-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3EN4+ovO6Br4xM/kNty5QyPiiCE1/6LnIa+ek22O90+/mLRQGMXZbqoQSxSMwPQ vFDZ2i5Oi7oHP9Zjg0L4pw== 0000068270-96-000042.txt : 19960903 0000068270-96-000042.hdr.sgml : 19960903 ACCESSION NUMBER: 0000068270-96-000042 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960601 FILED AS OF DATE: 19960830 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUBY TUESDAY INC CENTRAL INDEX KEY: 0000068270 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 630475239 STATE OF INCORPORATION: GA FISCAL YEAR END: 0605 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12454 FILM NUMBER: 96624079 BUSINESS ADDRESS: STREET 1: 4721 MORRISON DR STREET 2: P O BOX 160266 CITY: MOBILE STATE: AL ZIP: 36625 BUSINESS PHONE: 2053443000 FORMER COMPANY: FORMER CONFORMED NAME: MORRISON RESTAURANTS INC/ DATE OF NAME CHANGE: 19930923 FORMER COMPANY: FORMER CONFORMED NAME: MORRISON INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MORRISON CAFETERIAS CONSOLIDATED INC DATE OF NAME CHANGE: 19680605 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended June 1, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) 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 (I.R.S. Employer incorporation or organization) Identification No.) 4721 Morrison Drive, Mobile, Alabama 36609 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (334)344-3000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of each exchange Title of each class on which registered $0.01 par value Common Stock New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None (Title of class) 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[ ] The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing sale price of Common Stock on August 9, 1996 as reported on the New York Stock Exchange, was approximately $312,984,000. The number of shares of the Registrant's common stock outstanding at August 9, 1996 was 17,611,070. DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996 are incorporated by reference into Parts I and II. Portions of the Registrant's definitive proxy statement dated August 23, 1996 are incorporated by reference into Part III. INDEX PART I Page Number Item 1. Business 4 - 9 Item 2. Properties 9 Item 3. Legal Proceedings 9 Item 4. Submission of Matters to a Vote of Security Holders 10-11 Executive Officers of the Company 11-12 PART II Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters 12 Item 6. Selected Financial Data 12 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 8. Financial Statements and Supplementary Data 13 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 13 PART III Item 10. Directors and Executive Officers of the Registrant 13 Item 11. Executive Compensation 13 Item 12. Security Ownership of Certain Beneficial Owners and Management 14 Item 13. Certain Relationships and Related Transactions 14 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 14-21 PART I Item 1. Business. General Prior to March 9, 1996, Ruby Tuesday, Inc. (the "Company") was known as Morrison Restaurants Inc. ("Morrison"). Morrison operated three businesses in the foodservice industry. These businesses were organized into two operating groups, the Ruby Tuesday Group, consisting of the Company's casual dining concepts, and the Morrison Group which was comprised of Morrison's family dining restaurant and health care food and nutrition services businesses. On March 7, 1996, the shareholders of Morrison approved the distribution (the "Distribution") of its family dining restaurant business (Morrison Fresh Cooking, Inc. ("MFCI")) and its health care food and nutrition services business (Morrison Health Care, Inc. ("MHCI")) to its shareholders effective March 9, 1996. In conjunction with the Distribution, the Company reincorporated in the state of Georgia, effected a one-for-two reverse stock split of its common stock and changed its name to Ruby Tuesday, Inc. The first Ruby Tuesday restaurant was opened in 1972 in Knoxville, Tennessee near the campus of the University of Tennessee. The Ruby Tuesday concept, with 16 operational units, was acquired by Morrison in 1982. During the following years, Morrison added other casual dining concepts, including the internally-developed Mozzarella's Cafe ("Mozzarella's", formerly "Silver Spoon") and L&N Seafood Grill ("L&N"). In June 1994, Morrison's Board of Directors approved the plan to phase out the L&N concept in an attempt to align all of the concepts into the strategic focus of "feeding America for under $10." A majority of the L&N's were converted primarily to either Ruby Tuesday or Mozzarella's and the remaining locations were either sold or closed. Based on favorable operating results, Morrison subsequently decided to continue to operate four of the L&N units as L&N's through the remainder of their lease terms. In January 1995, Morrison completed the acquisition of Tias, Inc., a chain of Tex-Mex restaurants, which allowed it to enter into one of the fastest growing segments of the casual dining market. The information presented below relates to the business of the Company following the Distribution unless the context otherwise requires. Operations The Company operates three separate and distinct casual dining concepts comprised of Ruby Tuesday, Mozzarella's and Tia's. As of June 1, 1996, the Company operated 365 casual dining restaurants in 33 states. Ruby Tuesday Ruby Tuesdays are casual, full-service restaurants with mahogany woods and whimsical artifacts, classic brass and Tiffany lamps which create a comfortable, nostalgic look and feel. This year we're making Ruby Tuesdays feel even more fun and a little more casual, with black and white checked table cloths, servers dressed in red polo shirts, and lighter, brighter wall colors. Ruby Tuesday's menu is based on variety, with something for just about everyone. Some of Ruby Tuesday's most popular entree items which are prepared fresh daily are: fajitas, baby-back ribs, chicken entrees, soups, sandwiches, salad bar, and signature "Tallcake" desserts in strawberry and chocolate-Oreo varieties. Entree selections range in price from $4.99 to $14.99. Ruby Tuesday, with 301 units concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest, is the Company's primary growth vehicle. The Company intends to open approximately 32 additional units in fiscal 1997 with the majority of these in existing markets. While the concept has historically been mall- based, current development plans call for 85% of new units to be freestanding. Existing prototypes range in size from 4,300 to 5,600 square feet with seating for 180 to 210 guests. A new prototype measuring slightly below 4,000 square feet is being tested in order to enable Ruby Tuesday to more efficiently fill in existing markets and penetrate additional smaller markets. Other than population and traffic volume, site criteria requirements for new units include annual household incomes ranging from $30,000 to $50,000 and good accessibility and visibility of the location. Mozzarella's Cafe Mozzarella's is a company-developed, full-service restaurant with a menu that features a variety of pastas and thin-crust gourmet pizzas, along with made-from-scratch soups, entree salads and sandwiches, fresh seafood selections, prime steak and grilled chicken all prepared with signature recipes. Entree selections range in price from $4.99 to $12.99. Mozzarella's decor is upbeat and colorful with polished wood trim and paneling, European poster art, strings of overhead lights and tile floors. Displays of olive oil, tomatoes, pasta and other food products contribute to the appeal of the restaurant. Servers approach the guests dressed in white button-down shirts accented with a colorful tie, black trousers and a red bistro apron. With 46 Company-owned establishments, Mozzarella's are primarily located in the Southeast and Mid-Atlantic with particular concentration in the Washington, D.C. area, Florida and Virginia. The Company intends to open only three units in fiscal 1997 in order to concentrate on improving the operational efficiency and effectiveness of existing units. New restaurants typically range in size from 4,200 to 4,500 square feet and seat 140 to 160 visitors. Tia's Tex-Mex Tia's, the Company's newest concept, is a full-service, casual dining restaurant. The decor is reminiscent of an authentic Mexican restaurant with chandeliers replicating those of an old Mexican hotel and colors, textures and artifacts that reflect the restaurants' genuine Southwestern heritage. Tortillas are made by hand in a display station which contributes to Tia's unique atmosphere. Tia's menu items, which are all fresh and made from scratch, include an array of traditional Tex-Mex favorites such as: fajitas, enchiladas, tacos, nachos and quesadillas and a selection of unique grilled and sauteed dishes. The menu also provides the guest with a variety of appetizers and desserts. Entree items range in price from $4.49 to $11.99. Chips are cooked fresh throughout the day and served with just-made salsa to every guest. Each guest is greeted by a casually dressed server wearing a camp shirt, in various colors, with the Tia's logo, blue jeans and a short black apron. The Company had 18 Tia's operational at the end of fiscal 1996 and plans to open at least four units in fiscal 1997. New and existing units are located in the Southwest, Southeast and Mid-Atlantic regions. New units will have approximately 5,670 square feet with seating capacity for 215 visitors. New Tia's restaurants are considered in areas with annual household incomes greater than $40,000, with sites which are visible, accessible and meet certain population and traffic criteria. Research and Development The Company does not engage in any material research and development activities. The Company, however, engages in on-going studies in connection with the development of menu items for all of its restaurant concepts. Additionally, it conducts consumer research to determine guest preferences, trends, and opinions. Raw Materials Raw materials essential to the operation of the Company's business are obtained through MRT Purchasing, LLC ("MRT"). MRT was organized to serve as a purchasing cooperative to allow the Company, MHCI, and MFCI to pool their collective purchasing power and to coordinate the purchase of certain food, equipment and services. The Company is obligated to purchase all core products through MRT arrangements; non-core products may be purchased independently. The Company is committed to this purchasing arrangement for an initial term of five years from March 9, 1996, the effective date of the Distribution, and the agreement will automatically renew for additional five-year terms. The Company may terminate its participation in these purchasing arrangements upon six months prior written notice, provided it continues to honor its purchase commitments under any then existing contracts to which MRT is a party that extend beyond the termination date. Raw materials are purchased by MRT principally from PYA/Monarch under a cost-plus arrangement. The purchases from PYA/Monarch are in accordance with a Supply Agreement entered into on July 8, 1988, as amended. Purchasing obligations have been allocated to the Company, MHCI, and MFCI based on past practice. If PYA/Monarch is unable to meet the Company's supply needs, the Company negotiates directly with primary suppliers to obtain competitive prices. The Company uses purchase commitment contracts to stabilize the potentially volatile pricing associated with certain commodities. Because of the relatively short storage life of inventories, limited storage facilities at the restaurants themselves, the