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Ruby Tuesday, Inc. (NYSE:RT)

F1Q08 Earnings Call

October 10, 2007 5:00 pm ET

Executives

Marguerite N. Duffy - Chief Financial Officer, Senior Vice President

Sandy Beall - Chairman of the Board, President, Chief Executive Officer

Kimberly Grant - Executive Vice President of Operations

Mark Young - Senior Vice President - Marketing

Analysts

Robert Barrington

Bryan Elliot - Raymond James

Jeff Omohundro - Wachovia

Keith Siegner - Credit Suisse

Chris O'Cull - SunTrust Robinson Humphrey

Joe Fischer - Bear Stearns

Stephen Rees - J.P. Morgan

Conrad Lyon - FTN Midwest Securities

Fitzhugh Taylor - Banc of America

Operator

Good afternoon. My name is Molly and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Ruby Tuesday first quarter fiscal year 2008 earnings call. (Operator Instructions) I would now like to introduce Margie Duffy, Senior Vice President and Chief Financial Officer. Ms. Duffy, you may begin your conference.

Marguerite N. Duffy

Thank you, Molly and thanks to all of you for joining us this evening. I am Margie Duffy, Ruby Tuesday's Chief Financial Officer. With me today is Sandy Beall, Ruby Tuesday's Chairman and CEO. In addition, Kimberly Grant, our Executive Vice President of Operations, and Mark Young, our Senior Vice President of Marketing, are with us for the Q&A portion of the call.

I would like to remind you that there are likely to be forward-looking statements in our comments and refer you to the note regarding forward-looking information in our press release and most recently filed Form 10-K.

Our format today includes an overview of our first quarter fiscal 2008 financial results, information on our fiscal 2008 financial plans, and then an update on our plans and strategies. And at the conclusion of the call, we will have a question-and-answer session.

Before we get started, I would like to also announce that we are scheduled to release second quarter fiscal 2008 results after the market close on Wednesday, January 9th, and will host a conference call that same evening at 5:00 p.m.

I will take a few minutes to touch on our first quarter financial highlights and fiscal 2008 financial plans, then Sandy will update you on our business plans and initiatives.

As you saw in our release, we reported diluted earnings per share for the first quarter of $0.21. During the quarter, we expensed $4.5 million in costs associated with our remodel initiative, which resulted in a reduction of $0.05 per diluted share.

Now let me provide a little more detail on a few things on the income statement for the quarter. Revenue increased by 2.4%, driven by new restaurant growth, the acquisition of the 17 Orlando, Florida restaurants, and 11 South Florida restaurants in the first and third quarter of fiscal 2007, and 11 West Palm Beach restaurants in the first quarter of fiscal 2008, as well as stronger average restaurant volumes for the quarter from both our newer restaurants and remodeled restaurants, offsetting the decline in same-restaurant sales.

Restaurant level margins were 21.4%, which was lower than our expectations, due in part to our freestyle [ad] campaign, our maintenance of constant staffing levels in order to ensure a high level of service, as well as investments made for the rollout of our service excellence training program.

The other operating expense was higher than the prior year due to investments made in the current year. These investments include the following: additional costs for replacement of higher quality china, silver, and glassware, and higher quality linen-like napkins; higher rent due to increased leased restaurants, as the additional rent from leased restaurants was incurred from purchasing some of our Florida franchisees; additional spending on food safety initiatives, focused primarily on hand washing and sanitation, as well as external inspections to help ensure high levels of food safety and sanitation; higher repair and maintenance for smaller items outside the specific remodel project that’s being done at the restaurant level as the remodels are rolled to complete the new look.

We do expect these higher costs as a percent of sales to continue as long as sales are lower.

The higher interest expense was a result of share repurchases during the third and fourth quarter of fiscal 2007, as well as the first quarter of fiscal 2008. During the last three quarters, we have repurchased approximately 8.8 million shares at an average price of $27.74, or approximately 15% of our shares outstanding at the beginning of fiscal 2007.

Equity and earnings came in less than we expected, due to lower sales than projected and lower restaurant level margins due to labor and controllable investments, similar to company-owned restaurants.

