FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter ended July 3, 2002
Commission File No. 0-10943
RYAN'S FAMILY STEAK HOUSES, INC.
(Exact name of registrant as specified in its charter)
South Carolina No. 57-0657895
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
405 Lancaster Avenue (29650)
P. O. Box 100
Greer, South Carolina 29652
(Address of principal executive
offices, including zip code)
864-879-1000
(Registrant's telephone number, including area code)
------------------------------------------------------------
-----------
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 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 ________
At July 3, 2002, there were 43,510,000 shares outstanding of
the registrant's common stock, par value $1.00 per share.
RYAN'S FAMILY STEAK HOUSES, INC.
TABLE OF CONTENTS PAGE NO.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Earnings (Unaudited) -
Quarters Ended July 3, 2002 and July 4, 2001 3
Consolidated Statements of Earnings (Unaudited) -
Six Months Ended July 3, 2002 and July 4, 20014
Consolidated Balance Sheets -
July 3, 2002 (Unaudited) and January 2, 2002 5
Consolidated Statements of Cash Flows (Unaudited) -
Six Months Ended July 3, 2002 and July 4, 20016
Consolidated Statements of Shareholders' Equity
(Unaudited) -
Six Months Ended July 3, 2002 and July 4, 20017
Notes to Consolidated Financial Statements
(Unaudited) 8 - 9
Item 2.Management's Discussion and Analysis of Financial
Condition
and Results of Operations 10 - 13
Item 3.Quantitative And Qualitative Disclosures About
Market Risk 13
Forward-Looking Information 14
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
15
Item 6. Exhibits and Reports on Form 8-K
15
SIGNATURES 16
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
Quarter Ended
July 3, July 4,
2002 2001
Restaurant sales $201,027 192,606
Operating expenses:
Food and beverage 71,480 70,116
Payroll and benefits 60,952 57,143
Depreciation 7,351 7,266
Other operating expenses 26,089 26,245
Total operating expenses 165,872 160,770
Operating profit 35,155 31,836
General and administrative expenses 9,578 9,338
Interest expense 2,326 3,360
Revenues from franchised restaurants (463) (325)
Other income, net (530) (591)
Earnings before income taxes 24,244 20,054
Income taxes 8,818 7,220
Net earnings $ 15,426 12,834
Net earnings per common share:
Basic $ .35 .28
Diluted .34 .27
Weighted-average shares:
Basic 43,733 45,507
Diluted 45,977 46,958
See accompanying notes to consolidated financial statements.
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
Six Months Ended
July 3, July 4,
2002 2001
Restaurant sales $394,597 376,502
Operating expenses:
Food and beverage 142,202 138,199
Payroll and benefits 119,278 112,190
Depreciation 14,703 14,320
Other operating expenses 52,377 51,611
Total operating expenses 328,560 316,320
Operating profit 66,037 60,182
General and administrative expenses 18,787 18,602
Interest expense 4,601 6,726
Revenues from franchised restaurants (895) (675)
Other income, net (1,671) (1,369)
Earnings before income taxes 45,215 36,898
Income taxes 16,368 13,283
Net earnings $ 28,847 23,615
Net earnings per common share:
Basic $ .65 .51
Diluted .62 .50
Weighted-average shares:
Basic 44,284 46,050
Diluted 46,557 47,198
See accompanying notes to consolidated financial statements.
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
July 3, January 2,
2002 2002
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 10,833 13,323
Receivables 4,512 4,806
Inventories 4,726 5,091
Deferred income taxes 5,048 5,048
Prepaid expenses 2,267 816
Total current assets 27,386 29,084
Property and equipment:
Land and improvements 134,836 132,074
Buildings 388,937 379,254
Equipment 216,243 207,150
Construction in progress 42,693 38,145
782,709 756,623
Less accumulated depreciation 219,935 209,514
Net property and equipment 562,774 547,109
Other assets 7,478 6,936
$597,638 583,129
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 12,813 13,472
Income taxes payable 6,422 3,238
Accrued liabilities 39,616 36,333
Total current liabilities 58,851 53,043
Long-term debt 195,000 178,000
Deferred income taxes 31,583 31,419
Other long-term liabilities 4,679 3,913
Total liabilities 290,113 266,375
Shareholders' equity:
Common stock of $1.00 par value; authorized
100,000,000 shares; issued 43,510,000 in
2002 and 45,816,000 shares in 2001 43,510 45,816
Additional paid-in capital 1,686 5,042
Retained earnings 262,329 265,896
Total shareholders' equity 307,525 316,754
Commitments
$597,638 583,129
See accompanying notes to consolidated financial statements.