Company's requirement for freshness and the numerous sources of goods, a minimum amount of inventory is maintained at the units. If necessary, all essential food, beverage and operational products are available and can be obtained from alternative suppliers in all cities in which the Company operates. Trademarks of the Company The Company has registered certain trademarks and service marks, with the United States Patent and Trademark Office, including " Ruby Tuesday"," Mozzarella's", and "Tia's". The Company believes that these and other related marks are of material importance to the Company's business. Registrations of the trademarks listed above expire from 2004 to 2005, unless renewed. Seasonality The Company's business is moderately seasonal. Average restaurant sales of the Company are slightly higher during the winter months than during the summer months as the Company is currently concentrated in mall-based units. Freestanding restaurant sales are higher in the summer months whereas mall-based restaurants have higher sales in the winter months, generally peaking during the holiday season. Customer Dependence No material part of the business of the Company is dependent upon a single customer, or very few customers, the loss of any one of which would have a material adverse effect on the Company. Competition The Company's activities in the restaurant industry are subject to vigorous competition relating to restaurant location and service, as well as quality, variety and value perception of the food products offered. The Company is in competition with other food service operations, with locally-owned operations as well as national and regional chains that offer the same type of services and products as the Company. Government Compliance The Company is subject to various licensing and regulations at both the state and local levels for items such as zoning, land use, sanitation, alcoholic beverage control, and health and fire safety, all of which could delay the opening of a new restaurant or the operation of an existing unit. The Company's business is subject to various other regulations at the federal level such as health care, minimum wage, and fair labor standards. Compliance with these regulations has not had, and is not expected to have, a material adverse effect on the Company's operations. There is no material portion of the Company's business that is subject to renegotiation of profits or termination of contracts or sub-contracts at the election of the Government. Environmental Compliance Compliance with federal, state and local laws and regulations which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, is not expected to have a material effect upon the capital expenditures, earnings or competitive position of the Company. Personnel The Company employs approximately 12,500 full-time and 12,300 part- time employees. The Company believes working conditions are favorable and employee compensation is comparable with its competition. None of the Company's employees are covered by a collective bargaining agreement. International Operations All Company-owned operations are located within the United States. On March 30, 1995 the Company entered into a development agreement (the "Agreement") with Jardine Pacific Restaurants Group Limited (the "Developer") to open a minimum of eight, 20, and 38 Ruby Tuesday restaurants in the Asia-Pacific region by the end of the third, sixth, and tenth anniversaries of the date of the Agreement, respectively. Under the terms of the Agreement the Company is to receive a licensing fee on the first seven Ruby Tuesday restaurants opened by the Developer in the Asia-Pacific region and royalties from all units, derived as applicable, from sales or profits as defined in the Agreement. As of June 1, 1996, the Developer had opened two Ruby Tuesday restaurants. The Company does not expect this Agreement to have a material effect on future operations, nor is it currently engaged in material operations in foreign countries. Item 2. Properties. Information regarding the locations of the Company's Ruby Tuesdays, Mozzarella's Cafes and Tia's operations is shown in the list below. Of the 365 Company-operated restaurants, the Company owned the building and held long-term land leases for 32 restaurants, owned the land and building for 40 restaurants, held leases covering land and building for 293 restaurants. Administrative personnel of the Company are located in the executive and administrative headquarters building located in Mobile, Alabama. The administrative headquarters has a lease term ending in 1998 and provides an option to purchase at a nominal amount at the end of the initial lease term. This building was financed through the sale of Industrial Development Revenue Bonds from the Industrial Development Board of the City of Mobile, Alabama. Additional information concerning the properties of the Company and its lease obligations is incorporated herein by reference to Note 7 of the Notes to Consolidated Financial Statements included in the Annual Report to Shareholders for the fiscal year ended June 1, 1996. As of June 1, 1996, the Company operated 365 restaurants, including 301 Ruby Tuesday, 46 Mozzarella's Cafes and 18 Tia's Tex-mex restaurants in the following locations: Alabama (20) Kentucky (3) New York (23) Arizona (4) Louisiana (4) North Carolina (6) Arkansas (3) Maine (1) Ohio (14) Colorado (5) Maryland (17) Oklahoma (1) Connecticut (7) Massachusetts (5) Pennsylvania (18) Delaware (3) Michigan (16) Rhode Island (1) Florida (54) Minnesota (3) South Carolina (6) Georgia (32) Mississippi (5) Tennessee (27) Illinois (10) Missouri (7) Texas (13) Indiana (4) Nebraska (2) Virginia (37) Iowa (1) New Jersey (11) Wisconsin (2) Item 3. Legal Proceedings. The Company is from time to time, party to ordinary, routine litigation incidental to its business. In the opinion of management, the ultimate resolution of all pending legal proceedings will not have a material adverse effect on the Company's business, financial position, results of operations or liquidity. Item 4. Submission of Matters to a Vote of Security Holders. On March 7, 1996 a Special Meeting of Shareholders of Morrison was held. The matters voted upon and the voting results are detailed below: Proposal 1 Approval of the distribution of all of the outstanding shares of common stock of MFCI and MHCI, wholly-owned subsidiaries of Morrison. Votes for 24,984,490 Votes against 981,869 Abstentions 75,068 Proposal 2 Approval and adoption of an Agreement and Plan of Merger between Morrison (a Delaware corporation) and Ruby Tuesday, Inc. (a Georgia corporation and wholly-owned subsidiary of Morrison) providing for (i) the reincorporation of Morrison in the state of Georgia pursuant to a statutory merger of Morrison into Ruby Tuesday, Inc. and (ii) a one-for-two reverse stock split. Votes for 24,921,628 Votes against 1,036,519 Abstentions 83,280 Proposal 3 Approval of amendments to the Company's Stock Incentive Plan to (i) increase the number of shares reserved for issuance thereunder, (ii) permit grants of equity-based awards to non- employee directors, and (iii) permit adjustments to outstanding options in connection with the Distribution. Votes for 23,173,717 Votes against 2,609,274 Abstentions 258,435 Proposal 4 Approval of amendments to (i) the Company's Stock Incentive and Deferred Compensation Plan for Directors, (ii) the Company's 1987 Stock Bonus and Non-Qualified Stock Option Plan, and (iii) the Company's 1984 Long Term Incentive Plan to permit adjustments to outstanding awards in connection with the Distribution. Votes for 24,461,194 Votes against 1,333,381 Abstentions 246,852 Proposal 5 Approval of the adoption (i)by MFCI of the MFCI 1996 Stock Incentive Plan and (ii) by MHCI of the MHCI 1996 Stock Incentive Plan. Votes for 22,106,754 Votes against 2,664,353 Abstentions 1,290,320 Executive Officers of the Company. Executive officers of the Company are appointed by and serve at the discretion of the Company's Board of Directors. Information regarding the Company's executive officers as of August 9, 1996 is provided below. Executive Officer Name Age Position with the Company Since S. E. Beall, III 46 Chairman of the Board and 1982 Chief Executive Officer R. D. McClenagan 48 President- Ruby Tuesday 1985 Division P. G. Hunt 60 Senior Vice President, 1972 General Counsel and Secretary J. R. Mothershed 48 Senior Vice President and 1992 Chief Financial Officer, Treasurer and Assistant Secretary R. Vilord 60 Senior Vice President, 1993 Human Resources Mr. Beall has been Chairman of the Board and Chief Executive Officer of the Company and prior to the Distribution, Morrison, since May 5, 1995. Mr. Beall served as President and Chief Executive Officer of Morrison from June 6, 1992 to May 4, 1995 and as President and Chief Operating Officer of Morrison from September 1986 to June 1992. Mr. McClenagan has been President of the Ruby Tuesday Division of the Company and prior to the Distribution, Morrison, since March 1994. He served as President of the Ruby Tuesday Group of Morrison from April 1990 to March 1994 and as Senior Vice President of the Specialty Rest- aurant Division of Morrison from March 1985 to April 1990. Mr. Hunt joined Morrison in June 1968 and was named Senior Vice President, General Counsel and Secretary of Morrison in September 1985 and has served in the same capacity at the Company since the Distribution. From December 1984 to September 1985, he served as Vice President, General Counsel and Secretary of Morrison. Mr. Mothershed joined Morrison in July 1972 and was named Senior Vice President, Finance in March 1994. Mr. Mothershed has been Senior Vice of the Company since the Distribution and in June 1996 was also named Chief Financial Officer of the Company. He served as Vice President, Controller and Treasurer of Morrison from March 1989 until March 1994. Mr. Vilord joined Morrison in April 1988 and was named Senior Vice President of Human Resources of Morrison in June 1993 and has served the Company in the same capacity since the Distribution. He served as Vice President of Purchasing for Morrison from October 1989 until June 1993. PART II Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters. Certain information required by this item is incorporated herein by reference to Note 13 of the Notes to Consolidated Financial Statements of the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996. The Company has not paid dividends to shareholders since the Distribution and does not intend to pay cash dividends in the foreseeable future. In addition, under various financing agreements, the Company has agreed to restrict dividend payments (other than stock dividends) and purchases of its capital stock to amounts (collectively, "Restricted Payments") based on earnings after fiscal year 1996. Specifically, the maximum amount available for Restricted Payments at any time is the excess of shareholders' equity above the amount equal to the sum of $180 million plus 50% (or minus 100% in the case of a deficit) of Consolidated Net Earnings for the period commencing on June 2, 1996, and terminating at the end of the last fiscal quarter preceding the date of any proposed Restricted Payment. At June 1, 1996, the maximum amount of permissible Restricted Payments was $17.3 million. Item 6. Selected Financial Data. The information contained under the caption "Summary of Operations" of the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996 is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996 is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. The following consolidated financial statements and the related report of the Company's independent auditors contained in the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996, are incorporated herein by reference: Consolidated Statements of Income - Fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994. Consolidated Balance Sheets - As of June 1, 1996 and June 3, 1995. Consolidated Statements of Shareholders' Equity - Fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994. Consolidated Statements of Cash Flows - Fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994. Notes to Consolidated Financial Statements. