized actuarial loss	430		428
Net periodic benefit cost	$       824		$      840

	Postretirement Medical and Life Benefits
	Thirteen weeks ended
	September 2, 2014	September 3, 2013
Service cost	$           1	$          3
Interest cost	12	17
Amortization of prior service cost (a)	–	(11	)
Recognized actuarial loss	33	61
Net periodic benefit cost	$         46	$       70

(a)   Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

During the 13 weeks ended September 2, 2014 and September 3, 2013, we reclassified recognized actuarial losses and amortized prior service costs out of accumulated other comprehensive loss and into pension expense, which is included in Selling, general and administrative, net within our Condensed Consolidated Statements of Operations, as follows (in thousands):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Recognized actuarial loss	$	463	$	489
Amortization of prior service cost		–		(11	)
Pension liability reclassification	$	463	$	478

Accumulated other comprehensive loss in our Condensed Consolidated Balance Sheets as of September 2, 2014 and June 3, 2104 was $10.4 million and $10.9 million, respectively.  The change in accumulated other comprehensive loss during the 13 weeks ended September 2, 2014 was attributable to $0.5 million of recognized actuarial losses related to our pension plans.

We also sponsor two defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

Executive Separations

On June 26, 2014, our then Executive Vice President, Chief Financial Officer separated employment with the Company.  Additionally, our Senior Vice President, Chief Development Officer departed the Company on July 24, 2014.  During the 13 weeks ended September 2, 2014, we recorded severance expense and made severance payments of $0.3 million in connection with the separation agreements for these former executives.

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As of September 2, 2014, liabilities of $0.5 million and $0.1 million, representing unpaid obligations in connection with the staff reductions, were included within Accrued liabilities: Payroll and related costs and Other deferred liabilities, respectively, in our Condensed Consolidated Balance Sheet.  A roll forward of our obligations in connection with employee separations is as follows (in thousands):

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		569
Cash payments		(1,013	)
Balance at September 2, 2014	$	611

See Note L to the Condensed Consolidated Financial Statements for discussion of the impact of executive separations to our share-based employee compensation costs.

NOTE K – INCOME TAXES

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.  The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events.  Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements.  We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal 2015.  The adoption of this standard in the first quarter of fiscal 2015 resulted in a reclassification of $5.0 million of our liability for unrecognized tax benefits against our deferred tax assets.

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period.  Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable.  In this situation, the interim tax rate should be based on the actual year-to-date results.  Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine.  As such, we recorded a tax provision for the first quarter of fiscal 2015 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $2.6 million during the first quarter of fiscal 2015, compared to a tax benefit from continuing operations of $5.2 million in the prior year quarter.  Included in our $2.6 million tax benefit from continuing operations for the quarter ended September 2, 2014 was a benefit of $3.2 million representing an immaterial prior period correction to our deferred tax asset valuation allowance. 

Our valuation allowance for deferred tax assets totaled $53.8 million and $54.6 million as of September 2, 2014 and June 3, 2014, respectively.  

We had a gross liability for unrecognized tax benefits, exclusive of accrued interest and penalties, of $6.7 million and $7.0 million as of September 2, 2014 and June 3, 2014, respectively. As of September 2, 2014 and June 3, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate was $2.4 million and $2.6 million, respectively. The liability for unrecognized tax

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benefits as of September 2, 2014 includes $0.3 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations and negotiations with tax authorities.

Interest and penalties related to unrecognized tax benefits are recognized as components of income tax expense.  As of September 2, 2014 and June 3, 2014, we had accrued $0.4 million and $0.5 million, respectively, for the payment of interest and penalties.  During the first quarter of fiscal 2014, accrued interest and penalties decreased by an insignificant amount.

At September 2, 2014, we are no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2011, and with few exceptions, state and local examinations by tax authorities prior to fiscal year 2011.

NOTE L – SHARE-BASED EMPLOYEE COMPENSATION

We compensate our employees and directors using share-based compensation through the following plans:

The Ruby Tuesday, Inc. Stock Incentive Plan and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan

A committee, appointed by the Board of Directors, administers the Ruby Tuesday, Inc. Stock Incentive Plan (“SIP”) and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan (“1996 SIP”), and has full authority in its discretion to determine the key employees, officers, and non-employee directors to whom share-based  incentives are granted and the terms and provisions of share-based incentives.  Option grants under the SIP and 1996 SIP can have varying vesting provisions and exercise periods as determined by such committee.  A majority of currently outstanding options granted under the SIP and 1996 SIP vest within three years following the date of grant and expire seven years after the date of grant.  The SIP and 1996 SIP permit the committee to make awards of shares of common stock, awards of stock options or other derivative securities related to the value of the common stock, and certain cash awards to eligible persons.  These discretionary awards may be made on an individual basis or for the benefit of a group of eligible persons.  All options awarded under the SIP and 1996 SIP have been awarded with an exercise price equal to the fair market value at the time of grant.

At September 2, 2014, we had reserved a total of 4,469,000 and 77,000 shares of common stock for the SIP and 1996 SIP, respectively.  Of the reserved shares at September 2, 2014, 2,517,000 and 77,000 were subject to options outstanding for the SIP and 1996 SIP, respectively.  Stock option exercises are settled with the issuance of new shares.  Net shares of common stock available for issuance at September 2, 2014 under the SIP and 1996 SIP were 1,952,000 and negligible, respectively.

Stock Options

The following table summarizes the activity in options for the 13 weeks ended September 2, 2014 under these stock option plans (in thousands, except per-share data):

	Options		Weighted Average Exercise Price
Service-based vesting:
Balance at June 3, 2014	1,953		$	8.66
Granted	810			5.91
Exercised	–			–
Forfeited	(31	)		9.35
Balance at September 2, 2014	2,732		$	7.84
Exercisable	1,308		$	8.72
Market-based vesting:
Balance at June 3, 2014	735		$	8.82
Forfeited	(120	)		9.34
Balance at September 2, 2014	615		$	8.72
Exercisable	–		$	–

At September 2, 2014, there was approximately $3.4 million of unrecognized pre-tax compensation expense related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 1.7 years.

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During the first quarter of fiscal 2015, we granted 810,000 service-based stock options to certain employees under the terms of the SIP.  The stock options awarded vest in equal annual installments over a three-year period following grant of the award, and have a maximum life of seven years.  There are no performance-based vesting requirements associated with these stock options.

Restricted Stock

The following table summarizes our restricted stock activity for the 13 weeks ended September 2, 2014 (in thousands, except per-share data):

		Weighted-Average
	Restricted	Grant-Date
Performance-based vesting:	Stock	Fair Value
Unvested at June 3, 2014	68	$    7.81
Granted	–	–
Vested	–	–
Forfeited	–	–
Unvested at September 2, 2014	68	$    7.81
		Weighted-Average
	Restricted	Grant-Date
Service-based vesting:	Stock	Fair Value
Unvested at June 3, 2014	1,008	$    8.11
Granted	449	6.04
Vested	(95)	8.63
Forfeited	(2)	7.81
Unvested at September 2, 2014	1,360	$    7.39

The fair values of the restricted stock awards reflected above were based on the fair market value of our common stock at the time of grant.  At September 2, 2014, unrecognized compensation expense related to restricted stock grants expected to vest totaled approximately $5.4 million and will be recognized over a weighted average vesting period of approximately 1.7 years.

During the first quarter of fiscal 2015, we granted 449,000 shares of service-based restricted stock to certain employees under the terms of the SIP and 1996 SIP, 368,000 of which will cliff vest 2.5 years following the grant date and 81,000 of which will vest in three equal installments over a three-year period following the date of grant.

Share-based compensation expense of $1.7 million is included within Selling, general, and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for both the 13 weeks ended September 2, 2014 and September 3, 2013.

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NOTE M – SEGMENT REPORTING

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources.  We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment.  Financial results by reportable segment for the 13 weeks ended September 2, 2014 and September 3, 2013 are as follows (in thousands):

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Revenues:
Ruby Tuesday concept	$	276,043		$	284,022
Lime Fresh concept		5,139			5,652
Total revenues	$	281,182		$	289,674
Segment profit:
Ruby Tuesday concept	$	30,389		$	9,851
Lime Fresh concept		(176	)		(2,454	)
Total segment profit	$	30,213		$	7,397
Depreciation and amortization:
Ruby Tuesday concept	$	12,263		$	13,792
Lime Fresh concept		423			499
Support center and other		552			583
Total depreciation and amortization	$	13,238		$	14,874
Capital expenditures:
Ruby Tuesday concept	$	6,341		$	8,242
Lime Fresh concept		49			2,366
Support center and other		587			551
Total capital expenditures	$	6,977		$	11,159

Total assets by reportable segment as of September 2, 2014 and June 3, 2014 are as follows (in thousands):

	September 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	816,194	$	824,293
Lime Fresh concept		14,522		15,203
Support center and other		120,032		116,931
Total assets	$	950,748	$	956,427

The following is a reconciliation of segment profit to loss from continuing operations before taxes for the 13 weeks ended September 2, 2014 and September 3, 2013 (in thousands):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Segment profit	$       30,213		$         7,397
Less:
Depreciation and amortization	(13,238	)	(14,874	)
Unallocated general and administrative expenses	(10,962	)	(11,897	)
Interest expense, net	(5,422	)	(6,753	)
Preopening expenses	(89	)	(354	)
Other expense, net	(571	)	(571	)
Loss from continuing operations before income taxes	$             (69	)	$     (27,052	)

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NOTE N – COMMITMENTS AND CONTINGENCIES

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business.  We provide reserves for such claims when payment is probable and estimable in accordance with GAAP.  At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On April 17, 2012, a wage and hour case styled Guttentag, et al vs. Ruby Tuesday, Inc. was filed in the United States District Court, Southern District of New York.  The named plaintiffs, and five additional former employees who have joined the suit as opt-in plaintiffs, alleged that the Company violated the Fair Labor Standards Act and state wage and hour laws in New York and Florida.  Plaintiffs filed their motion for conditional certification on March 8, 2013, which sought a nationwide putative class of all current and former servers, bartenders, and food runners who worked for the Company for the three-year period prior to the filing of the lawsuit.  On June 11, 2013, the court entered an order granting conditional certification of the nationwide class requested by plaintiffs, but for the time frame of June 11, 2010 to the present.  Notice of the lawsuit and the right to opt-in was mailed to the putative class members in November 2013, and approximately 5%, or about 4,170 of the putative class members, filed consents to opt-in.  The parties have been engaged in mediation and recently reached a preliminary settlement agreement that, when approved by the court, will resolve the lawsuit and result in its dismissal with prejudice.  The total settlement sum is $3.0 million, and would cover the claims of all named and opt-in plaintiffs, including plaintiffs’ claims for costs and attorneys’ fees.  Accordingly, included within Accrued liabilities – Rent and other in our September 2, 2014 Condensed Consolidated Balance Sheet is a $3.0 million accrual in connection with this case.  

On October 2, 2014, the court granted the motion to approve the settlement without modification.  After a thirty-day appeals period runs without the filing of any appeals, and none are anticipated, the settlement agreement will become effective, final, and binding.  At that point, the Company has an obligation to fund at least $2.0 million of the settlement fund within 21 days.  The Company can defer, at its option, funding the remaining $1.0 million for up to another 90 days, but will incur an obligation to pay 8% per annum simple interest on any amount deferred for the deferral period.  Per the court's approval order, the case has now been dismissed with prejudice, subject to the court retaining jurisdiction to enforce the terms of the settlement agreement. 

NOTE O – FAIR VALUE MEASUREMENTS

The following table presents the fair value of financial assets and liabilities measured on a recurring basis and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Level	September 2,  2014			June 3, 2014
Deferred compensation plan: other investments – Assets	1	$	8,808		$	8,930
Deferred compensation plan: other investments – Liabilities	1		(8,808	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity	1		455			622
Deferred compensation plan: RTI common stock – Equity	1		(455	)		(622	)
Total		$	–		$	–

During the 13 weeks ended September 2, 2014 there were no transfers among levels within the fair value hierarchy.

The Ruby Tuesday, Inc. 2005 Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Ruby Tuesday, Inc. Restated Deferred Compensation Plan (the “Predecessor Plan”) are unfunded, non-qualified deferred compensation plans for eligible employees.  Assets earmarked to pay benefits under the Deferred Compensation Plan and Predecessor Plan are held by a rabbi trust.  We report the accounts of the rabbi trust in our Condensed Consolidated Financial Statements.  The investments held by these plans are reported at fair value based on third-party broker statements.  The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, is recorded in Selling, general and administrative expense in the Condensed Consolidated Financial Statements.

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The following table presents the fair value of assets measured on a non-recurring basis during the quarter ended September 2, 2014 and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Fair Value Measurements
	Level	September 2, 2014
Long-lived assets held for sale	2	$	2,525
Long-lived assets held for use	2		37
Total		$	2,562

The following table presents losses recognized during the 13 weeks ended September 2, 2014 and September 3, 2013 resulting from non-recurring fair value measurements.  The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Loss from discontinued operations, net of tax in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (in thousands):

	13 weeks ended
	September 2,  2014		September 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	599	$	269
Long-lived assets held for use		457		4,661
Total	$	1,056	$	4,930
Included within discontinued operations			$	153

Long-lived assets held for sale are valued using Level 2 inputs, primarily representing information obtained through broker listings and sales agreements.  Costs to market and/or sell the assets are factored into the estimates of fair value for those assets included in Assets held for sale on our Condensed Consolidated Balance Sheets.

We review our long-lived assets (primarily property, equipment, and, as appropriate, reacquired franchise rights and favorable leases) related to each restaurant to be held and used in the business, whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that we have impaired.  From time to time, this will also include closed restaurants or surplus sites that do not meet the held for sale criteria that we have offered for sale at a price less than carrying value.

The Level 2 fair values of our long-lived assets held for use are based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets.

Our financial instruments at September 2, 2014 and June 3, 2014 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit.  The fair value of cash and cash equivalents and accounts receivable and payable approximated carrying value due to the short-term nature of these instruments.  The carrying value and fair value of our other financial instruments not measured at fair value on a recurring basis, however subject to fair value disclosures, are as follows (in thousands):

	September 2, 2014		June 3, 2014
	Carrying Value	Fair Value (Level 2)	Carrying Value	Fair Value (Level 2)
Long-term debt and capital leases	$  257,512	$  264,196	$  258,691	$  263,526
Letters of credit	–	408	–	405

We estimated the fair value of debt and letters of credit using market quotes and present value calculations based on market rates.

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NOTE P – SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

As discussed in Note H to the Condensed Consolidated Financial Statements, the Senior Notes held by Ruby Tuesday, Inc. (the “Parent”) are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions (the “Guarantors”).  Each of the Guarantors is wholly-owned by Ruby Tuesday, Inc.  None of the few remaining subsidiaries of Ruby Tuesday, Inc., which were primarily created to hold liquor license assets, guarantee the Senior Notes (the “Non-Guarantors”).  Our Non-Guarantor subsidiaries are immaterial and are aggregated within the Parent information disclosed below.

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(f) of Regulation S-X promulgated by the Securities and Exchange Commission, presents the condensed consolidating financial information separately for the Parent, the Guarantors, and elimination entries necessary to consolidate the Parent and Guarantors.  Investments in wholly-owned subsidiaries are accounted for using the equity method for purposes of the consolidated presentation.  The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

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Condensed Consolidating Balance Sheet

As of September 2, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	56,573		$	316	$	–		$	56,889
Accounts receivable		1,568			2,963		–			4,531
Inventories		14,260			5,734		–			19,994
Income tax receivable		142,065			–		(140,334	)		1,731
Deferred income taxes		(1,889	)		3,213		–			1,324
Other current assets		17,236			3,112		–			20,348
Total current assets		229,813			15,338		(140,334	)		104,817
Property and equipment, net		580,924			204,132		–			785,056
Investment in subsidiaries		134,922			–		(134,922	)		–
Due from/(to) subsidiaries		73,041			217,057		(290,098	)		–
Other assets		48,399			12,476		–			60,875
Total assets	$	1,067,099		$	449,003	$	(565,354	)	$	950,748
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	19,177		$	3,944	$	–		$	23,121
Accrued and other current liabilities		49,406			33,963		–			83,369
Current maturities of long-term debt,
including capital leases		(347	)		5,198		–			4,851
Income tax payable		–			140,334		(140,334	)		–
Total current liabilities		68,236			183,439		(140,334	)		111,341
Long-term debt and capital leases,
less current maturities		213,139			39,522		–			252,661
Deferred income taxes		(1,078	)		4,656		–			3,578
Due to/(from) subsidiaries		217,057			73,041		(290,098	)		–
Other deferred liabilities		103,812			13,423		–			117,235
Total liabilities		601,166			314,081		(430,432	)		484,815
Shareholders’ equity:
Common stock		619			–		–			619
Capital in excess of par value		77,960			–		–			77,960
Retained earnings		397,791			134,922		(134,922	)		397,791
Accumulated other comprehensive loss		(10,437	)		–		–			(10,437	)
Total shareholders’ equity		465,933			134,922		(134,922	)		465,933
Total liabilities & shareholders’ equity	$	1,067,099		$	449,003	$	(565,354	)	$	950,748

22

Condensed Consolidating Balance Sheet

As of June 3, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	$	–		$	51,326
Accounts receivable		1,725			3,136		–			4,861
Inventories		15,114			6,060		–			21,174
Income tax receivable		138,524			–		(136,391	)		2,133
Deferred income taxes		(548	)		3,945		–			3,397
Other current assets		14,610			2,289		–			16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063		–			794,846
Investment in subsidiaries		158,266			–		(158,266	)		–
Due from/(to) subsidiaries		78,612			243,665		(322,277	)		–
Other assets		48,780			13,011		–			61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	$	–		$	26,201
Accrued and other current liabilities		46,450			36,356		–			82,806
Current maturities of long-term debt,
including capital leases		(341	)		5,157					4,816
Income tax payable		–			136,391		(136,391	)		–
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases,
less current maturities		213,039			40,836		–			253,875
Deferred income taxes		(445	)		3,945		–			3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)		–
Other deferred liabilities		109,756			14,264		–			124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614			–		–			614
Capital in excess of par value		76,269			–		–			76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)		–		–			(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934	)	$	956,427

23

Condensed Consolidating Statement of Operations and

Comprehensive Income

For the Thirteen Weeks Ended September 2, 2014

(In thousands)

	Parent				Guarantors		Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	202,551		$	76,906		$	–		$	279,457
Franchise revenue		146			1,579			–			1,725
		202,697			78,485			–			281,182
Operating costs and expenses:
Cost of goods sold		54,530			20,617			–			75,147
Payroll and related costs		68,042			27,800			–			95,842
Other restaurant operating costs		43,412			16,387			–			59,799
Depreciation		9,387			3,271			–			12,658
Selling, general, and administrative		20,221			10,680			–			30,901
Intercompany selling, general, and
administrative allocations		11,142			(11,142	)		–			–
Closures and impairments		1,231			251			–			1,482
Equity in earnings of subsidiaries		(7,781	)		–			7,781			–
Interest expense, net		4,511			911			–			5,422
Intercompany interest expense/(income)		2,892			(2,892	)		–			–
		207,587			65,883			7,781			281,251
(Loss)/income before income taxes		(4,890	)		12,602			(7,781	)		(69	)
(Benefit)/provision for income taxes		(7,455	)		4,821			–			(2,634	)
Net income	$	2,565		$	7,781		$	(7,781	)	$	2,565
Other comprehensive income:
Pension liability reclassification, net of tax		463			–			–			463
Total comprehensive income	$	3,028		$	7,781		$	(7,781	)	$	3,028

24

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Thirteen Weeks Ended September 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	210,082		$	78,010		$	–		$	288,092
Franchise revenue		21			1,561			–			1,582
		210,103			79,571			–			289,674
Operating costs and expenses:
Cost of goods sold		58,527			21,411			–			79,938
Payroll and related costs		73,526			29,207			–			102,733
Other restaurant operating costs		48,402			19,132			–			67,534
Depreciation		10,364			3,845			–			14,209
Selling, general, and administrative		25,994			11,021			–			37,015
Intercompany selling, general, and
administrative allocations		14,763			(14,763	)		–			–
Closures and impairments		5,165			2,868			–			8,033
Equity in earnings of subsidiaries		(4,525	)		–			4,525			–
Interest expense, net		5,060			1,693			–			6,753
Intercompany interest expense/(income)		3,185			(3,185	)		–			–
Loss on extinguishment of debt		511			–			–			511
		240,972			71,229			4,525			316,726
(Loss)/income from continuing operations
before income taxes		(30,869	)		8,342			(4,525	)		(27,052	)
(Benefit)/provision for income taxes from
continuing operations		(8,970	)		3,817			–			(5,153	)
(Loss)/income from continuing operations		(21,899	)		4,525			(4,525	)		(21,899	)
Loss from discontinued operations, net of tax		(343	)		–			–			(343	)
Net (loss)/income	$	(22,242	)	$	4,525		$	(4,525	)	$	(22,242	)
Other comprehensive income:
Pension liability reclassification, net of tax		478			–			–			478
Total comprehensive (loss)/income	$	(21,764	)	$	4,525		$	(4,525	)	$	(21,764	)

25

Condensed Consolidating Statement of Cash Flows

For the Thirteen Weeks Ended September 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	37,370		$	33,445		$	(57,733	)	$	13,082
Investing activities:
Purchases of property and equipment		(5,717	)		(1,260	)		–			(6,977	)
Proceeds from disposal of assets		250			23			–			273
Other, net		370			135			–			505
Net cash used by investing activities		(5,097	)		(1,102	)		–			(6,199	)
Financing activities:
Principal payments on long-term debt		11			(1,216	)		–			(1,205	)
Stock repurchases		(55	)		–			–			(55	)
Payments for debt issuance costs		(60	)		–			–			(60	)
Intercompany transactions		(26,608	)		(31,125	)		57,733			–
Net cash used by financing activities		(26,712	)		(32,341	)		57,733			(1,320	)
Increase in cash and cash equivalents		5,561			2			–			5,563
Cash and cash equivalents:
Beginning of year		51,012			314			–			51,326
End of quarter	$	56,573		$	316		$	–		$	56,889

26

Condensed Consolidating Statement of Cash Flows

For the Thirteen Weeks Ended September 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	(7,987	)	$	25,540		$	(8,689	)	$	8,864
Investing activities:
Purchases of property and equipment		(7,850	)		(3,309	)		–			(11,159	)
Proceeds from sale-leaseback transactions, net		5,637			–			–			5,637
Proceeds from disposal of assets		1,525			1,023			–			2,548
Other, net		205			–			–			205
Net cash used by investing activities		(483	)		(2,286	)		–			(2,769	)
Financing activities:
Principal payments on long-term debt		(12,941	)		(11,343	)		–			(24,284	)
Stock repurchases		(540	)		–			–			(540	)
Proceeds from exercise of stock options		1,419			–			–			1,419
Excess tax benefits from share-based
compensation		256			–			–			256
Intercompany transactions		3,186			(11,875	)		8,689			–
Net cash used by financing activities		(8,620	)		(23,218	)		8,689			(23,149	)
Decrease in cash and cash equivalents		(17,090	)		36			–			(17,054	)
Cash and cash equivalents:
Beginning of year		52,635			272			–			52,907
End of quarter	$	35,545		$	308		$	–		$	35,853

27

NOTE Q – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During Fiscal 2015

As discussed further in Note K to the Condensed Consolidated Financial Statements, we adopted ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists during the first quarter of fiscal 2015.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances.  The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal 2017).  Early application is permitted.  We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  The ASU is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous guidance, and improves guidance for multiple-element arrangements. The standard permits the use of either the retrospective or cumulative effect transition method.  The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (our fiscal 2018 first quarter).  We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

NOTE R – SUBSEQUENT EVENTS

Subsequent to September 2, 2014, we prepaid and retired three mortgage loan obligations with a September 2, 2014 aggregate balance of $3.9 million using cash on hand.  Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The discussion and analysis below for the Company should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes to such financial statements included elsewhere in this Quarterly Report on Form 10-Q.  The discussion below contains forward-looking statements which should be read in conjunction with the “Special Note Regarding Forward-Looking Information” included elsewhere in this Quarterly Report on Form 10-Q.