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
July 3, July 4,
2002 2001
Cash flows from operating activities:
Net earnings $ 28,847 23,615
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 15,385 15,147
Gain on sale of property and equipment (8)
(74)
Tax benefit related to stock options exercised 1,686
1,104
Decrease (increase) in:
Receivables 294 (1,523)
Inventories 365 49
Prepaid expenses (1,451) (474)
Other assets (681) (347)
Increase (decrease) in:
Accounts payable (659) 6,283
Income taxes payable 1,498 5,570
Accrued liabilities 3,283 3,674
Deferred income taxes 164 133
Other long-term liabilities 766 565
Net cash provided by operating activities 49,489
53,722
Cash flows from investing activities:
Proceeds from sale of property and equipment 3,697
612
Capital expenditures (34,600) (29,182)
Net cash used in investing activities (30,903)
(28,570)
Cash flows from financing activities:
Net borrowings from revolving credit facility 17,000
-
Proceeds from stock options exercised 4,438 2,904
Purchases of common stock (42,514) (11,883)
Net cash used in financing activities (21,076)
(8,979)
Increase (decrease) in cash and cash equivalents (2,490)
16,173
Cash and cash equivalents - beginning of period 13,323
2,098
Cash and cash equivalents - end of period $ 10,833
18,271
See accompanying notes to consolidated financial statements.
RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)
I. For the Six Months ended July 3, 2002
$1 Par Value Additional
Common Paid-In Retained
Stock Capital Earnings Total
Balances at January 2, 2002 $45,816 5,042 265,896 316,754
Net earnings - - 28,847 28,847
Issuance of common stock
under stock option plans 525 2,227 - 2,752
Tax benefit from exercise of
non-qualified stock options - 1,686 - 1,686
Purchases of common stock (2,831) (7,269) (32,414) (42,514)
Balances at July 3, 2002 $43,510 1,686 262,329 307,525
II. For the Six Months ended July 4, 2001
$1 Par Value Additional
Common Paid-In Retained
Stock Capital Earnings Total
Balances at January 3, 2001 $46,788 - 235,641 282,429
Net earnings - - 23,615 23,615
Issuance of common stock
under stock option plans 591 1,209 - 1,800
Tax benefit from exercise of
non-qualified stock options - 1,104 - 1,104
Purchases of common stock (1,706) (1,080) (9,097) (11,883)
Balances at July 4, 2001 $45,673 1,233 250,159 297,065
See accompanying notes to consolidated financial statements.
RYAN'S FAMILY STEAK HOUSES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 3, 2002
(Unaudited)
Note 1. Description of Business
Ryan's Family Steak Houses, Inc. operates a single-concept
restaurant chain consisting of 316 Company-owned and 22
franchised restaurants located principally in the southern
and midwestern United States. The Company, organized in
1977, opened its first restaurant in 1978 and completed its
initial public offering in 1982. The Company does not
operate or franchise any international units.
Note 2. Basis of Presentation
The consolidated financial statements include the financial
statements of Ryan's Family Steak Houses, Inc. and its
wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States of America for
interim financial information and the instructions to Form
10-Q and do not include all of the information and footnotes
required by accounting principles generally accepted in the
United States of America for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Consolidated operating
results for the six months ended July 3, 2002 are not
necessarily indicative of the results that may be expected
for the fiscal year ending January 1, 2003. For further
information, refer to the consolidated financial statements
and footnotes included in the Company's annual report on
Form 10-K for the fiscal year ended January 2, 2002.
Note 3. Relevant New Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations," and SFAS No. 142,
"Goodwill and Other Intangible Assets." Under the new
rules, goodwill and other intangible assets with indefinite
lives are no longer amortized but are reviewed annually for
impairment. Separable intangible assets that are not deemed
to have an indefinite life will continue to be amortized
over their useful lives. The Company applied these new
accounting rules on January 3, 2002 and believes that their
application did not materially impact the accompanying 2002
financial statements.
The FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations" in June 2001. SFAS No. 143 applies
to legal obligations associated with the retirement of
certain tangible long-lived assets. This statement is
effective for fiscal years beginning after June 15, 2002.