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. PART III Item 10. Directors and Executive Officers of the Company. (a) The information regarding directors of the Company is incorporated herein by reference to the information set forth in the table captioned "Director and Director Nominee Information" under "Election of Directors" in the definitive proxy statement of the Registrant dated August 23, 1996, relating to the Registrant's annual meeting of shareholders to be held on September 30, 1996. (b) Pursuant to Form 10-K General Instruction G(3), the information regarding executive officers of the Company has been included in Part I of this Report under the caption "Executive Officers of the Company". Item 11. Executive Compensation. The information required by this Item 11 is incorporated herein by reference to the information set forth under the captions "Executive Compensation" and "Directors' Fees and Attendance" in the definitive proxy statement of the Registrant dated August 23, 1996 relating to the Registrant's annual meeting of shareholders to be held on September 30, 1996. Item 12. Security Ownership of Certain Beneficial Owners and Management. The information required by this Item 12 is incorporated herein by reference to the information set forth in the table captioned "Beneficial Ownership of Common Stock" under "Election of Directors" in the definitive proxy statement of the Registrant dated August 23, 1996, relating to the Registrant's annual meeting of shareholders to be held on September 30, 1996. Item 13. Certain Relationships and Related Transactions. The information required by this Item 13 is incorporated herein by reference to the information set forth under the caption "Certain Transactions" in the definitive proxy statement of the Registrant dated August 23, 1996, relating to the Registrant's annual meeting of shareholders to be held on September 30, 1996. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) The following documents are incorporated by reference into or are filed as a part of this report: 1. Financial Statements: The following consolidated financial statements and the independent auditors' report thereon, included in the Registrant's Annual Report to Shareholders for the fiscal year ended June 1, 1996, a copy of which is contained in the exhibits to this report, are incorporated herein by reference: Page Reference in paper version of Annual Report to Shareholders Consolidated Statements of Income for the fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994 24 Consolidated Balance Sheets as of June 1, 1996 and June 3, 1995 25 Consolidated Statements of Shareholders' Equity for the fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994 26 Consolidated Statements of Cash Flows for the fiscal years ended June 1, 1996, June 3, 1995 and June 4, 1994 27 Notes to Consolidated Financial Statements 28-40 Report of Independent Auditors 41 2. Financial statement schedules: Financial statement schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto. 3. Exhibits The following exhibits are filed as part of this report: RUBY TUESDAY, INC. AND SUBSIDIARIES LIST OF EXHIBITS Exhibit Number Description 3.1 Articles of Incorporation of Ruby Tuesday, Inc. (1) 3.2 Bylaws of Ruby Tuesday, Inc.(1) 4.1 Specimen Common Stock Certificate. (1) 4.2 Articles of Incorporation of Ruby Tuesday, Inc. (filed as Exhibit 3.1 hereto). (1) 4.3 Bylaws of Ruby Tuesday, Inc. (filed as Exhibit 3.2 hereto). (1) 4.4 Rights Agreement dated as of March 30, 1987 between Morrison Restaurants Inc. (predecessor to Ruby Tuesday, Inc.) and AmSouth National Association (predecessor of AmSouth Bank of Alabama), as Rights Agent. (2) 4.5 Form of Rights Certificate (attached as Exhibit B to the Rights Agreement filed as Exhibit 4.4 hereto). (1) 10.1 Executive Supplemental Pension Plan together with First Amendment made June 30, 1994 and Second Amendment made July 31, 1995.* (3) 10.2 [Reserved] 10.3 Morrison Restaurants Inc. Stock Incentive and Deferred Compensation Plan for Directors together with First Amendment dated June 29, 1995. *(4) 10.4 1993 Executive Stock Option Program.* (5) 10.5 1993 Management Stock Option Program (July 1, 1993 - June 30, 1996).* (6) 10.6 Morrison Restaurants Inc. Long-Term Incentive Plan. * (7) 10.7 Morrison Restaurants Inc. 1987 Stock Bonus and Non-Qualified Stock Option Plan, and Related Agreement.* (8) 10.8 Morrison Restaurants Inc. 1993 Non-Executive Stock Incentive Plan.* (9) 10.9 Morrison Restaurants Inc. Deferred Compensation Plan, as restated effective January 1, 1994 together with amended and restated Trust Agreement (dated December 1, 1992) to Deferred Compensation Plan.* (10) 10.10 Supply Agreement Between Morrison Restaurants Inc. and PYA/Monarch, Inc. dated July 8, 1988. (11) 10.11 Letter Agreement dated March 5, 1996 amending Supply Agreement between Morrison Restaurants Inc. and PYA/Monarch, Inc. (1) 10.12 Morrison Restaurants Inc. Management Retirement Plan together with First Amendment made June 30, 1994 and Second Amendment made July 31, 1995.* (12) 10.13 Asset Purchase Agreement dated June 27, 1994, by and among Morrison Restaurants Inc. and Gardner Merchant Food Services, Inc. and the related exhibits to such agreement. (13) 10.14 Morrison Restaurants Inc. Salary Deferral Plan as amended and restated December 31, 1993 together with amended and restated Trust Agreement (effective January 1, 1994) First and Second Amendments to the Plan dated October 21, 1994 and June 30, 1995, respectively, and the First Amendment to the Trust Agreement made June 30, 1995.* (14) 10.15 Executive Group Life and Executive Accidental Death and Dismemberment Plan.* (15) 10.16 Non-Qualified Option Agreement between Morrison Restaurants Inc. and Mr. E.E. Bishop, dated January 30, 1987.* (16) 10.17 Non-Qualified Option Agreement between Morrison Restaurants Inc. and Mr. S.E. Beall, III dated January 30, 1987.* (17) 10.18 Form of Non-Qualified Stock Option Agreement for Executive Officers Pursuant to the Morrison Restaurants Inc. Stock Incentive Plan.* (18) 10.19 [Reserved] 10.20 First Amendment to Morrison Restaurants Inc. Long-term Incentive Plan. * (19) 10.21 Amendments to Morrison Restaurants Inc. 1987 Stock Bonus and Non- Qualified Stock Option Plan.* (20) 10.22 Morrison Restaurants Inc. Executive Life Insurance Plan.* (21) 10.23 Distribution Agreement dated as of March 2, 1996 among Morrison Restaurants Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.24 Amended and Restated Tax Allocation and Indemnification Agreement dated as of March 2, 1996 among Morrison Restaurants Inc., Custom Management Corporation of Pennsylvania, Custom Management Corporation, John C. Metz & Associates, Inc., Morrison International, Inc., Morrison Custom Management Corporation of Pennsylvania, Morrison Fresh Cooking, Inc., Ruby Tuesday, Inc., a Delaware corporation, Ruby Tuesday (Georgia), Inc., a Georgia corporation, Tias, Inc. and Morrison Health Care, Inc. (1) 10.25 Agreement Respecting Employee Benefit Matters dated as of March 2, 1996 among Morrison Restaurants Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.26 License Agreement dated as of March 2, 1996 between Ruby Tuesday (Georgia), Inc. and Morrison Health Care, Inc. (1) 10.27 Amended and Restated Operating Agreement of MRT Purchasing, LLC dated as of March 2, 1996 among Morrison Restaurants Inc., Ruby Tuesday, Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.28 Form of 1996 Stock Incentive Plan.* (1) 10.29 Form of Second Amendment to Stock Incentive and Deferred Compensation Plan for Directors.* (1) 10.30 Form of First Amendment to 1993 Non-Executive Stock Incentive Plan. * (1) 10.31 Form of Third Amendment to Executive Supplemental Pension Plan. * (1) 10.32 Form of Third Amendment to Management Retirement Plan. * (1) 10.33 Form of Third Amendment to Salary Deferral Plan. * (1) 10.34 Form of First Amendment to Deferred Compensation Plan. * (1) 10.35 Form of Second Amendment to Retirement Plan. * (1) 10.36 Form of Fourth Amendment to 1987 Stock Bonus and Non-Qualified Stock Option Plan. * (1) 10.37 Form of Second Amendment to 1984 Long Term Incentive Plan. * (1) 10.38 Form of Indemnification Agreement to be entered into with executive officers and directors. (1) 10.39 Form of Change of Control Agreement to be entered into with executive officers. * (1) 10.40 Credit Agreement dated as of March 6, 1996 among Ruby Tuesday (Georgia), Inc., SunTrust Bank, Atlanta, for itself and as Agent and Administrative Agent, and the other lenders signatories thereto. (1) 11 Statement regarding computation of per share earnings. 13 Annual Report to Shareholders for the fiscal year ended June 1, 1996 (Only portions specifically incorporated by reference in the Form 10-K are being filed herewith). 21 Subsidiaries of Registrant. 23 Consent of Independent Auditors. 27 Financial Data Schedule. EXHIBIT FOOTNOTES Exhibit Footnote Description * Management contract or compensatory plan or arrangement. (1) Incorporated by reference to Exhibit of the same number on Form 8-B dated March 15, 1996 of Ruby Tuesday, Inc. (File No. 0-12454). (2) Incorporated by reference to Exhibit 4.2 to Quarterly Report on Form 10-Q of Morrison Restaurants Inc. for the fiscal quarter ended February 28, 1987 (File No. 0-1750). (3) Incorporated by reference to Exhibit 10(b) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (4) Incorporated by reference to Exhibit 10(c) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (5) Incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (6) Incorporated by reference to Exhibit 10(e) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (7) Incorporated by reference to Exhibit 28 to Registration Statement on Form S-8 of Morrison Restaurants Inc. (Reg. No. 2-97120). (8) Incorporated by reference to Exhibit 28.1 to Registration Statement on Form S-8 of Morrison Restaurants Inc. (Reg. No. 33-13593). (9) Incorporated by reference to Exhibit 10(h) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (10) Incorporated by reference to Exhibit 10(i) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (11) Incorporated by reference to Exhibit 10(m) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended May 28, 1988 (File No. 0-1750). (12) Incorporated by reference to Exhibit 10(n) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (13) Incorporated by reference to Exhibit (2) to the Current Report on Form 8-K dated July 27, 1995 of Morrison Restaurants Inc. (File No. 1-12454) (14) Incorporated by reference to Exhibit 10(p) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (15) Incorporated by reference to Exhibit 10(q) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1989 (File No. 0-1750). (16) Incorporated by reference to Exhibit 10(s) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990 (File No. 0-1750). (17) Incorporated by reference to Exhibit 10(t) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990 (File No. 0-1750). (18) Incorporated by reference to Exhibit 10(v) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (19) Incorporated by reference to Exhibit 10(y) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). (20) Incorporated by reference to Exhibit 10(z) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). (21) Incorporated by reference to Exhibit 10(a)(a) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). (b) Reports on Form 8-K Current Report on Form 8-K dated March 14, 1996 reporting the spin-off of two subsidiaries, the reincorporation of Morrison Restaurants Inc. in the state of Georgia pursuant to a statutory merger effective March 9, 1996, the one-for-two reverse stock split effected in conjunction with the reincorporation, the name change to Ruby Tuesday, Inc. and the details regarding the new credit agreement entered into as of March 6, 1996. (c) Exhibits filed with this report are attached hereto. (d) The financial statement schedules listed in subsection (a) (2) above are attached hereto. