Note 13 - Supplemental Condensed Consolidating Financial Statements

3 Months Ended

Aug. 30, 2016

Notes to Financial Statements

Condensed Financial Statements [Text Block]

13

. Supplemental Condensed Consolidating Financial Statements

As discussed in Note 6 to the

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

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

 

Condensed Consolidating Balance Sheet

As of August 30, 2016

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	68,515		$	146	$	–		$	68,661
Accounts and other receivables		2, 625			4, 483		–			7,108
Inventories		13,653			5,005		–			18,658
Income tax receivable		170,031			–		( 165,310	)		4,721
Other current assets		12, 652			9, 840		–			22,49 2
Total current assets		267,476			19,474		( 165,310	)		121,6 40
Property and equipment, net		491,229			160,548		–			651,777
Investment in subsidiaries		8 2,482			–		( 82,482	)		–
Due from/(to) subsidiaries		8 1,389			216,770		( 298,159	)		–
Other assets		39,993			4,749		–			44,7 42
Total assets	$	962,569		$	401,541	$	( 545,951	)	$	818,159
Liabilities & Shareholders ’ Equity
Current liabilities:
Accounts payable	$	18,065		$	3,968	$	–		$	2 2,033
Accrued and other current liabilities		5 2,324			39, 834		–			92,158
Current maturities of long-term debt,
including capital leases		( 1,088	)		10,869		–			9, 781
Income tax payable		–			165,310		( 165,310	)		–
Total current liabilities		69,301			219,981		( 165,310	)		123,972
Long-term debt and capital leases,
less current maturities		209,350			4,378		–			213,728
Due to/(from) subsidiaries		216,770			8 1,389		( 298,159	)		–
Other deferred liabilities		97, 869			13, 311		–			111, 180
Total liabilities		593, 290			3 19,059		( 463,469	)		448,880
Shareholders ’ equity:
Common stock		602			–		–			602
Capital in excess of par value		7 6,772			–		–			7 6,772
Retained earnings		301,658			82,482		( 82,482	)		301,658
Accumulated other comprehensive loss		( 9,753	)		–		–			( 9,753	)
Total shareholders ’ equity		369,279			82,482		( 82,482	)		369,279
Total liabilities & shareholders ’ equity	$	962, 569		$	40 1,541	$	( 545,951	)	$	818,159

Condensed Consolidating Balance Sheet

As of May 31, 2016

(In thousands)

	Parent			Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	67,208		$	133	$	–		$	67,341
Accounts and other receivables		8,102			4,725		–			12,827
Inventories		15,401			6,194		–			21,595
Income tax receivable		167,065			–		(164,062	)		3,003
Other current assets		11,282			4,868		–			16,150
Total current assets		269,058			15,920		(164,062	)		120,916
Property and equipment, net		501,482			169,768		–			671,250
Investment in subsidiaries		98,929			–		(98,929	)		–
Due from/(to) subsidiaries		76,208			213,816		(290,024	)		–
Other assets		40,626			5,125		–			45,751
Total assets	$	986,303		$	404,629	$	(553,015	)	$	837,917
Liabilities & Shareholders ’ Equity
Current liabilities:
Accounts payable	$	17,405		$	4,736	$	–		$	22,141
Accrued and other current liabilities		35,674			29,957		–			65,631
Current maturities of long-term debt,
including capital leases		(1,067	)		11,001		–			9,934
Income tax payable		–			164,062		(164,062	)		–
Total current liabilities		52,012			209,756		(164,062	)		97,706
Long-term debt and capital leases,
less current maturities		209,058			4,745		–			213,803
Due to/(from) subsidiaries		213,816			76,208		(290,024	)		–
Other deferred liabilities		103,637			14,991		–			118,628
Total liabilities		578,523			305,700		(454,086	)		430,137
Shareholders ’ equity:
Common stock		601			–		–			601
Capital in excess of par value		75,938			–		–			75,938
Retained earnings		341,350			98,929		(98,929	)		341,350
Accumulated other comprehensive loss		(10,109	)		–		–			(10,109	)
Total shareholders ’ equity		407,780			98,929		(98,929	)		407,780
Total liabilities & shareholders ’ equity	$	986,303		$	404,629	$	(553,015	)	$	837,917