Accordingly, the Company will adopt this statement on
January 2, 2003. The Company believes the adoption of SFAS
143 will not have a material impact on its financial
statements.
In August 2001, the FASB issued SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets." This
statement addresses financial accounting and reporting for
the impairment of disposal of long-lived assets and
supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001 and interim periods within those
fiscal years. The Company adopted the Statement effective
January 3, 2002 with no impact on its 2002 results.
Note 4. Stock Split
On May 1, 2002, Ryan's board of directors approved a 3-for-2
stock split of the Company's common shares in the form of a
50% stock dividend. Accordingly, shareholders of record on
May 15, 2002 received an additional common share for every
two shares they held. The additional shares were
distributed on May 29, 2002. All share and per share
amounts in the accompanying financial statements have been
restated to reflect the stock split.
Note 5. Reclassifications
Certain prior year amounts in the accompanying consolidated
financial statements have been reclassified to conform to
the 2002 presentation. These reclassifications did not
affect the prior year's net income or stockholders' equity.
Note 6. Subsequent Event
On July 22, 2002 at a Special Meeting of Shareholders, the
Company's shareholders approved the 2002 Stock Option Plan
under which 3,600,000 shares of the Company's common stock
were made available for future stock option grants.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Quarter ended July 3, 2002 versus July 4, 2001
Restaurant sales during the second quarter of 2002 increased
by 4.4% over the comparable quarter of 2001. Average unit
growth, based on the average number of restaurants in
operation, amounted to 2.6% for the quarter. Average unit
sales ("AUS"), or the average weekly sales volume per unit,
for all stores (including newly opened restaurants)
increased by 2.1%. Same-store sales increased by 0.7% for
the quarter compared to a 0.4% increase for 2001. The
Company calculates same-store sales using AUS in units that
have been open for at least 18 months and operating during
comparable weeks during the current and prior years. Same-
store sales in 2002 were favorably affected by new product
introductions and menu price increases, but trended downward
during the quarter, declining from +1.8% in April to -0.1%
in June. All store formats, including Display Cooking (see
"Liquidity and Capital Resources") were affected by the
decline. In addition, first-year Display Cooking
conversions showed average sales increases ranging from 3%
to 5% during the quarter compared to management's expected
increases of approximately 15% and a first quarter 2002 peak
of +10%. Based on continued high sales volumes at new
Display Cooking restaurants, management continues to believe
that Display Cooking has consumer appeal and that current
sales trends can be improved with better store-level
execution and training.
Total costs and expenses of Company-owned restaurants
include food and beverage, payroll, payroll taxes and
employee benefits, depreciation, repairs, maintenance,
utilities, supplies, advertising, insurance, property taxes
and licenses. Such costs, as a percentage of sales, were
82.5% during the second quarter of 2002 compared to 83.5% in
2001. Food and beverage costs decreased to 35.6% of sales
in 2002 from 36.4% of sales in 2001 due to lower beef,
seafood, and pork costs combined with menu price increases,
partially offset by higher potato, soybean-oil products and
distribution costs. Payroll and benefits increased to 30.3%
of sales in 2002 from 29.7% of sales in 2001 due principally
to higher manager pay and workers' compensation costs.
Manager pay increased as a result of improved retention and
higher performance bonuses, and workers' compensation costs
increased due to higher projected per claim costs. All
other operating costs, including depreciation, decreased to
16.6% of sales in 2002 from 17.4% in 2001 due principally to
lower natural gas and store closing costs in 2002. Based on
these factors, the Company's operating profit increased by
1.0% of sales to 17.5% of sales in 2002 from 16.5% of sales
in 2001.
General and administrative expenses remained flat at 4.8% of
sales in both 2002 and 2001.
Interest expense for the second quarters of 2002 and 2001
amounted to 1.2% and 1.7% of sales, respectively. The
effective average interest rate decreased to 5.5% during the
second quarter of 2002 from 7.9% in 2001, resulting from a
favorable interest rate environment. At July 3, 2002,
approximately 62% of the Company's outstanding debt was
variable-rate debt with interest rates based generally on
the London Interbank Offered Rate ("LIBOR"). Based on
current LIBOR rates management believes that the effective
interest rate comparisons will remain favorable at least
through the third quarter of 2002.
An effective income tax rate of 36.4% was used for the
second quarter of 2002 compared to 36.0% for the second
quarter of 2001 due to management's revised projection of
overall 2002 income tax expense.