SG&A came in lower than expected due to reduced expense for both stock compensation and support bonuses due to currently projected results. Depreciation came in pretty much as we had anticipated.

In looking at the balance sheet, we ended the quarter with total debt to EBITDA, including operating leases, guarantees and letters of credit at 3.5 times, up from 3.2 times in the fourth quarter, and we ended the quarter with total book debt of approximately $553 million.

Now let’s turn to fiscal year 2008. You saw in our press release that our guidance for fiscal 2008 is based on same-restaurant sales of down 3% to 5%. Our fiscal 2008 guidance for diluted earnings per share is $1.01 to $1.13, which reflects an estimated $0.18 to $0.20 per share impact for increased depreciation due to the acceleration of assets to be retired and depreciation on new assets associated with the remodeling of almost all company-owned restaurants in the fiscal year, as well as other small wares upgrades associated with the remodeling initiative. In addition, our updated guidance includes investments in food and labor associated with our compelling value promotion.

For the second quarter of fiscal 2008, we are targeting diluted earnings per share of $0.01 to $0.03, based on same-restaurant sales of down 6% to 8% and the food and labor investment. The second quarter diluted earnings per share includes an estimated $0.05 to $0.07 per share impact for costs related to the remodel initiative previously noted.

In addition, our annual guidance assumes 20 to 25 new company-owned restaurant openings, 20 to 25 new franchise-owned restaurant openings, $65 million to $75 million in normal capital expenditures, and $55 million to $65 million in capital expenditures for our company remodeling.

We anticipate we will finish fiscal 2008 with approximately $25 million to $35 million in positive free cash flow.

Now a little more color on margins for fiscal year 2008. We now expect our annual restaurant level margins versus the prior year to be down approximately 240 to 280 basis points, with second quarter lower by 360 to 390 basis points on lower-than-expected sales, an investment in sales, and quality initiatives, including food and labor.

We expect food costs to be 50 to 70 basis points higher for the fiscal year, due to investments in pricing and promotion that begin in the second quarter. We expect the second quarter food costs to be approximately 30 to 50 basis points higher than first quarter.

We expect labor to still be highest in the second quarter as we continue the rollout of our service excellence program and lap prior year minimum wage increases, in addition to the lost leverage on lower sales.

The other operating line should be higher in the second quarter as we lose leverage on sales. We expect that to be about 60 to 70 basis points higher in the second quarter than in the first quarter, and then come down later in the year.

In the second quarter, we also expect costs of approximately $500,000 to $600,000 in other operating costs related to upgraded small wares associated with the re-imaging program. This should be a non-recurring charge.

Effective with the start of our first quarter of fiscal 2008, we repurchased 11 restaurants from our West Palm Beach franchisee. We now have repurchased all of our Florida franchisees who represented the largest and most profitable of our 50% owned franchisees.

Based on similar sales and margin trends on the franchise side of the company, we are now projecting the equity and earnings line to be negative for the year by approximately $2 million.

We are still projecting depreciation expense for the year of $95 million to $100 million, which includes approximately $14 million to $16 million associated with the remodeling. We expect depreciation to be highest in the third quarter at approximately $26 million to $28 million. For the remaining quarters, we are projecting depreciation to be similar to the first quarter.

Since a large portion of our depreciation expense in fiscal 2008 is related to the remodel initiative, I wanted to note that we do expect our fiscal 2009 depreciation to be lower than fiscal 2008 and to be approximately $80 million to $85 million.

We are now projecting G&A for the year at $110 million to $120 million.

Based on current projections, the bonus and stock-based compensation expense has been decreased for the year. Stock-based compensation expense is estimated at $10 million to $11 million.

G&A is expected to be highest in the second quarter, based on advertising plans and to be approximately $32 million to $35 million. We project G&A to come down in the last two quarters of the year and to be lowest in the fourth quarter. Third quarter spending is expected to be in a similar range to first quarter.

We expect interest expense for the year to be approximately $30 million to $35 million.

Our tax rate for the first quarter was approximately 29.9%, which was lower than expected due primarily to tax credits, which had a greater impact on the lower pretax dollar. Looking at the balance of the year, we expect we’ll be lowest in the second quarter and then higher in the second half of the year.