General:

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants.  As of September 2, 2014, we owned and operated 666, and franchised 83, Ruby Tuesday restaurants.  Ruby Tuesday restaurants can be found in 45 states, the District of Columbia, 12 foreign countries, and Guam.

As of September 2, 2014, there were 20 Company-owned and operated Lime Fresh restaurants, as well as seven domestic Lime Fresh restaurants operated by franchisees.

Overview and Strategies

The bar and grill segment of the casual dining industry in which we primarily operate is intensely competitive with respect to prices, services, convenience, locations, employees, advertising and promotion, and the types and quality of food.  We compete with other food service operations, including locally-owned restaurants, and other national and regional restaurant chains that offer similar types of services and products as we do.  We continue to believe there are opportunities to grow our business, strengthen our competitive position, enhance our profitability, and create value through the execution of the following strategies:

Enhance Sales and Margins Through Repositioning of Our Core Brand

We are in the process of executing a strategic brand transformation of the Ruby Tuesday concept which we believe will result in a more energetic, affordable, and broadly appealing brand.  We further believe the execution of this strategy provides opportunities for increased customer counts, same-restaurant sales growth, and increased shareholder value.  Our brand transformation is supported by four key pillars: core menu transformation, service and atmosphere enhancements, and communication.  As part of our transformation strategy, we have taken what we believe to be meaningful steps to improve our food, customer experience, organizational capabilities, and business model.  We have worked aggressively to transform our menu and, through successive menu launches throughout the past year, we introduced new menu platforms and offerings that provide a compelling value throughout the menu at a wide-range of price points.  Enhancing our service and atmosphere are also critical components of our brand transformation strategy.  As we introduced new menu and culinary platforms, we also simplified recipes and operational processes which we believe resulted in better and more consistent food and service execution.  Most recently, we introduced more casual and colorful new team uniforms and have a new menu design, both of which better reflect our brand personality.  We believe these changes have combined to deliver improved customer service and create a more energetic dining atmosphere for our customers.  The fourth pillar of our brand transformation strategy is our communication and marketing programs.  Historically our marketing strategy has primarily focused on print promotions, digital media and local marketing programs, with a minimal amount spent on television.  Over the past year, we have deployed what we believe to be a more balanced marketing program comprised of a mixture of national cable television advertising supported with direct mail and other print and electronic promotions.  Our television advertising is designed to reshape consumer perceptions of the Ruby Tuesday brand, by showcasing our brand personality in a fresh and energetic way, featuring compelling new food products, highlighting the freshness and variety of our Garden Bar, and effectively communicating value and affordability.  The four key areas of menu, service, atmosphere, and communication will continue to be foundational drivers of our brand transformation and key to building a stronger business model.

Focus on Low-Capital Intensive Potential Growth in the Fast Casual Sector

We have been focused on growing our Company in a low-capital intensive manner through Lime Fresh, our Mexican fast casual concept.  We initially opened Lime Fresh restaurants under a licensing agreement and,

29

after over a year of experience that enabled us to better understand the concept’s positioning and potential in the high-quality fast casual segment, we acquired the business in fiscal 2012 since we believed we could more effectively grow the concept if we owned it.  The fast casual segment of our industry is a growing segment where demand has historically exceeded supply, and we believe opening smaller, inline locations under the Lime Fresh brand provides a low-capital intensive potential growth option for us.  While the concept is still in its early stages, we believe it has the potential to generate attractive returns for us if we are able to realize our revenue and profitability targets.  Over the last fiscal year, we have made improvements to the business model, which include menu improvements, including better flavor profiles and increased portion size of our proteins, as well as improvements in cost of goods sold, labor productivity, and site selection criteria.

Enhancing Our Business Model

Over the past year, we made significant progress towards lowering our overall cost structure with identified reductions in cost of goods sold and selling, general, and administrative expenses that are estimated to result in annualized savings of $6.0 million and $7.0 million, respectively.  We are in the process of implementing enhanced business processes and capabilities, such as new platforms for guest count forecasting, labor management, and food waste management that should benefit our business model and result in a better guest experience and improved profitability.  We believe there is opportunity to further improve our business model with a continued focus on improving our restaurant-level returns and through a continued focus on lowering our overall cost structure through the implementation of business technology platforms.

Strengthen our Balance Sheet to Facilitate Growth and Value Creation

During the second quarter of fiscal 2014, we entered into a four-year $50.0 million revolving credit agreement (the “Senior Credit Facility”).  Our Senior Credit Facility, which is secured by substantially all of the shares of capital stock of the Company’s subsidiaries, real property, improvements and fixtures of 49 Ruby Tuesday restaurants, and substantially all of the personal property of the Company and each of its present and future subsidiaries, was obtained to provide access to capital for general corporate purposes and provides us with more covenant flexibility than our previous revolving credit facility.  The Senior Credit Facility has a $35.0 million accordion feature which provides us with additional liquidity if needed.  Aside from the $12.5 million allocated to letters of credit issued primarily in conjunction with our insurance programs, the $50.0 million revolving Senior Credit Facility has remained undrawn.

Our objective over the next several years is to continue to reduce outstanding debt levels in order to lower our leverage and focus on prudent restaurant development.  Our success in the key strategic initiatives outlined above should enable us to improve both our return on assets and return on equity, and to create additional shareholder value.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires us to make subjective or complex judgments that may affect the reported financial condition and results of operations.  We base our estimates on historical experience and other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.  We continually evaluate the information used to make these estimates as our business and the economic environment changes.

Results of Operations:

The following is an overview of our results of operations for the 13-week period ended September 2, 2014:

Net income was $2.6 million for the 13 weeks ended September 2, 2014 compared to a net loss of $22.2 million for the same quarter of the previous year.  Diluted earnings per share for the fiscal quarter ended September 2, 2014 was $0.04 compared to a diluted loss per share of $0.37 for the corresponding period of the prior year as a result of the decrease in net loss as discussed below.

30

During the 13 weeks ended September 2, 2014:

·   Same-restaurant sales* at Company-owned Ruby Tuesday restaurants increased 1.1%, while same-restaurant sales at domestic franchise Ruby Tuesday restaurants increased 6.0%.

·   Two Company-owned Ruby Tuesday restaurants were closed;

·   One franchised Lime Fresh restaurant was opened;

·   Four franchised Ruby Tuesday restaurants were opened;

·   Michael O. Moore stepped down as our Chief Financial Officer on June 26, 2014 and Jill M. Golder was appointed Executive Vice President, Chief Financial Officer, and Treasurer on the same date.  Mr. Moore left the Company on August 4, 2014; and

·   Jeffrey C. Wood, our former Senior Vice President and Chief Development Officer, left the Company on July 24, 2014.

* We define same-restaurant sales as a year-over-year comparison of sales volumes for restaurants that, in the current year have been open at least 18 months, in order to remove the impact of new openings in comparing the operations of existing restaurants.

The following table sets forth selected restaurant operating data as a percentage of total revenue, except where otherwise noted, for the periods indicated.  All information is derived from our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

	Thirteen weeks ended
	September 2,		September 3,
	2014		2013
Revenue:
Restaurant sales and operating revenue	99	.4%	99	.5%
Franchise revenue	0	.6	0	.5
Total revenue	100	.0	100	.0
Operating costs and expenses:
Cost of goods sold (1)	26	.9	27	.7
Payroll and related costs (1)	34	.3	35	.7
Other restaurant operating costs (1)	21	.4	23	.4
Depreciation (1)	4	.5	4	.9
Selling, general and administrative, net	11	.0	12	.8
Closures and impairments	0	.5	2	.8
Interest expense, net	1	.9	2	.3
Loss on extinguishment of debt		–	0	.2
Total operating costs and expenses	100	.0	109	.3
Loss from continuing operations before income taxes	(0	.0)	(9	.3)
Benefit for income taxes from continuing operations	(0	.9)	(1	.8)
Income/(loss) from continuing operations	0	.9	(7	.6)
Loss from discontinued operations, net of tax		–	(0	.1)
Net income/(loss)	0	.9%	(7	.7)%

 (1)     As a percentage of restaurant sales and operating revenue.

The following table shows Company-owned Ruby Tuesday and Lime Fresh concept restaurant activity for the 13-week periods ended September 2, 2014 and September 3, 2013.

	Ruby Tuesday	Lime  Fresh	Total
13 weeks ended September 2, 2014
Beginning number	668	20	688
Opened	–	–	–
Closed	(2))	–	(2))
Ending number	666	20	686

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13 weeks ended September 3, 2013
Beginning number	706	18	724
Opened	–	3	3
Closed	(3))	–	(3))
Ending number	703	21	724

The following table shows franchised Ruby Tuesday and Lime Fresh concept restaurant activity for the 13-week periods ended September 2, 2014 and September 3, 2013.

	Ruby  Tuesday	Lime  Fresh
13 weeks ended September 2, 2014
Beginning number	79	6
Opened	4	1
Closed	–	–
Ending number	83	7
13 weeks ended September 3, 2013
Beginning number	77	6
Opened	–	2
Closed	(2)	–
Ending number	75	8

Revenue

RTI’s restaurant sales and operating revenue for the 13 weeks ended September 2, 2014 decreased 3.0% to $279.5 million compared to the same period of the prior year.  This decrease is primarily a result of restaurant closings since the first quarter of the prior year offset by a 1.1% increase in same-restaurant sales at Company-owned Ruby Tuesday restaurants.  The increase in Ruby Tuesday concept same-restaurant sales is attributable to a 1.3% increase in customer traffic offset by a slight decrease in net check.  First quarter of fiscal 2015 marked the second consecutive quarter of positive customer traffic driven in our opinion by a more effective promotional strategy and perceived positive customer response to our brand transformation efforts.

Franchise revenue for the 13 weeks ended September 2, 2014 increased 9.0% to $1.7 million compared to the same period of the prior year.  Franchise revenue is predominately comprised of domestic and international franchise royalties, which totaled $1.6 million for both 13-week periods ended September 2, 2014 and September 3, 2013.  The increase in franchise revenue for the 13 weeks ended September 2, 2014 was due to a $0.1 million increase in international franchise license fees as compared to the same quarter of the prior year.

Segment Profit

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources.  We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment.  Segment profit/(loss) by reportable segment for the 13 weeks ended September 2, 2014 and September 3, 2013 are as follows (in thousands):

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Segment profit/(loss):
Ruby Tuesday concept	$	30,389		$	9,851
Lime Fresh concept		(176	)		(2,454	)
Total segment profit	$	30,213		$	7,397

32

Segment profit for the 13 weeks ended September 2, 2014 for the Ruby Tuesday concept increased $20.5 million to $30.4 million compared to the first quarter of fiscal 2014 due primarily to the 1.1% increase in same-restaurant sales at Company-owned Ruby Tuesday restaurants discussed above, improvements in cost of goods sold, payroll and related costs, and other restaurant operating costs due to initiatives discussed later within this MD&A, and decreases in closures and impairments expense of $5.3 million and advertising spending of $4.1 million. The reduction in closures and impairments expense is attributable to the prior year impairment of 13 open restaurants, four of which closed in January 2014 and two thereafter. During the current year, only one Ruby Tuesday concept open restaurant was impaired for poor performance.  The reduction in advertising spending relates to reduced television advertising.

Segment losses for the 13 weeks ended September 2, 2014 for the Lime Fresh concept decreased $2.3 million compared to the first quarter of fiscal 2014 to $0.2 million due primarily to decreases in closures and impairments expense of $1.8 million as the prior year Lime Fresh segment losses included lease reserve charges related to four undeveloped sites for which a management decision was reached to forego restaurant development.

The following is a reconciliation of segment profit to loss from continuing operations before taxes for the 13 weeks ended September 2, 2014 and September 3, 2013 (in thousands):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Segment profit	$       30,213		$         7,397
Less:
Depreciation and amortization	(13,238	)	(14,874	)
Unallocated general and administrative expenses	(10,962	)	(11,897	)
Interest expense, net	(5,422	)	(6,753	)
Preopening expenses	(89	)	(354	)
Other expense, net	(571	)	(571	)
Loss from continuing operations before income taxes	$             (69	)	$     (27,052	)

Pre-tax Loss from Continuing Operations

Pre-tax loss from continuing operations was $0.1 million for the 13 weeks ended September 2, 2014 compared to $27.1 million for the corresponding period of the prior year.  The decrease in pre-tax loss is due to an increase in same-restaurant sales of 1.1% at Company-owned Ruby Tuesday restaurants, lower closures and impairments expense ($6.6 million) and interest expense ($1.3 million), and decreases, as a percentage of restaurant sales and operating revenue or total revenue, as appropriate, of cost of goods sold, payroll and related costs, other restaurant operating costs, depreciation, and selling general, and administrative, net.

In the paragraphs that follow, we discuss in more detail the components of the decrease in pre-tax loss from continuing operations for the 13-week period ended September 2, 2014, as compared to the comparable period in the prior year.  Because a significant portion of the costs recorded in the cost of goods sold, payroll and related costs, other restaurant operating costs, and depreciation categories are either variable or highly correlative with the number of restaurants we operate, we evaluate our trends by comparing the costs as a percentage of restaurant sales and operating revenue, as well as the absolute dollar change, to the comparable prior year period.

Cost of Goods Sold

Cost of goods sold decreased $4.8 million (6.0%) to $75.1 million for the 13 weeks ended September 2, 2014, over the corresponding period of the prior year.  As a percentage of restaurant sales and operating revenue, cost of goods sold decreased from 27.7% to 26.9%.

The absolute dollar decrease in cost of goods sold for the 13-week period ended September 2, 2014 was the result of restaurant closures and cost savings on certain products as a result of renegotiated contracts with certain vendors since the first quarter of fiscal 2014.  These were partially offset by price increases on seafood, dairy, and certain other products since the same quarter of the prior year.

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As a percentage of restaurant sales and operating revenue, the decrease in cost of goods sold for the 13-week period ended September 2, 2014 is primarily the result of renegotiated contracts with certain vendors since the first quarter of fiscal 2014.

Payroll and Related Costs

Payroll and related costs decreased $6.9 million (6.7%) to $95.8 million for the 13 weeks ended September 2, 2014, as compared to the corresponding period in the prior year. As a percentage of restaurant sales and operating revenue, payroll and related costs decreased from 35.7% to 34.3%.

The absolute dollar decrease in payroll and related costs for the 13-week period ended September 2, 2014 was due to restaurant closures, decreases in hourly labor as a result of scheduling improvements with the rollout of a new labor forecasting system in our restaurants, and lower management labor, which were partially offset by higher bonus expense as more restaurants achieved the performance goals as compared to the same quarter of the prior year.

As a percentage of restaurant sales and operating revenue, the decrease in payroll and related costs for the 13 weeks ended September 2, 2014 was primarily the result of decreased hourly and management labor due to reasons as discussed above coupled with leveraging associated with higher sales volumes.

Other Restaurant Operating Costs

Other restaurant operating costs decreased $7.7 million (11.5%) to $59.8 million for the 13-week period ended September 2, 2014, as compared to the corresponding period in the prior year.  As a percentage of restaurant sales and operating revenue, these costs decreased from 23.4% to 21.4%.

For the 13 weeks ended September 2, 2014, the decrease in other restaurant operating costs related to the following (in thousands):

Repairs	$    2,092
Legal	1,180
Utilities	1,075
Business interruption recoveries	1,050
Rent and leasing	1,017
Other decreases, net	1,321
Net decrease	$    7,735

In both absolute dollars and as a percentage of restaurant sales and operating revenue for the 13-week period ended September 2, 2014, the decrease was a result of reduced building repairs, utilities, and rent and leasing due primarily to restaurant closures since the same quarter of the prior year, lower legal costs related to pending litigation, business interruption recoveries related to claims collected for certain of our restaurants in the Gulf Coast area, and leveraging associated with higher sales volumes.

Depreciation

Depreciation expense decreased $1.6 million (10.9%) to $12.7 million for the 13-week period ended September 2, 2014, as compared to the corresponding period in the prior year.  As a percentage of restaurant sales and operating revenue, depreciation expense decreased from 4.9% to 4.5%.

In terms of absolute dollars and as a percentage of restaurant sales and operating revenue, the decrease for the 13-week period ended September 2, 2014 is due primarily to assets that became fully depreciated since the first quarter of the prior year coupled with restaurant closures and leveraging associated with higher sales volumes.

Selling, General and Administrative Expenses, Net

Selling, general and administrative expenses, net decreased $6.1 million (16.5%) to $30.9 million for the 13-week period ended September 2, 2014, as compared to the corresponding period in the prior year.

The decrease for the 13-week period ended September 2, 2014 is due to lower advertising costs ($4.2 million), primarily as a result of decreased television advertising, and a reduction in general and 

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administrative costs ($1.9 million) due to lower management labor from reductions in staffing, lower health insurance costs as a result of favorable claims experience, and lower legal fees, which were partially offset by higher accruals for support center bonus.

Closures and Impairments

Closures and impairments decreased $6.6 million to $1.5 million for the 13-week period ended September 2, 2014, as compared to the corresponding period of the prior year. The decrease for the 13-week period ended September 2, 2014 is primarily due to lower property impairment charges ($3.9 million) as the prior year included, among other charges, impairments on 13 open Ruby Tuesday concept restaurants, closed restaurant lease reserve expense ($2.1 million) due to the establishment in the prior year of lease reserves on four undeveloped Lime Fresh concept sites for which a management decision was reached to forego restaurant development, other closing costs ($0.2 million), and higher gains on the sale of surplus properties ($0.3 million).  See Note I to our Condensed Consolidated Financial Statements for further information on our closures and impairment charges recorded during the first quarters of fiscal 2015 and 2014.

Interest Expense, Net

Interest expense, net decreased $1.3 million to $5.4 million for the 13 weeks ended September 2, 2014, as compared to the corresponding period in the prior year, primarily due to lower interest expense on our Senior Notes due to repurchases and the early payoff of certain mortgage loans since the first quarter of fiscal 2014.

Benefit for Income Taxes from Continuing Operations

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period.  Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable.  In this situation, the interim tax rate should be based on the actual year-to-date results.  Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine.  As such, we recorded a tax provision for the first quarter of fiscal 2015 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not that we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $2.6 million during the first quarter of fiscal 2015, compared to a tax benefit from continuing operations of $5.2 million in the prior year quarter. Included in our $2.6 million tax benefit from continuing operations for the quarter ended September 2, 2014 was a benefit of $3.2 million representing an immaterial prior period correction to our deferred tax asset valuation allowance. 

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Discontinued Operations

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we closed all 13 Marlin & Ray’s restaurants, the Company’s one Wok Hay restaurant, and our two Truffles restaurants during the fourth quarter of fiscal 2013.  We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 weeks ended September 3, 2013.  The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen weeks ended
	September 3, 2013
Restaurant sales and operating revenue	$	–
Loss before income taxes	$	(528)
Benefit for income taxes		(185)
Loss from discontinued operations	$	(343)

Liquidity and Capital Resources:

Cash and cash equivalents increased/(decreased) by $5.6 million and $(17.1) million during the first 13 weeks of fiscal 2015 and 2014, respectively.  The change in cash and cash equivalents is as follows (in thousands):

	Thirteen weeks ended
	September 2,			September 3,
	2014			2013
Cash provided by operating activities	$	13,082		$	8,864
Cash used by investing activities		(6,199	)		(2,769	)
Cash used by financing activities		(1,320	)		(23,149	)
Increase/(decrease) in cash and cash equivalents	$	5,563		$	(17,054	)

Operating Activities

Our cash provided by operations is generally derived from cash receipts generated by our restaurant customers and franchisees.  Substantially all of the $279.5 million and $288.1 million of restaurant sales and operating revenue disclosed in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for the 13 weeks ended September 2, 2014 and September 3, 2013, respectively, was received in cash either at the point of sale or within two to four days (when our customers paid with debit or credit cards).  Our primary uses of cash for operating activities are food and beverage purchases, payroll and benefit costs, restaurant operating costs, general and administrative expenses, and marketing, a significant portion of which are incurred and paid in the same period.

Cash provided by operating activities for the first 13 weeks of fiscal 2015 increased $4.2 million (47.6%) from the corresponding period in the prior year to $13.1 million.  The increase is due primarily to higher Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") as a result of a 1.1% increase in same-restaurant sales at Company-owned Ruby Tuesday concept restaurants, coupled with lower cash paid for interest ($1.3 million) due to the prepayment of certain of our mortgage obligations and repurchases of a portion of our Senior Notes since the same quarter of the prior year, and reductions in amounts spent to acquire inventory (approximately $0.9 million).  These were partially offset by decreases in accounts payable, accrued, and other liabilities due to the timing of payments (approximately $7.9 million) and higher amounts spent on media advertising (approximately $6.3 million).

Our working capital deficiency and current ratio as of September 2, 2014 were $6.5 million and 0.9:1, respectively.  As is common in the restaurant industry, we typically carry current liabilities in excess of current assets because cash (a current asset) generated from operating activities is reinvested in capital expenditures (a long-term asset), debt reduction (a long-term liability), or stock repurchases (thereby reducing equity), and receivable and inventory levels are generally not significant.

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Investing Activities

We require capital principally for the maintenance and upkeep of our existing restaurants, limited new restaurant construction, investments in technology, equipment, remodeling of existing restaurants, and on occasion for the acquisition of franchisees or other restaurant concepts.  Property and equipment expenditures purchased with internally generated cash flows and/or proceeds from sale-leaseback transactions for the 13 weeks ended September 2, 2014 and September 3, 2013 were $7.0 million and $11.2 million, respectively.

During the 13 weeks ended September 3, 2013, we completed sale-leaseback transactions of the land and buildings for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million.  Equipment was not included.  Net proceeds from the sale-leaseback transactions were used for general corporate purposes, including debt payments.

Capital expenditures for the remainder of the fiscal year are projected to be approximately $21.0 to $25.0 million.  We intend to fund our investing activities with cash currently on hand, cash provided by operations, or borrowings on the Senior Credit Facility.

Financing Activities

Historically our primary sources of cash have been operating activities and refranchising transactions.  When these alone have not provided sufficient funds for both our capital and other needs, we have obtained funds through the issuance of indebtedness or through the issuance of additional shares of common stock.  Our current borrowings and credit facilities are described below.

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”).  The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions.  They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness.  The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date.  Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets.  The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest.  At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest.  At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings.  There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets.  These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture.  The Indenture also provides for events of default, which, if

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any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement (the “Senior Credit Facility” discussed below) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year.  During the quarter ended September 2, 2014, we did not repurchase any of the Senior Notes.  The balance on the Senior Notes was $215.0 million at September 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million.  The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015.  The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize.  Our options for the rate are a Base Rate or LIBOR, plus an applicable margin.  The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%.  The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%.  We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants.  The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a September 2, 2014 net book value of $80.8 million.

Under the Senior Credit Facility, we had no borrowings outstanding at September 2, 2014.  After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of September 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness.  In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio.  The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 5.00 to 1.0 and a minimum fixed charge coverage ratio of 1.30 to 1.0 for the quarter ended September 2, 2014.  The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility.  The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

Our $44.7 million in mortgage loan obligations as of September 2, 2014 consists of various loans acquired upon franchise acquisitions.  These loans, which mature between January 2015 and November 2022, have

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balances which range from negligible to $7.6 million and interest rates of 7.60% to 10.92%.  Many of the properties acquired from franchisees collateralize the loans outstanding.

During the 13 weeks ended September 2, 2014, we spent an insignificant amount to repurchase 0.1 million shares of RTI common stock.  As of September 2, 2014, the total number of remaining shares authorized to be repurchased was 11.8 million.  We spent $0.5 million to repurchase 0.1 million shares of RTI common stock during the 13 weeks ended September 3, 2013.