Net earnings for the second quarter amounted to $15.4
million in 2002 compared to $12.8 million in 2001. Weighted-
average shares (diluted) decreased 2.1% resulting from the
Company's stock repurchase program (see "Liquidity and
Capital Resources"). Accordingly, earnings per share
(diluted) increased by 25.9% to 34 cents in 2002 compared to
27 cents in 2001.
Six months ended July 3, 2002 versus July 4, 2001
For the six months ended July 3, 2002, restaurant sales were
up 4.8% compared to the same period in 2001. Principal
factors affecting the 2002 sales growth include 2.9% unit
growth of Company-owned restaurants and a 2.1% increase in
all-store AUS. Same-store AUS for the first six months of
2002 increased by 0.7%.
Six-month costs and expenses as detailed above were 83.3%
and 84.0% of sales for 2002 and 2001, respectively. During
the first six months of 2002, costs and expenses were most
affected by lower food and beverage costs (down 0.7% of
sales) resulting from lower beef, seafood, dairy and pork
costs. Payroll and benefits increased 0.4% of sales to
30.2% of sales for 2002 from 29.8% for 2001 due to higher
manager pay and workers' compensation costs, partially
offset by lower medical expense. All other operating costs,
including depreciation, decreased by 0.5% of sales due to
lower natural gas and store closing costs. Based on these
factors, the Company's operating margin at the restaurant
level amounted to 16.7% of sales for the first six months of
2002 compared to 16.0% of sales in 2001.
General and administrative expenses decreased by 0.2% of
sales for the first six months of 2002 due principally to
lower performance-based bonus costs. A reduction in the
average interest rate associated with the Company's
revolving credit facility (see "Liquidity and Capital
Resources") caused interest expense to decrease by 0.6% of
sales from the prior year.
Effective income tax rates of 36.2% and 36.0% were used for
the first six months of 2002 and 2001, respectively.
Net earnings for the first six months of 2002 amounted to
$28.8 million compared to $23.6 million in 2001. Weighted-
average shares (diluted) decreased 1.4% resulting from the
Company's stock repurchase program (see "Liquidity and
Capital Resources"). Accordingly, earnings per share
(diluted) increased by 24.0% to 62 cents in 2002 compared to
50 cents in 2001.
LIQUIDITY AND CAPITAL RESOURCES
The Company's restaurant sales are primarily derived from
cash. Inventories are purchased on credit and are rapidly
converted to cash, generally prior to the payment of the
related vendors' invoices. Therefore, the Company does not
maintain significant receivables or inventories, and other
working capital requirements for operations are not
significant. Cash balances in excess of immediate
disbursement requirements are typically used for non-current
uses, such as capital expenditures, repayment of long-term
debt or share repurchases. Accordingly, the Company
operates with a working capital deficit, which is managed
through the utilization of a significant and predictable
cash flow from restaurant sales and available credit under a
revolving credit facility.
At July 3, 2002, the Company's working capital deficit
amounted to $31.5 million compared to a $24.0 million
deficit at January 2, 2002. Management does not anticipate
any adverse effects from the current working capital deficit
due to (i) cash flow provided by operations, which amounted
to $49.5 million for the first six months of 2002 and $84.9
million for the year ended January 2, 2002, and (ii)
approximately $69 million in funds available under a
revolving credit facility.
Total capital expenditures for the first six months of 2002
amounted to $34.6 million. The Company opened eight Ryan's
restaurants during the first six months of 2002, including
three relocations, and closed five restaurants, including
three due to relocation. Management defines a relocation as
a restaurant opened within 18 months after closing another
restaurant in the same marketing area. A relocation
represents a redeployment of assets within a market. For
the remainder of 2002, the Company plans to build and open
11 new restaurants, including three relocations. All new
restaurants will open with Ryan's Display Cooking format.
This format was introduced in 2000 and involves a glass-
enclosed grill and cooking area that extends into the dining
room. A variety of meats are grilled daily and available to
customers as part of the buffet price. Customers go the
grill and can get hot, cooked-to-order steak, chicken or
other grilled items placed directly from the grill onto
their plate. Management intends to remodel approximately 35
restaurants during 2002 with the Display Cooking format.
Total 2002 capital expenditures are estimated at $73
million. The Company is currently concentrating its efforts
on Company-owned Ryan's restaurants and is not actively
pursuing any additional franchised locations, either
domestically or internationally.
