HEATHROW Fla. Ruth's Hospitality Group Inc. trimmed its losses in the fourth quarter on reduced charges and cost cutting, but sales remained slow at its upper-end restaurants.
Ruth's reported a net loss of $2.7 million, or 11 cents per share, in the Dec. 27-ended quarter, compared with a loss of $60.6 million loss, or $2.59 a share, a year ago, when it booked more than $90 million in impairment and restructuring charges. Excluding charges, Ruth's said it would have earned 11 cents a share in its latest quarter, compared with 4 cents a share a year ago.
Fourth-quarter revenue fell 9.9 percent, to $87.4 million. Sales at company-owned restaurants fell 10.5 percent, to $83.8 million from $93.5 million, while franchise income rose slightly.
Same-store sales fell 11.2 percent at company-owned Ruth’s Chris Steak House units and declined 2.5 percent at its company-owned Mitchell’s Fish Market locations.
For the full fiscal year, Ruth’s reported net income of $2.4 million, or 10 cents per share, compared with a loss of $53.9 million, or $2.31 per share, for 2008. Annual revenue declined 12.5 percent, to $344.6 million.
Michael P. O'Donnell, Ruth’s Hospitality’s president and chief executive, said, the company is benefiting from favorable beef prices, cost savings and reduced interest expense from lower debt levels.
In the past week, Ruth’s Hospitality said it completed several transactions to pay down its debt, including the private placement of $25 million of convertible preferred stock to affiliates of Bruckmann, Rosser, Sherrill & Co. Management LP. The company also closed on the sale of 10.1 million shares of common stock for $25.4 million.
Ruth's used the proceeds from the transactions and cash to pay down $44.3 million of debt under its existing credit line. The company has about $78.8 million in outstanding debt, it reported.
“Over the past 18 months, our priorities have centered on expense management and balance sheet improvement and given our recent progress, we are now focused on re-energizing sales," O'Donnell said. "Ultimately, we have two great brands in our portfolio, experienced management in place, and with some stability in the economy, we look forward to continuing our progress in 2010.”
Also Friday, Ruth’s announced two senior-level promotions: Kevin Toomy will assume the role of president and chief operating officer of Ruth’s Chris Steak House, and Samuel Tancredi will serve as president and chief operating officer of Mitchell’s Fish Market. Both had been senior vice presidents of those divisions.
Ruth's Hospitality Group owns or franchises more than 150 restaurants under the banners of Ruth’s Chris Steak House, Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse.
Contact Ron Ruggless at [email protected].