During the remainder of fiscal 2015, we expect to fund operations, capital expansion, and any other investments from cash currently on hand, operating cash flows, or our Senior Credit Facility.

Covenant Compliance

Under the terms of the Senior Credit Facility, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants.  The financial ratios include maximum funded debt and minimum fixed charge coverage covenants.  While as of September 2, 2014 we were in compliance with the financial ratios contained in our Senior Credit Facility, our continued ability to meet those financial ratios, tests, and covenants can be affected by events beyond our control, and we cannot assure you that we will meet those ratios, tests, and covenants.

Maximum Funded Debt Covenant

Our maximum funded debt covenant is an Adjusted Total Debt to Consolidated EBITDAR ratio.  Adjusted Total Debt, as defined in our covenants, includes items both on-balance sheet (debt and capital lease obligations) and off-balance sheet (such as the present value of leases, letters of credit and guarantees).  Consolidated EBITDAR is consolidated net income/(loss) (for the Company and its majority-owned subsidiaries) plus interest charges, income tax, depreciation, amortization, rent and other non-cash charges.  Among other charges, we have reflected share-based compensation, asset impairment and bad debt expense, as non-cash.

Consolidated EBITDAR and Adjusted Total Debt are not presentations made in accordance with U.S. generally accepted accounting principles (“GAAP”), and, as such, should not be considered a measure of financial performance or condition, liquidity or profitability.  They also should not be considered alternatives to GAAP-based net income or balance sheet amounts or operating cash flows or indicators of the amount of free cash flow available for discretionary use by management, as Consolidated EBITDAR does not consider certain cash requirements such as interest payments, tax payments or debt service requirements and Adjusted Total Debt includes certain off-balance sheet items.  Further, because not all companies use identical calculations, amounts reflected by RTI as Consolidated EBITDAR or Adjusted Total Debt may not be comparable to similarly titled measures of other companies.  We believe the information shown below is relevant as it presents the amounts used to calculate covenants which are provided to our lenders.  Non-compliance with our debt covenants could result in the requirement to immediately repay all amounts outstanding under such agreements.

The following is a reconciliation of our total long-term debt and capital leases, which are GAAP-based, to Adjusted Total Debt as defined in our bank covenants (in thousands):

	September 2, 2014
Current portion of long-term debt, including capital leases	$	4,851
Long-term debt and capital leases, less current maturities		252,661
Total long-term debt and capital leases		257,512
Present value of operating leases*		213,058
Letters of credit*		12,502
Unrestricted cash in excess of $10.0 million		(46,858	)
Unamortized discount of senior unsecured notes		2,420
Unamortized premium of mortgage loan obligations		(685	)
Adjusted Total Debt	$	437,949

 * Non-GAAP measure.  See below for discussion regarding reconciliation to GAAP-based amounts.

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The following is a reconciliation of net loss, which is a GAAP-based measure of our operating results, to Consolidated EBITDAR as defined in our bank covenants (in thousands):

	Twelve Months
	Ended
	September 2, 2014
Net loss	$	(39,539	)
Income taxes		(2,067	)
Rent expense		54,933
Depreciation		53,277
Interest expense		23,671
Asset impairments		21,341
Share-based compensation expense		7,624
Restructuring costs		3,210
Restaurant closing costs		2,542
Amortization of intangibles		2,435
Non-cash accruals		1,313
Other		1,144
Consolidated EBITDAR	$	129,884
Adjusted Total Debt to Consolidated EBITDAR – Actual		3.37x
Maximum allowed per covenant (1)		5.00x

(1) For fiscal 2015, the Senior Credit Facility requires us to maintain quarterly maximum Adjusted Total Debt to EBITDAR ratios of less than or equal to 5.00x (for our first fiscal quarter), 4.85x (for our second and third fiscal quarters), and 4.75x (for our fourth fiscal quarter). For fiscal 2016 and thereafter, the maximum Adjusted Total Debt to EBITDAR ratio fluctuates as provided in Article VII of the Senior Credit Facility.

Minimum Fixed Charge Coverage

Our fixed charge coverage ratio compares Consolidated EBITDAR (as discussed above) to interest and cash-based rents.

The following shows our computation of our fixed charge coverage ratio (in thousands):

	Twelve Months
	Ended
	September 2, 2014
Consolidated EBITDAR	$	129,884
Interest*	$	21,399
Cash rents*		51,994
Total	$	73,393

* Non-GAAP measure.  See below for discussion regarding reconciliation to GAAP-based amounts.

Fixed Charge Covenant – Actual	1.77x
Minimum allowed per covenant (2)	1.30x

(2) For fiscal 2015, the Senior Credit Facility requires us to maintain quarterly minimum fixed charge coverage ratios of greater than or equal to 1.30x (for our first fiscal quarter), 1.35x (for our second and third fiscal quarters), and 1.40x (for our fourth fiscal quarter). For fiscal 2016 and thereafter, the minimum fixed charge coverage ratio fluctuates as provided in Article VII of the Senior Credit Facility.

Non-GAAP Amounts Used in Debt Covenant Calculations

As previously discussed, we use various non-GAAP amounts in our Adjusted Total Debt, Consolidated EBITDAR, and Fixed Charge covenant calculations.  Two of the amounts presented in the Adjusted Total Debt calculation, the present value of operating leases and letters of credit, are off-balance sheet and there is no corresponding amount presented in our Condensed Consolidated Balance Sheets.

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Our Minimum Fixed Charge Coverage ratio requires interest to be included in the denominator.  The amount we reflect for interest in the denominator of this calculation ($21.4 million on a rolling 12 month basis) differs from interest expense determined in accordance with GAAP ($23.7 million) because of three adjustments we make.  As shown below, we exclude brokerage fees, prepayment penalties, and the amortization of loan fees and fair market value adjustments.  While these items are reflected as interest expense in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss), they do not require on-going cash payments for servicing and therefore are not impacted by future Consolidated EBITDAR.  The table below reconciles debt covenant interest for the preceding 12 months to GAAP interest for the same time period (amounts in thousands):

Interest	$	21,399
Brokerage fees		1,965
Prepayment penalties		344
Amortization of loan fees and fair market
value adjustments		(37	)
GAAP-based interest expense	$	23,671

Our Minimum Fixed Charge Coverage ratio also allows for recurring cash rents to be included in the denominator.  Cash rents ($52.0 million on a rolling 12 month basis) differ from rents determined in accordance with GAAP ($55.7 million) by the following (amounts in thousands):

Cash rents	$	51,994
Change in rent accruals		1,037
Rent settlement payments		2,714
GAAP-based rent expense	$	55,745

Significant Contractual Obligations and Commercial Commitments

Long-term financial obligations were as follows as of September 2, 2014 (in thousands):

	Payments Due By Period
			Less than		1-3		3-5		More than 5
	Total		1 year		years		years		years
Notes payable and other    long-term debt, including
current maturities (a)	$	44,247	$	4,982	$	19,583	$	11,788	$	7,894
Senior unsecured notes (a)		215,000		–		–		–		215,000
Interest (b)		111,291		19,765		37,827		35,113		18,586
Operating leases (c)		370,999		47,910		86,750		73,105		163,234
Purchase obligations (d)		82,375		48,222		28,972		3,124		2,057
Pension obligations (e)		33,125		3,751		4,944		4,766		19,664
Total (f)	$	857,037	$	124,630	$	178,076	$	127,896	$	426,435

(a)   See Note H to the Condensed Consolidated Financial Statements for more information.

(b)   Amounts represent contractual interest payments on our fixed-rate debt instruments.  Interest payments on our variable-rate notes payable with balances of $2.4 million as of September 2, 2014 have been excluded from the amounts shown above, primarily because the balances outstanding can fluctuate monthly.  Additionally, the amounts shown above include interest payments on the Senior Notes at the current interest rate of 7.625%.

(c)   This amount includes operating leases totaling $2.4 million for which sublease income from franchisees or others is expected.  Certain of these leases obligate us to pay maintenance costs, utilities, real estate taxes, and insurance, which are excluded from the amounts shown above.  See Note G to the Condensed Consolidated Financial Statements for more information.

(d)   The amounts for purchase obligations include cash commitments under contract for food items and supplies, advertising, utility contracts, and other miscellaneous commitments.

(e)   See Note J to the Condensed Consolidated Financial Statements for more information.

(f)   This amount excludes $6.7 million of gross unrecognized tax benefits due to the uncertainty regarding the timing of future cash outflows associated with such obligations.

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Commercial Commitments as of September 2, 2014 (in thousands):

	Payments Due By Period
				Less than		1-3		3-5	More than 5
		Total		1 year		years		years	years
Letters of credit	$	12,502	$	12,502	$	–	$	–	$	–
Divestiture guarantees		6,010		856		2,002		1,778		1,374
Lease guarantees		1,561		264		541		506		250
Total	$	20,073	$	13,622	$	2,543	$	2,284	$	1,624

At September 2, 2014, we had divestiture guarantees, which arose in fiscal 1996, when our shareholders approved the distribution of our family dining restaurant business (Morrison Fresh Cooking, Inc., “MFC”) and our health care food and nutrition services business (Morrison Health Care, Inc., “MHC”). Subsequent to that date Piccadilly Cafeterias, Inc. (“Piccadilly”) acquired MFC and Compass Group (“Compass”) acquired MHC. As agreed upon at the time of the distribution, we have been contingently liable for payments to MFC and MHC employees retiring under MFC’s and MHC’s versions of the Management Retirement Plan and the Executive Supplemental Pension Plan (the two non-qualified defined benefit plans) for the accrued benefits earned by those participants as of March 1996.

We estimated our divestiture guarantees at September 2, 2014 to be $5.5 million for employee benefit plans (all of which resides with MHC following Piccadilly’s bankruptcy in fiscal 2004).  We believe the likelihood of being required to make payments for MHC’s portion to be remote due to the size and financial strength of MHC and Compass.

As of September 2, 2014, we are the guarantor of two third-party leases associated with closed concept restaurants.  Lease guarantee amounts in the table above represent lease payments for which we are contingently liable.  While we believe that the likelihood of being required to make these lease payments is remote, we recorded a guarantee liability of $0.1 million in our Condensed Consolidated Balance Sheets at both September 2, 2014 and June 3, 2014.

Accounting Pronouncements Adopted During Fiscal 2015

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.  The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events.  Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements.  We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal 2015.  The adoption of this standard did not have a significant impact on our Condensed Consolidated Financial Statements.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances.  The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal 2017).  Early application is permitted.  We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  The ASU is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous

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guidance, and improves guidance for multiple-element arrangements. The standard permits the use of either the retrospective or cumulative effect transition method.  The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (our fiscal 2018 first quarter).  We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

Known Events, Uncertainties and Trends:

Financial Strategy and Stock Repurchase Plan

Our financial strategy is to utilize a prudent amount of debt, including operating leases, letters of credit, and any guarantees, to minimize the weighted average cost of capital while allowing financial flexibility.  This strategy has periodically allowed us to repurchase our common stock.  During the first quarter of fiscal 2015, we repurchased an insignificant number of shares of our common stock at an aggregate cost of $0.1 million.  As of September 2, 2014, the total number of remaining shares authorized to be repurchased was 11.8 million.  To the extent not funded with cash on hand or cash from operating activities, additional repurchases, if any, may be funded by available cash on hand or borrowings on the Senior Credit Facility.  The repurchase of shares in any particular future period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future.

Mortgage Loan Payoffs and Repurchases of Senior Notes

Subsequent to September 2, 2014, we prepaid and retired three mortgage loan obligations with a September 2, 2014 aggregate balance of $3.9 million using cash on hand.  Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

We are allowed under the terms of the Senior Credit Facility to prepay up to $20.0 million of indebtedness in any fiscal year to various holders of the Senior Notes.  We did not repurchase any of the Senior Notes during the 13 weeks ended September 2, 2014.  As of the date of this filing, we may repurchase $20.0 million of the Senior Notes during the remainder of fiscal 2015.  Any future repurchases of the Senior Notes, if any, will be funded with available cash on hand.

Dividends

During fiscal 1997, our Board of Directors approved a dividend policy as an additional means of returning capital to our shareholders.  No dividends were declared or paid during the 13 weeks ended September 2, 2014 or September 3, 2013.  Thepayment of a dividend in any particular period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that dividends will be paid in the future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures about Market Risk

We are exposed to market risk from fluctuations in interest rates and changes in commodity prices. The interest rate charged on our Senior Credit Facility can vary based on the interest rate option we choose to utilize. Our options for the rate are LIBOR or a Base Rate plus an applicable margin. The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%. The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%. As of September 2, 2014, the total amount of outstanding debt subject to interest rate fluctuations was $2.4 million. A hypothetical 100 basis point change in short-term interest rates would result in an increase or decrease in interest expense of an insignificant amount per year, assuming a consistent capital structure.

Many of the ingredients used in the products we sell in our restaurants are commodities that are subject to unpredictable price volatility.  This volatility may be due to factors outside our control such as weather and seasonality.  We attempt to minimize the effect of price volatility by negotiating fixed price contracts for the supply of key ingredients.  Historically, and subject to competitive market conditions, we have been able to mitigate the negative impact of price volatility through adjustments to average check or menu mix.

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ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and under the supervision of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.  Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Based on the evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 2, 2014.

Changes in Internal Controls

During the fiscal quarter ended September 2, 2014, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business, including claims relating to injury or wrongful death under “dram shop” laws, workers’ compensation and employment matters, claims relating to lease and contractual obligations, and claims from customers alleging illness or injury.  We provide reserves for such claims when payment is probable and estimable in accordance with U.S. generally accepted accounting principles.  At this time, in the opinion of management, the ultimate resolution of pending legal proceedings will not have a material adverse effect on our consolidated operations, financial position, or cash flows.  See Note N to the Condensed Consolidated Financial Statements for further information about our legal proceedings as of September 2, 2014.

ITEM 1A.  RISK FACTORS

Information regarding risk factors appears in our Annual Report on Form 10-K for the year ended June 3, 2014 in Part I, Item 1A. Risk Factors.  There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table includes information regarding purchases of our common stock made by us during the first quarter ended September 2, 2014:

	(a)	(b)	(c)	(d)
	Total number	Average	Total number of shares	Maximum number of shares
	of shares	price paid	purchased as part of publicly	that may yet be purchased
Period	purchased (1)	per share	announced plans or programs (1)	under the plans or programs (2)
Month #1
(June 4 to July 8)	7,066	$7.76	7,066	11,766,305
Month #2
(July 9 to August 5)	–	–	–	11,766,305
Month #3
(August 6 to September 2)	–	–	–	11,766,305
Total	7,066	$7.76	7,066

(1) No shares were repurchased other than through our publicly-announced repurchase programs and authorizations during the first quarter of our year ending June 2, 2015.

(2) As of September 2, 2014, 11.8 million shares remained available for purchase under existing programs, which consists of 1.8 million shares remaining under a July 11, 2007 authorization by the Board of Directors to repurchase 6.5 million shares and a January 8, 2013 authorization by the Board of Directors, not yet begun, to repurchase 10.0 million shares.  The timing, price, quantity, and manner of the purchases to be made are at the discretion of management upon instruction from the Board of Directors, depending upon market conditions.  The repurchase of shares in any particular future period and the actual amount thereof remain at the discretion of the Board of Directors, and no assurance can be given that shares will be repurchased in the future.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this report:

 Exhibit No.

10	.1	Agreement and General Release between Ruby Tuesday, Inc. and Jeff Wood.
12	.1	Statement regarding computation of Consolidated Ratio of Earnings to Fixed Charges.
31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
		Sarbanes-Oxley Act of 2002.
32	.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
		Sarbanes-Oxley Act of 2002.
10	1.INS	XBRL Instance Document.
10	1.SCH	XBRL Schema Document.
10	1.CAL	XBRL Calculation Linkbase Document.
10	1.DEF	XBRL Definition Linkbase Document.
10	1.LAB	XBRL Labels Linkbase Document.
10	1.PRE	XBRL Presentation Linkbase Document.

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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.

RUBY TUESDAY, INC.

(Registrant)

Date: October 14, 2014  BY: /s/ JILL M. GOLDER —————————————— Jill M. Golder Executive Vice President – Chief Financial Officer, Treasurer and Assistant Secretary (Principal Financial Officer)

Date: October 14, 2014  BY: /s/ FRANKLIN E. SOUTHALL, JR. ————————————————— Franklin E. Southall, Jr. Vice President – Corporate Controller and Principal Accounting Officer (Principal Accounting Officer)

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EX-10.1

AGREEMENT AND GENERAL RELEASE

Jeff Wood (“Employee”) and Ruby Tuesday, Inc. (“RTI” or the “Company”), a Georgia corporation, enter into this Agreement and General Release ("Agreement") and agree as follows:

1.           Termination Date.  Employee ceased to be employed by the Company on July 24, 2014 ("Termination Date").

2.           Payment to Employee.  In consideration of the releases, waivers, representations and obligations by Employee contained in this Agreement, the Company will pay to Employee a sum equal to Four (4) weeks of Employee’s regular gross base salary, less required deductions (“Severance Payment”). The Severance Payment will be paid within fifteen (15) days following the Effective Date (as defined in Section 17(b) below.) The one-time severance payment will be in the gross amount of Twenty-Five Thousand Dollars and 00/100 ($25,000.00) subject to reduction for all required withholdings and deductions.

3.           Continuation of Health Insurance; Other Benefits.  Employee's health insurance terminated on July 24, 2014, unless employee elects to extend coverage under and pursuant to COBRA. The Company provided Employee with information covering health insurance continuation under COBRA under separate cover.  Except as otherwise provided, all other benefits ceased as of the Termination Date.  The following is a general summary of certain benefit plans available to Employee; however, in the event of any conflict between this summary and the below referenced plan documents and agreements, the latter will govern:

a.           Salary Deferral Plan / Deferred Compensation Plan.  If Employee participated in the Ruby Tuesday, Inc. Salary Deferral 401(k) Plan or the Deferred Compensation Plan, Employee may receive monies in accordance with the terms of those plans, but Employee will not be allowed to make any contributions or receive Company matching contributions under these plans with respect to any compensation otherwise payable to Employee following the Termination Date.  Employee is responsible for repayment of any loan taken against his/her 401K Plan.

b.           Credit Union.  If Employee is currently a member of the Family Security Credit Union, Employee may continue to participate in that program, subject only to observing the terms of the written agreement governing participation.

c.           Equity Awards.  Exhibit A to this Agreement contains a complete list of Employee’s outstanding Company-granted equity awards.  Employee is not eligible for any Company-granted equity awards following the Termination Date.  Employee’s rights under the outstanding Company-granted equity awards are controlled by the terms of the applicable written agreement.  The Company agrees not to dispute the characterization of Employee’s termination as without Cause (as that term is defined in the equity awards listed in Exhibit A).

4.           Consideration.  Employee acknowledges, agrees and understands that the Severance Payment described in Section 2 and the consideration with respect to the equity awards stated in Section 3c: (a) are not required by the Company’s policies and procedures; (b) exceed any

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and all pay and benefits to which Employee already may have been entitled by contract or law; (c) constitute good, valuable and sufficient consideration for this Agreement, including the waiver and release of claims; (d) would not be paid or provided but for Employee's entering into this Agreement; and (e) are in lieu of any other severance or separation payment.  Aside from the amounts to which Employee is specifically entitled under the terms of this Agreement, Employee acknowledges that Employee has been paid in full for all hours that Employee has worked for the Company and received any and all compensation, benefits and remuneration of any kind and character earned by Employee as of the date Employee signs this Agreement, including, but not limited to, wages, salary (other than salary earned since the last pay day prior to the Termination Date), benefits, bonuses, auto allowance, compensatory time off, commissions, vacation pay, personal leave, restricted stock, stock options, performance cash, and pay due under the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA), which Employee may be entitled to receive from the Company at any time now or in the future.

 5.           General Release of Claims by Employee.

a.           Employee knowingly and voluntarily agrees to release, waive, settle, and discharge the Company and the other people and entities referred to in section 5(b) ("Releasees,") from any and all claims, charges, demands, damages, suits, liens, debts, actions or causes of action, of whatever nature in law or in equity, known or unknown, accrued or which may ever accrue, that Employee has or might have against the Releasees arising from or related to any act or omission occurring on or before the date Employee signs this Agreement.  This release is to be generally construed to release any such claim that Employee has or might have against the Releasees. The parties specifically agree, however, that the Release will not cover, and Employee expressly reserves, indemnification rights existing to him as a former officer of the Company under the Articles and Bylaws of the Company and pursuant to applicable state law and in accordance with any “D&O” policy existing for former officers of the Company.

b.           This release applies to all "Releasees" which include the Company, its parents, subsidiaries, divisions, franchisees, affiliates, employee benefit plans and arrangements, and their respective predecessors, successors and assigns, and the officers, directors, employees, agents, shareholders, underwriters, insurers, administrators, fiduciaries, and legal representatives of each of them, and their respective heirs and personal representatives.

c.           Employee understands the claims subject to and being released by Employee under section 5(a)-(b) include, but are not limited to, claims for discrimination arising under or as a result of alleged violations of (1) the Age Discrimination in Employment Act (29 U.S.C. §§ 621 et seq.) (ADEA), as amended by the Older Workers Benefit Protection Act (OWBPA); (2) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (Title VII); (3) the Americans with Disabilities Act (ADA); (4) the Civil Rights Act of 1866 (42 U.S.C. § 1981); (5) the Equal Pay Act (29 U.S.C. § 206(d)(1)); (6) Executive Order 11246; (7) Executive Order 11141; (8) Section 503 of the Rehabilitation Act of 1973; (9) Employee Retirement Income Security Act (ERISA); (10) the Occupational Safety and Health Act (OSHA); (11) the Worker Adjustment and Retraining Notification Act (WARN Act); (12)  the Family and Medical Leave Act (FMLA); (13) the Ledbetter Fair Pay Act; (14) the Genetic Information and Discrimination Act; (15) the Tennessee Human Rights Act; (16) the Tennessee Disability Act; and (17) any other federal, state and local statutory or common law.

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d.           Employee also understands the claims subject to and being released by  Employee under section 5(a)-(c) include, but are not limited to, any and all claims based on any tort, whistle-blower, personal injury, defamation, invasion of privacy or wrongful discharge theory; retaliatory discharge theory; any and all claims based on any oral, written or implied contract or on any contractual or quasi-contractual theory (including any offer letter or employment agreement); any claims based on a severance pay plan; and all claims based on any other federal, state or local Constitution, regulation, law (statutory or common), or other legal theory, as well as any and all claims for punitive, compensatory, liquidated, and/or other damages, wages, salary, bonus, vacation pay, back pay, front pay, fringe benefits, penalties, interest, attorneys’ fees, costs or expenses, and any other legally recoverable category of damages or relief.

e.           This Agreement does not prevent Employee from filing any charge of discrimination with the EEOC, participating in an investigation or proceeding by the EEOC, or pursuing any claims for unemployment or workers’ compensation or claims that cannot be released by private agreement.  Employee also understands the claims subject to and being released by Employee under section 5(a)-(d) include Employee's right to claim or receive damages or other relief as a result of any charge of discrimination or other proceeding asserting such released claims, which may be filed by him or any person or entity acting on his/her behalf, and hereby assigns all his/her right, title and interest in any such damages and relief to RTI.

f.           Employee also understands that by virtue of this section 5, Employee waives his/her right to file suit for any claim Employee may have or assert against the Releasees including, but not limited to, those which may arise under the legal doctrines, laws and the statutes named in section 5(a) through (d), by virtue of Employee's employment with the Company or termination of employment from the Company.  Employee also acknowledges and understands that Employee is waiving and releasing unknown claims as well as known claims, and Employee waives any right or benefit Employee may have under any law regarding waiver of unknown claims.    However, this Agreement does not waive or release rights or claims that may arise after the date Employee signs this Agreement, including, without limitation, any rights or claims Employee may have to enforce the terms of this Agreement.  Furthermore, this Agreement does not waive Employee's right to challenge the validity of the waiver and release of ADEA claims.