The Company began a stock repurchase program in March 1996
and is currently authorized to repurchase up to 55 million
shares of the Company's common stock through December 2005.
Repurchases may be made from time to time on the open market
or in privately negotiated transactions in accordance with
applicable securities regulations, depending on market
conditions, share price and other factors. During the first
six months of 2002, the Company purchased 2,825,100 shares
at an aggregate cost of $42.5 million. Through July 3,
2002, approximately 40.8 million shares, or 51% of total
shares available at the beginning of the repurchase program,
had been purchased at an aggregate cost of $286.7 million.
The Company purchased an additional 299,400 shares since
July 3, 2002 at an aggregate cost of $3.5 million. The
Company completed substantially all of its 2002 share
repurchase plan during the first six months of 2002, but may
repurchase an additional $2.0 million to $4.0 million of its
common stock during the remainder of the year if management
believes that the share price is at an attractive level,
subject to the continued availability of capital, the
limitations imposed by the Company's current credit
agreements, applicable securities regulations and the other
factors described in "Forward-Looking Information". The
Company is currently prohibited from repurchasing stock
after 2002 by the terms of its revolving credit facility.
Management is currently discussing potential revisions to
this covenant with its lenders.
At July 3, 2002, the Company's outstanding debt consisted of
$75 million of 9.02% senior notes and a $200 million
revolving credit facility of which $120 million was
outstanding at that date. As noted above, after allowances
for letters of credit and other items, there was
approximately $69 million in funds available under the
revolving credit facility. The Company's ability to draw on
these funds may be limited by restrictions in the agreements
governing both the senior notes and the revolving credit
facility. Management believes that, based on its current
plans, these restrictions will not impair the Company's
operations during 2002.
Management believes that its current capital structure is
sufficient to meet its 2002 requirements. The Company has
entered into interest rate hedging transactions in the past,
and although no such agreements are currently outstanding,
management intends to continue monitoring the interest rate
environment and may enter into such transactions in the
future if deemed advantageous.
CRITICAL ACCOUNTING POLICIES
Critical accounting policies are defined as those that have
significant impact on the Company's financial statements and
involve difficult or subjective estimates of future events
by management. Management's estimates could differ
significantly from actual results, leading to possible
significant adjustments to future financial results.
Management believes that the Company's policy regarding
asset impairment is the Company's sole critical accounting
policy. This policy generally applies to the recoverability
of a restaurant's carrying amount. For restaurants that
will continue to be operated, the carrying amount is
compared to the undiscounted future cash flows, including
proceeds from future disposal, of the restaurant. The
estimate of future cash flows is based on management's
review of historical and current sales and cost trends of
both the subject and similar restaurants. The estimate of
proceeds from future disposal is based on management's
knowledge of current and planned development near the
restaurant site and on current market transactions. If the
carrying amount is not recoverable, or less than the sum of
the undiscounted future cash flows, the carrying value is
reduced to the restaurant's current fair value less costs to
sell ("Current Market Proceeds"). The estimate of Current
Market Proceeds is based on current market transactions for
similar restaurants. If the decision has been made to close
a restaurant, the carrying value of that restaurant is
reduced to its Current Market Proceeds.
IMPACT OF INFLATION
The Company's operating costs that may be affected by
inflation consist principally of food, payroll and utility
costs. A significant number of the Company's restaurant
team members are paid at the Federal minimum wage and
accordingly, legislated changes to the minimum wage affect
the Company's payroll costs. Although no minimum wage
increases have been signed into law, legislation proposing
to increase the minimum wage by $1.50 to $6.65 per hour was
introduced In the U.S. Senate in May 2002. This proposed
legislation would increase the minimum wage in several
increments with the $6.65 rate being in place at January 1,
2004. The Company is typically able to increase menu prices
to cover most of the payroll rate increases.
The Company considers its current price structure to be very
competitive. This factor, among others, is considered by
the Company when passing cost increases on to its customers.
Annual menu price increases during the last five years have
generally ranged from 2% to 4%.
Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Company's exposure to market risk relates primarily to
changes in interest rates. Foreign currencies are not used
in the Company's operations, and approximately 90% of the
commodities used in the preparation of food at the Company's
restaurants are not under purchase contract for more than
one year in advance.