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Date 8/29/96 By: /s/ Samuel E. Beall, III Samuel E. Beall, III Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Date 8/29/96 By: /s/ Samuel E. Beall, III Samuel E. Beall, III Chairman of the Board and Chief Executive Officer Date 8/29/96 By: /s/ J. Russell Mothershed J. Russell Mothershed Senior Vice President, Finance Chief Financial Officer Treasurer and Assistant Secretary Date 8/29/96 By:/s/J.B. McKinnon J. B. McKinnon Director Date 8/29/96 By: /s/ Dr. Donald Ratajczak Dr. Donald Ratajczak Director Date 8/29/96 By:/s/ Dolph W. von Arx Dolph W. von Arx Director Date 8/29/96 By:/s/ Claire L. Arnold Claire L. Arnold Director Date 8/29/96 By:/s/ Arthur R. Outlaw Arthur R. Outlaw Vice-Chairman of the Board Date 8/29/96 By:/s/ Dr. Benjamin F. Payton Dr. Benjamin F. Payton Director RUBY TUESDAY, INC. AND SUBSIDIARIES LIST OF EXHIBITS Exhibit Number Description 3.1 Articles of Incorporation and all mergers of Ruby Tuesday, Inc. (1) 3.2 Bylaws of Ruby Tuesday, Inc.(1) 4.1 Specimen Common Stock Certificate. (1) 4.2 Articles of Incorporation and all mergers of Ruby Tuesday, Inc. (filed as Exhibit 3.1 hereto). (1) 4.3 Bylaws of Ruby Tuesday, Inc. (filed as Exhibit 3.2 hereto). (1) 4.4 Rights Agreement dated as of March 30, 1987 between Morrison Restaurants Inc. (predecessor to Ruby Tuesday, Inc.) and AmSouth National Association (predecessor of AmSouth Bank of Alabama), as Rights Agent. (2) 4.5 Form of Rights Certificate (attached as Exhibit B to the Rights Agreement filed as Exhibit 4.4 hereto). (1) 10.1 Executive Supplemental Pension Plan together with First Amendment made June 30, 1994 and Second Amendment made July 31, 1995.* (3) 10.2 [Reserved] 10.3 Morrison Restaurants Inc. Stock Incentive and Deferred Compensation Plan for Directors together with First Amendment dated June 29, 1995. *(4) 10.4 1993 Executive Stock Option Program.* (5) 10.5 1993 Management Stock Option Program (July 1, 1993 - June 30, 1996).* (6) 10.6 Morrison Restaurants Inc. Long-Term Incentive Plan. * (7) 10.7 Morrison Restaurants Inc. 1987 Stock Bonus and Non-Qualified Stock Option Plan, and Related Agreement.* (8) 10.8 Morrison Restaurants Inc. 1993 Non-Executive Stock Incentive Plan.* (9) 10.9 Morrison Restaurants Inc. Deferred Compensation Plan, as restated effective January 1, 1994 together with amended and restated Trust Agreement (dated December 1, 1992) to Deferred Compensation Plan.* (10) 10.10 Supply Agreement Between Morrison Restaurants Inc. and PYA/Monarch, Inc. dated July 8, 1988. (11) 10.11 Letter Agreement dated March 5, 1996 amending Supply Agreement between Morrison Restaurants Inc. and PYA/Monarch, Inc. (1) 10.12 Morrison Restaurants Inc. Management Retirement Plan together with First Amendment made June 30, 1994 and Second Amendment made July 31, 1995.* (12) 10.13 Asset Purchase Agreement dated June 27, 1994, by and among Morrison Restaurants Inc. and Gardner Merchant Food Services, Inc. and the related exhibits to such agreement. (13) 10.14 Morrison Restaurants Inc. Salary Deferral Plan as amended and restated December 31, 1993 together with amended and restated Trust Agreement (effective January 1, 1994) First and Second Amendments to the Plan dated October 21, 1994 and June 30, 1995, respectively, and the First Amendment to the Trust Agreement made June 30, 1995.* (14) 10.15 Executive Group Life and Executive Accidental Death and Dismemberment Plan.* (15) 10.16 Non-Qualified Option Agreement between Morrison Restaurants Inc. and Mr. E.E. Bishop, dated January 30, 1987.* (16) 10.17 Non-Qualified Option Agreement between Morrison Restaurants Inc. and Mr. S.E. Beall, III dated January 30, 1987.* (17) 10.18 Form of Non-Qualified Stock Option Agreement for Executive Officers Pursuant to the Morrison Restaurants Inc. Stock Incentive Plan.* (18) 10.19 [Reserved] 10.20 First Amendment to Morrison Restaurants Inc. Long-term Incentive Plan. * (19) 10.21 Amendments to Morrison Restaurants Inc. 1987 Stock Bonus and Non- Qualified Stock Option Plan.* (20) 10.22 Morrison Restaurants Inc. Executive Life Insurance Plan.* (21) 10.23 Distribution Agreement dated as of March 2, 1996 among Morrison Restaurants Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.24 Amended and Restated Tax Allocation and Indemnification Agreement dated as of March 2, 1996 among Morrison Restaurants Inc., Custom Management Corporation of Pennsylvania, Custom Management Corporation, John C. Metz & Associates, Inc., Morrison International, Inc., Morrison Custom Management Corporation of Pennsylvania, Morrison Fresh Cooking, Inc., Ruby Tuesday, Inc., a Delaware corporation, Ruby Tuesday (Georgia), Inc., a Georgia corporation, Tias, Inc. and Morrison Health Care, Inc. (1) 10.25 Agreement Respecting Employee Benefit Matters dated as of March 2, 1996 among Morrison Restaurants Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.26 License Agreement dated as of March 2, 1996 between Ruby Tuesday (Georgia), Inc. and Morrison Health Care, Inc. (1) 10.27 Amended and Restated Operating Agreement of MRT Purchasing, LLC dated as of March 2, 1996 among Morrison Restaurants Inc., Ruby Tuesday, Inc., Morrison Fresh Cooking, Inc. and Morrison Health Care, Inc. (1) 10.28 Form of 1996 Stock Incentive Plan.* (1) 10.29 Form of Second Amendment to Stock Incentive and Deferred Compensation Plan for Directors.* (1) 10.30 Form of First Amendment to 1993 Non-Executive Stock Incentive Plan. * (1) 10.31 Form of Third Amendment to Executive Supplemental Pension Plan. * (1) 10.32 Form of Third Amendment to Management Retirement Plan. * (1) 10.33 Form of Third Amendment to Salary Deferral Plan. * (1) 10.34 Form of First Amendment to Deferred Compensation Plan. * (1) 10.35 Form of Second Amendment to Retirement Plan. * (1) 10.36 Form of Fourth Amendment to 1987 Stock Bonus and Non-Qualified Stock Option Plan. * (1) 10.37 Form of Second Amendment to 1984 Long Term Incentive Plan. * (1) 10.38 Form of Indemnification Agreement to be entered into with executive officers and directors. (1) 10.39 Form of Change of Control Agreement to be entered into with executive officers. * (1) 10.40 Credit Agreement dated as of March 6, 1996 among Ruby Tuesday (Georgia), Inc., SunTrust Bank, Atlanta, for itself and as Agent and Administrative Agent, and the other lenders signatories thereto. (1) 11 Statement regarding computation of per share earnings. 13 Annual Report to Shareholders for the fiscal year ended June 1, 1996 (Only portions specifically incorporated by reference in the Form 10-K are being filed herewith). 21 Subsidiaries of Registrant. 23 Consent of Independent Auditors. 27 Financial Data Schedule. RUBY TUESDAY, INC. EXHIBIT FOOTNOTES Exhibit Footnote Description * Management contract or compensatory plan or arrangement. (1) Incorporated by reference to Exhibit of the same number on Form 8-B dated March 15, 1996 of Ruby Tuesday, Inc. (File No. 0-12454). (2 ) Incorporated by reference to Exhibit 4.2 to Quarterly Report on Form 10-Q of Morrison Restaurants Inc. for the fiscal quarter ended February 28, 1987 (File No. 0-1750). (3) Incorporated by reference to Exhibit 10(b) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (4) Incorporated by reference to Exhibit 10(c) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (5) Incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (6) Incorporated by reference to Exhibit 10(e) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (7) Incorporated by reference to Exhibit 28 to Registration Statement on Form S-8 of Morrison Restaurants Inc. (Reg. No. 2-97120). (8) Incorporated by reference to Exhibit 28.1 to Registration Statement on Form S-8 of Morrison Restaurants Inc. (Reg. No. 33-13593). (9) Incorporated by reference to Exhibit 10(h) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (10) Incorporated by reference to Exhibit 10(i) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (11) Incorporated by reference to Exhibit 10(m) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended May 28, 1988 (File No. 0-1750). (12) Incorporated by reference to Exhibit 10(n) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (13) Incorporated by reference to Exhibit (2) to the Current Report on Form 8-K dated July 27, 1995 of Morrison Restaurants Inc. (File No. 1-12454) (14) Incorporated by reference to Exhibit 10(p) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995 (File No. 1-12454). (15) Incorporated by reference to Exhibit 10(q) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 3, 1989 (File No. 0-1750). (16) Incorporated by reference to Exhibit 10(s) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990 (File No. 0-1750). (17) Incorporated by reference to Exhibit 10(t) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990 (File No. 0-1750). (18) Incorporated by reference to Exhibit 10(v) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993 (File No. 0-1750). (19) Incorporated by reference to Exhibit 10(y) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). (20) Incorporated by reference to Exhibit 10(y) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). (21) Incorporated by reference to Exhibit 10(a)(a) to Annual Report on Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994 (File No. 1-12454). EX-11 2 RUBY TUESDAY, INC. AND SUBSIDIARIES EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS EXCEPT PER-SHARE DATA)
Fiscal Year Ended June 1, June 3, June 4, 1996 1995 1994 PRIMARY EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Average common shares outstanding......... 17,689 17,321 17,987 Average additional common shares issuable on exercise of dilutive stock options (computed by use of the "treaury stock method", at the average market price)..................... 640 697 Number of shares used in computation of primary earnings per share.............. 17,689 17,961 18,684 Net Income (loss)....................... $(2,884) $62,171 $44,684 Primary earnings (loss) per common and common equivalent share................. $ (0.16) $ 3.46 $ 2.39
Fiscal Year Ended June 1, June 3, June 4, 1996 1995 1994 FULLY DILUTED EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Average common shares outstanding......... 17,689 17,321 17,987 Average additional common shares issuable on exercise of dilutive stock options (computed by use of the "treasury stock method", at the higher of period-end or average market price)................ 664 707 Number of shares used in computation of fully diluted earnings per share........ 17,689 17,985 18,694 Net Income (loss)....................... $(2,884) $62,171 $44,684 Fully diluted earnings (loss) per common and common equivalent share................. $ (0.16) $ 3.46 $ 2.39 Weighted average shares and all per share data for prior years have been restated to give effect to common stock dividends and common stock splits through June 1, 1996.