6.           Acknowledgments;Representations.

a.           FMLA.  Employee acknowledges, understands and agrees that Employee has been notified of Employee’s rights under the Family and Medical Leave Act (FMLA) and state leave laws.  Employee further acknowledges, understands and agrees that Employee has not been denied any leave requested under the FMLA or applicable state leave laws and that, to the extent applicable, Employee has been returned to Employee’s job, or an equivalent position, following any FMLA or state leave taken pursuant to the FMLA or state laws.

b.           Work-Related Injury. Employee acknowledges, understands and agrees that it is Employee’s obligation to make a timely report, in accordance with the Company’s policy and procedures, of any work-related injury or illness.  Employee further acknowledges, understands and agrees that Employee has reported to the Company’s management personnel

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any work-related injury or illness that occurred up to and including Employee’s last day of employment and that except as so reported, Employee has not sustained any such injury or illness.

c.           No Violations.  Employee acknowledges, understands, and agrees that Employee has no knowledge and is not aware of any other person with knowledge of any actions or inactions by any of the Releasees (including the Company) or by Employee that Employee believes could possibly constitute a basis for a claimed violation of any federal, state, or local law, any common law or any rule promulgated by an administrative body.

d.           No Claims.  Employee represents and warrants that Employee has not filed, nor assigned to others the right to file, nor does Employee currently have pending, any complaints, charges, claims, grievances, lawsuits or other proceedings against the Company with any administrative, state, federal, or governmental entity or agency or with any court or other forum.

e.           Subpoena.  To the extent Employee receives a subpoena after the date of this Agreement relating to Employee's employment or former employment at the Company or any matter related to the Company, Employee will notify the Company within 72 hours of receipt by contacting Scarlett May, Senior Vice President and Chief Legal Officer, Ruby Tuesday, Inc., 150 West Church Avenue, Maryville, Tennessee 37801.  Pursuant to section 5(d), Employee has released any right to claim or receive damages as a result of any pending charge of discrimination or other proceeding.

7.           Return of Company Property.  Employee represents and Company acknowledges that Employee has returned to a Company representative as of the Termination Date any and all Company property, Trade Secrets (as defined in section 8), and Confidential Information (as defined in section 9) currently in Employee’s possession or control, including, without limitation, all electronic property that Employee received from the Company or used in the course of employment with the Company which is Company-owned.

8.           Trade Secrets.  Employee acknowledges that Employee has had access to Trade Secrets, which are the sole and exclusive property of RTI.  "Trade secret" means information, without regard to form, including, but not limited to, technical, nontechnical or financial data, business plans and strategies, a formula, pattern, compilation, program, device, method, technique, process or plan that (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.  Employee agrees that until the Trade Secrets become public through no wrongful act, Employee shall not reproduce, use, distribute or disclose any Trade Secrets to any other person including, without limitation, any competitors or potential competitors of RTI.  In keeping with section 7, Employee shall not retain in written form any Trade Secret but shall return it to the Company.  The parties agree that the damages which the Company will suffer in the event of the Employee's breach of this section are not readily ascertainable and difficult to quantify and determine.

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9.           Confidential Information.  Employee acknowledges that Employee has had access to Confidential Information.  The term “Confidential Information” means data and information relating to the business of RTI which does not rise to the level of a Trade Secret and which is or has been disclosed to Employee or of which Employee has become aware as a consequence of or through Employee’s employment relationship with RTI (or a subsidiary, franchisee, licensee, or affiliate of the Company); has value to RTI (or a subsidiary, franchisee, licensee, or affiliate of the Company); and is not generally known to its competitors including, without limitation, financial, loan, and bond data and strategies; employee and personnel information (including their personal information); business and marketing strategies, merger and acquisition strategies or candidates; tactics and future restaurant opening or closing schedules; menu items; processes; manuals; and technology.  Confidential Information shall not include (a) any data or information that (i) has been voluntarily disclosed to the public by RTI (except where such public disclosure was effected by Employee without authorization), (ii) has been independently developed and disclosed by others or (iii) otherwise enters the public domain through lawful means, or (b) Employee’s skills or experience developed in connection with performance of job functions. Employee agrees to maintain the confidentiality of all Confidential Information for a period of one (1) year following the Termination Date.  Employee shall not reproduce, use, distribute or disclose any Confidential Information to any other person including without limitation, any competitors or potential competitors of RTI.  In keeping with section 7, Employee shall not retain in written form any Confidential Information but shall return it to the Company.  The parties agree that the damages which the Company will suffer in the event of the Employee’s breach of this section are not readily ascertainable and difficult to quantify and determine.

10.           Nonsolicitation.  For a period of one (1) year from the Effective Date, Employee shall not, for himself/herself or on behalf of or for the benefit of any other person, corporation or entity, seek to employ, solicit or recruit any employee of the Company (or a subsidiary, franchisee, licensee or affiliate of the Company) for employment by any third party, or induce or encourage any such employee to terminate such employment; nor will Employee knowingly provide the name of any employee of the Company (or a subsidiary, franchisee, licensee, or affiliate of the Company) for the purpose of solicitation or recruitment by any third party.  The parties agree that the damages which the Company will suffer in the event of the Employee’s breach of this section are not readily ascertainable and difficult to quantify and determine.

11.           Nondisparagement.  For a period of one (1) year from the Effective Date, Employee has not and shall not disparage the Company (or a subsidiary, franchisee, licensee, or affiliate of the Company) in any form or fashion or communicate any false or adverse information about the Company (or a subsidiary, franchisee, licensee, or affiliate of the Company) or RTI's restaurants or food products or services, orally or in writing via email, social media, or otherwise, provided that nothing herein shall prevent Employee from testifying truthfully or providing truthful information to any government agency.  The parties agree that the damages which the Company will suffer in the event of the Employee’s breach of this section are not readily ascertainable and difficult to quantify and determine.   For a period of one (1) year from the Effective Date, the Company shall not disparage or communicate any false information about Employee, Employee’s skills, work product or job performance, or the terms of this Agreement.

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12.           Noncompetition.  For a period of three (3) months from the Termination Date, Employee shall not perform services similar to that which Employee performed for the Company for the following competitors:  Applebee’s, T.G.I. Friday’s, O’Charley’s, Red Robin Gourmet Burgers, Olive Garden or Outback Steak House unless Employee obtains the Company’s prior written consent.  Employee and Company agree that this limitation is reasonable and necessary to protect the business, interests and properties of the Company and that the damage which the Company will suffer in the event of Employee’s breach of this section are not readily ascertainable and difficult to quantify and determine.

13.           Confidentiality of Agreement.  Employee acknowledges, understands and agrees that Employee will not hereafter disclose any information concerning this Agreement, provided that nothing contained in this Agreement shall be construed to prevent Employee from (i) discussing the consideration paid and the terms of this Agreement with a spouse, attorneys or tax preparers or (ii) disclosing to any prospective employer Employee’s obligations set forth in sections 8 through 13, as long as they are informed of this confidentiality provision, agree to comply with its terms, and Employee takes reasonable steps to ensure that they comply.The parties agree that the damages which the Company will suffer in the event of the Employee’s breach of this section are not readily ascertainable and difficult to quantify and determine.

14.           Remedies for Employee's Breach; Liquidated Damages.  Employee acknowledges that his/her obligations set forth in sections 8 through 13 are reasonable and necessary to protect the business, interests and property of the Company and are material to this Agreement.  Therefore, the parties agree that, in the event of any breach of any such section of this Agreement and in light of the difficulty of accurately determining actual damages, Employee shall pay to the Company as liquidated damages and as a reasonable estimate of the total net detriment that the Company would suffer: Ten Thousand Dollars ($10,000.00) per violation or the total of the Severance Payment received by the Employee, whichever is less.  Employee agrees that this sum is not a penalty but is an agreed remedy for a contract breach. This liquidated damages provision shall not limit the Company from seeking temporary and permanent injunctive relief or other non-monetary relief for any breach of this Agreement.  To prevent a breach, further breach, or contemplated breach of sections 8 through 13 of this Agreement, the parties agree that the Company shall have all rights and remedies available to it by law or in equity, including by way of example and not of limitation, a temporary restraining order and temporary and permanent injunctions.

15.           Cooperation.  Employee further agrees that Employee will fully cooperate and consult with the Company, answer questions for the Company, and provide information as needed by the Company from time to time on a reasonable basis, including but not limited to cooperation in connection with litigation, audits, investigations, claims, or personnel matters that arise or have arisen over actions or matters that occurred or failed to occur during Employee’s employment with the Company.  Employee agrees to assist the Company as a witness or during any audit, investigation, or litigation (including depositions, affidavits and trial) if requested by the Company.  It is expected that at all times Employee will testify truthfully.  Employee agrees to meet at reasonable times and places with the Company’s representatives, agents or attorneys for purposes of preparing for such activities.  To the extent practicable and within the control of

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the Company, the Company will use reasonable efforts to schedule the timing of Employee’s participation in any such activities in a reasonable manner to take into account Employee’s then-current employment, and will pay the reasonable documented out-of-pocket expenses that the Company pre-approves and that Employee incurs for travel required by the Company with respect to those activities.

16.           Nonadmission.  This Agreement shall in no way be construed as an admission by the Company that it has acted wrongfully with respect to Employee or any other person or that Employee has any rights whatsoever against the Company or any other party.  The Company specifically disclaims any liability to or wrongful acts against Employee or any other person on the part of itself, its employees or its agents.

17.           Information Required by the Age Discrimination in Employment Act.  The following information is provided in accordance with the Age Discrimination in Employment Act (ADEA).

a.           Time to Consider the Agreement.  Employee acknowledges that Employee shall have twenty-one (21) days from the date this Agreement is presented to him/her to consider whether to sign this Agreement, which contains a general release.  If Employee signs this Agreement sooner than twenty-one days (21) from the date this Agreement is presented to him/her, Employee agrees that Employee has waived the balance of the time to consider the Agreement.

b.           Right to Revoke.  If Employee signs this Agreement, Employee will have seven (7) additional days following the signing of the Agreement to change his/her mind and revoke acceptance of the Agreement.  To revoke the Agreement, Employee must ensure that written notice is delivered to Scarlett May, Senior Vice President and Chief Legal Officer, Ruby Tuesday, Inc., 150 West Church Avenue, Maryville, Tennessee 37801 by the end of the day on the seventh calendar day after Employee signs this Agreement.  If Employee does not revoke this Agreement within seven (7) days of signing, this Agreement will become final and binding on the eighth (8th) day after the date you sign this Agreement (the “Effective Date”).  Whether or not Employee signs this Agreement or revokes it, Employee is no longer an employee of the Company as of the Termination Date.

18.           Attorney's Fees.  The parties to this Agreement will bear their own attorney's fees in connection with the negotiation, drafting and making of this Agreement. Employee also has released in Section 5 of this Agreement any claim Employee might have to attorney's fees.  Except as otherwise provided in this Agreement, the prevailing party shall be entitled to an award of costs and attorneys' fees, including any costs and attorneys’ fees on appeal, in any action to enforce the terms of this Agreement (including by seeking injunctive relief or rescission) or to defend a claim, lawsuit or other type of action which has been waived or released in this Agreement.

19.           Entire Agreement; Amendments; Successors.  This Agreement supersedes all other promises, agreements, representations, or understandings between Employee and the Company, and it is the intent of this Agreement that it embodies any and all promises, agreements, and understandings between Employee and the Company, except that the plan documents and

page 7 of 10

agreements referenced in Section 3 remain in full force and effect.  No changes or modifications may be made in the terms stated in this Agreement unless made in writing and signed by Employee or Employee’s authorized representative and an authorized representative of the Company.  This Agreement will inure to the benefit of, and will be binding on both parties, and their personal representatives, heirs, successors, and assigns.

20.           Governing Law and Jurisdiction.  This Agreement shall be interpreted in accordance with the laws of the State of Tennessee without regard to any choice of law or conflicts of laws provisions or principles which may direct the application of the laws of any other jurisdiction.  Venue for any dispute arising under this Agreement shall be in Blount County, Tennessee.

21.           Severability.  It is understood and agreed that if any provision or part of this Agreement is found to be unenforceable, illegal, or inoperable, such provision or part shall be severed, and all remaining provisions and parts of this Agreement shall remain fully valid and enforceable.

22.           Interpretation.  The headings in this Agreement are for reference purposes only, have been inserted as a matter of convenience and in no way define, limit or enlarge the scope of this Agreement or affect the interpretation of the Agreement.  Nothing herein shall preclude Employee from enforcing or challenging this Agreement.

23.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, and all of which together will be deemed to be one and the same Agreement.  An executed copy of this Agreement delivered by facsimile, email or other means of electronic transmission will be deemed to have the same legal effect as delivery of an original executed copy of this Agreement.

24.           Knowing and Voluntary Agreement.  Employee knowingly, freely and without duress or promises or representations other than those specifically contained in this Agreement, enters into this Agreement, intending to be legally bound.

25.           Consult with an Attorney.Employee is advised to consult with an attorney before signing this Agreement and General Release.  By signing this Agreement and General Release Employee gives up and waives important legal rights.

IN WITNESS WHEREOF, the parties have executed this Agreement consisting of 10 pages (with Exhibit A and Schedule 1) as of the dates noted below.

page 8 of 10

Witness	RUBY TUESDAY, INC.
/s/ Natalie Moore	/s/ Scarlett May
	By:  Scarlett May
	Its:   SVP, Chief Legal Officer & Secretary
	Date:  9/19/14
Witness	EMPLOYEE
/s/ Kathy Wood	/s/ Jeff Wood
	Jeff Wood
	Date: 09/12/14

page 9 of 10

EXHIBIT A

OPTIONS/RESTRICTED STOCK/PERFORMANCE CASH LIST

1.   STOCK OPTION:

Grant Date	Grant Price	Description/Notes
7/24/13	$9.34	33,860 Stock Option (Right to Buy) will expire 90 days after separation.
7/24/13	$9.34	60,000 High-Performance Stock Option (Right to Buy) – forfeited at separation.

2.   SERVICE-BASED RESTRICTED STOCK:

Grant Date	Description/Notes
7/24/13	8,030 Restricted Shares – vest at separation.

3.   PERFORMANCE-BASED CASH INCENTIVE AWARD:

Grant Date	Description/Notes
7/24/13	Performance Cash Incentive forfeited as performance goals were not achieved.

page 10 of 10

EX-12.1

Ruby Tuesday, Inc
Unaudited Computation of Ratio of Consolidated Earnings to Fixed Charges
(Dollar Amounts in Millions)
	Thirteen     Weeks Ended		Fiscal Year Ended
	September 2,			June 3,		June 4,		June 5,		May 31,		June 1,
	2014			2014		2013		2012		2011		2010
Earnings before fixed charges:
(Loss)/income from continuing operations before income taxes	$	(0.1)	$	(69.6)	$	(21.9)	$	(8.6)	$	57.1	$	58.6
Add equity in losses (deduct equity in earnings) of equity interest		-		-		-		-		0.6		0.3
Less Capitalized interest		0.2		0.5		0.5		0.5		0.6		0.6
		0.1		(69.1)		(21.4)		(8.1)		58.3		59.5
Fixed charges:
Interest expense		5.4		25.0		26.7		23.5		14.1		18.0
Interest portion of rent expense		3.9		16.0		16.6		15.8		14.7		14.0
Total fixed charges		9.3		41.0		43.3		39.3		28.8		32.0
Adjusted earnings from continuing operations before income taxes available to cover fixed charges	$	9.4	$	(28.1)	$	21.9	$	31.2	$	87.1	$	91.5
Ratio of earnings to fixed charges		1.01		(0.69)		0.51		0.79		3.03		2.86
Amount by which earnings were insufficient to cover fixed charges		N/A		(69.1)	$	(21.4)		(8.1)		N/A		N/A
* We are presenting the ratio above solely pursuant to the requirement set forth in Item 503 of Regulation S-K.  The earnings and fixed charges in the above ratio are calculated using the definitions as set for by Regulation S-K.

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James J. Buettgen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 14, 2014	/s/ James J. Buettgen
	James J. Buettgen
	Chairman of the Board, President,
	and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jill M. Golder, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: October 14, 2014	/s/ Jill M. Golder
	Jill M. Golder
	Executive Vice President,
	Chief Financial Officer, Treasurer, and Assistant Secretary

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ruby Tuesday, Inc. (the “Company”) on Form 10-Q for the quarter ended September 2, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, James J. Buettgen, Chairman of the Board, President, and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 14, 2014	/s/ James J. Buettgen
	James J. Buettgen
	Chairman of the Board, President, and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ruby Tuesday, Inc. (the “Company”) on Form 10-Q for the quarter ended September 2, 2014 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Jill M. Golder, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 14, 2014	/s/ Jill M. Golder
	Jill M. Golder
	Executive Vice President,
	Chief Financial Officer, Treasurer, and Assistant Secretary

XML

Note D - Discontinued Operations (Details) - Financial Results of Discontinued Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 03, 2013
Financial Results of Discontinued Operations [Abstract]
Loss before income taxes	$ (528)
Benefit for income taxes	(185)
Loss from discontinued operations	$ (343)

XML

Note K - Income Taxes (Details) (USD $)	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013	Jun. 03, 2014
Note K - Income Taxes (Details) [Line Items]
Reclassification Of Unrecognized Tax Benefit Amount	$ 5,000,000
Income Tax Expense (Benefit)	(2,634,000)	(5,153,000)
Immaterial Prior Period Correction	3,200,000
Deferred Tax Assets, Valuation Allowance	53,800,000		54,600,000
Unrecognized Tax Benefits	6,700,000		7,000,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	2,400,000		2,600,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	400,000		500,000
Reasonably Possible Amounts Will Change Within Next Twelve Months [Member]
Note K - Income Taxes (Details) [Line Items]
Unrecognized Tax Benefits	$ 300,000

XML

Note I - Closure and Impairments Expense (Details) - Closures and Impairments Expense (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Closures and impairments from continuing operations
Closure and Impairment	$ 1,482	$ 8,033
Closed restaurant lease reserves	466
Property [Member] | Continuing Operations [Member]
Closures and impairments from continuing operations
Closure and Impairment	1,056	4,930
Continuing Operations [Member] | Other Closing Expense [Member]
Closures and impairments from continuing operations
Closure and Impairment	233	468
Continuing Operations [Member]
Closures and impairments from continuing operations
Closure and Impairment	1,482	8,033
(Gain)/loss on sale of surplus properties	(273)	40
Closed restaurant lease reserves	466	2,595
Discontinued Operations [Member]
Closures and impairments from continuing operations
Closure and Impairment		$ 518

XML

Note L - Share-Based Employee Compensation (Details) (USD $)	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation (in Dollars)	$ 1,749,000	$ 1,704,000
Employee Stock Option [Member] | SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,952,000
Employee Stock Option [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars)	3,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 255 days
Restricted Stock [Member] | Cliff Vest [Member] | SIP and 1996 SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	2 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	368,000
Restricted Stock [Member] | Annual Installments [Member] | SIP and 1996 SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	81,000
Restricted Stock [Member] | SIP and 1996 SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	449,000
Number of Annual Installments	3
Restricted Stock [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars)	$ 5,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 255 days
Certain Employees [Member] | SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	810,000
SIP and 1996 SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years
SIP [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	4,469,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	2,517,000
SIP 1996 [Member]
Note L - Share-Based Employee Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	77,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	77,000

XML

Note H - Long-Term Debt and Capital Leases (Details) - Long-Term Debt And Capital Lease Obligations (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014	May 14, 2012
Debt Instrument [Line Items]
Mortgage loan obligations	$ 44,720	$ 45,993
Capital lease obligations	212	201
	257,512	258,691
Less current maturities	4,851	4,816
	252,661	253,875
Senior Notes [Member]
Debt Instrument [Line Items]
Senior unsecured notes	215,000	215,000
Unamortized discount	(2,420)	(2,503)	(3,700)
Senior unsecured notes less unamortized discount	$ 212,580	$ 212,497

XML

Note O – Fair Value Measurements (Tables)

3 Months Ended

Sep. 02, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Level	September 2, 2014			June 3, 2014
Deferred compensation plan: other investments – Assets	1	$	8,808		$	8,930
Deferred compensation plan: other investments – Liabilities	1		(8,808	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity	1		455			622
Deferred compensation plan: RTI common stock – Equity	1		(455	)		(622	)
Total		–			–

Fair Value Measurements, Nonrecurring [Table Text Block]

	Fair Value Measurements
	Level		September 2, 2014
Long-lived assets held for sale		2	$	2,525
Long-lived assets held for use		2		37
Total			$	2,562

Schedule of Gains and Losses Recognized from Fair Value Measurements on Non-recurring Basis [Table Text Block]

	13 weeks ended
	September 2, 2014		September 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	599	$	269
Long-lived assets held for use		457		4,661
Total	$	1,056	$	4,930
Included within discontinued operations			$	153

Fair Value, by Balance Sheet Grouping [Table Text Block]

	September 2, 2014				June 3, 2014
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Long-term debt and capital leases	$	257,512	$	264,196	$	258,691	$	263,526
Letters of credit	–			408	–			405

XML

Note L - Share-Based Employee Compensation (Details) - Summary of Restricted Stock Activity (USD $)			3 Months Ended
	Sep. 02, 2014 Restricted Stock, Performance-based [Member]	Jun. 03, 2014 Restricted Stock, Performance-based [Member]	Sep. 02, 2014 Restricted Stock, Service-based [Member]
Note L - Share-Based Employee Compensation (Details) - Summary of Restricted Stock Activity [Line Items]
Unvested at June 3, 2014	68	68	1,008
Unvested at June 3, 2014	$ 7.81	$ 7.81	$ 8.11
Granted			449
Granted			$ 6.04
Vested			(95)
Vested			$ 8.63
Forfeited			(2)
Forfeited			$ 7.81
Unvested at September 2, 2014	68	68	1,360
Unvested at September 2, 2014	$ 7.81	$ 7.81	$ 7.39

XML

Note D - Discontinued Operations (Tables)

3 Months Ended

Sep. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

	Thirteen weeks ended September 3, 2013
Restaurant sales and operating revenue	$	–
Loss before income taxes	$	(528	)
Benefit for income taxes		(185	)
Loss from discontinued operations	$	(343	)

XML

Note J - Employee Post-Employment Benefits (Details) (USD $)	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013	Jun. 03, 2014
Note J - Employee Post-Employment Benefits (Details) [Line Items]
Defined Benefit Pension Plans	3
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (10,437,000)		$ (10,900,000)
Defined Benefit Plan, Amortization of Gains (Losses)	463,000	489,000
Defined contribution plans	2
Severance Costs	569,000
Employee-related Liabilities, Current	20,646,000		22,637,000
Other Liabilities, Noncurrent	68,175,000		75,193,000
Employee Severance [Member]
Note J - Employee Post-Employment Benefits (Details) [Line Items]
Severance Costs	300,000
Employee-related Liabilities, Current	500,000
Other Liabilities, Noncurrent	100,000
Retirement Plan [Member]
Note J - Employee Post-Employment Benefits (Details) [Line Items]
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	400,000
Pension Plan [Member]
Note J - Employee Post-Employment Benefits (Details) [Line Items]
Defined Benefit Pension Plan Liabilities, Current	3,300,000		3,300,000
Defined Benefit Pension Plan, Liabilities, Noncurrent	32,400,000		32,500,000
Defined Benefit Plan, Amortization of Gains (Losses)	$ 430,000	$ 428,000

XML

Note F - Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Inventory Disclosure [Abstract]
Retail Related Inventory, Merchandise	$ 12,029	$ 12,924

XML

Note B - Income/(Loss) Per Share and Stock Repurchases (Details) - Antidilutive Shares Excluded from Computation of Diluted Earnings/(Loss) Per Share In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	2,834	4,360	[1]
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	2,826	3,114	[1]
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	8	1,246	[1]