The rate is expected to range from approximately 25% to 28% for the remainder of the fiscal year, with fluctuations by quarter.

Our expectation is that the rate would be towards the low end of the range in the second quarter and towards the higher end of the range for the third and fourth quarters.

From an equivalent shares perspective, we are modeling these in the 52 million to 53 million range for the year, and to remain fairly consistent each quarter.

Now, let me turn the call over to Sandy for an update on our strategies and initiatives.

Sandy Beall

Thanks, Margie and welcome, everyone. We all know it is a difficult industry environment and I won’t go in to all the big picture reasons why. What I want to do is talk today about what we believe is affecting our performance and more importantly, what we are doing in the short term as well as the long term to become stronger, stronger for the brand, sales, and to get profitability back up.

As you’ve seen, we didn’t perform in the first quarter and before going into detail, I want to just touch very, very briefly on our sales and some other sales trends. Margie mentioned the one-year performance for the quarter is down 4.8 and our franchise is down 2.9. On a two-year basis, we are down 5.3 and for our domestic franchisees, they were down 1.5. Not good, but worth noting.

Our weakest markets continue to be the Florida market, where we are getting killed. It is off about eight points in the first quarter, as well as the Gulf Coast and Washington, D.C. markets are weak also.

On a one-year and on a two-year basis, compared to Knapp Track trends and our primary competitors, our same-restaurant sales were turning pretty much at parity through April, and then fell behind in May. At that point, we hadn’t changed any of the menus, had no new programs, no advertising, and hadn’t begun really any of our remodels.

So the only thing that changed in addition to consumer softness at that time was that our direct -- was that the consumer softened and our direct competitors began heavy value advertising with price, which we didn’t do. The sales drop-off for us versus Knapp Track continued through the summer and then further declined in August.

So sales aren’t good -- what are we going to do about it? First and foremost, we’ve assessed the segment, we’ve assessed our performance, and we definitely believe that our strategies are the right strategies for the short-term and long-term.

Uncompromising freshness and quality, gracious hospitality, creating a fresh new look -- but we do see the importance and relevancy of adding one more key strategy, especially for these times, and it’s called compelling value.

We want to be thought of as a high quality casual dining restaurant by bringing simple, fresh, American dining alive, being the best of bar grill, and differentiating ourselves from bar grill competitors and operating at a quality casual dining level with a compelling value proposition.

We think this is more critical today than ever. Overall casual dining demand growth, as you all know, is below 5%. For the back half of the year, it is probably closer to 4%. The bar and grill segment is probably worse than casual, and the last three to four years haven’t been good for traffic or sales really for the segment overall, especially bar grill.

Future demand growth for our mature segment probably isn’t the most promising either. I would hope it will settle in for casual dining in that 5% to 6% range, bar grill again being a little bit less, I believe.

We have to address our current sales issue because that is what is driving our profitability down but even more critical is how we get back to consistently positive traffic, something we probably haven’t focused on enough so long as profits were good and sales were within reach. Positive traffic is what is key for the long term.

Considering the tough sales environment, this might appear to be the worst timing for investing in making our concept the best in bar grill and at a quality level consistent with high quality casual dining, as well as offering a compelling value proposition. Timing certainly isn’t working in our favor when it comes to transition our brand, but the positive is it’s making us -- these challenging times are making us review and challenge all we’ve done and need to do for the short term, but more importantly for the long term in becoming a stronger brand and stronger competitor.

Our focus is on uncompromising freshness and quality, gracious hospitality, fresh new look and compelling value. All these efforts will result in a concept -- are resulting in a concept now more grounded in the current than the past, more relevant with greater differentiation in a crowded marketplace.

We are in the last stages of our plan. Our food is much better than two years ago. Our staff’s image and service levels are also greatly improved. In this month, we are finishing up our first large group of remodels, approximately 300 restaurants will all be completed before the end of October, and over 400 by the end of December.

We also anticipate that the last full remodels, as well as about 150 partial remodels to get the full effect of the look and feel, will all be completed by the end of February. So all company restaurants will be remodeled with a fresh new look by the first of March.