EX-13 3 RUBY TUESDAY, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME (In thousands except per-share data) For the Fiscal Year Ended June 1, June 3, June 4, 1996 1995 1994 Revenues: Net sales and operating revenues $ 618,803 $ 514,292 $ 458,451 Other revenues 1,331 1,020 588 620,134 515,312 459,039 Operating costs and expenses: Cost of merchandise 170,352 138,665 127,862 Payroll and related costs 209,007 169,881 151,270 Other 134,043 106,028 94,330 Selling, general and administrative 39,139 37,521 34,250 Depreciation and amortization 34,131 26,634 23,353 L&N conversion/closing costs 19,727 Interest expense net of interest income totaling $160 in 1996, $736 in 1995, and $660 in 199 4,637 744 160 Loss on impairment of assets 25,881 Restructure charges 5,257 622,447 499,200 431,225 Income (loss) from continuing operations before income taxes (2,313) 16,112 27,814 Provision (benefit) for federal and state income taxes (1,651) 5,027 9,707 Income (loss) from continuing operations (662) 11,085 18,107 Income (loss) from discontinued operations, net of applicable income taxes (2,222) 51,086 26,577 Net income (loss) $ (2,884) $ 62,171 $ 44,684 Earnings (loss) per common and common equivalent share: Continuing operations $ (0.03) $ 0.62 $ 0.97 Discontinued operations (0.13) 2.84 1.42 Earnings (loss) per common and common equivalent share $ (0.16) $ 3.46 $ 2.39 Weighted average common and common equivalent shares 17,689 17,961 18,684 The accompanying notes are an integral part of the consolidated financial statements. RUBY TUESDAY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) June 1, June 3, Assets 1996 1995 Current assets: Cash and short-term investments................. $ 7,139 $ 5,957 Receivables..................................... 2,040 2,475 Inventories: Merchandise................................... 5,678 4,989 China, silver and supplies.................... 3,003 2,495 Prepaid expenses................................ 12,410 8,043 Prepaid income taxes............................ 2,988 3,758 Current assets of discontinued operations....... 52,481 Total current assets......................... 33,258 80,198 Property and Equipment - at cost: Land............................................ 25,663 17,511 Buildings....................................... 55,284 38,728 Improvements.................................... 175,102 149,405 Restaurant equipment............................ 120,144 116,275 Other equipment................................. 28,122 26,206 Construction in progress........................ 39,160 38,945 Less accumulated depreciation and amortization.. 129,937 117,068 313,538 270,002 Costs in excess of net assets acquired............ 21,058 22,298 Non-current assets of discontinued operations..... 102,726 Other assets...................................... 13,262 8,827 Total assets...................................... $ 381,116 $ 484,051 RUBY TUESDAY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - (Continued) (In thousands) June 1, June 3, Liabilities and Shareholders' Equity 1996 1995 Current liabilities: Accounts payable................................. $ 26,386 $ 26,393 Short-term borrowings............................ 6,001 12,638 Accrued liabilities: Taxes, other than income taxes................. 10,602 9,097 Payroll and related costs...................... 6,917 6,394 Insurance...................................... 7,478 6,396 Rent and other................................. 9,112 11,287 Current portion of long-term debt................ 95 87 Current liabilities of discontinued operations... 52,686 Total Current Liabilities...................... 66,591 124,978 Notes and mortgages payable........................ 76,108 32,003 Deferred income taxes.............................. 8,232 16,864 Other deferred liabilities......................... 32,842 18,672 Non-current liabilities of discontinued operations. 46,041 Shareholders' Equity: Common stock, $0.01 par value; (authorized: 50,000 shares; issued: 1996 - 17,598 shares, 1995 - 21,822 shares)......................... 176 218 Capital in excess of par value.................. 1,762 84,733 Retained earnings............................... 198,354 298,181 200,292 383,132 Less cost of treasury stock..................... 2,949 137,639 197,343 245,493 Total Liabilities and Shareholders' Equity..... $ 381,116 $ 484,051 The accompanying notes are an integral part of the consolidated financial statements. RUBY TUESDAY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands except per-share data)
Capital in Total Common Stock Issued Treasury Stock Excess of Retained Stockholders' Shares Amount Shares Amount Par Value Earnings Equity Balance, June 5, 1993........................ 29,097 $ 291 (4,723) $ (71,074) $ 75,181 $215,226 $219,624 Net income................................. 44,684 44,684 3-for-2 stock split........................ 14,547 145 (2,415) (145) 0 Shares issued under stock bonus and stock option plans.............................. 484 5,844 2,620 8,464 Cash dividends of $0.6598 per common share. (11,866) (11,866) Purchase of treasury stock including deferred compensation plan...... (1,681) (39,770) (39,770) Balance, June 4, 1994........................ 43,644 436 (8,335) (105,000) 77,656 248,044 221,136 Net income................................. 62,171 62,171 Shares issued under stock bonus and stock option plans.............................. 562 7,792 3,132 10,924 Shares issued pursuant to Tias, Inc. acquisition.............................. 355 5,273 3,727 9,000 Cash dividends of $0.6916 per common share.................. (12,034) (12,034) Purchase of treasury stock including deferred compensation plan................ (1,701) (45,704) (45,704) Balance, June 3, 1995........................ 43,644 436 (9,119) (137,639) 84,515 298,181 245,493 Net income (loss)......................... (2,884) (2,884) Shares issued under stock bonus and stock option plans............................. 84 1 129 1,926 1,663 251 3,841 Cash dividends of $0.543 per common share. (9,377) (9,377) Purchase of treasury stock, net of changes in deferred compensation plan............ 240 (858) (858) Equity transfers to MFC and MHC........... 5,080 (43,952) (38,872) Retirement of treasury stock.............. (8,616) (86) 8,616 128,542 (84,416) (44,040) 0 1-for-2 reverse stock split............... (17,514) (175) 175 0 Balance, June 1, 1996........................ 17,598 $ 176 (134) $ (2,949) $ 1,762 $198,354 $197,343 The accompanying notes are an integral part of the consolidated financial statements.
RUBY TUESDAY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
For the Fiscal Year Ended June 1, June 3, June 4, 1996 1995 1994 Operating activities: Income (loss) from continuing operations......... $ (662) $ 11,085 $ 18,107 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss on impairment of assets................... 25,881 Depreciation................................... 34,131 26,634 23,353 Amortization of intangibles.................... 699 607 485 Other, net..................................... (1,118) Deferred income taxes.......................... (7,157) 2,501 4,909 Loss on disposition of assets.................. 2,592 4,419 523 Changes in operating assets and liabilities: (Increase)/decrease in receivables........... (282) (213) 878 Increase in inventories...................... (1,197) (1,059) (862) (Increase)/decrease in prepaid and other assets................................ 721 3,355 (2,116) Increase in accounts payable, accrued and other liabilities............... 14,989 18,810 6,677 Increase/(decrease) in income taxes payable.. (4,493) 1,205 (1,947) Cash provided by continuing operations........... 64,104 67,344 50,007 Cash provided (used) by discontinued operations.. 10,030 (11,128) 58,514 Net cash provided by operating activities......... 74,134 56,216 108,521 Investing activities: Purchases of property and equipment............. (109,164) (108,452) (70,189) Proceeds from disposal of assets................ 3,444 153 67 Other, net...................................... (4,475) 2,701 (779) Discontinued operations investing activities, net................................ (14,448) 71,693 (22,826) Net cash used by investing activities............. (124,643) (33,905) (93,727) Financing activities: Proceeds from long-term debt.................... 44,200 30,800 559 Net change in short-term borrowings............. (6,637) (11,828) 17,416 Principal payments on long-term debt and capital leases................................. (87) (7,438) Proceeds from issuance of stock, including treasury stock....................... 3,841 10,924 8,464 Stock repurchases............................... (858) (45,704) (39,770) Dividends paid.................................. (9,377) (12,034) (11,866) Discontinued operations financing activities, net................................ 20,609 14,506 (147) Net cash provided (used) by financing activities.. 51,691 (20,774) (25,344) Increase/(decrease) in cash and short-term investments...................................... 1,182 1,537 (10,550) Cash and short-term investments: Beginning of period.............................. 5,957 4,420 14,970 End of period.................................... $ 7,139 $ 5,957 $ 4,420 Supplemental disclosure of cash flow information- cash paid for: Interest (net of amount capitalized)............ $ 4,252 $ 1,547 $ 656 Income taxes, net............................... $ 2,605 $ 5,200 $ 9,678 The accompanying notes are an integral part of the consolidated financial statements.
1. Summary of Significant Accounting Policies Basis of Presentation Ruby Tuesday, Inc. (the "Company") operates three separate and distinct casual dining concepts comprised of Ruby Tuesday, Mozzarella's Cafes and Tia's Tex-Mex restaurants. At June 1, 1996, the Ruby Tuesday concept consisted of 301 units concentrated primarily in the Northeast, Southeast, Mid-Atlantic and the Midwest. With 46 company-owned establishments, Mozzarella's units are primarily located in the Mid-Atlantic and the Southeast with particular concentration in the Washington, D.C. area, Florida and Atlanta. The Company's newest concept, Tia's Tex-Mex, operates 18 units located in the Southwest, Southeast and Mid-Atlantic regions. Prior to March 9, 1996, the Company was known as Morrison Restaurants Inc. ("Morrison"). Morrison operated three businesses in the foodservice industry. These businesses were organized into two operating groups, the Ruby Tuesday Group, consisting of the Company's casual dining concepts, and the Morrison Group, which was comprised of Morrison's family dining restaurant and health care food and nutrition services businesses. Effective March 9, 1996, the shareholders of Morrison approved the spin-off (the "Distribution") of its family dining restaurant and health care food and nutrition services businesses to its shareholders. The spin-off resulted in the family dining restaurant and health care food and nutrition services businesses operating as two separate stand-alone, publicly-traded companies. In accordance with Accounting Principles Board Opinion No. 30, the financial results of these two businesses, together referred to as the Morrison Group, are reported as discontinued operations. For accounting purposes, the Distribution is reflected as if it occurred on March 2, 1996, the last day of the Company's third fiscal quarter. As part of the Distribution, Morrison reincorporated in Georgia and changed its name to Ruby Tuesday, Inc. The accompanying consolidated financial statements have been prepared to reflect the operations of the family dining restaurant and health care food and nutrition businesses as discontinued operations for all periods presented, as if the Company's casual dining restaurant operations had operated as a stand- alone entity, thus all disclosures except for the information relating to discontinued operations as presented in Note 2 of Notes to the Consolidated Financial Statements relate to continuing operations only. Fiscal Year The Company's fiscal year ends on the first Saturday following May 30. The fiscal years ended June 1, 1996, June 3, 1995, and June 4, 1994 were comprised of 52 weeks. Cash and Short-Term Investments The Company's cash management program provides for the investment of excess cash balances in short-term money market instruments. Short-term investments are stated at cost, which approximates market. The Company considers marketable securities with a maturity of three months or less when purchased to be short-term investments. Inventories Inventories consist of materials, food supplies, china and silver and are stated at the lower of cost (first in-first out) or market. Property and Equipment and Depreciation Depreciation for financial reporting purposes is computed using the straight-line method over the estimated useful lives of the assets or, for capital lease property, over the term of the lease, if shorter. Annual rates of depreciation range from 3% to 5% for buildings and improvements and from 8% to 34% for restaurant and other equipment. Accounting Changes During March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"). FAS 121 requires that, beginning in fiscal years starting after December 15, 1995, long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As discussed in Note 3, the Company adopted FAS 121 during the third quarter of fiscal year 1996. Income Taxes Deferred income taxes are determined utilizing a liability approach. This method gives consideration to the future tax consequences associated with differences between financial accounting and tax bases of assets and liabilities. Pre-Opening Expenses Salaries, personnel training costs and other expenses of opening new facilities are charged to expense as incurred. Intangible Assets Excess of costs over the fair value of net assets acquired of purchased businesses generally is amortized on a straight-line basis over 40 years. At June 1, 1996 and June 3, 1995, accumulated amortization for costs in excess of net assets acquired was $5.3 million and $4.7 million, respectively. Fair Value of Financial Instruments The Company's financial instruments at June 1, 1996 and June 3, 1995 consisted of cash and short-term investments, notes receivable, short-term borrowings and long-term debt. The fair value of these financial instruments approximated the carrying amounts reported in the consolidated balance sheets. Earnings Per Share Earnings per share are based on the weighted average number of shares outstanding during each year and are adjusted, when the effect is dilutive, for the assumed exercise of options, after the assumed repurchase of shares with the related proceeds, after adjustment for stock splits and stock dividends through June 1, 1996. Stock-Based Employee Compensation Plans During October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation" ("FAS 123"). FAS 123 establishes financial accounting and reporting standards for stock-based employee compensation plans. FAS 123 defines a fair value-based method of accounting for an employee stock option or similar equity instrument. FAS 123 allows an entity to continue to measure compensation cost for those plans using the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees". The Company intends to continue to measure compensation cost following the principles of APB Opinion No. 25 and will therefore be required to present pro forma disclosures of net income and earnings per share as if the fair value-based method had been applied beginning in fiscal 1997. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. 2. Discontinued Operations As previously mentioned, Morrison distributed the common stock of its family dining restaurant business (Morrison Fresh Cooking, Inc., or "MFC") and its health care contract food and nutrition business (Morrison Health Care, Inc., or "MHC") to its shareholders. Morrison shareholders received one share of MFC stock for every four shares of Morrison stock and one share of MHC stock for every three shares of Morrison stock. In accordance with Accounting Principles Board Opinion No. 30, the financial results of the two businesses, together referred to as the Morrison Group, are reported as discontinued operations in the accompanying consolidated financial statements and the results of the prior periods have been restated. The condensed results presented below include an allocation of general expenses of Morrison, such as legal, data processing and interest on a specific identification method, where appropriate. Management believes the allocation methods used are reasonable. Condensed results of the discontinued operations are as follows: (In thousands) Fiscal Year Ended 1996 1995 1994 Revenues......................... $ 370,439 $ 519,777 $ 754,351 Income (loss) before provision for income taxes............... $ (2,434) $ 88,600 $ 43,344 Provision (benefit) for federal and state income taxes......... $ (212) $ 37,514 $ 16,767 Net income (loss)................ $ (2,222) $ 51,086 $ 26,577 Included in the June 3, 1995 income before provision for income taxes is a $46.8 million gain on sale of certain business and industry contracts and assets of MHC. Included in the June 1, 1996 income before provision for income taxes is a charge of $23.7 million for costs associated with asset impairment and restructuring. As a result of the Distribution, the Company does not have any ownership interest in either MFC or MHC, except for stock held by the rabbi trust associated with the Company's Deferred Compensation Plan. (See Note 9 of Notes to Consolidated Financial Statements for more information.) Prior to the Distribution, the Company entered into agreements with both MFC and MHC governing certain operating relationships among the Company, MFC and MHC subsequent to the Distribution including (i) an agreement providing for assumptions of liabilities and cross-indemnities to allocate responsibilities for liabilities arising out of or in connection with business activities prior to the Distribution; (ii) a tax indemnity agreement which provides that none of the three companies will take any action that would jeopardize the intended tax free consequences of the Distribution; (iii) a tax allocation agreement to the effect that MFC and MHC will pay their respective shares of the Company's consolidated tax liability for the tax years that MFC and MHC were included in the Company's consolidated federal income tax return; (iv) intellectual property license agreements which provided for the licensing of rights currently owned by the Company to the three companies; and (v) an agreement providing for the allocation of employee benefit rights and responsibilities among the three companies. 3. Impairment of Long-Lived Assets/Restructure Charges The Company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("FAS 121"), in the third quarter of fiscal 1996. A pre-tax charge of $25.9 million was recorded of which $3.9 million, the difference between fair value and net realizable value of the impaired assets, resulted from the adoption of FAS 121. The $25.9 million charge is comprised of the following: impairment on 16 units approved for closure within one year by the Board of Directors on January 10, 1996, ($10.0 million); impairment on in-unit computer equipment ($0.8 million) and write-offs resulting from management's decision to abandon an information technology plan ($3.8 million) approved on that same date; and impairment on units remaining open ($11.3 million). The Board approved the closing of ten Ruby Tuesdays, four Mozzarella's and two Tia's restaurants based upon management's review of negative cash flow and operating loss units and other considerations. The expected loss on disposal of the long-lived assets of these units is $10.0 million (net of an assumed salvage value of $0.9 million). Included in this amount is $0.6 million which represents the goodwill associated with two Tia's units to be closed. As of June 1, 1996, nine of these units have been closed (six Ruby Tuesdays and three Mozzarella's). Management anticipates closing the remaining seven units during the first two quarters of fiscal 1997. Prior to the initiation of the Distribution, Morrison was undertaking an information technology project intended, among other things, to update or replace certain accounting and human resource systems for all of Morrison. Upon initiation of the intended Distribution, management commenced a project by project review of the information technology plan. Upon completion of its review, management decided to abandon certain projects in development, including the project to update or replace certain accounting and human resource systems. In connection therewith, the Company instituted a plan to dispose of certain in-unit computer equipment and replace that equipment with computers more technologically advanced. Accordingly, the Company recorded the charge of $3.8 million for the write-off of the information technology projects and $0.8 million for the remaining carrying value of certain in-unit computer equipment. Negative cash flow and operating loss units not recommended for closure were also reviewed for impairment. Management believed these units might have been impaired based upon poor operating performance. Accordingly, management estimated the undiscounted future cash flows to be generated by these units and determined that certain of them would not likely generate net cash flows in excess of carrying value. Based upon third quarter operating and cash flow results, two additional units were identified as impaired. Accordingly, the charge of $11.3 million was recorded to reduce the carrying value of the impaired assets (including the two units identified during the third quarter) to their estimated fair value, as determined by using discounted estimated future cash flows. Future cash flows were estimated based on considerable management judgment. Thus actual cash flows could vary from such estimates. As a result of the reduced carrying value of the impaired assets, depreciation expense for the fourth quarter of fiscal 1996 was reduced by $0.6 million ($0.3 million after-tax or $0.02 per share) and fiscal 1997 depreciation expense is expected to be reduced by approximately $2.3 million ($1.4 million after-tax or $0.08 per share). In addition to the write-down of fixed assets on the 16 units to be closed, the Company accrued charges not included above of $3.4 million relating to the settlement of the related lease obligations. Management estimates it can negotiate lease settlements within 36 months on a majority of those units which cannot be sublet. At June 1, 1996, $3.0 million of this reserve remains. Other charges of $1.8 million were also recorded during the third quarter of fiscal 1996. These charges consisted of estimated professional and other fees incurred in accordance with the Distribution ($1.3 million); severance pay for staff reductions expected during the quarter ($0.2 million) and miscellaneous other asset write-offs ($0.3 million). Professional fees and severance pay approximating the amounts accrued were paid prior to the end of the fiscal year. No additional amounts are anticipated. 4. Acquisition of Tias, Inc. On January 17, 1995, the Company acquired all of the outstanding common stock of Tias, Inc., a 12-unit Tex-Mex restaurant concept based in Dallas, Texas, for $9.0 million in common stock (177,336 shares). The acquisition was accounted for as a purchase. Accordingly, the purchase price was allocated on the basis of the estimated fair value of the assets acquired and liabilities assumed. This treatment resulted in goodwill of $12.2 million which is being amortized on a straight-line basis over 40 years. As discussed in Note 3 to the Consolidated Financial Statements, the Company wrote off $0.6 million of goodwill in accordance with the restructure approved by the Board of Directors on January 10, 1996. This amount represented the goodwill associated with two Tia's units to be closed. 5. Phase Out of the L&N Seafood Grill Concept On June 27, 1994, plans to phase-out the L&N Seafood Grill concept were announced by the Company. The original plan, as approved by the Board of Directors, called for the conversion of 30 L&N units into other Company concepts. All remaining units were to be sold or closed. The Company accrued $19.7 million for costs to be incurred as a result of the phase-out. This amount, originally accrued to cover the costs to convert 30 L&N units and close the remaining eight, consisted primarily of the following: losses on disposal of fixed assets net of anticipated proceeds and the net cost of related lease obligations for the units to be closed ($11.6 million), expected operating losses during the phase-out period ($4.8 million), severance pay ($1.1 million) and other losses on the conversion of units, consisting primarily of the write-off of fixed assets, inventory, and unamortized cost in excess of net assets acquired ($2.2 million). The Company originally estimated that, of the $19.7 million charge, asset write-offs (including inventory, fixed assets and goodwill) would total $9.2 million. Cash proceeds from disposal of the properties were anticipated to be $0.7 million. The remaining $11.2 million represented the estimated cash outlay for lease settlements, severance pay and other operating expenditures. The original plan assumed that no units would be sublet and that buyout of leases could occur. Determination of the number of months assumed in which buyouts could occur was made on an individual unit basis. Subsequent to the June 1994 announcement, the Company reacquired three additional L&N units as a result of a default on a licensing agreement. These three units were closed. Based on favorable operating results, in the third quarter of fiscal 1995, management decided to continue to operate four of the L&N units as L&N's through the remainder of their lease terms. During fiscal 1995, 21 of the L&N units were converted and are operating as other restaurant concepts. In fiscal 1996, two additional units were converted and reopened as Tia's. The increase from the original plan in the number of units to be closed did not result in a material increase to the $11.6 million closing cost estimate as the increases necessary for the six additional units ultimately closed were offset by decreases in estimates for the other units closed and the decrease which resulted from the decision to continue to operate the four units discussed above. Of the original $19.7 million accrued to phase out the concept, $1.0 million and $6.0 million of reserves remain outstanding as of June 1, 1996 and June 3, 1995, respectively. 6. Notes and Mortgages Payable Notes and mortgages payable consists of the following: (In thousands) 1996 1995 Revolving credit facility $25,000 $30,800 Term notes payable to banks 50,000 Other notes and mortgages 1,203 1,290 76,203 32,090 Less current maturities 95 87 $76,108 $32,003 Annual maturities of notes and mortgages at June 1, 1996 are as follows (in thousands): 1997 $ 95 1998 103 1999 112 2000 121 2001 75,132 Subsequent years 640 Total $ 76,203 On March 6, 1996, the Company entered into a five-year credit facility with several banks which allows the Company to borrow up to $100.0 million under various interest rate options. The $100.0 million credit facility is comprised of a $50.0 million five-year term note and a $50.0 million five-year revolving credit facility. Commitment fees equal to 0.1875% per annum are payable quarterly on the unused portion of the revolving credit facility. At June 1, 1996, the Company had $25.0 million of borrowings outstanding with various banks under the revolving credit facility at interest rates ranging from 5.75% to 5.87% per annum. Such borrowings (with maturities up to 180 days) have been classified as long-term based on the Company's ability and intent to refinance such borrowings under the revolving facility. The credit facility provides for certain restrictions on incurring additional indebtedness and certain funded debt, net worth, and fixed charge coverage requirements. At June 1, 1996, retained earnings in the amount of $17.3 million were available for distribution under the debt restrictions. In order to control interest costs on the term loan, the Company entered into an interest rate swap agreement. The notional amount of this agreement is equal to the $50.0 million term loan. The agreement effectively fixes the interest rate at 6.25% for the five-year period ended March 4, 2001. In conjunction with entering into the new swap agreement, Morrison settled the previous interest swap agreement at a cost of approximately $0.4 million. Prior to the Distribution, each of the Company, MFC and MHC agreed to pay one- third of the cost of settling the swap. Accordingly, the portion allocated to the Company, $0.1 million, was included as part of the restructure costs recorded in the third quarter of fiscal 1996. The March 6, 1996 credit facility replaced previous indebtedness which had been incurred by Morrison under a September 30, 1994 five-year revolving line of credit with various banks. The 1994 credit facility allowed Morrison to borrow up to $200.0 million under various interest rate options. Commitment fees ranging from 0.0625% to 0.15% per annum were payable on the unused portion of the credit facility. Based on the allocation of debt as of the date of the Distribution, a pro rata percentage of Morrison's March 2, 1996 outstanding balance under the revolving line of credit was allocated to MHC. This amount totaled $27.1 million and was assumed by MHC at that date. The Company retained the balance of Morrison's obligations under the revolving line of credit at the time of distribution. In addition, at June 1, 1996, the Company had committed lines of credit amounting to $25.0 million (of which $19.0 million remain available at June 1, 1996) and non-committed lines of credit amounting to $10.0 million with various banks at various interest rates. All of these lines of credit are subject to periodic review by each bank and may be canceled by the Company at any time. The Company utilized its lines of credit to meet operational cash needs during fiscal year 1996. Borrowings on these lines of credit were $6.0 and $12.6 million at June 1, 1996 and June 3, 1995, respectively. Interest expense capitalized in connection with financing additions to property and equipment amounted to approximately $1.6 and $1.0 million for the years ended June 1, 1996 and June 3, 1995, respectively. 