[1] Due to a net loss from continuing operations for the 13 weeks ended September 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

XML

Note J - Employee Post-Employment Benefits (Details) - Changes in the Amounts Recognized in Accumulated Other Comprehensive Income/(Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Changes in the Amounts Recognized in Accumulated Other Comprehensive Income/(Loss) [Abstract]
Recognized actuarial loss	$ 463	$ 489
Amortization of prior service cost		(11)
Pension liability reclassification	$ 463	$ 478

XML

Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Revenue:
Restaurant sales and operating revenue	$ 279,457	$ 288,092
Franchise revenue	1,725	1,582
Total revenue	281,182	289,674
Operating costs and expenses:
Cost of merchandise	75,147	79,938
Payroll and related costs	95,842	102,733
Other restaurant operating costs	59,799	67,534
Depreciation	12,658	14,209
Selling, general, and administrative	30,901	37,015
Closures and impairments	1,482	8,033
Interest expense, net	5,422	6,753
Loss on extinguishment of debt		511
Total costs and expenses	281,251	316,726
(Loss)/income from continuing operations before income taxes	(69)	(27,052)
(benefit)/Provision for income taxes from continuing operations	(2,634)	(5,153)
(Loss)/income from continuing operations	2,565	(21,899)
Loss from discontinued operations, net of tax		(343)
Net (loss)/income	2,565	(22,242)
Other comprehensive income:
Pension liability reclassification, net of tax	463	478
Total comprehensive	3,028	(21,764)
Consolidation, Eliminations [Member]
Operating costs and expenses:
Equity in earnings of subsidiaries	7,781	4,525
Total costs and expenses	7,781	4,525
(Loss)/income from continuing operations before income taxes	(7,781)	(4,525)
(Loss)/income from continuing operations		(4,525)
Net (loss)/income	(7,781)	(4,525)
Other comprehensive income:
Total comprehensive	(7,781)	(4,525)
Parent Company [Member]
Revenue:
Restaurant sales and operating revenue	202,551	210,082
Franchise revenue	146	21
Total revenue	202,697	210,103
Operating costs and expenses:
Cost of merchandise	54,530	58,527
Payroll and related costs	68,042	73,526
Other restaurant operating costs	43,412	48,402
Depreciation	9,387	10,364
Selling, general, and administrative	20,221	25,994
Intercompany selling, general, and administrative allocations	11,142	14,763
Closures and impairments	1,231	5,165
Equity in earnings of subsidiaries	(7,781)	(4,525)
Interest expense, net	4,511	5,060
Intercompany interest expense/(income)	2,892	3,185
Loss on extinguishment of debt		511
Total costs and expenses	207,587	240,972
(Loss)/income from continuing operations before income taxes	(4,890)	(30,869)
(benefit)/Provision for income taxes from continuing operations	(7,455)	(8,970)
(Loss)/income from continuing operations		(21,899)
Loss from discontinued operations, net of tax		(343)
Net (loss)/income	2,565	(22,242)
Other comprehensive income:
Pension liability reclassification, net of tax	463	478
Total comprehensive	3,028	(21,764)
Guarantor Subsidiaries [Member]
Revenue:
Restaurant sales and operating revenue	76,906	78,010
Franchise revenue	1,579	1,561
Total revenue	78,485	79,571
Operating costs and expenses:
Cost of merchandise	20,617	21,411
Payroll and related costs	27,800	29,207
Other restaurant operating costs	16,387	19,132
Depreciation	3,271	3,845
Selling, general, and administrative	10,680	11,021
Intercompany selling, general, and administrative allocations	(11,142)	(14,763)
Closures and impairments	251	2,868
Interest expense, net	911	1,693
Intercompany interest expense/(income)	(2,892)	(3,185)
Total costs and expenses	65,883	71,229
(Loss)/income from continuing operations before income taxes	12,602	8,342
(benefit)/Provision for income taxes from continuing operations	4,821	3,817
(Loss)/income from continuing operations		4,525
Net (loss)/income	7,781	4,525
Other comprehensive income:
Total comprehensive	$ 7,781	$ 4,525

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Note N - Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	0 Months Ended			3 Months Ended
	Sep. 02, 2014	Oct. 02, 2014 Due Within 21 Days Once Settlement Becomes Effective [Member] Subsequent Event [Member]	Oct. 02, 2014 Due Within 90 Days Once Settlement Becomes Effective [Member] Subsequent Event [Member]	Oct. 02, 2014 Subsequent Event [Member]	Sep. 02, 2014 Rent and Other [Member]
Note N - Commitments and Contingencies (Details) [Line Items]
Litigation Settlement, Amount	$ (3.0)	$ (2.0)	$ (1.0)		$ (3.0)
Litigation Settlement Interest Rate				8.00%

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Note I - Closure and Impairments Expense (Details) (USD $)	Sep. 02, 2014	Jun. 03, 2014	Sep. 02, 2014 Open more than one year with rolling 12-month negative cash flows [Member]	Sep. 02, 2014 Impaired to salvage value [Member]	Sep. 02, 2014 Not impaired to salvage value [Member]	Sep. 02, 2014 Located on owned properties [Member]	Sep. 02, 2014 Rent and Other [Member]	Jun. 04, 2014 Rent and Other [Member]
Note I - Closure and Impairments Expense (Details) [Line Items]
Operating Lease Obligation (in Dollars)	$ 10,026,000	$ 10,873,000					$ 9,700,000	$ 10,500,000
Number of Restaurants	686		57	36	21	8
Negative cash flow restaurants not recorded at salvage value, remaining net book value (in Dollars)	$ 24,100,000

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Note D - Discontinued Operations

3 Months Ended

Sep. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE D – DISCONTINUED OPERATIONS

In an effort to focus primarily on the sales turnaround of our core Ruby Tuesday concept and secondly, to improve the financial performance of our Lime Fresh concept, we closed all of our Marlin & Ray’s, Wok Hay, and Truffles restaurants during the fourth quarter of fiscal 2013. We have classified the results of operations of our Company-owned Marlin & Ray’s, Wok Hay, and Truffles concepts as discontinued operations for the 13 weeks ended September 3, 2013. The results of operations of our discontinued operations are as follows (in thousands):

	Thirteen weeks ended September 3, 2013
Restaurant sales and operating revenue	$	–
Loss before income taxes	$	(528	)
Benefit for income taxes		(185	)
Loss from discontinued operations	$	(343	)

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Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: RTI common stock – Equity	$ 455	$ 622
Deferred compensation plan: RTI common stock – Equity	(455)	(622)
Fair Value, Inputs, Level 1 [Member] | Deferred Compensation Plan [Member]
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: other investments – Assets	8,808	8,930
Deferred compensation plan: other investments – Liabilities	(8,808)	(8,930)
Fair Value, Inputs, Level 1 [Member]
Note O – Fair Value Measurements (Details) - Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis [Line Items]
Deferred compensation plan: RTI common stock – Equity	455	622
Deferred compensation plan: RTI common stock – Equity	$ (455)	$ (622)

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Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) (USD $)	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013	Jun. 03, 2014
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) [Line Items]
Disposal Group, Including Discontinued Operation, Assets, Current	$ 7,097,000		$ 4,683,000
Gain (Loss) on Disposition of Property Plant Equipment		(100,000)
Property, Plant and Equipment, Disposals		2,600,000
Proceeds from Sale of Property, Plant, and Equipment, Net	300,000	2,500,000
Percentage of Restaurants Located on Leased Properties	55.00%
Number of Restaurants	686
Percentage of Restaurants Located on Leased Land	68.00%
Percentage of Restaurants Located on Leased Land and Building	32.00%
Sale Leaseback Transaction, Gross Proceeds, Investing Activities		5,900,000
Sale Leaseback Transaction Costs		300,000
Sale Leaseback Transaction, Net Book Value		4,800,000
Sale Leaseback Transaction Lease Terms 1	15 years
Sale Leaseback Transaction Lease Renewal Terms	20 years
Sale Leaseback Transaction, Deferred Gain, Gross		800,000
Sale Leaseback Transactions Current Portion of Deferred Gain	1,100,000		1,100,000
Sale Leaseback Transactions Noncurrent Portion of Deferred Gain	12,700,000		13,000,000
Amortization of Deferred Charges	300,000	300,000
Construction in Progress [Member]
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) [Line Items]
Assets Held for Sale, Property Plant and Equipment, Noncurrent	16,600,000		18,400,000
Company Owned Ruby Tuesday Concept Restaurants [Member]
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) [Line Items]
Sale Leaseback Transaction, Number of Restaurants		3
Liquor Licenses [Member]
Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) [Line Items]
Gain (Loss) on Disposition of Property Plant Equipment	$ 300,000

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Note I - Closure and Impairments Expense (Tables)

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Closures and Impairment Expenses [Table Text Block]

	September 2, 2014			September 3, 2013
Closures and impairments from continuing operations
Property impairments	$	1,056		$	4,930
Closed restaurant lease reserves		466			2,595
Other closing expense		233			468
(Gain)/loss on sale of surplus properties		(273	)		40
Closures and impairments, net	$	1,482		$	8,033
Closures and impairments from discontinued operations				$	518

Future Lease Obligations Associated with Closed Properties [Table Text Block]

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		466
Payments		(1,326	)
Other adjustments		13
Balance at September 2, 2014	$	10,026

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Note H - Long-Term Debt and Capital Leases (Tables)

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

	September 2, 2014			June 3, 2014
Senior unsecured notes	$	215,000		$	215,000
Unamortized discount		(2,420	)		(2,503	)
Senior unsecured notes less unamortized discount		212,580			212,497
Revolving credit facility	–			–
Mortgage loan obligations		44,720			45,993
Capital lease obligations		212			201
		257,512			258,691
Less current maturities		4,851			4,816
	$	252,661		$	253,875

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Note L - Share-Based Employee Compensation (Details) - Summary of Stock Option Activity (USD $)	3 Months Ended		3 Months Ended
	Sep. 02, 2014 Stock Options, Service-based [Member]	Jun. 03, 2014 Stock Options, Service-based [Member]	Sep. 02, 2014 Stock Options, Performanced-based [Member]	Jun. 04, 2013 Stock Options, Performanced-based [Member]
Note L - Share-Based Employee Compensation (Details) - Summary of Stock Option Activity [Line Items]
Balance at June 3, 2014	1,953,000			735,000
Balance at June 3, 2014	$ 8.66			$ 8.82
Granted	810,000
Granted	$ 5.91
Forfeited	(31,000)		(120,000)
Forfeited	$ 9.35		$ 9.34
Balance at September 2, 2014	2,732,000		615,000	735,000
Balance at September 2, 2014	$ 7.84		$ 8.72	$ 8.82
Exercisable		1,308,000
Exercisable		$ 8.72

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Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Details) - Property and Equipment, Net (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014		Jun. 03, 2014
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 1,365,297		$ 1,366,838
Less accumulated depreciation	580,241		571,992
Property and equipment, net	785,056		794,846
Land [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	214,217		214,277
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	429,217		430,988
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	364,780		365,599
Restaurant Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	249,569		248,852
Other Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	85,233		84,876
Construction in Progress and Other [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment	$ 22,281	[1]	$ 22,246	[1]

[1] Included in Construction in progress and other as of September 2, 2014 and June 3, 2014 are $16.6 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months. These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

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Note J - Employee Post-Employment Benefits (Tables)

3 Months Ended

Sep. 02, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

	Pension Benefits
	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Service cost	$	75		$	89
Interest cost		443			434
Expected return on plan assets		(124	)		(111	)
Recognized actuarial loss		430			428
Net periodic benefit cost	$	824		$	840

	Postretirement Medical and Life Benefits
	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Service cost	$	1	$	3
Interest cost		12		17
Amortization of prior service cost (a)	–			(11	)
Recognized actuarial loss		33		61
Net periodic benefit cost	$	46	$	70

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Recognized actuarial loss	$	463	$	489
Amortization of prior service cost	–			(11	)
Pension liability reclassification	$	463	$	478

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		569
Cash payments		(1,013	)
Balance at September 2, 2014	$	611

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Note L - Share-Based Employee Compensation (Tables)

3 Months Ended

Sep. 02, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Options			Weighted Average Exercise Price
Service-based vesting:
Balance at June 3, 2014		1,953		$	8.66
Granted		810			5.91
Exercised	–			–
Forfeited		(31	)		9.35
Balance at September 2, 2014		2,732		$	7.84
Exercisable		1,308		$	8.72
Market-based vesting:
Balance at June 3, 2014		735		$	8.82
Forfeited		(120	)		9.34
Balance at September 2, 2014		615		$	8.72
Exercisable	–			–

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

			Weighted-Average
	Restricted		Grant-Date
	Stock		Fair Value
Unvested Performance-based vesting:at June 3, 2014		68	$	7.81
Granted	–		–
Vested	–		–
Forfeited	–		–
Unvested at September 2, 2014		68	$	7.81

				Weighted-Average
	Restricted			Grant-Date
	Stock			Fair Value
Service-based vesting:
Unvested at June 3, 2014		1,008		$	8.11
Granted		449			6.04
Vested		(95	)		8.63
Forfeited		(2	)		7.81
Unvested at September 2, 2014		1,360		$	7.39

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Note C - Franchise Programs

3 Months Ended

Sep. 02, 2014

Franchise Programs [Text Block] [Abstract]

Franchise Programs [Text Block]

NOTE C – FRANCHISE PROGRAMS

As of September 2, 2014, our domestic and international franchisees collectively operated 83 Ruby Tuesday restaurants and seven Lime Fresh restaurants. We do not own any equity interest in our franchisees.

Under the terms of the franchise operating agreements, we charge a royalty fee (generally 4.0% of monthly gross sales for our Ruby Tuesday concept franchisees and 5.25% of monthly gross sales for our Lime Fresh concept franchisees) and require all domestic franchisees to contribute a percentage, 1.5% as of September 2, 2014, of monthly gross sales to a national advertising fund formed to cover their pro rata portion of the production and airing costs associated with our national advertising campaign. Under the terms of those agreements, we can charge up to 3.0% of monthly gross sales for this national advertising fund.

Advertising amounts received from domestic franchisees are considered by RTI to be reimbursements, recorded on an accrual basis as earned, and have been netted against selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

In addition to the advertising fee discussed above, our Ruby Tuesday concept franchise agreements allow us to charge up to a 2.0% support service fee and a 1.5% marketing and purchasing fee. For the 13 weeks ended September 2, 2014 and September 3, 2013, we recorded $0.5 million and $0.3 million, respectively, in support service and marketing and purchasing fees, which were an offset to Selling, general and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss).

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Note M - Segment Reporting (Tables)

3 Months Ended

Sep. 02, 2014

Note M - Segment Reporting (Tables) [Line Items]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Segment profit	$	30,213		$	7,397
Less:
Depreciation and amortization		(13,238	)		(14,874	)
Unallocated general and administrative expenses		(10,962	)		(11,897	)
Interest expense, net		(5,422	)		(6,753	)
Preopening expenses		(89	)		(354	)
Other expense, net		(571	)		(571	)
Loss from continuing operations before income taxes	$	(69	)	$	(27,052	)

Income Statement [Member]

Note M - Segment Reporting (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Revenues:
Ruby Tuesday concept	$	276,043		$	284,022
Lime Fresh concept		5,139			5,652
Total revenues	$	281,182		$	289,674
Segment profit:
Ruby Tuesday concept	$	30,389		$	9,851
Lime Fresh concept		(176	)		(2,454	)
Total segment profit	$	30,213		$	7,397
Depreciation and amortization:
Ruby Tuesday concept	$	12,263		$	13,792
Lime Fresh concept		423			499
Support center and other		552			583
Total depreciation and amortization	$	13,238		$	14,874
Capital expenditures:
Ruby Tuesday concept	$	6,341		$	8,242
Lime Fresh concept		49			2,366
Support center and other		587			551
Total capital expenditures	$	6,977		$	11,159

Balance Sheet [Member]

Note M - Segment Reporting (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	September 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	816,194	$	824,293
Lime Fresh concept		14,522		15,203
Support center and other		120,032		116,931
Total assets	$	950,748	$	956,427

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Note E - Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	$ 775	$ 1,014
Due from Distributor [Member]
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	300	400
Sales and Other Miscellaneous Tax Refunds [Member]
Note E - Accounts Receivable (Details) [Line Items]
Other Receivables, Net, Current	$ 200	$ 200

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Note J - Employee Post-Employment Benefits (Details) - Roll Forward of Employee Separation Obligations (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014
Note J - Employee Post-Employment Benefits (Details) - Roll Forward of Employee Separation Obligations [Line Items]
Employee severance and unused vacation accruals	$ 569
Cash payments	(1,013)
Employee Severance [Member]
Note J - Employee Post-Employment Benefits (Details) - Roll Forward of Employee Separation Obligations [Line Items]
Balance at June 3, 2014	1,055
Employee severance and unused vacation accruals	300
Balance at September 2, 2014	$ 611

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Current assets:
Cash and cash equivalents	$ 56,889	$ 51,326
Accounts receivable	4,531	4,861
Inventories:
Merchandise	12,029	12,924
China, silver and supplies	7,965	8,250
Income tax receivable	1,731	2,133
Deferred income taxes	1,324	3,397
Prepaid rent and other expenses	13,251	12,216
Assets held for sale	7,097	4,683
Total current assets	104,817	99,790
Property and equipment, net	785,056	794,846
Other assets	60,875	61,791
Total assets	950,748	956,427
Current liabilities:
Accounts payable	23,121	26,201
Accrued liabilities:
Taxes, other than income and payroll	11,928	11,221
Payroll and related costs	20,646	22,637
Insurance	6,156	5,962
Deferred revenue – gift cards	15,023	16,584
Rent and other	29,616	26,402
Current portion of long-term debt, including capital leases	4,851	4,816
Total current liabilities	111,341	113,823
Long-term debt and capital leases, less current maturities	252,661	253,875
Deferred income taxes	3,578	3,500
Deferred escalating minimum rent	49,060	48,827
Other deferred liabilities	68,175	75,193
Total liabilities	484,815	495,218
Commitments and contingencies (Note N)
Shareholders’ equity:
Common stock, $0.01 par value; (authorized: 100,000 shares; issued: 61,882 shares at 9/02/14; 61,442 shares at 6/03/14)	619	614
Capital in excess of par value	77,960	76,269
Retained earnings	397,791	395,226
Deferred compensation liability payable in Company stock	455	622
Company stock held by Deferred Compensation Plan	(455)	(622)
Accumulated other comprehensive loss	(10,437)	(10,900)
Total shareholders’ equity	465,933	461,209
Total liabilities & shareholders’ equity	$ 950,748	$ 956,427

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Note H - Long-Term Debt and Capital Leases (Details) (USD $)				3 Months Ended				3 Months Ended
	Sep. 02, 2014	Jun. 03, 2014	Dec. 03, 2013 Replaced Credit Facility ]Member] Revolving Credit Facility [Member]	Sep. 02, 2014 Senior Notes [Member]	Jun. 03, 2014 Senior Notes [Member]	May 14, 2012 Senior Notes [Member]	Sep. 02, 2014 Mortgages [Member] Maximum [Member]	Sep. 02, 2014 Mortgages [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Federal Funds Rate [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] London Interbank Offered Rate (LIBOR) [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Eurodollar [Member] Minimum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Eurodollar [Member] Maximum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Base Rate [Member] Minimum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Base Rate [Member] Maximum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Minimum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member] Maximum [Member]	Sep. 02, 2014 Revolving Credit Facility [Member]	Dec. 03, 2013 Revolving Credit Facility [Member]	Dec. 03, 2013 Sublimit for Standby Letters of Credit [Member]
Note H - Long-Term Debt and Capital Leases (Details) [Line Items]
Debt Instrument, Face Amount (in Dollars)						$ 250,000,000
Debt Instrument, Interest Rate, Stated Percentage						7.625%
Debt Instrument, Unamortized Discount (in Dollars)				2,420,000	2,503,000	3,700,000
Debt Instrument, Maturity Date				May 15, 2020
Redemption Price Percentage on Principal Amount				100.00%
Percentage of Senior Notes Redeemed from Equity Offering				35.00%
Debt Instrument, Term																	4 years
Debt Instrument Repurchased Amount Authorized (in Dollars)				20,000,000
Long-term Debt, Gross (in Dollars)				215,000,000	215,000,000
Line of Credit Facility, Current Borrowing Capacity (in Dollars)																		50,000,000	25,000,000
Option to Increase Revolving Credit Facility Capacity (in Dollars)																		35,000,000
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)			200,000,000
Debt Instrument, Basis Spread on Variable Rate									0.50%	1.00%	2.50%	3.50%	1.50%	2.50%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage															0.40%	0.75%
Debt Instrument, Collateral Amount, Appraised Value (in Dollars)																		101,400,000
Debt Instrument, Collateral Amount (in Dollars)																	80,800,000
Long-term Line of Credit (in Dollars)																	0
Line of Credit Facility, Remaining Borrowing Capacity (in Dollars)																	37,500,000
Line of Credit Facility Maximum Leverage Ratio Thereafter																	5.00
Line of Credit Facility, Minimum Fixed Charge Coverage Ratio Thereafter																	1.30
Secured Debt (in Dollars)	44,720,000	45,993,000						44,700,000
Range of Loan Balances (in Dollars)							$ 7,600,000
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum								7.60%
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Maximum								10.92%

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Note A - Basis of Presentation

3 Months Ended

Sep. 02, 2014

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE A – BASIS OF PRESENTATION

Ruby Tuesday, Inc., including its wholly-owned subsidiaries (“RTI,” the “Company,” “we,” and/or “our”), owns and operates Ruby Tuesday® casual dining and Lime Fresh Mexican Grill® (“Lime Fresh”) fast casual restaurants. We also franchise the Ruby Tuesday and Lime Fresh concepts in selected domestic and international markets. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring entries) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the 13-week period ended September 2, 2014 are not necessarily indicative of results that may be expected for the 52-week year ending June 2, 2015.

The Condensed Consolidated Balance Sheet at June 3, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. We have made certain reclassifications to prior year amounts in our Condensed Consolidated Statements of Cash Flows to conform to the current period presentation (all reclassifications were within operating activities).

For further information, refer to the consolidated financial statements and footnotes thereto included in RTI’s Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

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Note M - Segment Reporting (Details) - Financial Results by Reportable Segment (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Total assets:
Total assets	$ 950,748	$ 956,427
Ruby Tuesday [Member]
Total assets:
Total assets	816,194	824,293
Lime Fresh [Member]
Total assets:
Total assets	14,522	15,203
Support Center and Other [Member]
Total assets:
Total assets	$ 120,032	$ 116,931

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Note B - Income/(Loss) Per Share and Stock Repurchases (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 02, 2014
Earnings Per Share [Abstract]
Stock Repurchased and Retired During Period, Value	$ 0.1
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	11.8

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Note O – Fair Value Measurements (Details) - Carrying Amounts and Fair Values of Other Financial Instruments Not Measured on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Carrying Amounts and Fair Values of Other Financial Instruments Not Measured on a Recurring Basis [Abstract]
Long-term debt and capital leases	$ 257,512	$ 258,691
Long-term debt and capital leases	264,196	263,526
Letters of credit	$ 408	$ 405

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Note Q – Recently Issued Accounting Pronouncements

3 Months Ended

Sep. 02, 2014

Disclosure Text Block [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

NOTE Q – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During Fiscal 2015

As discussed further in Note K to the Condensed Consolidated Financial Statements, we adopted ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists during the first quarter of fiscal 2015.

Accounting Pronouncements Not Yet Adopted

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable) and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter (our fiscal 2017). Early application is permitted. We do not believe the adoption of this guidance will have a significant impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU is a jointly converged standard between the FASB and the International Accounting Standards Board, and will replace almost all existing revenue recognition guidance, including industry specific guidance, upon its effective date. The standard’s core principle is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2014-09 also enhances disclosures about revenue, provides guidance for transactions that were not addressed comprehensively in previous guidance, and improves guidance for multiple-element arrangements. The standard permits the use of either the retrospective or cumulative effect transition method. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (our fiscal 2018 first quarter). We have not yet selected a transition method and are currently evaluating the impact of this guidance on our Condensed Consolidated Financial Statements.