The Company is exposed to interest rate risk on its variable-
rate debt, which is composed entirely of outstanding debt
under the Company's revolving credit facility (see
"Liquidity and Capital Resources"). At July 3, 2002, there
was $120 million in outstanding debt under this facility.
Interest rates for the facility generally change in response
to LIBOR. Management estimates that a one-percent change in
interest rates throughout the quarter ended July 3, 2002
would have impacted interest expense by approximately
$248,000 and net earnings by $159,000.
While the Company has entered into interest rate derivative
agreements in the past, there were no such agreements
outstanding as of July 3, 2002. The Company does not enter
into financial instrument agreements for trading or
speculative purposes.
FORWARD-LOOKING INFORMATION
In accordance with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Company
cautions that the statements in this annual report and
elsewhere that are forward-looking involve risks and
uncertainties that may impact the Company's actual results
of operations. All statements other than statements of
historical fact that address activities, events or
developments that the Company expects or anticipates will or
may occur in the future, including such things as deadlines
for completing projects, expected financial results,
expected regulatory environment and other such matters, are
forward-looking statements. The words "estimates", "plans",
"anticipates", "expects", "intends", "believes" and similar
expressions are intended to identify forward-looking
statements. All forward-looking information reflects the
Company's best judgment based on current information.
However, there can be no assurance that other factors will
not affect the accuracy of such information. While it is
not possible to identify all factors, the following could
cause actual results to differ materially from expectations:
general economic conditions including consumer confidence
levels; competition; developments affecting the public's
perception of buffet-style restaurants; real estate
availability; food and labor supply costs; food and labor
availability; weather fluctuations; interest rate
fluctuations; stock market conditions; political
environment; and other risks and factors described from time
to time in the Company's reports filed with the Securities
and Exchange Commission, including the Company's annual
report on Form 10-K for the fiscal year ended January 2,
2002. The ability of the Company to open new restaurants
depends upon a number of factors, including its ability to
find suitable locations and negotiate acceptable land
acquisition and construction contracts, its ability to
attract and retain sufficient numbers of restaurant managers
and team members, and the availability of reasonably priced
capital. The extent of the Company's stock repurchase
program during 2002 and future years depends upon the
financial performance of the Company's restaurants, the
investment required to open new restaurants, share price,
the availability of reasonably priced capital, the financial
covenants contained in the Company's loan agreements that
govern the senior notes and the revolving credit facility,
and the maximum debt and share repurchase levels authorized
by the Company's Board of Directors.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The following table summarizes the results of the
shareholder votes cast at the Annual Meeting of Shareholders held
on May 1, 2002 (all votes, as adjusted for the stock split
effected May 15, 2002, are in thousands):
Broker-
For Against Withheld Abstain Nonvotes
(i) Election of Directors:
C. D. Way 30,507 n/a 9,827 n/a n/a
G. E. McCranie 40,044 n/a 290 n/a n/a
B. L. Edwards 40,043 n/a 290 n/a n/a
J. M. Shoemaker,Jr.39,777 n/a 552 n/a n/a
H. K. Roberts,Jr.40,043 n/a 291 n/a n/a
J. D. Cockman 40,040 n/a 294 n/a n/a
B. S. MacKenzie 40,044 n/a 290 n/a n/a
(ii) Approval of
2002 Stock
Option Plan 16,770 18,039 n/a 87 5,438
(iii) Ratify the
appointment
of KPMG LLP
for fiscal
2003 40,050 251 n/a 33 n/a
(b) The following table summarizes the results of the
shareholder votes cast at a Special Meeting of Shareholders held
on July 22, 2002 (all votes are in thousands):
Broker-
For Against Withheld Abstain Nonvotes
Approval of 2002
Stock Option Plan 17,156 9,309 n/a 80 10,905
Item 6. Exhibits and Reports on Form 8-K.
(a) None.
(b) On May 1, 2002, the Company filed a report on Form 8-K
regarding the Board of Directors' approval of a 3-for-2 stock
split.
SIGNATURES
Pursuant to the requirements 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.
RYAN'S FAMILY STEAK HOUSES, INC.
(Registrant)
August 19, 2002 /s/Charles D. Way
Charles D. Way
Chairman, President and Chief
Executive Officer
August 19, 2002 /s/Fred T. Grant, Jr.
Fred T. Grant, Jr.
Senior Vice President-Finance and
Treasurer
August 19, 2002 /s/Richard D. Sieradzki
Richard D. Sieradzki
Controller