7. Leases Various operations of the Company are conducted in leased premises. Initial lease terms expire at various dates over the next 23 years and may provide for escalation of rent during the lease term. Most of these leases provide for additional contingent rents based upon sales volume and contain options to renew (at adjusted rentals for some leases). The administrative headquarters has a lease term ending in 1998 and provides an option to purchase at a nominal amount at the end of the initial lease term. Assets recorded under capital leases (included in Property and Equipment in the accompanying consolidated balance sheets) are as follows: (In Thousands) 1996 1995 Buildings $4,500 $4,500 Other equipment 50 4,500 4,550 Less accumulated amortization 2,229 2,149 $ 2,271 $ 2,401 The capital lease obligation relating to the administrative headquarters lease are considered extinguished in accordance with Statement of Financial Accounting Standards No. 76 concerning in-substance defeasance of corporate debt. U. S. Treasury Bills and cash have been placed in an irrevocable trust to satisfy scheduled payments of both interest and principal on this capital lease obligation. At June 1, 1996, the future minimum lease payments under operating leases for the next five years and in the aggregate are as follows: (In Thousands) _ 1997 $ 34,817 1998 35,123 1999 34,412 2000 32,820 2001 31,881 Subsequent years 243,082 Total minimum lease payments $412,135 Rental expense pursuant to operating leases is summarized as follows: (In Thousands) 1996 1995 1994_ Minimum rent $35,357 $30,337 $24,732 Contingent rent 768 1,416 1,677 $36,125 $31,753 $26,409 8. Income Taxes The components of income tax expense (benefit) are as follows: (In thousands) 1996 1995 1994 Current: Federal $ 4,323 $ 1,959 $ 3,835 State 1,183 567 963 5,506 2,526 4,798 Deferred: Federal (5,949) 2,313 4,105 State (1,208) 188 804 (7,157) 2,501 4,909 $(1,651) $ 5,027 $ 9,707 Deferred tax assets and liabilities are comprised of the following: (In thousands) 1996 1995 Deferred tax assets: Employee benefits $ 7,626 $ 3,609 Insurance reserves 4,005 3,124 Escalating rents 3,451 2,348 Acquired net operating losses 2,551 2,629 Restructuring and FAS 121 reserves 1,264 Unit closing reserve 313 2,626 Other 687 245 Total deferred tax assets 19,897 14,581 Deferred tax liabilities: Depreciation 20,493 24,534 Prepaid deductions 1,010 1,593 Retirement plans 833 624 Other 2,805 936 Total deferred tax liabilities 25,141 27,687 Net deferred tax (liability) $ (5,244) $(13,106) At June 1, 1996, the Company had net operating loss carryforwards for tax purposes of approximately $6.5 million as a result of the acquisition of Tias, Inc., which expire through 2002. The Company's net operating loss carryforwards are subject to an annual limitation for tax reporting purposes due to changes in ownership of the acquired company. Management does not believe a valuation allowance is necessary. A reconciliation from the statutory federal income tax expense (benefit) to the reported income tax expense is as follows: (In thousands) 1996 1995 1994 Statutory federal income taxes $ (810) $ 5,639 $ 9,735 State income taxes net of federal income tax benefit (68) 549 1,128 Tax credits (1,349) (2,964) (1,579) Other, net 576 1,803 423 $ (1,651) $ 5,027 $ 9,707 The effective income tax rate (benefit) was (71.4)%, 31.2%, and 34.9% in 1996, 1995, and 1994, respectively. The increase in the effective tax benefit for 1996 is attributable to the tax credits which were available to the Company. 9. Employee Benefit Plans Salary Deferral Plan - Under the Ruby Tuesday, Inc. Salary Deferral Plan each eligible employee may elect to make pre-tax contributions to a trust fund in amounts ranging from 2% to 10% of their annual earnings. Employees contributing a pre-tax contribution of at least 2% may elect to make after-tax contributions not in excess of 10% of annual earnings. The Company contribu- tion to the Plan is based on the employee's pre-tax contribution and years of service. After three years of service the Company contributes 20% of the employee's pre-tax contribution, 30% after ten years of service and 40% after 20 years of service. Normally, the full amount of each participant's interest in the trust fund is paid upon termination of employment. However, the Plan allows participants to make early withdrawals of pre-tax and after-tax contributions, subject to certain restrictions. The Plan may be terminated by the Company at any time. The Company's contributions to the trust fund approximated $0.2 million, $0.1 million, and $0.1 million for 1996, 1995, and 1994, respectively. Deferred Compensation Plan - The Company maintains the Ruby Tuesday, Inc. Deferred Compensation Plan for certain selected employees. The provisions of this Plan are similar to those of the Salary Deferral Plan. The Company's contributions under the Plan approximated $0.1 million for each of 1996, 1995, and 1994. Company assets earmarked to pay benefits under the Plan are held by a rabbi trust. Under current accounting rules, assets of a rabbi trust must be accounted for as if they are assets of the Company, therefore, all earnings and expenses are recorded in the Company's financial statements. The Plan's assets, which approximated $9.5 million and $6.1 million in 1996 and 1995, respectively, are included in Other Assets in the Consolidated Balance Sheets. Retirement Plan - The Company, along with MFC and MHC, sponsors the Morrison Restaurants Inc. Retirement Plan. Effective December 31, 1987, the Plan was amended so that no additional benefits will accrue and no new participants will enter the Plan after that date. Participants will receive benefits based upon salary and length of service. Certain responsibilities involving the administration of the Plan are jointly shared by each of the three companies. No contribution was made in 1996, 1995, or 1994. The Company recorded net pension expense of $44,000 in 1996 and income of $2,000 in each of 1995 and 1994. Executive Supplemental Pension Plan - Under the Ruby Tuesday, Inc. Executive Supplemental Pension Plan, employees with an average annual compensation of at least $120,000 and who have completed five years in a qualifying position become eligible to earn supplemental retirement income based upon salary and length of service, reduced by social security benefits and amounts otherwise receivable under the Retirement Plan. Expenses under the Plan approximated $0.6 million, $0.5 million, and $0.4 million for 1996, 1995, and 1994, respectively. Management Retirement Plan - Under the Ruby Tuesday, Inc. Management Retirement Plan, individuals actively employed by the Company as of June 1, 1989, or thereafter, who have 15 years of credited service and whose average annual compensation equals or exceeds $40,000, become participants. Participants will receive benefits based upon salary and length of service, reduced by social security benefits and benefits payable under the Retirement Plan. Expenses recognized approximated $0.3 million, $0.1 million, and $0.1 million in 1996, 1995, and 1994, respectively. To provide a source for the payments of benefits under the Executive Supplemental Pension Plan and the Management Retirement Plan, the Company owns whole-life insurance contracts on some of the participants. The cash value of these policies net of policy loans is $3.0 million at June 1, 1996. The Company maintains a rabbi trust to hold the policies and death benefits as they are received. The table presented on the following page details the components of pension expense, the funded status and amounts recognized in the Company's Consolidated Financial Statements for the Management Retirement Plan, the Executive Supplemental Pension Plan, and the Retirement Plan. Amounts presented are in thousands.
Assets Exceed Accumulated Benefits Exceed Assets- Accumulated Benefits- Executive Supplemental Pension Plan Retirement Plan and Management Retirement Plan 1996 1995 1994 1996 1995 1994 Components of pension expense (income): Service cost......................... $ $ $ $ 96 $ 73 $ 71 Interest cost........................ 334 31 31 525 276 247 Actual return on plan assets......... (787) (10) (46) Amortization and deferral............ 497 (23) 13 294 123 171 Other................................ 89 $ 44 $ (2) $ (2) $ 915 $ 561 $ 489 Plan assets at fair value............ $ 4,502 $ 382 $ 446 $ 0 $ 0 $ 0 Actuarial present value of projected benefit obligations: Accumulated benefit obligations: Vested............................ 4,432 374 435 7,479 3,434 2,088 Nonvested......................... 63 8 598 Provision for future salary increases......................... 1,960 883 1,515 Total projected benefit obligations... 4,432 374 435 9,502 4,325 4,201 Excess (deficit) of plan assets over projected benefit obligations........ 70 8 11 (9,502) (4,325) (4,201) Unrecognized net loss (gain).......... 607 74 67 235 (265) 160 Unrecognized prior service cost....... 840 665 211 Unrecognized net transition obligation 389 41 47 1,510 993 1,291 Additional minimum liability.......... (1,164) (578) (343) Prepaid (accrued) pension cost........ $ 1,066 $ 123 $ 125 $ (8,081) $ (3,510) $ (2,882)
The Retirement Plan's assets include common stock, fixed income securities, short-term investments and cash. The weighted-average discount rate for all three plans is 7.75%, 8.5%, and 7.5% for 1996, 1995, and 1994, respectively. The rate of increase in compensation levels for the Executive Supplemental Pension Plan and Management Retirement Plan is 4% for 1996 and 1995 and 5% for 1994. The expected long-term rate of return on plan assets for the Retirement Plan is 10% for all three years. 10. Preferred Stock Under its Certificate of Incorporation the Company is authorized to issue preferred stock with a par value of $0.01 in an amount not to exceed 250,000 shares which may be divided into and issued in designated series, with dividend rates, rights of conversion, redemption, liquidation prices and other terms or conditions as determined by the Board of Directors. No preferred shares have been issued as of June 1, 1996. The Board of Directors has designated 50,000 of such shares as Series A Junior Participating Preferred Stock and has issued rights to acquire such shares, upon certain events, with an exercise price of $75.00 per one one-thousandth of a share, subject to adjustment. The rights expire on April 9, 1997, and may be redeemed prior to ten days after the acquisition of 20% or more of the Company's common stock. 11. Capital Stock, Options, And Bonus Plans The Ruby Tuesday, Inc. 1996 Stock Incentive Plan - In March 1996, the shareholders approved the Ruby Tuesday, Inc. 1996 Stock Incentive Plan which is an amendment and restatement of the Morrison Restaurants Inc. 1992 Stock Incentive Plan. A Committee, appointed by the Board, administers the Plan on behalf of the Company and has complete discretion to determine participants and the terms and provisions of Stock Incentives, subject to the Plan. The Plan permits the Committee to make awards of shares of common stock, awards of 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 pursuant to a program approved by the Committee for the benefit of a group of eligible persons. All options awarded under this plan have been at the prevailing market value at the time of issue or grant. During 1996, 22,000 shares were issued under the Plan. At June 1, 1996, the Company had reserved a total of 819,000 shares of common stock for this Plan. The Ruby Tuesday, Inc. Stock Incentive and Deferred Compensation Plan for Directors - In March 1996, the shareholders approved the Ruby Tuesday, Inc. Stock Incentive and Deferred Compensation Plan for Directors, which is a continuation of the similarly titled 1994 Morrison plan. To defer the receipt of their retainer fees or to allocate their retainer fees to the purchase of shares of the Company, the Plan provides that the directors must use 60% of their retainer to purchase shares of the Company if they have not attained a specified level of ownership of shares of Company common stock. Each director purchasing stock receives additional shares equal to 15% of the shares purchased and three times the total shares in options which after six months are exercisable for five years from the grant date. During 1996, 3,000 shares were issued under the Plan. Pursuant to this Plan, a one-time restricted stock award totaling 5,000 shares was made in fiscal 1995 to each non-management director who was elected after September 1993. All options awarded under this plan have been at the prevailing market value at the time of issue or grant. A Committee, appointed by the Board, administers the Plan on behalf of the Company. At June 1, 1996, the Company had reserved 95,000 shares of common stock for the Plan. The Ruby Tuesday, Inc. 1996 Non-Executive Stock Incentive Plan - In March 1996, the Board of Directors approved the Ruby Tuesday, Inc. 1996 Non-Executive Stock Incentive Plan, which is an amendment and restatement of the similarly titled 1993 Morrison plan. A Committee, appointed by the Board, administers the Plan on behalf of the Company and has full authority in its discretion to determine the officers and key employees to whom Stock Incentives are granted and the terms and provisions of Stock Incentives, subject to the Plan. The Plan permits the Committee to make awards of shares of common stock, awards of 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 pursuant to a program approved by the Committee for the benefit of a group of eligible persons. All options awarded under this plan have been at the prevailing market value at the time of issue or grant. During 1996, 91,000 shares were issued under the Plan. At June 1, 1996, the Company had reserved a total of 1,320,000 shares of common stock for this Plan. In March 1996, the number and exercise price of all outstanding options were adjusted for the spin-off of MFC and MHC and the concurrent reverse one-for-two split of the Company shares. This adjustment decreased the number of options outstanding by 1,368,000 and increased each outstanding option's exercise price. In addition to the above plans, stock options remain outstanding under two terminated plans, the Ruby Tuesday, Inc. Long-Term Incentive Plan, which was effective from 1984 to 1989, and the Ruby Tuesday, Inc. Stock Bonus and Non- Qualified Stock Option Plan, which was effective from 1986 to 1992. Options to purchase 8,000 and 472,000 shares, respectively, remain outstanding under the terms of these two plans at June 1, 1996. The following table summarizes the activity in options under these stock option plans (option amounts and prices for 1994 and 1995 are derived from the historical financial statements of Morrison Restaurants Inc. and do not reflect the March 1996 reverse stock split): Number of Shares Under Options (In thousands except per-share data) 1996 1995 1994 Beginning of year 2,695 2,717 2,386 Adjustment due to MFC and MHC spin-off and reverse stock split (1,368) Granted 1,340 343 755 Exercised (87) (258) (313) Forfeited (115) (107) (111) End of year 2,465 2,695 2,717 Exercisable 808 971 958 Outstanding options' prices $ 8.09-$30.57 $ 7.61-$28.75 $ 5.40-$25.38 Exercised options' prices $ 7.61-$14.09 $ 5.40-$25.38 $ 5.40-$11.36 Granted options' prices $13.62-$23.50 $14.01-$28.75 $11.88-$25.38 12. Contingencies At June 1, 1996, the Company was contingently liable for approximately $15.5 million in letters of credit, issued primarily in connection with its workers' compensation and casualty insurance programs. The Company is presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of its business. In the opinion of management, the ultimate resolution of these pending legal proceedings will not have a material adverse effect on the Company's operations or consolidated financial position. 13. Supplemental Quarterly Financial Data (Unaudited) Quarterly financial results for the years ended June 1, 1996 and June 3, 1995, are summarized below. All quarters are composed of 13 weeks.
