Note 4 - Accounts and Other Receivables

3 Months Ended

Aug. 30, 2016

Notes to Financial Statements

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

4. Accounts and Other Receivables

Accounts and other receivables consist of the following (in thousands):

	August 30, 2016		May 31, 2016
Amounts due from franchisees	$	3,318	$	3,013
Third-party gift card sales		925		1,272
Rebates receivable		819		1,001
Receivables from sales of Lime Fresh Mexican Grill assets		140		5,289
Other receivables		1, 906		2,252
	$	7,108	$	12,827

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

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

As of August 30, 2016 and May 31, 2016, other receivables consisted primarily of amounts due from our distributor, online ordering, sales and other miscellaneous tax refunds, and other receivables.

Sale

s

of Lime Fresh Mexican Grill

Assets

On May 31, 2016, we entered into agreements with two separate buyers to sell various Lime Fresh

Mexican Grill assets. Pursuant to the terms of an asset purchase agreement with another restaurant company, we agreed to sell our eight remaining Lime Fresh Mexican Grill Company-owned restaurants for $6.0 million. Given that closing requirements were satisfied for only six of the eight restaurants, an amendment was agreed upon which allowed for the payment of $5.0 million upon the transfer of the six restaurants and the holdback of $1.0 million until such time that both of the remaining two restaurants had closed and transferred to the buyer. The six restaurants closed and were transferred on May 31, 2016. While one of the two remaining restaurants was sold and transferred to the buyer on June 14, 2016, the final restaurant is expected to remain open and be operated by Ruby Tuesday until a date in our second quarter of fiscal year 2017.

The $5.3 million of receivables from sales of Lime Fresh assets

included in the table above as of May 31, 2016 consists of $5.0 million due from the buyer of our Lime Fresh restaurants, which was collected on the first day of fiscal year 2017, and $0.3 million due from the buyer of the Lime Fresh brand, of which $0.1 million remains outstanding. Given that the closing requirements were not satisfied on the two remaining restaurants as of August 30, 2016, we did not reflect those restaurants as having been sold during the 13 weeks ended August 30, 2016, nor we did accrue as a receivable the $1.0 million holdback.