Ruby Tuesday founder holds his final annual meeting as company chief
By Robert Norris | (email@example.com)
Ruby Tuesday was tinted blue Wednesday as Sandy Beall conducted his final annual meeting as president and CEO of the company he founded.
He had announced in June — 40 years after opening the first Ruby Tuesday restaurant on the Cumberland Avenue Strip in Knoxville with four college buddies — that he would step down this year.
Beall’s meeting finale was conducted at the Ruby Tuesday Inc. headquarters on Church Avenue in downtown Maryville.
“I’m not sad about leaving. I’m ecstatic, not just for me but for the company. Because a company isn’t about a person. ... A company is about the culture and the people that make it up,” Beall said.
“I feel as though I’m leaving it in pretty good shape and there is tremendous opportunity for all our great team members and executives and everybody else who is staying. I’m excited about the future and I still have massive amounts of shareholder interest that will always be there.”
Dr. Donald Ratajczak, a company director, presented a proclamation of appreciation to Beall that expressed the company’s and the Board of Directors’ “deepest and sincerest gratitude for the creation, growth and long-lasting success of our company. His legacy will be with us forever.”
It was announced that Jeff O’Neill and Lane Cardwell were elected as new members to the board, and Kevin Clayton was re-elected. Matthew Drapkin is assuming the chairman’s slot, and it is anticipated a new CEO will be selected by the end of the year.
Beall expressed appreciation for the support he received as he grew a single restaurant just off the University of Tennessee campus into an international chain of casual-dining establishments.
“I would like to thank all of our 36,000 team members, all the people who have helped, who have been through all the challenges of the last five years as we figured out how to make this brand stronger and how to keep it rolling for another 20, 30, hopefully 40 years and create value for all our shareholders. Ruby Tuesday has a lot of opportunity and it’s a solid brand,” Beall said.
Back to business
Getting down to financial matters, the company said its net income declined in the fiscal first quarter ended Sept. 4 on costs related to its search for a new CEO.
The operator of the Ruby Tuesday, Lime Fresh and Marlin & Ray’s chains said sales improved for the first time in seven quarters. It also reported more revenue from company-owned locations open at least a year.
On Wednesday, Ruby Tuesday Inc. shares lost 51 cents, or 7.3 percent, to $6.51 in after-hours trading.
Net income dropped to $2.6 million, or 4 cents per share, from $3.1 million, or 5 cents per share in the same period a year ago. Excluding one-time items, such as costs related to its search for a replacement for Beall, Ruby Tuesday made 5 cents per share. The company has closed dozens of restaurants over the last year, but revenue edged up 1 percent, to $332.9 million.
Analysts expected net income of 5 cents per share and $330.5 million in revenue, according to FactSet.
Revenue from company-owned restaurants open at least a year grew 1.9 percent. That same-restaurant sales figure excludes sales from locations that have opened or closed within the past 12 months, making it a key measurement of how the company’s restaurants are doing.
At the end of the quarter Ruby Tuesday had 712 company owned locations and 78 franchised stores in 45 states, the District of Columbia, Guam, and 12 foreign countries. It had 746 company owned and 95 franchised stores a year ago.
In fiscal 2013 Ruby Tuesday expects net income of 24 to 34 cents per share, excluding costs related to its CEO pension settlement and transition costs. Analysts forecast net income of 28 cents per share.
The Last Word
In a prepared statement, Beall expressed confidence in the company’s prospects as it enters its second quarter.
“We have good momentum as a company as many of the investments we made in the brand last year are beginning to pay off. Our sales are starting to stabilize, we are making steady progress on both of our new brands, and our capital structure has significant flexibility and capacity,” Beall said.
“All of these positive developments signal a momentum change and even though we anticipate continued economic headwinds, we are excited about our plans to create long-term value for our shareholders.”
The Associated Press contributed to this report.