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the

Thirteen Weeks Ended August 30, 2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	185,088		$	70,676		$	–		$	255,764
Franchise revenue		10			883			–			893
Total revenue		185,098			71,559			–			256,657
Operating costs and expenses:
Cost of goods sold		52,182			20,008			–			72,190
Payroll and related costs		63,575			27,032			–			90,607
Other restaurant operating costs		40,976			16,387			–			57,363
Depreciation and amortization		8,088			3,141			–			11,229
Selling, general, and administrative		19,386			12,199			–			31,585
Intercompany selling, general, and
administrative allocations		10,363			( 10,363	)		–			–
Closures and impairments, net		1 6,584			1 3,608			–			30,192
Equity in losses of subsidiaries		9,032			–			(9,032	)		–
Interest expense, net		4,582			295			–			4,877
Intercompany interest expense/(income)		2,953			( 2,953	)		–			–
Total operating costs and expenses		22 7,721			79,354			(9,032	)		298,043
Loss before income taxes		( 42,623	)		(7,795	)		9,032			( 41,386	)
(Benefit)/provision for income taxes		( 2,931	)		1,237			–			( 1,694	)
Net loss	$	( 39,692	)	$	(9,032	)	$	9,032		$	( 39,692	)
Other comprehensive income:
Pension liability reclassification		355			–			–			355
Total comprehensive loss	$	( 39,337	)	$	(9,032	)	$	9,032		$	( 39,337	)

Condensed Consolidating Statement of Operations and

Comprehensive Loss

For the

Thirteen Weeks Ended September 1, 2015

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Revenue:
Restaurant sales and operating revenue	$	201,416		$	76,491		$	–		$	277,907
Franchise revenue		15			1,558			–			1,573
Total revenue		201,431			78,049			–			279,480
Operating costs and expenses:
Cost of goods sold		55,228			21,013			–			76,241
Payroll and related costs		67,341			27,994			–			95,335
Other restaurant operating costs		45,202			17,005			–			62,207
Depreciation and amortization		9,127			3,679			–			12,806
Selling, general, and administrative		20,589			8,807			–			29,396
Intercompany selling, general, and
administrative allocations		11,126			( 11,126	)		–			–
Closures and impairments, net		2,589			123			–			2,712
Equity in earnings of subsidiaries		( 11,966	)		–			11,966			–
Interest expense, net		4,598			1,402			–			6,000
Intercompany interest expense/(income)		2,975			( 2,975	)		–			–
Total operating costs and expenses		206,809			65,922			11,966			284,697
(Loss)/income before income taxes		( 5,378	)		12,127			( 11,966	)		( 5,217	)
(Benefit)/provision for income taxes		( 1,184	)		161			–			( 1,023	)
Net (loss)/income	$	( 4,194	)	$	11,966		$	( 11,966	)	$	( 4,194	)
Other comprehensive loss:
Pension liability reclassification, net of tax		( 44	)		–			–			( 44	)
Total comprehensive (loss)/income	$	( 4,238	)	$	11,966		$	( 11,966	)	$	( 4,238	)

Condensed Consolidating Statement of Cash Flows

For the

Thirteen Weeks Ended August 30, 2016

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities	$	4,204		$	9,280		$	( 11,877	)	$	1, 607
Investing activities:
Purchases of property and equipment		(4,992	)		(1,366	)		–			( 6,358	)
Proceeds from disposal of assets		5,257			–			–			5,257
Other, net		1,322			–			–			1,322
Net cash provided/(used) by investing activities		1,587			(1,366	)		–			221
Financing activities:
Principal payments on long-term debt		11			(486	)		–			( 475	)
Stock repurchases		( 26	)		–			–			( 26	)
Payments for debt issuance costs		( 7	)		–			–			( 7	)
Intercompany dividend		–			(7,415	)		7,415			–
Other intercompany transactions		(4,462	)		–			4,462			–
Net cash used by financing activities		(4,484	)		(7,901	)		11,877			( 508	)
In crease in cash and cash equivalents		1,307			13			–			1,320
Cash and cash equivalents:
Beginning of fiscal year		67,208			133			–			67,341
End of quarter	$	68,515		$	146		$	–		$	6 8,661

Consolidating Statement of Cash Flows

For the

Thirteen Weeks Ended September 1, 2015

(In thousands)

	Parent			Guarantors			Eliminations			Consolidated
Net cash (used)/provided by operating activities	$	(6,213	)	$	22,659		$	(18,917	)	$	(2,471	)
Investing activities:
Purchases of property and equipment		( 7,138	)		( 2,804	)		–			( 9,942	)
Proceeds from disposal of assets		2,746			–			–			2,746
Other, net		209			–			–			209
Net cash used by investing activities		( 4,183	)		( 2,804	)		–			( 6,987	)
Financing activities:
Principal payments on long-term debt		11			( 8,912	)		–			( 8,901	)
Stock repurchases		( 9	)		–			–			( 9	)
Payments for debt issuance costs		( 25	)		–			–			( 25	)
Intercompany dividend		–			(10,946	)		10,946			–
Other intercompany transactions		(7,971	)		–			7,971			–
Net cash used by financing activities		(7,994	)		( 19,858	)		18,917			( 8,935	)
D ecrease in cash and cash equivalents		(18,390	)		( 3	)		–			(18,393	)
Cash and cash equivalents:
Beginning of fiscal year		75,034			297			–			75,331
End of quarter	$	56,644		$	294		$	–		$	56,938