We also believe most franchisees will have key elements of remodel in place in this timeframe also, so we will have a fresh new brand and be able to have a fresh new brand launch.

To compete more effectively for the short and long term, we feel we have to add our fourth strategy, which I mentioned earlier, compelling value -- not just value, but compelling value that is not just short-term but also long-term.

We are the smallest of the national chains in sales and more importantly, ad dollars. We not only have to do better but based on projected industry growth, we believe we will also have to invest more in our value proposition to grow traffic and sales in the current marketplace.

It’s especially important, compelling value is, as others increased advertising and promotion but it is also critical as we launch our fresh new brand, attracting people maybe who haven’t been to Ruby’s in a while to have, in addition to our improved food and service and new look, with the compelling value piece of the equation also.

We are definitely committed to our long-term strategies of brand position. Better food and service and a nicer place always works with the guests, and if you add better value, it should work even better.

We’ve invested heavily in food and service and image remodels. After two years, we are close to being finished. We believe our investment is in compelling value result and food cost of approximately 28% on an ongoing basis -- a major commitment to value and to rebuilding traffic and sales short and long term.

We believe there are five reasons why our sales are soft and why we are taking the actions I will describe in a few minutes. First, we are number four in size, top of mind in advertising dollars in bar grill segment and probably seventh, maybe eighth in casual dining. Being lower in top of mind makes it more difficult to attract guests, but where there is a lot of business for people to come in this segment, it is probably easier to get them. But we think it is also easier to lose them in a downturn when people are leaving the segment, or really focused on value.

Second, the economic situation and the pressure on consumer spending; we know we are losing some lower income guests. Some are responding to deals from our competitors, who are doing a good job advertising, with advertising promotion, but also many to fast food or just eating more at home. Look at the grocery store sales; they continue to increase compared to the prior year.

Third, since starting in the Spring, the competition has been advertising heavily, as I mentioned. Many, many value ads and we didn’t; a mistake, but we didn’t do that.

Fourth, critically important, we haven’t been competitive with value, advertising or promotion, as I just mentioned.

Fifth, small but worth mentioning, we have noticed that we do have a slight decline as we are remodeling stores of 1% before the sales bounce back upon remodeling completion, probably just because of more of the mess, the inconvenience during the remodeling, but it is definitely a lot better than closing during that time.

The key is -- is it our brand or is it operations or is it about value advertising promotion to the consumer? In reality, it is probably all of the above. Consider some facts: NPD, probably the most credible research company out there, performs annual brand studies on all casual dining restaurants. It says we are definitely better than last year.

Our food scores in September of this year are the highest scores we’ve had on quality, value, portion, higher than the ones we communicated to you last December.

Also keep in mind that we sell more burgers and garden bar combinations today than ever. Over 50% of our entrees are all under $8.99. We have value options. Also, our check is currently running up about 1.5 points over the prior year.

Our guest satisfaction scores are solid with no signs of weakness. This is true in all categories, including overall value, intent to revisit, and recommending to others. Our remodel and new restaurant guest satisfaction scores are even higher.

Our average guest incomes are increasing, which says we are attracting a bit higher income guest, which we think is a positive.

Overall, our signs say we are performing as a brand and it seems as though we are losing lower income or tight consumers either to fast food, grocery stores, or value advertising by our competitors.

I think you can’t define it for sure, that we’ve lost about 5% of our traffic to this since May, based on Knapp Track trends. All the research and statistics say we are offering better food, better service, and they like our remodels, so what we need to do is add a much more value proposition to the brand and one that is every day part of the brand.

So how do we get more competitive, attract more customers, stay on strategy, add compelling value?

First, to support our lunch strategy that we talked about before of increasing traffic, we were really hurt with some competitive price points for lunch. We lost our lunch momentum where we had been strong. So we are lowering our combo pricing to begin at $6.99, and these are for three item combos. We have six different combos to offer, beginning with our great endless fresh garden bar, as well as our choice of homemade soups. They start at $6.99.

We’ll be supporting these with heavy advertising starting next week through mid-December, except for two weeks.