FIRST SECOND THIRD FOURTH In thousands except per-share data) QUARTER QUARTER QUARTER QUARTER TOTAL For The Year Ended June 1, 1996: Revenues $145,964 $152,001 $163,957 $158,212 $620,134 Gross profit* $ 25,448 $ 23,068 $ 30,435 $ 27,781 $106,732 Income (loss) before income taxes $ 6,211 $ 3,125 $(20,981)** $ 9,332 $ (2,313) Provision (benefit) for federal and state income taxes 2,000 1,038 (8,142) 3,453 (1,651) Income (loss) from continuing operations 4,211 2,087 (12,839) 5,879 (662) Income (loss) from discontinued operations 5,245 4,647 (12,114)** - (2,222) Net income (loss) $ 9,456 $ 6,734 $(24,953) $ 5,879 $ (2,884) Earnings (loss) per common and common equivalent share: Continuing operations $ 0.24 $ 0.13 $ (0.73) $ 0.33 $ (0.03) Discontinued operations 0.29 0.26 (0.68) - (0.13) $ 0.53 $ 0.39 $ (1.41) $ 0.33 $ (0.16)
FIRST SECOND THIRD FOURTH (In thousands except per-share data) QUARTER QUARTER QUARTER QUARTER TOTAL For The Year Ended June 3, 1995: Revenues $113,284 $120,778 $142,094 $139,156 $515,312 Gross profit* $ 24,026 $ 24,232 $ 28,626 $ 23,854 $100,738 Income (loss) before income taxes $(11,229)***$ 8,267 $ 12,293 $ 6,781 $ 16,112 Provision (benefit) for federal and state income taxes (4,784) 2,945 4,425 2,441 5,027 Income (loss) from continuing operations (6,445) 5,322 7,868 4,340 11,085 Income from discontinued operations 30,955**** 6,809 5,274 8,048 51,086 Net income $ 24,510 $ 12,131 $ 13,142 $ 12,388 $ 62,171 Earnings (loss) per common and common equivalent share: Continuing operations $ (0.35) $ 0.28 $ 0.44 $ 0.25 $ 0.62 Discontinued operations 1.70 0.39 0.30 0.45 2.84 $ 1.35 $ 0.67 $ 0.74 $ 0.70 $ 3.46 * The Company defines gross profit as revenue less cost of merchandise, payroll and related costs, and other operating costs and expenses. ** Continuing operations includes a pre-tax loss of $25.9 million recognized as a result of the implementation of FAS 121, other asset impairment charges and a $5.3 million restructure charge. Discontinued operations includes a pre-tax loss of $23.7 million recognized for costs associated with asset impairment and restructurings. *** Includes a pre-tax loss of $19.7 million recognized upon the decision to phase out the L&N Seafood Grill concept. **** Includes a pre-tax gain of $46.8 million ($25.8 million net of tax) realized upon the sale of certain business and industry contracts and assets of MHC.
Morrison Restaurants Inc. common stock was traded on the New York Stock Exchange under the ticker symbol RI. In connection with the Distribution, Morrison effected a one-for-two reverse stock split and changed its name to Ruby Tuesday, Inc. The common stock for Ruby Tuesday, Inc. is traded under the same ticker symbol, RI. The following table sets forth the reported high and low prices for each quarter during fiscal 1996 and 1995 for (i) the common stock of Morrison Restaurants Inc. prior to the Distribution, not adjusted for either the Distribution or the reverse stock split; and (ii) the common stock of Ruby Tuesday, Inc. after the Distribution. Fiscal Year Ended June 1, 1996 Fiscal Year Ended June 3, 1995 As Morrison Restaurants Inc. As Morrison Restaurants Inc. Per Share Per Share Cash Cash Quarter High Low Dividends Quarter High Low Dividends First $25.75 $19.13 $0.1750 First $25.88 $20.88 $0.1666 Second $20.63 $15.50 $0.1840 Second $29.75 $24.88 $0.1750 Third $17.38 $12.50 $0.1840 Third $27.88 $22.88 $0.1750 Fourth $26.88 $20.88 $0.1750 As Ruby Tuesday, Inc. Per Share Cash Quarter High Low Dividends Fourth $23.00 $17.25 $0.0000 Report of Independent Auditors Shareholders and Board of Directors Ruby Tuesday, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of Ruby Tuesday, Inc. as of June 1, 1996 and June 3, 1995, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three fiscal years in the period ended June 1, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ruby Tuesday, Inc. and Subsidiaries at June 1, 1996 and June 3, 1995, and the consolidated results of their operations and their cash flows for each of the three fiscal years in the period ended June 1, 1996, in conformity with generally accepted accounting principles. As discussed in Note 3 to the consolidated financial statements, in fiscal 1996 the Company changed its method of accounting for the impairment of long-lived assets and for long-lived assets to be disposed of. ERNST & YOUNG LLP Birmingham, Alabama June 19, 1996 EX-21 4 RUBY TUESDAY, INC. AND SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES OF REGISTRANT (a) The Registrant has no parent. (b) The Registrant's subsidiaries and their jurisdictions of each organization are as follows (100% of voting securities of each subsidiary owned by the Registrant): Delaware: Morrison International, Inc. Texas: Tias, Inc. In addition to the subsidiaries listed above, the Registrant has a minority ownership in several operating subsidiaries and several wholly-owned and minority interests in non-operating subsidiaries created solely for the purpose of holding certain licenses. EX-23 5 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-32697) pertaining to the Ruby Tuesday, Inc. Deferred Compensation Plan, in the Registration Statement (Form S-8 No. 333-03165) pertaining to the Ruby Tuesday, Inc. Deferred Compensation Plan , in the Registration Statement (Form S-8 No. 33-20585) pertaining to the Ruby Tuesday, Inc. Salary Deferral Plan, in the Registration Statement (Form S-8 No. 333-03153) pertaining to the Ruby Tuesday, Inc. Salary Deferral Plan, in the Registration Statement (Form S-8 No. 2-97120) pertaining to Ruby Tuesday, Inc. Long-Term Incentive Plan, in the Registration Statement (Form S-8 No. 33-13593) pertaining to the Ruby Tuesday, Inc. 1987 Stock Bonus and Non- Qualified Stock Option Plan, in the Registration Statement (Form S-8 No. 33-46220) pertaining to the Ruby Tuesday, Inc. Compensatory Non-Qualified Stock Option Arrangements, in the Registration Statement (Form S-8 No. 33-56452) pertaining to the Ruby Tuesday, Inc. Stock Incentive and Compensation Plan for Directors, Stock Incentive Plan and Non-Qualified Management Stock Option Agreements, in the Registration Statement (Form S-8 No. 333-03155) pertaining to the Ruby Tuesday, Inc. 1996 Stock Incentive Plan, in the Registration Statement (Form S-8 No. 333-03157) pertaining to the Ruby Tuesday, Inc. 1993 Non-Executive Stock Incentive Plan, in the Resgistration Statement (Form S-8 No. 33-70490) pertaining to the Ruby Tuesday, Inc. 1993 Non-Executive Stock Incentive Plan, in the Registration Statement (Form S-8 No. 33-46218) pertaining to the Ruby Tuesday,Inc. 1989 Non-qualified Stock Option Plan,and in the Registration Statement (Form S-3 No. 33-57159) of Ruby Tuesday, Inc., of our report dated June 19,1996, with respect to the consolidated financial statements of Ruby Tuesday, Inc. incorporated by reference in the Annual Report (Form 10-K) for the yearended June 1, 1996. /s/ Ernst & Young LLP Ernst & Young LLP Birmingham, Alabama August 27, 1996 EX-27 6
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RUBY TUESDAY, INC. FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED JUNE 1, 1996 AND ARE QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR JUN-01-1996 JUN-01-1996 7,139 0 2,040 0 8,681 33,258 443,475 129,937 313,538 66,591 76,108 0 0 176 197,167 381,116 618,803 620,134 170,352 416,320 31,138 0 4,637 (2,313) (1,651) (662) (2,222) 0 0 (2,884) $(0.16) $(0.16)
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