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Note B - Income/(Loss) Per Share and Stock Repurchases (Details) - Weighted-Average Common and Dilutive Potential Common Shares Outstanding (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Weighted-Average Common and Dilutive Potential Common Shares Outstanding [Abstract]
Income/(loss) from continuing operations (in Dollars)	$ 2,565	$ (21,899)
Loss from discontinued operations (in Dollars)		(343)
Net income/(loss) (in Dollars)	$ 2,565	$ (22,242)
Weighted-average common shares outstanding (in Shares)	60,419	60,026
Dilutive effect of stock options and restricted stock (in Shares)	634
Weighted average common and dilutive potential common shares outstanding (in Shares)	61,053	60,026
Income/(loss) per share – Basic
Income/(loss) from continuing operations	$ 0.04	$ (0.36)
Loss from discontinued operations		$ (0.01)
Net income/(loss) per share	$ 0.04	$ (0.37)
Income/(loss) per share – Diluted
Income/(loss) from continuing operations	$ 0.04	$ (0.36)
Loss from discontinued operations		$ (0.01)
Net income/(loss) per share	$ 0.04	$ (0.37)

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Note B - Income/(Loss) Per Share and Stock Repurchases (Tables)

3 Months Ended

Sep. 02, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Income/(loss) from continuing operations	$	2,565	$	(21,899	)
Loss from discontinued operations	–			(343	)
Net income/(loss)	$	2,565	$	(22,242	)
Weighted-average common shares outstanding		60,419		60,026
Dilutive effect of stock options and restricted stock		634	–
Weighted average common and dilutive potential common shares outstanding		61,053		60,026
Income/(loss) per share – Basic
Income/(loss) from continuing operations	$	0.04	$	(0.36	)
Loss from discontinued operations	–			(0.01	)
Net income/(loss) per share	$	0.04	$	(0.37	)
Income/(loss) per share – Diluted
Income/(loss) from continuing operations	$	0.04	$	(0.36	)
Loss from discontinued operations	–			(0.01	)
Net income/(loss) per share	$	0.04	$	(0.37	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Stock options		2,826		3,114*
Restricted shares		8		1,246*
Total		2,834		4,360*

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Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidating Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	$ 13,082	$ 8,864
Investing activities:
Purchases of property and equipment	(6,977)	(11,159)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	273	2,548
Other, net	505	205
Net cash used by investing activities	(6,199)	(2,769)
Financing activities:
Principal payments on long-term debt	(1,205)	(24,284)
Stock repurchases	(55)	(540)
Proceeds from exercise of stock options		1,419
Excess tax benefits from share-based compensation		256
Payments for debt issuance costs	(60)
Net cash used by financing activities	(1,320)	(23,149)
Increase (Decrease) in cash and cash equivalents	5,563	(17,054)
Cash and cash equivalents:
Beginning of year	51,326	52,907
End of quarter	56,889	35,853
Consolidation, Eliminations [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	(57,733)	(8,689)
Financing activities:
Intercompany transactions	57,733	8,689
Net cash used by financing activities	57,733	8,689
Cash and cash equivalents:
End of quarter	0
Parent Company [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	37,370	(7,987)
Investing activities:
Purchases of property and equipment	(5,717)	(7,850)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	250	1,525
Other, net	370	205
Net cash used by investing activities	(5,097)	(483)
Financing activities:
Principal payments on long-term debt	11	(12,941)
Stock repurchases	(55)	(540)
Proceeds from exercise of stock options		1,419
Excess tax benefits from share-based compensation		256
Payments for debt issuance costs	(60)
Intercompany transactions	(26,608)	3,186
Net cash used by financing activities	(26,712)	(8,620)
Increase (Decrease) in cash and cash equivalents	5,561	(17,090)
Cash and cash equivalents:
Beginning of year	51,012	52,635
End of quarter	56,573	35,545
Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	33,445	25,540
Investing activities:
Purchases of property and equipment	(1,260)	(3,309)
Proceeds from disposal of assets	23	1,023
Other, net	135
Net cash used by investing activities	(1,102)	(2,286)
Financing activities:
Principal payments on long-term debt	(1,216)	(11,343)
Intercompany transactions	(31,125)	(11,875)
Net cash used by financing activities	(32,341)	(23,218)
Increase (Decrease) in cash and cash equivalents	2	36
Cash and cash equivalents:
Beginning of year	314	272
End of quarter	$ 316	$ 308

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Note B - Income/(Loss) Per Share and Stock Repurchases

3 Months Ended

Sep. 02, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE B – INCOME/(LOSS) PER SHARE AND STOCK REPURCHASES

Basic income/(loss) per share is computed by dividing net income/(loss) by the weighted average number of common shares outstanding during each period presented. Diluted income/(loss) per share gives effect to stock options and restricted stock outstanding during the applicable periods, if dilutive. The following table reflects the calculation of weighted-average common and dilutive potential common shares outstanding as presented in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (in thousands, except per share data):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Income/(loss) from continuing operations	$	2,565	$	(21,899	)
Loss from discontinued operations	–			(343	)
Net income/(loss)	$	2,565	$	(22,242	)
Weighted-average common shares outstanding		60,419		60,026
Dilutive effect of stock options and restricted stock		634	–
Weighted average common and dilutive potential common shares outstanding		61,053		60,026
Income/(loss) per share – Basic
Income/(loss) from continuing operations	$	0.04	$	(0.36	)
Loss from discontinued operations	–			(0.01	)
Net income/(loss) per share	$	0.04	$	(0.37	)
Income/(loss) per share – Diluted
Income/(loss) from continuing operations	$	0.04	$	(0.36	)
Loss from discontinued operations	–			(0.01	)
Net income/(loss) per share	$	0.04	$	(0.37	)

Stock options with an exercise price greater than the average market price of our common stock and certain options and restricted shares with unrecognized compensation expense do not impact the computation of diluted income/(loss) per share because the effect would be anti-dilutive. The following table summarizes stock options and restricted shares that did not impact the computation of diluted income/(loss) per share because their inclusion would have had an anti-dilutive effect (in thousands):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Stock options		2,826		3,114*
Restricted shares		8		1,246*
Total		2,834		4,360*

*Due to a net loss from continuing operations for the 13 weeks ended September 3, 2013, all outstanding share-based awards were excluded from the computation of diluted loss per share.

During the first quarter of fiscal 2015, we repurchased an insignificant number of shares of our common stock at a cost of $0.1 million. As of September 2, 2014, the total number of remaining shares authorized by our Board of Directors to be repurchased was 11.8 million. All shares repurchased during the current quarter were cancelled as of September 2, 2014.

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	100,000	100,000
Common stock, issued	61,882	61,442

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Note L - Share-Based Employee Compensation

3 Months Ended

Sep. 02, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE L – SHARE-BASED EMPLOYEE COMPENSATION

We compensate our employees and directors using share-based compensation through the following plans:

The Ruby Tuesday, Inc. Stock Incentive Plan and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan

A committee, appointed by the Board of Directors, administers the Ruby Tuesday, Inc. Stock Incentive Plan (“SIP”) and the Ruby Tuesday, Inc. 1996 Stock Incentive Plan (“1996 SIP”), and has full authority in its discretion to determine the key employees, officers, and non-employee directors to whom share-based incentives are granted and the terms and provisions of share-based incentives. Option grants under the SIP and 1996 SIP can have varying vesting provisions and exercise periods as determined by such committee. A majority of currently outstanding options granted under the SIP and 1996 SIP vest within three years following the date of grant and expire seven years after the date of grant. The SIP and 1996 SIP permit the committee to make awards of shares of common stock, awards of stock options or other derivative securities related to the value of the common stock, and certain cash awards to eligible persons. These discretionary awards may be made on an individual basis or for the benefit of a group of eligible persons. All options awarded under the SIP and 1996 SIP have been awarded with an exercise price equal to the fair market value at the time of grant.

At September 2, 2014, we had reserved a total of 4,469,000 and 77,000 shares of common stock for the SIP and 1996 SIP, respectively. Of the reserved shares at September 2, 2014, 2,517,000 and 77,000 were subject to options outstanding for the SIP and 1996 SIP, respectively. Stock option exercises are settled with the issuance of new shares. Net shares of common stock available for issuance at September 2, 2014 under the SIP and 1996 SIP were 1,952,000 and negligible, respectively.

Stock Options

The following table summarizes the activity in options for the 13 weeks ended September 2, 2014 under these stock option plans (in thousands, except per-share data):

	Options			Weighted Average Exercise Price
Service-based vesting:
Balance at June 3, 2014		1,953		$	8.66
Granted		810			5.91
Exercised	–			–
Forfeited		(31	)		9.35
Balance at September 2, 2014		2,732		$	7.84
Exercisable		1,308		$	8.72
Market-based vesting:
Balance at June 3, 2014		735		$	8.82
Forfeited		(120	)		9.34
Balance at September 2, 2014		615		$	8.72
Exercisable	–			–

At September 2, 2014, there was approximately $3.4 million of unrecognized pre-tax compensation expense related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 1.7 years.

During the first quarter of fiscal 2015, we granted 810,000 service-based stock options to certain employees under the terms of the SIP. The stock options awarded vest in equal annual installments over a three-year period following grant of the award, and have a maximum life of seven years. There are no performance-based vesting requirements associated with these stock options.

Restricted Stock

The following table summarizes our restricted stock activity for the 13 weeks ended September 2, 2014 (in thousands, except per-share data):

			Weighted-Average
	Restricted		Grant-Date
	Stock		Fair Value
Unvested Performance-based vesting:at June 3, 2014		68	$	7.81
Granted	–		–
Vested	–		–
Forfeited	–		–
Unvested at September 2, 2014		68	$	7.81

				Weighted-Average
	Restricted			Grant-Date
	Stock			Fair Value
Service-based vesting:
Unvested at June 3, 2014		1,008		$	8.11
Granted		449			6.04
Vested		(95	)		8.63
Forfeited		(2	)		7.81
Unvested at September 2, 2014		1,360		$	7.39

The fair values of the restricted stock awards reflected above were based on the fair market value of our common stock at the time of grant. At September 2, 2014, unrecognized compensation expense related to restricted stock grants expected to vest totaled approximately $5.4 million and will be recognized over a weighted average vesting period of approximately 1.7 years.

During the first quarter of fiscal 2015, we granted 449,000 shares of service-based restricted stock to certain employees under the terms of the SIP and 1996 SIP, 368,000 of which will cliff vest 2.5 years following the grant date and 81,000 of which will vest in three equal installments over a three-year period following the date of grant.

Share-based compensation expense of $1.7 million is included within Selling, general, and administrative, net in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) for both the 13 weeks ended September 2, 2014 and September 3, 2013.

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Document And Entity Information	3 Months Ended
	Sep. 02, 2014	Oct. 06, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	RUBY TUESDAY INC
Document Type	10-Q
Current Fiscal Year End Date	--06-02
Entity Common Stock, Shares Outstanding		61,923,945
Amendment Flag	false
Entity Central Index Key	0000068270
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 02, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Note M - Segment Reporting

3 Months Ended

Sep. 02, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE M – SEGMENT REPORTING

Our President and Chief Executive Officer, who is our chief operating decision maker, with the assistance of our senior management, reviews discrete financial information for both the Ruby Tuesday and Lime Fresh restaurant concepts to assess performance and allocate resources. We consider the Ruby Tuesday and Lime Fresh concepts to be our reportable segments as we do not believe they have similar economic and other characteristics to be aggregated into a single reportable segment. Financial results by reportable segment for the 13 weeks ended September 2, 2014 and September 3, 2013 are as follows (in thousands):

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Revenues:
Ruby Tuesday concept	$	276,043		$	284,022
Lime Fresh concept		5,139			5,652
Total revenues	$	281,182		$	289,674
Segment profit:
Ruby Tuesday concept	$	30,389		$	9,851
Lime Fresh concept		(176	)		(2,454	)
Total segment profit	$	30,213		$	7,397
Depreciation and amortization:
Ruby Tuesday concept	$	12,263		$	13,792
Lime Fresh concept		423			499
Support center and other		552			583
Total depreciation and amortization	$	13,238		$	14,874
Capital expenditures:
Ruby Tuesday concept	$	6,341		$	8,242
Lime Fresh concept		49			2,366
Support center and other		587			551
Total capital expenditures	$	6,977		$	11,159

Total assets by reportable segment as of September 2, 2014 and June 3, 2014 are as follows (in thousands):

	September 2, 2014		June 3, 2014
Total assets:
Ruby Tuesday concept	$	816,194	$	824,293
Lime Fresh concept		14,522		15,203
Support center and other		120,032		116,931
Total assets	$	950,748	$	956,427

The following is a reconciliation of segment profit to loss from continuing operations before taxes for the 13 weeks ended September 2, 2014 and September 3, 2013 (in thousands):

	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Segment profit	$	30,213		$	7,397
Less:
Depreciation and amortization		(13,238	)		(14,874	)
Unallocated general and administrative expenses		(10,962	)		(11,897	)
Interest expense, net		(5,422	)		(6,753	)
Preopening expenses		(89	)		(354	)
Other expense, net		(571	)		(571	)
Loss from continuing operations before income taxes	$	(69	)	$	(27,052	)

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Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Revenue:
Restaurant sales and operating revenue	$ 279,457	$ 288,092
Franchise revenue	1,725	1,582
	281,182	289,674
Operating costs and expenses:
Cost of goods sold	75,147	79,938
Payroll and related costs	95,842	102,733
Other restaurant operating costs	59,799	67,534
Depreciation	12,658	14,209
Selling, general and administrative, net	30,901	37,015
Closures and impairments	1,482	8,033
Interest expense, net	5,422	6,753
Loss on extinguishment of debt		511
	281,251	316,726
Loss from continuing operations before income taxes	(69)	(27,052)
Benefit for income taxes from continuing operations	(2,634)	(5,153)
Income/(loss) from continuing operations	2,565	(21,899)
Loss from discontinued operations, net of tax		(343)
Net income/(loss)	2,565	(22,242)
Other comprehensive income:
Pension liability reclassification, net of tax	463	478
Total comprehensive income/(loss)	$ 3,028	$ (21,764)
Basic income/(loss) per share:
Income/(loss) from continuing operations (in Dollars per share)	$ 0.04	$ (0.36)
Loss from discontinued operations (in Dollars per share)		$ (0.01)
Net income/(loss) per share (in Dollars per share)	$ 0.04	$ (0.37)
Diluted income/(loss) per share:
Income/(loss) from continuing operations (in Dollars per share)	$ 0.04	$ (0.36)
Loss from discontinued operations (in Dollars per share)		$ (0.01)
Net income/(loss) per share (in Dollars per share)	$ 0.04	$ (0.37)
Weighted average shares:
Basic (in Shares)	60,419	60,026
Diluted (in Shares)	61,053	60,026

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Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions

3 Months Ended

Sep. 02, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE G – PROPERTY, EQUIPMENT, ASSETS HELD FOR SALE, OPERATING LEASES, AND SALE-LEASEBACK TRANSACTIONS

Property and equipment, net, is comprised of the following (in thousands):

	September 2, 2014		June 3, 2014
Land	$	214,217	$	214,277
Buildings		429,217		430,988
Improvements		364,780		365,599
Restaurant equipment		249,569		248,852
Other equipment		85,233		84,876
Construction in progress and other*		22,281		22,246
		1,365,297		1,366,838
Less accumulated depreciation		580,241		571,992
Property and equipment, net	$	785,056	$	794,846

* Included in Construction in progress and other as of September 2, 2014 and June 3, 2014 are $16.6 million and $18.4 million, respectively, of assets held for sale that are not classified as such in the Condensed Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months. These assets primarily consist of parcels of land upon which we have no intention to build restaurants and closed properties which include a building.

Included within the current assets section of our Condensed Consolidated Balance Sheets at September 2, 2014 and June 3, 2014 are amounts classified as held for sale totaling $7.1 million and $4.7 million, respectively. Assets held for sale primarily consist of parcels of land upon which we have no intention to build restaurants, land and buildings of closed restaurants, and various liquor licenses. During the 13 weeks ended September 2, 2014, we sold liquor licenses with no carrying value at a gain of $0.3 million. During the 13 weeks ended September 3, 2013, we sold surplus properties with carrying values of $2.6 million at a loss of $0.1 million. Cash proceeds, net of broker fees, from these sales totaled $0.3 million and $2.5 million for the 13 weeks ended September 2, 2014 and September 3, 2013, respectively.

Approximately 55% of our 686 Company-owned restaurants are located on leased properties. Of these, approximately 68% are land leases only; the other 32% are for both land and building. The initial terms of these leases expire at various dates over the next 22 years. These leases may also contain required increases in minimum rent at varying times during the lease term and have options to extend the terms of the leases at a rate that is included in the original lease agreement. Most of our leases require the payment of additional (contingent) rent that is based upon a percentage of restaurant sales above agreed upon sales levels for the year. These sales levels vary for each restaurant and are established in the lease agreements. We recognize contingent rental expense (in annual as well as interim periods) prior to the achievement of the specified target that triggers the contingent rental expense, provided that achievement of that target is considered probable.

During the 13 weeks ended September 3, 2013, we completed sale-leaseback transactions of the land and building for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million. Equipment was not included. The carrying value of the properties sold was $4.8 million. The leases have been classified as operating leases and have initial terms of 15 years, with renewal options of up to 20 years following a rent reset based on fair market value at the end of the initial term. Net proceeds from fiscal 2014’s sale-leaseback transactions were used for general corporate purposes, including debt payments and the repurchase of shares of our common stock.

We realized gains on these transactions during the 13 weeks ended September 3, 2013 of $0.8 million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases. The current portion of the deferred gains on all sale-leaseback transactions was $1.1 million as of both September 2, 2014 and June 3, 2014, and is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets. The long-term portion of the deferred gains on all sale-leaseback transactions was $12.7 million and $13.0 million as of September 2, 2014 and June 3, 2014, respectively, and is included in Other deferred liabilities in our Condensed Consolidated Balance Sheets. Amortization of the deferred gains of $0.3 million is included within Other restaurant operating costs in our Condensed Consolidated Statement of Operations and Comprehensive Income/(Loss) for both of the 13-week periods ended September 2, 2014 and September 3, 2013.

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Note F - Inventories

3 Months Ended

Sep. 02, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE F – INVENTORIES

Our merchandise inventory was $12.0 million and $12.9 million as of September 2, 2014 and June 3, 2014, respectively. In order to ensure adequate supply and competitive pricing, we sometimes purchase lobster in advance of our needs and store it in third-party facilities prior to our distributor taking possession of the inventory. In anticipation of lower promotional levels, we have utilized substantially all of the lobster on hand as of September 2, 2014 and June 3, 2014.

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Note R – Subsequent Events

3 Months Ended

Sep. 02, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE R – SUBSEQUENT EVENTS

Subsequent to September 2, 2014, we prepaid and retired three mortgage loan obligations with a September 2, 2014 aggregate balance of $3.9 million using cash on hand. Additionally, we paid $0.4 million in prepayment premiums in connection with the retirement of these obligations.

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Note N - Commitments and Contingencies

3 Months Ended

Sep. 02, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE N – COMMITMENTS AND CONTINGENCIES

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business. We provide reserves for such claims when payment is probable and estimable in accordance with GAAP. At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On April 17, 2012, a wage and hour case styled Guttentag, et al vs. Ruby Tuesday, Inc. was filed in the United States District Court, Southern District of New York.  The named plaintiffs, and five additional former employees who have joined the suit as opt-in plaintiffs, alleged that the Company violated the Fair Labor Standards Act and state wage and hour laws in New York and Florida.  Plaintiffs filed their motion for conditional certification on March 8, 2013, which sought a nationwide putative class of all current and former servers, bartenders, and food runners who worked for the Company for the three-year period prior to the filing of the lawsuit.  On June 11, 2013, the court entered an order granting conditional certification of the nationwide class requested by plaintiffs, but for the time frame of June 11, 2010 to the present. Notice of the lawsuit and the right to opt-in was mailed to the putative class members in November 2013, and approximately 5%, or about 4,170 of the putative class members, filed consents to opt-in. The parties have been engaged in mediation and recently reached a preliminary settlement agreement that, when approved by the court, will resolve the lawsuit and result in its dismissal with prejudice. The total settlement sum is $3.0 million, and would cover the claims of all named and opt-in plaintiffs, including plaintiffs’ claims for costs and attorneys’ fees. Accordingly, included within Accrued liabilities – Rent and other in our September 2, 2014 Condensed Consolidated Balance Sheet is a $3.0 million accrual in connection with this case.

On October 2, 2014, the court granted the motion to approve the settlement without modification. After a thirty-day appeals period runs without the filing of any appeals, and none are anticipated, the settlement agreement will become effective, final, and binding. At that point, the Company has an obligation to fund at least $2.0 million of the settlement fund within 21 days. The Company can defer, at its option, funding the remaining $1.0 million for up to another 90 days, but will incur an obligation to pay 8% per annum simple interest on any amount deferred for the deferral period. Per the court’s approval order, the case has now been dismissed with prejudice, subject to the court retaining jurisdiction to enforce the terms of the settlement agreement.

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Note J - Employee Post-Employment Benefits

3 Months Ended

Sep. 02, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE J – EMPLOYEE POST-EMPLOYMENT BENEFITS

We sponsor three defined benefit pension plans for active employees and offer certain postretirement benefits for retirees. A summary of each of these is presented below.

Retirement Plan

RTI sponsors the Morrison Restaurants Inc. Retirement Plan (the “Retirement Plan”). Effective December 31, 1987, the Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the Retirement Plan after that date. Participants receive benefits based upon salary and length of service.

Minimum funding for the Retirement Plan is determined in accordance with the guidelines set forth in employee benefit and tax laws. From time to time we may contribute additional amounts as we deem appropriate. We estimate that we will be required to make contributions totaling $0.4 million to the Retirement Plan during the remainder of fiscal 2015.

Executive Supplemental Pension Plan and Management Retirement Plan

Under these unfunded defined benefit pension plans, eligible employees earn supplemental retirement income based upon salary and length of service, reduced by social security benefits and amounts otherwise receivable under other specified Company retirement plans. Effective June 1, 2001, the Management Retirement Plan was amended so that no additional benefits would accrue and no new participants may enter the plan after that date.

Included in our Condensed Consolidated Balance Sheets as of September 2, 2014 and June 3, 2014 are amounts within Accrued liabilities: Payroll and related costs of $3.3 million as of both dates and amounts within Other deferred liabilities of $32.4 million and $32.5 million, respectively, relating to our three defined benefit pension plans.

Postretirement Medical and Life Benefits

Our Postretirement Medical and Life Benefits plans provide medical and life insurance benefits to certain retirees. The medical plan requires retiree cost sharing provisions that are more substantial for employees who retire after January 1, 1990.

The following tables detail the components of net periodic benefit costs and the amounts recognized in our Condensed Consolidated Financial Statements for the Retirement Plan, Management Retirement Plan, and the Executive Supplemental Pension Plan (collectively, the “Pension Plans”) and the Postretirement Medical and Life Benefits plans (in thousands):

	Pension Benefits
	Thirteen weeks ended
	September 2, 2014			September 3, 2013
Service cost	$	75		$	89
Interest cost		443			434
Expected return on plan assets		(124	)		(111	)
Recognized actuarial loss		430			428
Net periodic benefit cost	$	824		$	840

	Postretirement Medical and Life Benefits
	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Service cost	$	1	$	3
Interest cost		12		17
Amortization of prior service cost (a)	–			(11	)
Recognized actuarial loss		33		61
Net periodic benefit cost	$	46	$	70

(a) Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

During the 13 weeks ended September 2, 2014 and September 3, 2013, we reclassified recognized actuarial losses and amortized prior service costs out of accumulated other comprehensive loss and into pension expense, which is included in Selling, general and administrative, net within our Condensed Consolidated Statements of Operations, as follows (in thousands):

	Thirteen weeks ended
	September 2, 2014		September 3, 2013
Recognized actuarial loss	$	463	$	489
Amortization of prior service cost	–			(11	)
Pension liability reclassification	$	463	$	478

Accumulated other comprehensive loss in our Condensed Consolidated Balance Sheets as of September 2, 2014 and June 3, 2014 was $10.4 million and $10.9 million, respectively. The change in accumulated other comprehensive loss during the 13 weeks ended September 2, 2014 was attributable to $0.5 million of recognized actuarial losses related to our pension plans.