Second, to support our dinner strategy of increasing check as well as traffic, for starters, we’ve lowered a few key category entry level prices to encourage stepping up from burgers, because we need to shift people from burgers and combos on up to dinners. Plus we’ve lowered four pure appetizers from $7.49 to $6.99 to try to get that appetizer add-on preference up, which will help us with check actually and allow us to make more money. And last, we are giving better value on our dinner meals with our salad bar pricing being discounted here this Fall also, again to increase preference and it could help move people to dinners.

Beginning in January, we’ll complete our compelling value proposition with a few more additions that we won’t talk about today.

Third, we will also advertise differently. When our ads on the air, they will run with the same weight levels as our competitors, starting with our strong value message, $6.99 combos beginning next week and again running through mid-December, basically.

Fourth, we are also increasing the level of our promotion activity, like our competitors. This will include standard freestanding inserts, like Olive Garden, in Sunday papers October 28th and I think December 1st, but primarily centered around a very targeted direct mail piece. And these mailings will be targeted to residences with average household incomes primarily of $75,000 and above, to introduce our fresh new look in all of our remodeled restaurants for a consistent 90-day period after remodelings are complete. This will start with 300 in November.

We are ramping up our efforts to further increase our guest satisfaction scores also in addition to these other points.

So for the Fall, we think we have a compelling value proposition, we have a solid marketing plan, we have the strongest promotional plan that we’ve had in years, and I think that we will be competitive and get good results off of that.

We are also testing more compelling value options to roll out with the remodel launch in the Spring, sometime between January and Spring, but our focus on value is about our salad bar/garden bar combinations, our fresh, hand-crafted burgers which have outstanding ratings, and being in our dinner-house dinners. Last, we have a fresh new look, as I mentioned, for the entire system for our brand launch in the Spring.

Overall, a multi-step plan to more aggressively fight for and attract guests in this challenging environment, short and long-term though, focusing on better operations, increased value, more effective advertising, and increased, significantly increased promotion, but promotion in a quality way, in a good way.

In summary, we are extremely disappointed with our current sales and profits but feel good about where we are taking our brand and believe our teams have accomplished a lot. It’s just a painful transition.

We get more positive comments on our food than we ever have that I can remember in the history of Ruby Tuesday, as well as on our remodels. If you haven’t been to one of our restaurants recently, I hope you will get into one. For those of you in New York, our new Times Square location has been opened for a little bit over a month now. It is open for dinner so I encourage you to stop by.

Our goal is not to be a different Ruby Tuesday -- just a better and fresher Ruby Tuesday, one that is more current, more relevant, and can take care of all of us and the shareholders for another 35 years, as it has for most of the last 35 years.

We want to be the best bar and grill brand out there. We want to operate at a high quality casual dining level. Our expectations for same-restaurant sales for the quarter, as Margie mentioned, is to be down 6% to 8%, with September down approximately 10.4% and then trending up through the quarter with November being down 3% to 4%, and that’s with a flat to down check, so traffic we project will be back in reasonably good shape by then.

Margie mentioned for the year we will be down 3% to 5% in sales is what we are projecting. We think our sales will improve throughout the year after gaining momentum in the second quarter with our increased promotional and advertising activity, and further improve as we start to overlap the easier comparisons in January through the last five months of the fiscal year.

I hope it is evident that we are taking very active steps to address what we believe to be the drivers that we can control. We were a little late to the game on the value game, but we are there now. We are committing to what we believe is a prudent investment in profit, painful in the short term but it will be good for the long term in driving positive traffic and sales.

We’ll have a fresh new brand in the Spring. We believe our concept is stronger today -- just not showing it in sales and profitability but we are working hard to get both of those fixed.

With that, I will open it up to questions from any of you.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Stephen Rees.

Stephen Rees - J.P. Morgan

Can you hear me?

Sandy Beall

Yes, I can hear you now.

Stephen Rees - J.P. Morgan

Yeah, so when you were --

Sandy Beall

I can’t hear you now. Operator?

Operator

Yes, his line disconnected. Your next question comes from the line of Robert Barrington.

Robert Barrington

Sandy, could you help us understand a couple of things? One, what are you seeing in the operating trends of those stores that have been remodeled for a longer period of time? Are you seeing some stabilization or some improvement in their trends?