We also sponsor two defined contribution retirement savings plans. Information regarding these plans is included in our Annual Report on Form 10-K for the fiscal year ended June 3, 2014.

Executive Separations

On June 26, 2014, our then Executive Vice President, Chief Financial Officer separated employment with the Company. Additionally, our Senior Vice President, Chief Development Officer departed the Company on July 24, 2014. During the 13 weeks ended September 2, 2014, we recorded severance expense and made severance payments of $0.3 million in connection with the separation agreements for these former executives.

As of September 2, 2014, liabilities of $0.5 million and $0.1 million, representing unpaid obligations in connection with the staff reductions, were included within Accrued liabilities: Payroll and related costs and Other deferred liabilities, respectively, in our Condensed Consolidated Balance Sheet. A roll forward of our obligations in connection with employee separations is as follows (in thousands):

Balance at June 3, 2014	$	1,055
Employee severance and unused vacation accruals		569
Cash payments		(1,013	)
Balance at September 2, 2014	$	611

See Note L to the Condensed Consolidated Financial Statements for discussion of the impact of executive separations to our share-based employee compensation costs.

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Note M - Segment Reporting (Details) - Reconciliation of Segment Profit to (Loss)/Income from Continuing Operations before Taxes (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment profit	$ 30,213	$ 7,397
Less:
Depreciation and amortization	(13,238)	(14,874)
Unallocated general and administrative expenses	(30,901)	(37,015)
Interest expense, net	(5,422)	(6,753)
Preopening expenses	(89)	(354)
Other expense, net	(571)	(571)
Loss from continuing operations before income taxes	(69)	(27,052)
Corporate, Non-Segment [Member]
Less:
Unallocated general and administrative expenses	$ (10,962)	$ (11,897)

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Note H - Long-Term Debt and Capital Leases

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Debt and Capital Leases Disclosures [Text Block]

NOTE H – LONG-TERM DEBT AND CAPITAL LEASES

Long-term debt and capital lease obligations consist of the following (in thousands):

	September 2, 2014			June 3, 2014
Senior unsecured notes	$	215,000		$	215,000
Unamortized discount		(2,420	)		(2,503	)
Senior unsecured notes less unamortized discount		212,580			212,497
Revolving credit facility	–			–
Mortgage loan obligations		44,720			45,993
Capital lease obligations		212			201
		257,512			258,691
Less current maturities		4,851			4,816
	$	252,661		$	253,875

On May 14, 2012, we entered into an indenture (the “Indenture”) among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee, governing the Company’s $250.0 million aggregate principal amount of 7.625% senior notes due 2020 (the “Senior Notes”). The Senior Notes were issued at a discount of $3.7 million, which is being amortized using the effective interest method over the eight-year term of the notes.

The Senior Notes are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions. They rank equal in right of payment with our existing and future senior indebtedness and senior in right of payment to any of our future subordinated indebtedness. The Senior Notes are effectively subordinated to all of our secured debt, including borrowings outstanding under our revolving credit facility, to the extent of the value of the assets securing such debt and structurally subordinated to all of the liabilities of our existing and future subsidiaries that do not guarantee the Senior Notes.

Interest on the Senior Notes is calculated at 7.625% per annum, payable semiannually on each May 15 and November 15 to holders of record on the May 1 or November 1 immediately preceding the interest payment date. Accrued interest on the Senior Notes and our other long-term debt and capital lease obligations is included in Accrued liabilities – Rent and other in our Condensed Consolidated Balance Sheets. The Senior Notes mature on May 15, 2020.

At any time prior to May 15, 2016, we may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus an applicable “make-whole” premium and accrued and unpaid interest. At any time on or after May 15, 2016, we may redeem the Senior Notes, in whole or in part, at the redemption prices specified in the Indenture plus accrued and unpaid interest. At any time prior to May 15, 2015, we may redeem up to 35% of the Senior Notes from the proceeds of certain equity offerings. There is no sinking fund for the Senior Notes.

The Indenture contains covenants that limit, among other things, our ability and the ability of certain of our subsidiaries to (i) incur or guarantee additional indebtedness; (ii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iii) make certain investments; (iv) create liens or use assets as security in other transactions; (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of their assets; (vi) enter into transactions with affiliates; and (vii) sell or transfer certain assets. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture, and certain covenants will not apply at any time when the Senior Notes are rated investment grade by the Rating Agencies, as defined in the Indenture. The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Notes to be due and payable immediately.

Under the terms of our December 2013 four-year revolving credit agreement (the “Senior Credit Facility” discussed below) we are allowed, under certain circumstances, to repurchase up to $20.0 million of the Senior Notes in any fiscal year. We did not repurchase any Senior Notes during the quarter ended September 2, 2014. The balance on the Senior Notes was $215.0 million at September 2, 2014.

On December 3, 2013, we entered into the Senior Credit Facility under which we may borrow up to $50.0 million with the option, subject to certain conditions, to increase the facility by up to $35.0 million. The Senior Credit Facility, which was obtained to provide access to capital for general corporate purposes, replaced a previous five-year $200.0 million credit facility that was set to expire in December 2015. The terms of the Senior Credit Facility provide for a $25.0 million sublimit for the issuance of standby letters of credit.

Under the Senior Credit Facility, interest rates charged on borrowings can vary depending on the interest rate option we choose to utilize. Our options for the rate are a Base Rate or LIBOR, plus an applicable margin. The Base Rate is defined as the highest of the issuing bank’s prime rate, the Federal Funds rate plus 0.50%, or the Adjusted LIBO rate (as defined in the Senior Credit Facility) plus 1.0%. The applicable margin for the LIBOR rate-based option is a percentage ranging from 2.50% to 3.50% and for the Base Rate option is a percentage ranging from 1.50% to 2.50%. We pay commitment fees quarterly ranging from 0.40% to 0.75% on the unused portion of the Senior Credit Facility.

As security for the Senior Credit Facility, we granted the lenders liens and security interests in substantially all of the shares of capital stock of the Company and each of our present and future subsidiaries, substantially all of the personal property of the Company and each of our present and future subsidiaries, and the real property, improvements, and fixtures of 49 Ruby Tuesday restaurants. The real property, improvements, and fixtures of the 49 restaurants pledged as collateral appraised at $101.4 million at the time of the transaction and have a September 2, 2014 net book value of $80.8 million.

Under the Senior Credit Facility, we had no borrowings outstanding at September 2, 2014. After consideration of letters of credit outstanding, we had $37.5 million available under the Senior Credit Facility as of September 2, 2014.

The Senior Credit Facility contains a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability to incur liens, engage in mergers or other fundamental changes, make acquisitions, investments, loans and advances, pay dividends or other distributions, sell or otherwise dispose of certain assets, engage in certain transactions with affiliates, enter into burdensome agreements or certain hedging agreements, amend organizational documents, change accounting practices, incur additional indebtedness and prepay other indebtedness. In addition, under the Senior Credit Facility, we are required to comply with financial covenants relating to the maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio. The terms of the Senior Credit Facility require us to maintain a maximum leverage ratio of no more than 5.00 to 1.0 and a minimum fixed charge coverage ratio of 1.30 to 1.0 for the quarter ended September 2, 2014. The minimum required ratios fluctuate thereafter as provided in the Senior Credit Facility.

The Senior Credit Facility terminates no later than December 3, 2017.  Upon the occurrence of an event of default, the lenders may terminate the loan commitments, accelerate all loans and exercise any of their rights under the Senior Credit Facility and any ancillary loan documents.

On December 3, 2013, in connection with our entry into the Senior Credit Facility, the Company and certain of its subsidiaries entered into loan modification agreements (the “Loan Modification Agreements”) with certain mortgage lenders to, among other things, provide waivers and consents under certain of our mortgage loan obligations to enter into the Senior Credit Facility. The Loan Modification Agreements also, among other things, amend certain financial reporting requirements under the specified loans and modify and/or provide for certain financial covenants for the specified loans, including the minimum consolidated fixed charge coverage ratio and the minimum adjusted total debt to EBITDAR ratio.

Our $44.7 million in mortgage loan obligations as of September 2, 2014 consists of various loans acquired upon franchise acquisitions. These loans, which mature between January 2015 and November 2022, have balances which range from negligible to $7.6 million and interest rates of 7.60% to 10.92%. Many of the properties acquired from franchisees collateralize the loans outstanding.

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Note I - Closure and Impairments Expense

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Asset Impairment Charges [Text Block]

NOTE I – CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the thirteen weeks ended September 2, 2014 and September 3, 2013 (in thousands):

	September 2, 2014			September 3, 2013
Closures and impairments from continuing operations
Property impairments	$	1,056		$	4,930
Closed restaurant lease reserves		466			2,595
Other closing expense		233			468
(Gain)/loss on sale of surplus properties		(273	)		40
Closures and impairments, net	$	1,482		$	8,033
Closures and impairments from discontinued operations				$	518

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 3, 2014	$	10,873
Closing expense including rent and other lease charges		466
Payments		(1,326	)
Other adjustments		13
Balance at September 2, 2014	$	10,026

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease obligations. Of the total future lease obligations included in the table above, $9.7 million and $10.5 million are included within the Accrued liabilities – Rent and other caption in our Consolidated Balance Sheets as of September 2, 2014 and June 3, 2014, respectively. For the remainder of fiscal 2015 and beyond, our focus will be on obtaining settlements, or subleases as necessary, on as many of these leases as possible and these settlements could be higher or lower than the amounts recorded. The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.

At September 2, 2014, we had 57 restaurants that had been open more than one year with rolling 12-month negative cash flows of which 36 have been impaired to salvage value. Of the 21 which remained, we reviewed the plans to improve cash flows at each of the restaurants and determined that no impairment was necessary. The remaining net book value of these 21 restaurants, eight of which are located on owned properties, was $24.1 million at September 2, 2014.

Should cash flows at these restaurants not improve within a reasonable period of time, further impairment charges are possible. Considerable management judgment is necessary to determine to estimate future cash flows, including cash flows from continuing use, terminal value, closure costs, salvage value, and sublease income. Accordingly, actual results could vary significantly from our estimates.

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Note K - Income Taxes

3 Months Ended

Sep. 02, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE K – INCOME TAXES

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance requires an entity to present its deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward net of unrecognized tax benefits when settlement in this manner is available under the tax law, which would be based on facts and circumstances as of the balance sheet reporting date and would not consider future events. Gross presentation of an unrecognized tax benefit will still be required in the notes to the financial statements. We adopted ASU 2013-11 on a prospective basis during the first quarter of fiscal 2015. The adoption of this standard in the first quarter of fiscal 2015 resulted in a reclassification of $5.0 million of our liability for unrecognized tax benefits against our deferred tax assets.

Under Accounting Standards Codification 740 (“ASC 740”), companies are required to apply their estimated annual tax rate on a year-to-date basis in each interim period. Under ASC 740, companies should not apply the estimated annual tax rate to interim financial results if the estimated annual tax rate is not reliably predictable. In this situation, the interim tax rate should be based on the actual year-to-date results. Due to changes in our projections, which have fluctuated as we work through our brand repositioning, a reliable projection of our annual effective rate has been difficult to determine. As such, we recorded a tax provision for the first quarter of fiscal 2015 based on the actual year-to-date results, in accordance with ASC 740.

We regularly evaluate the need for a valuation allowance for deferred tax assets by assessing whether it is more likely than not that we will realize the deferred tax assets in the future.  A valuation allowance assessment is performed each reporting period, with any additions or adjustments reflected in earnings in the period of assessment.  In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets for each jurisdiction.

Prior to the fourth quarter of fiscal 2013, we concluded that objective and subjective positive evidence outweighed negative evidence, and it was more likely than not we would realize all of our federal and most of our state deferred tax assets, except for loss carryforwards in certain states that have had cumulative losses and/or relatively short carryforward periods and annual limits of loss carryforward that is available for use to offset future taxable income.   During the fourth quarter of fiscal 2013, we recorded a valuation allowance following the conclusion that the negative evidence outweighed the positive evidence. 

We recorded a tax benefit from continuing operations of $2.6 million during the first quarter of fiscal 2015, compared to a tax benefit from continuing operations of $5.2 million in the prior year quarter. Included in our $2.6 million tax benefit from continuing operations for the quarter ended September 2, 2014 was a benefit of $3.2 million representing an immaterial prior period correction to our deferred tax asset valuation allowance.

Our valuation allowance for deferred tax assets totaled $53.8 million and $54.6 million as of September 2, 2014 and June 3, 2014, respectively.

We had a gross liability for unrecognized tax benefits, exclusive of accrued interest and penalties, of $6.7 million and $7.0 million as of September 2, 2014 and June 3, 2014, respectively. As of September 2, 2014 and June 3, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate was $2.4 million and $2.6 million, respectively. The liability for unrecognized tax benefits as of September 2, 2014 includes $0.3 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations and negotiations with tax authorities.

Interest and penalties related to unrecognized tax benefits are recognized as components of income tax expense. As of September 2, 2014 and June 3, 2014, we had accrued $0.4 million and $0.5 million, respectively, for the payment of interest and penalties. During the first quarter of fiscal 2014, accrued interest and penalties decreased by an insignificant amount.

At September 2, 2014, we are no longer subject to U.S. federal income tax examinations by tax authorities for fiscal years prior to 2011, and with few exceptions, state and local examinations by tax authorities prior to fiscal year 2011. 

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Note O – Fair Value Measurements (Details) - Losses Recognized from Fair Value Measurements on Non-recurring Basis (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Included within continuing operations
Asset impairment charges	$ 1,462	$ 5,494
Continuing Operations [Member]
Included within continuing operations
Long-lived assets held for sale	599	269
Long-lived assets held for use	457	4,661
Asset impairment charges	1,056	4,930
Discontinued Operations [Member]
Included within continuing operations
Asset impairment charges		$ 153

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Note P – Supplemental Condensed Consolidating Financial Statements (Details) - Condensed Consolidating Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014	Sep. 03, 2013	Jun. 04, 2013
Current assets:
Cash and cash equivalents	$ 56,889	$ 51,326	$ 35,853	$ 52,907
Accounts receivable	4,531	4,861
Inventories	19,994	21,174
Income tax receivable	1,731	2,133
Deferred income taxes	1,324	3,397
Other current assets	20,348	16,899
Total current assets	104,817	99,790
Property and equipment, net	785,056	794,846
Other assets	60,875	61,791
Total assets	950,748	956,427
Current liabilities:
Accounts payable	23,121	26,201
Accrued and other current liabilities	83,369	82,806
Current maturities of long-term debt, including capital leases	4,851	4,816
Total current liabilities	111,341	113,823
Long-term debt and capital leases, less current maturities	252,661	253,875
Deferred income taxes	3,578	3,500
Other deferred liabilities	117,235	124,020
Total liabilities	484,815	495,218
Shareholders’ equity:
Common stock	619	614
Capital in excess of par value	77,960	76,269
Retained earnings	397,791	395,226
Accumulated other comprehensive loss	(10,437)	(10,900)
Total shareholders’ equity	465,933	461,209
Total liabilities & shareholders’ equity	950,748	956,427
Consolidation, Eliminations [Member]
Current assets:
Cash and cash equivalents	0
Income tax receivable	(140,334)	(136,391)
Total current assets	(140,334)	(136,391)
Investment in subsidiaries	(134,922)	(158,266)
Due from/(to) subsidiaries	(290,098)	(322,277)
Total assets	(565,354)	(616,934)
Current liabilities:
Income tax payable	(140,334)	(136,391)
Total current liabilities	(140,334)	(136,391)
Due to/(from) subsidiaries	(290,098)	(322,277)
Total liabilities	(430,432)	(458,668)
Shareholders’ equity:
Retained earnings	(134,922)	(158,266)
Total shareholders’ equity	(134,922)	(158,266)
Total liabilities & shareholders’ equity	(565,354)	(616,934)
Parent Company [Member]
Current assets:
Cash and cash equivalents	56,573	51,012	35,545	52,635
Accounts receivable	1,568	1,725
Inventories	14,260	15,114
Income tax receivable	142,065	138,524
Deferred income taxes	(1,889)	(548)
Other current assets	17,236	14,610
Total current assets	229,813	220,437
Property and equipment, net	580,924	587,783
Investment in subsidiaries	134,922	158,266
Due from/(to) subsidiaries	73,041	78,612
Other assets	48,399	48,780
Total assets	1,067,099	1,093,878
Current liabilities:
Accounts payable	19,177	20,545
Accrued and other current liabilities	49,406	46,450
Current maturities of long-term debt, including capital leases	(347)	(341)
Total current liabilities	68,236	66,654
Long-term debt and capital leases, less current maturities	213,139	213,039
Deferred income taxes	(1,078)	(445)
Due to/(from) subsidiaries	217,057	243,665
Other deferred liabilities	103,812	109,756
Total liabilities	601,166	632,669
Shareholders’ equity:
Common stock	619	614
Capital in excess of par value	77,960	76,269
Retained earnings	397,791	395,226
Accumulated other comprehensive loss	(10,437)	(10,900)
Total shareholders’ equity	465,933	461,209
Total liabilities & shareholders’ equity	1,067,099	1,093,878
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	316	314	308	272
Accounts receivable	2,963	3,136
Inventories	5,734	6,060
Deferred income taxes	3,213	3,945
Other current assets	3,112	2,289
Total current assets	15,338	15,744
Property and equipment, net	204,132	207,063
Due from/(to) subsidiaries	217,057	243,665
Other assets	12,476	13,011
Total assets	449,003	479,483
Current liabilities:
Accounts payable	3,944	5,656
Accrued and other current liabilities	33,963	36,356
Current maturities of long-term debt, including capital leases	5,198	5,157
Income tax payable	140,334	136,391
Total current liabilities	183,439	183,560
Long-term debt and capital leases, less current maturities	39,522	40,836
Deferred income taxes	4,656	3,945
Due to/(from) subsidiaries	73,041	78,612
Other deferred liabilities	13,423	14,264
Total liabilities	314,081	321,217
Shareholders’ equity:
Retained earnings	134,922	158,266
Total shareholders’ equity	134,922	158,266
Total liabilities & shareholders’ equity	$ 449,003	$ 479,483

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Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis (Fair Value, Inputs, Level 2 [Member], USD $) In Thousands, unless otherwise specified	Sep. 02, 2014
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 2,562
Assets Held-for-sale [Member]
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	2,525
Assets Held-for-Use [Member]
Note O – Fair Value Measurements (Details) - Fair Values Financial Assets and Liabilities Measured on a Non-recurring Basis [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 37

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Note P – Supplemental Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Condensed Balance Sheet [Table Text Block]

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	56,573		$	316	–			$	56,889
Accounts receivable		1,568			2,963	–				4,531
Inventories		14,260			5,734	–				19,994
Income tax receivable		142,065		–			(140,334	)		1,731
Deferred income taxes		(1,889	)		3,213	–				1,324
Other current assets		17,236			3,112	–				20,348
Total current assets		229,813			15,338		(140,334	)		104,817
Property and equipment, net		580,924			204,132	–				785,056
Investment in subsidiaries		134,922		–			(134,922	)	–
Due from/(to) subsidiaries		73,041			217,057		(290,098	)	–
Other assets		48,399			12,476	–				60,875
Total assets	$	1,067,099		$	449,003	$	(565,354	)	$	950,748
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	19,177		$	3,944	–			$	23,121
Accrued and other current liabilities		49,406			33,963	–				83,369
Current maturities of long-term debt, including capital leases		(347	)		5,198	–				4,851
Income tax payable	–				140,334		(140,334	)	–
Total current liabilities		68,236			183,439		(140,334	)		111,341
Long-term debt and capital leases, less current maturities		213,139			39,522	–				252,661
Deferred income taxes		(1,078	)		4,656	–				3,578
Due to/(from) subsidiaries		217,057			73,041		(290,098	)	–
Other deferred liabilities		103,812			13,423	–				117,235
Total liabilities		601,166			314,081		(430,432	)		484,815
Shareholders’ equity:
Common stock		619		–		–				619
Capital in excess of par value		77,960		–		–				77,960
Retained earnings		397,791			134,922		(134,922	)		397,791
Accumulated other comprehensive loss		(10,437	)	–		–				(10,437	)
Total shareholders’ equity		465,933			134,922		(134,922	)		465,933
Total liabilities & shareholders’ equity	$	1,067,099		$	449,003	$	(565,354	)	$	950,748

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	–			$	51,326
Accounts receivable		1,725			3,136	–				4,861
Inventories		15,114			6,060	–				21,174
Income tax receivable		138,524		–			(136,391	)		2,133
Deferred income taxes		(548	)		3,945	–				3,397
Other current assets		14,610			2,289	–				16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063	–				794,846
Investment in subsidiaries		158,266		–			(158,266	)	–
Due from/(to) subsidiaries		78,612			243,665		(322,277	)	–
Other assets		48,780			13,011	–				61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	–			$	26,201
Accrued and other current liabilities		46,450			36,356	–				82,806
Current maturities of long-term debt, including capital leases		(341	)		5,157					4,816
Income tax payable	–				136,391		(136,391	)	–
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases, less current maturities		213,039			40,836	–				253,875
Deferred income taxes		(445	)		3,945	–				3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)	–
Other deferred liabilities		109,756			14,264	–				124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614		–		–				614
Capital in excess of par value		76,269		–		–				76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)	–		–				(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934	)	$	956,427

Condensed Income Statement [Table Text Block]

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	202,551		$	76,906		–			$	279,457
Franchise revenue		146			1,579		–				1,725
		202,697			78,485		–				281,182
Operating costs and expenses:
Cost of goods sold		54,530			20,617		–				75,147
Payroll and related costs		68,042			27,800		–				95,842
Other restaurant operating costs		43,412			16,387		–				59,799
Depreciation		9,387			3,271		–				12,658
Selling, general, and administrative		20,221			10,680		–				30,901
Intercompany selling, general, and administrative allocations		11,142			(11,142	)	–			–
Closures and impairments		1,231			251		–				1,482
Equity in earnings of subsidiaries		(7,781	)	–				7,781		–
Interest expense, net		4,511			911		–				5,422
Intercompany interest expense/(income)		2,892			(2,892	)	–			–
		207,587			65,883			7,781			281,251
(Loss)/income before income taxes		(4,890	)		12,602			(7,781	)		(69	)
(Benefit)/provision for income taxes		(7,455	)		4,821		–				(2,634	)
Net income	$	2,565		$	7,781		$	(7,781	)	$	2,565
Other comprehensive income:
Pension liability reclassification, net of tax		463		–			–				463
Total comprehensive income	$	3,028		$	7,781		$	(7,781	)	$	3,028

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	210,082		$	78,010		–			$	288,092
Franchise revenue		21			1,561		–				1,582
		210,103			79,571		–				289,674
Operating costs and expenses:
Cost of goods sold		58,527			21,411		–				79,938
Payroll and related costs		73,526			29,207		–				102,733
Other restaurant operating costs		48,402			19,132		–				67,534
Depreciation		10,364			3,845		–				14,209
Selling, general, and administrative		25,994			11,021		–				37,015
Intercompany selling, general, and administrative allocations		14,763			(14,763	)	–			–
Closures and impairments		5,165			2,868		–				8,033
Equity in earnings of subsidiaries		(4,525	)	–				4,525		–
Interest expense, net		5,060			1,693		–				6,753
Intercompany interest expense/(income)		3,185			(3,185	)	–			–
Loss on extinguishment of debt		511		–			–				511
		240,972			71,229			4,525			316,726
(Loss)/income from continuing operations before income taxes		(30,869	)		8,342			(4,525	)		(27,052	)
(Benefit)/provision for income taxes from continuing operations		(8,970	)		3,817		–				(5,153	)
(Loss)/income from continuing operations		(21,899	)		4,525			(4,525	)		(21,899	)
Loss from discontinued operations, net of tax		(343	)	–			–				(343	)
Net (loss)/income	$	(22,242	)	$	4,525		$	(4,525	)	$	(22,242	)
Other comprehensive income:
Pension liability reclassification, net of tax		478		–			–				478
Total comprehensive (loss)/income	$	(21,764	)	$	4,525		$	(4,525	)	$	(21,764	)

Condensed Cash Flow Statement [Table Text Block]

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	37,370		$	33,445		$	(57,733	)	$	13,082
Investing activities:
Purchases of property and equipment		(5,717	)		(1,260	)	–				(6,977	)
Proceeds from disposal of assets		250			23		–				273
Other, net		370			135		–				505
Net cash used by investing activities		(5,097	)		(1,102	)	–				(6,199	)
Financing activities:
Principal payments on long-term debt		11			(1,216	)	–				(1,205	)
Stock repurchases		(55	)	–			–				(55	)
Payments for debt issuance costs		(60	)	–			–				(60	)
Intercompany transactions		(26,608	)		(31,125	)		57,733		–
Net cash used by financing activities		(26,712	)		(32,341	)		57,733			(1,320	)
Increase in cash and cash equivalents		5,561			2		–				5,563
Cash and cash equivalents:
Beginning of year		51,012			314		–				51,326
End of quarter	$	56,573		$	316		–			$	56,889

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	(7,987	)	$	25,540		$	(8,689	)	$	8,864
Investing activities:
Purchases of property and equipment		(7,850	)		(3,309	)	–				(11,159	)
Proceeds from sale-leaseback transactions, net		5,637		–			–				5,637
Proceeds from disposal of assets		1,525			1,023		–				2,548
Other, net		205		–			–				205
Net cash used by investing activities		(483	)		(2,286	)	–				(2,769	)
Financing activities:
Principal payments on long-term debt		(12,941	)		(11,343	)	–				(24,284	)
Stock repurchases		(540	)	–			–				(540	)
Proceeds from exercise of stock options		1,419		–			–				1,419
Excess tax benefits from share-based compensation		256		–			–				256
Intercompany transactions		3,186			(11,875	)		8,689		–
Net cash used by financing activities		(8,620	)		(23,218	)		8,689			(23,149	)
Decrease in cash and cash equivalents		(17,090	)		36		–				(17,054	)
Cash and cash equivalents:
Beginning of year		52,635			272		–				52,907
End of quarter	$	35,545		$	308		–			$	35,853

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Note J - Employee Post-Employment Benefits (Details) - Components of Net Periodic Benefit Cost (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014		Sep. 03, 2013
Note J - Employee Post-Employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Amortization of prior service cost (a)			$ 11
Recognized actuarial loss	463		489
Pension Plan [Member]
Note J - Employee Post-Employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Service cost	75		89
Interest cost	443		434
Expected return on plan assets	(124)		(111)
Recognized actuarial loss	430		428
Net periodic benefit cost	824		840
Postretirement Medical and Life Benefit Plans [Member]
Note J - Employee Post-Employment Benefits (Details) - Components of Net Periodic Benefit Cost [Line Items]
Service cost	1		3
Interest cost	12		17
Amortization of prior service cost (a)		[1]	(11)	[1]
Recognized actuarial loss	33		61
Net periodic benefit cost	$ 46		$ 70

[1] Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.

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Note P – Supplemental Condensed Consolidating Financial Statements

3 Months Ended

Sep. 02, 2014

Disclosure Text Block Supplement [Abstract]

Condensed Financial Statements [Text Block]

NOTE P – SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

As discussed in Note H to the Condensed Consolidated Financial Statements, the Senior Notes held by Ruby Tuesday, Inc. (the “Parent”) are guaranteed on a senior unsecured basis by our existing and future domestic restricted subsidiaries, subject to certain exceptions (the “Guarantors”). Each of the Guarantors is wholly-owned by Ruby Tuesday, Inc. None of the few remaining subsidiaries of Ruby Tuesday, Inc., which were primarily created to hold liquor license assets, guarantee the Senior Notes (the “Non-Guarantors”). Our Non-Guarantor subsidiaries are immaterial and are aggregated within the Parent information disclosed below.

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(f) of Regulation S-X promulgated by the Securities and Exchange Commission, presents the condensed consolidating financial information separately for the Parent, the Guarantors, and elimination entries necessary to consolidate the Parent and Guarantors. Investments in wholly-owned subsidiaries are accounted for using the equity method for purposes of the consolidated presentation. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Balance Sheet

As of September 2, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	56,573		$	316	–			$	56,889
Accounts receivable		1,568			2,963	–				4,531
Inventories		14,260			5,734	–				19,994
Income tax receivable		142,065		–			(140,334	)		1,731
Deferred income taxes		(1,889	)		3,213	–				1,324
Other current assets		17,236			3,112	–				20,348
Total current assets		229,813			15,338		(140,334	)		104,817
Property and equipment, net		580,924			204,132	–				785,056
Investment in subsidiaries		134,922		–			(134,922	)	–
Due from/(to) subsidiaries		73,041			217,057		(290,098	)	–
Other assets		48,399			12,476	–				60,875
Total assets	$	1,067,099		$	449,003	$	(565,354	)	$	950,748
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	19,177		$	3,944	–			$	23,121
Accrued and other current liabilities		49,406			33,963	–				83,369
Current maturities of long-term debt, including capital leases		(347	)		5,198	–				4,851
Income tax payable	–				140,334		(140,334	)	–
Total current liabilities		68,236			183,439		(140,334	)		111,341
Long-term debt and capital leases, less current maturities		213,139			39,522	–				252,661
Deferred income taxes		(1,078	)		4,656	–				3,578
Due to/(from) subsidiaries		217,057			73,041		(290,098	)	–
Other deferred liabilities		103,812			13,423	–				117,235
Total liabilities		601,166			314,081		(430,432	)		484,815
Shareholders’ equity:
Common stock		619		–		–				619
Capital in excess of par value		77,960		–		–				77,960
Retained earnings		397,791			134,922		(134,922	)		397,791
Accumulated other comprehensive loss		(10,437	)	–		–				(10,437	)
Total shareholders’ equity		465,933			134,922		(134,922	)		465,933
Total liabilities & shareholders’ equity	$	1,067,099		$	449,003	$	(565,354	)	$	950,748

Condensed Consolidating Balance Sheet

As of June 3, 2014

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	51,012		$	314	–			$	51,326
Accounts receivable		1,725			3,136	–				4,861
Inventories		15,114			6,060	–				21,174
Income tax receivable		138,524		–			(136,391	)		2,133
Deferred income taxes		(548	)		3,945	–				3,397
Other current assets		14,610			2,289	–				16,899
Total current assets		220,437			15,744		(136,391	)		99,790
Property and equipment, net		587,783			207,063	–				794,846
Investment in subsidiaries		158,266		–			(158,266	)	–
Due from/(to) subsidiaries		78,612			243,665		(322,277	)	–
Other assets		48,780			13,011	–				61,791
Total assets	$	1,093,878		$	479,483	$	(616,934	)	$	956,427
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable	$	20,545		$	5,656	–			$	26,201
Accrued and other current liabilities		46,450			36,356	–				82,806
Current maturities of long-term debt, including capital leases		(341	)		5,157					4,816
Income tax payable	–				136,391		(136,391	)	–
Total current liabilities		66,654			183,560		(136,391	)		113,823
Long-term debt and capital leases, less current maturities		213,039			40,836	–				253,875
Deferred income taxes		(445	)		3,945	–				3,500
Due to/(from) subsidiaries		243,665			78,612		(322,277	)	–
Other deferred liabilities		109,756			14,264	–				124,020
Total liabilities		632,669			321,217		(458,668	)		495,218
Shareholders’ equity:
Common stock		614		–		–				614
Capital in excess of par value		76,269		–		–				76,269
Retained earnings		395,226			158,266		(158,266	)		395,226
Accumulated other comprehensive loss		(10,900	)	–		–				(10,900	)
Total shareholders’ equity		461,209			158,266		(158,266	)		461,209
Total liabilities & shareholders’ equity	$	1,093,878		$	479,483	$	(616,934	)	$	956,427

Condensed Consolidating Statement of Operations and

Comprehensive Income

For the Thirteen Weeks Ended September 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	202,551		$	76,906		–			$	279,457
Franchise revenue		146			1,579		–				1,725
		202,697			78,485		–				281,182
Operating costs and expenses:
Cost of goods sold		54,530			20,617		–				75,147
Payroll and related costs		68,042			27,800		–				95,842
Other restaurant operating costs		43,412			16,387		–				59,799
Depreciation		9,387			3,271		–				12,658
Selling, general, and administrative		20,221			10,680		–				30,901
Intercompany selling, general, and administrative allocations		11,142			(11,142	)	–			–
Closures and impairments		1,231			251		–				1,482
Equity in earnings of subsidiaries		(7,781	)	–				7,781		–
Interest expense, net		4,511			911		–				5,422
Intercompany interest expense/(income)		2,892			(2,892	)	–			–
		207,587			65,883			7,781			281,251
(Loss)/income before income taxes		(4,890	)		12,602			(7,781	)		(69	)
(Benefit)/provision for income taxes		(7,455	)		4,821		–				(2,634	)
Net income	$	2,565		$	7,781		$	(7,781	)	$	2,565
Other comprehensive income:
Pension liability reclassification, net of tax		463		–			–				463
Total comprehensive income	$	3,028		$	7,781		$	(7,781	)	$	3,028

Condensed Consolidating Statement of Operations and

Comprehensive (Loss)/Income

For the Thirteen Weeks Ended September 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	210,082		$	78,010		–			$	288,092
Franchise revenue		21			1,561		–				1,582
		210,103			79,571		–				289,674
Operating costs and expenses:
Cost of goods sold		58,527			21,411		–				79,938
Payroll and related costs		73,526			29,207		–				102,733
Other restaurant operating costs		48,402			19,132		–				67,534
Depreciation		10,364			3,845		–				14,209
Selling, general, and administrative		25,994			11,021		–				37,015
Intercompany selling, general, and administrative allocations		14,763			(14,763	)	–			–
Closures and impairments		5,165			2,868		–				8,033
Equity in earnings of subsidiaries		(4,525	)	–				4,525		–
Interest expense, net		5,060			1,693		–				6,753
Intercompany interest expense/(income)		3,185			(3,185	)	–			–
Loss on extinguishment of debt		511		–			–				511
		240,972			71,229			4,525			316,726
(Loss)/income from continuing operations before income taxes		(30,869	)		8,342			(4,525	)		(27,052	)
(Benefit)/provision for income taxes from continuing operations		(8,970	)		3,817		–				(5,153	)
(Loss)/income from continuing operations		(21,899	)		4,525			(4,525	)		(21,899	)
Loss from discontinued operations, net of tax		(343	)	–			–				(343	)
Net (loss)/income	$	(22,242	)	$	4,525		$	(4,525	)	$	(22,242	)
Other comprehensive income:
Pension liability reclassification, net of tax		478		–			–				478
Total comprehensive (loss)/income	$	(21,764	)	$	4,525		$	(4,525	)	$	(21,764	)

Condensed Consolidating Statement of Cash Flows

For the Thirteen Weeks Ended September 2, 2014

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	37,370		$	33,445		$	(57,733	)	$	13,082
Investing activities:
Purchases of property and equipment		(5,717	)		(1,260	)	–				(6,977	)
Proceeds from disposal of assets		250			23		–				273
Other, net		370			135		–				505
Net cash used by investing activities		(5,097	)		(1,102	)	–				(6,199	)
Financing activities:
Principal payments on long-term debt		11			(1,216	)	–				(1,205	)
Stock repurchases		(55	)	–			–				(55	)
Payments for debt issuance costs		(60	)	–			–				(60	)
Intercompany transactions		(26,608	)		(31,125	)		57,733		–
Net cash used by financing activities		(26,712	)		(32,341	)		57,733			(1,320	)
Increase in cash and cash equivalents		5,561			2		–				5,563
Cash and cash equivalents:
Beginning of year		51,012			314		–				51,326
End of quarter	$	56,573		$	316		–			$	56,889

Condensed Consolidating Statement of Cash Flows

For the Thirteen Weeks Ended September 3, 2013

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	(7,987	)	$	25,540		$	(8,689	)	$	8,864
Investing activities:
Purchases of property and equipment		(7,850	)		(3,309	)	–				(11,159	)
Proceeds from sale-leaseback transactions, net		5,637		–			–				5,637
Proceeds from disposal of assets		1,525			1,023		–				2,548
Other, net		205		–			–				205
Net cash used by investing activities		(483	)		(2,286	)	–				(2,769	)
Financing activities:
Principal payments on long-term debt		(12,941	)		(11,343	)	–				(24,284	)
Stock repurchases		(540	)	–			–				(540	)
Proceeds from exercise of stock options		1,419		–			–				1,419
Excess tax benefits from share-based compensation		256		–			–				256
Intercompany transactions		3,186			(11,875	)		8,689		–
Net cash used by financing activities		(8,620	)		(23,218	)		8,689			(23,149	)
Decrease in cash and cash equivalents		(17,090	)		36		–				(17,054	)
Cash and cash equivalents:
Beginning of year		52,635			272		–				52,907
End of quarter	$	35,545		$	308		–			$	35,853

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Note E - Accounts Receivable (Tables)

3 Months Ended

Sep. 02, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	September 2, 2014		June 3, 2014
Rebates receivable	$	895	$	930
Amounts due from franchisees		1,820		1,281
Third-party gift card sales		1,041		1,636
Other receivables		775		1,014
	$	4,531	$	4,861

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Note I - Closure and Impairments Expense (Details) - Future Liabilites Associated with Closed Properties (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014
Future Liabilites Associated with Closed Properties [Abstract]
Balance at June 3, 2014	$ 10,873
Closing expense including rent and other lease charges	466
Payments	(1,326)
Other adjustments	13
Balance at September 2, 2014	$ 10,026

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Note E - Accounts Receivable (Details) - Accounts Receivable, Current (USD $) In Thousands, unless otherwise specified	Sep. 02, 2014	Jun. 03, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 4,531	$ 4,861
Amounts due from franchisees	1,820	1,281
Third-party gift card sales	1,041	1,636
Other receivables	775	1,014
Rebates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	$ 895	$ 930

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Operating activities:
Net income/(loss)	$ 2,565	$ (22,242)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation	12,658	14,209
Amortization of intangibles	581	665
Deferred income taxes	(2,840)	(79)
Loss on impairments, including disposition of assets	1,462	5,494
Loss on extinguishment of debt		511
Share-based compensation expense	1,749	1,704
Excess tax benefits from share-based compensation		(256)
Lease reserve adjustments	466	2,792
Deferred escalating minimum rent	617	705
Other, net	(225)	1,193
Changes in operating assets and liabilities:
Receivables	227	428
Inventories	1,180	2,104
Income taxes	402	(1,434)
Prepaid and other assets	(978)	(22)
Accounts payable, accrued and other liabilities	(4,782)	3,092
Net cash provided by operating activities	13,082	8,864
Investing activities:
Purchases of property and equipment	(6,977)	(11,159)
Proceeds from sale-leaseback transactions, net		5,637
Proceeds from disposal of assets	273	2,548
Insurance proceeds from property claims	135	218
Reductions in Deferred Compensation Plan assets	370	130
Other, net		(143)
Net cash used by investing activities	(6,199)	(2,769)
Financing activities:
Principal payments on long-term debt and capital leases	(1,205)	(24,284)
Stock repurchases	(55)	(540)
Payments for debt issuance costs	(60)
Proceeds from exercise of stock options		1,419
Excess tax benefits from share-based compensation		256
Net cash used by financing activities	(1,320)	(23,149)
Increase/(decrease) in cash and cash equivalents	5,563	(17,054)
Cash and cash equivalents:
Beginning of year	51,326	52,907
End of quarter	56,889	35,853
Cash paid for:
Interest, net of amount capitalized	919	2,176
Income taxes, net	25	74
Significant non-cash investing and financing activities:
Retirement of fully depreciated assets	5,115	6,101
Reclassification of properties to assets held for sale	$ 2,967	$ 1,643

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Note E - Accounts Receivable

3 Months Ended

Sep. 02, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE E – ACCOUNTS RECEIVABLE

Accounts receivable – current consist of the following (in thousands):

	September 2, 2014		June 3, 2014
Rebates receivable	$	895	$	930
Amounts due from franchisees		1,820		1,281
Third-party gift card sales		1,041		1,636
Other receivables		775		1,014
	$	4,531	$	4,861

We negotiate purchase arrangements, including price terms, with designated and approved suppliers on behalf of us and our franchise system. We receive various volume discounts and rebates based on purchases for our Company-owned restaurants from numerous suppliers.

Amounts due from franchisees consist of royalties, license and other miscellaneous fees, a substantial portion of which represents current and recently-invoiced billings.

As of September 2, 2014 and June 3, 2014, Other receivables consisted primarily of amounts due from our distributor ($0.3 million and $0.4 million, respectively) and sales and other miscellaneous tax refunds ($0.2 million for both periods).

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Note M - Segment Reporting (Details) - Financial Results by Reportable Segment (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Revenues:
Revenues	$ 281,182	$ 289,674
Segment profit:
Segment profit	30,213	7,397
Depreciation and amortization:
Depreciation and amortization	13,238	14,874
Capital expenditures:
Capital expenditures	6,977	11,159
Ruby Tuesday [Member]
Revenues:
Revenues	276,043	284,022
Segment profit:
Segment profit	30,389	9,851
Depreciation and amortization:
Depreciation and amortization	12,263	13,792
Capital expenditures:
Capital expenditures	6,341	8,242
Lime Fresh [Member]
Revenues:
Revenues	5,139	5,652
Segment profit:
Segment profit	(176)	(2,454)
Depreciation and amortization:
Depreciation and amortization	423	499
Capital expenditures:
Capital expenditures	49	2,366
Support Center and Other [Member]
Depreciation and amortization:
Depreciation and amortization	552	583
Capital expenditures:
Capital expenditures	$ 587	$ 551

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Note R – Subsequent Events (Details) (Subsequent Event [Member], Mortgages [Member], USD $) In Millions, unless otherwise specified	1 Months Ended
	Sep. 30, 2014
Subsequent Event [Member] | Mortgages [Member]
Note R – Subsequent Events (Details) [Line Items]
Repayments of Secured Debt	$ 3.9
Payments of Debt Extinguishment Costs	$ 0.4

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Note G - Property, Equipment, Assets Held for Sale, Operating Leases, and Sale-Leaseback Transactions (Tables)

3 Months Ended

Sep. 02, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	September 2, 2014		June 3, 2014
Land	$	214,217	$	214,277
Buildings		429,217		430,988
Improvements		364,780		365,599
Restaurant equipment		249,569		248,852
Other equipment		85,233		84,876
Construction in progress and other*		22,281		22,246
		1,365,297		1,366,838
Less accumulated depreciation		580,241		571,992
Property and equipment, net	$	785,056	$	794,846

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Note C - Franchise Programs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Sep. 02, 2014	Sep. 03, 2013
Ruby Tuesday [Member]
Note C - Franchise Programs (Details) [Line Items]
Number of Franchise Restaurants	83
Royalty fee percentage	4.00%
Operating agreements, support service fee, gross sales contribution, maximum	2.00%
Operating agreements, marketing and purchase fee,gross sales contribution, maximum	1.50%
Support service and marketing and purchasing fees (in Dollars)	$ 0.5	$ 0.3
Lime Fresh [Member]
Note C - Franchise Programs (Details) [Line Items]
Number of Franchise Restaurants	7
Royalty fee percentage	5.25%
Domestic [Member]
Note C - Franchise Programs (Details) [Line Items]
Operating agreements, national advertising fund gross sales contribution	1.50%
Operating agreements, national advertising fund gross sales contribution, maximum	3.00%

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Note O – Fair Value Measurements

3 Months Ended

Sep. 02, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE O – FAIR VALUE MEASUREMENTS

The following table presents the fair value of financial assets and liabilities measured on a recurring basis and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Level	September 2, 2014			June 3, 2014
Deferred compensation plan: other investments – Assets	1	$	8,808		$	8,930
Deferred compensation plan: other investments – Liabilities	1		(8,808	)		(8,930	)
Deferred compensation plan: RTI common stock – Equity	1		455			622
Deferred compensation plan: RTI common stock – Equity	1		(455	)		(622	)
Total		–			–

During the 13 weeks ended September 2, 2014 there were no transfers among levels within the fair value hierarchy.

The Ruby Tuesday, Inc. 2005 Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Ruby Tuesday, Inc. Restated Deferred Compensation Plan (the “Predecessor Plan”) are unfunded, non-qualified deferred compensation plans for eligible employees. Assets earmarked to pay benefits under the Deferred Compensation Plan and Predecessor Plan are held by a rabbi trust. We report the accounts of the rabbi trust in our Condensed Consolidated Financial Statements. The investments held by these plans are reported at fair value based on third-party broker statements. The realized and unrealized holding gains and losses related to these investments, as well as the offsetting compensation expense, is recorded in Selling, general and administrative expense in the Condensed Consolidated Financial Statements.

The following table presents the fair value of assets measured on a non-recurring basis during the quarter ended September 2, 2014 and the level within the fair value hierarchy in which the measurements fall (in thousands):

	Fair Value Measurements
	Level		September 2, 2014
Long-lived assets held for sale		2	$	2,525
Long-lived assets held for use		2		37
Total			$	2,562

The following table presents losses recognized during the 13 weeks ended September 2, 2014 and September 3, 2013 resulting from non-recurring fair value measurements. The losses associated with continuing operations are included in Closures and impairments, net and the losses associated with discontinued operations are included in Loss from discontinued operations, net of tax in our Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (in thousands):

	13 weeks ended
	September 2, 2014		September 3, 2013
Included within continuing operations
Long-lived assets held for sale	$	599	$	269
Long-lived assets held for use		457		4,661
Total	$	1,056	$	4,930
Included within discontinued operations			$	153

Long-lived assets held for sale are valued using Level 2 inputs, primarily representing information obtained through broker listings and sales agreements. Costs to market and/or sell the assets are factored into the estimates of fair value for those assets included in Assets held for sale on our Condensed Consolidated Balance Sheets.

We review our long-lived assets (primarily property, equipment, and, as appropriate, reacquired franchise rights and favorable leases) related to each restaurant to be held and used in the business, whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable.

Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that we have impaired. From time to time, this will also include closed restaurants or surplus sites that do not meet the held for sale criteria that we have offered for sale at a price less than carrying value.

The Level 2 fair values of our long-lived assets held for use are based on broker estimates of the value of the land, building, leasehold improvements, and other residual assets.

Our financial instruments at September 2, 2014 and June 3, 2014 consisted of cash and cash equivalents, accounts receivable and payable, long-term debt, and letters of credit. The fair value of cash and cash equivalents and accounts receivable and payable approximated carrying value due to the short-term nature of these instruments. The carrying value and fair value of our other financial instruments not measured at fair value on a recurring basis, however subject to fair value disclosures, are as follows (in thousands):

	September 2, 2014				June 3, 2014
	Carrying Value		Fair Value (Level 2)		Carrying Value		Fair Value (Level 2)
Long-term debt and capital leases	$	257,512	$	264,196	$	258,691	$	263,526
Letters of credit	–			408	–			405

We estimated the fair value of debt and letters of credit using market quotes and present value calculations based on market rates.