Sandy Beall

Oh no, we’re seeing improvement, Bob. If you take just pure -- I should have mentioned that, sorry. If we took just pure remodel-to-remodel, apples-to-apples, they are up a couple of points -- a couple points, anyway. There is nothing negative there at all -- 2.5 points, Kimberly said.

Robert Barrington

Okay, so that’s for the first five that have been remodeled or the first --

Sandy Beall

That’s about 50-ish. They’ve been remodeled. They were finished by the July period. They actually gained a little ground in August, September.

Kimberly Grant

The end of August and throughout September is where they really started to start to separate from the rest of the concepts.

Robert Barrington

And the traffic trends, are those similar? Are you seeing a benefit from the check average in those restaurants?

Kimberly Grant

Actually, all of the improvement is 100% in traffic. The check has been pretty similar overall, maybe within a couple of pennies. And it’s all been in traffic improvement.

Robert Barrington

Sandy, help us understand; the one thing that I am curious about when I hear you mention that you will be doing some couponing, some FSIs and some targeted mailers, it sounded as though you were going to mail those to your higher income consumers, yet you mentioned that the lower income consumers were the ones that you had lost. Can you reconcile that?

Sandy Beall

Yeah. We said for a long time we are trying to move our average check up. We would like to have the customers, we would like to have a higher percentage of customers that Outback or Carrabba’s or Olive Garden would have to support our strong core customers that are eating burgers and combos.

The lower end customer we are losing, which I think is more financial and deal driven. The ones we want -- and we’ve always said this, Bob. We realize in our transition we are going to lose a few of the lower end as we reposition the brand, but the $75,000 and above income person that we are trying to attract, so we are just targeting that person. We are not trying to exclude anybody else and the FSI really covers broad demographic appeal in the Sunday paper. But to supplement that, we also want to target the higher income.

Robert Barrington

Sandy, is there any risk of retraining these customers to look for coupons in the mail?

Sandy Beall

I don’t think anymore so than Olive Garden or others do it. This isn’t val-pak. This isn’t -- these are large Sunday newspaper ads. It’s an advertisement actually of a beautiful food product as well as with a trial offer on the bottom. And then our -- the ones that go to the houses are very high quality, very high-end. It’s a three-fold. There’s pictures of the restaurant, Bob. If you’ve ever gotten a direct mail piece say from Carrabba’s or Macaroni Grill, it is of that quality and nature. It has a nice, not a clip out, not a cut-out coupon but a nice plastic card that gives you an incentive offer to come in and our redemption on those are very, very good.

We know that they work. Everything we are doing this fall, we’ve tested. We’re not taking any risk here. We know what results we get from FSIs, we know what results we get from the direct mail coupon. The only variable is how much result we get from the value-oriented advertising. I know that they respond to it because you can look at what’s happened there with some of the others this year.

Robert Barrington

Sure, and then the last question, Sandy, on your franchisees as they look to begin this remodel process, how do they stand financially? Do they have, given their sales trends, do they have the finances to be able to remodel the restaurant?

Sandy Beall

What I said, Bob, there was a minor remodeling. In other words, to have everybody with a common look, there are a couple of elements that we can do in all the restaurants and I think they can figure out and we can help them figure out how to pay for this, what I call minor expense. For the entire franchise system, it may only be about $4 million in total.

But if you just take out the Tiffany lamps, you know what a Ruby’s look like, take out the Tiffany lamps and put the new red lights in the circle lamps in that are in all the remodels, and then if you just change some of the artifacts in there and put the more contemporary artifacts in, for less than $20,000 a unit, you do have a new look, you have a different look. It’s not as nice as the one you’ve seen at West End maybe, but it would still be different than the dated, the 80’s, firm bar, Ruby Tuesday look that we’ve had for 35 years.

Robert Barrington

Okay, great. Thank you, Sandy, appreciate it.

Operator

Your next question comes from Bryan Elliot.

Bryan Elliot - Raymond James

Good afternoon. Sandy, could you help us a little bit understand how the advertising and things that you’ve done, the brand awareness, you said you’ve done a lot of research and tested things. What is the perception with that 75K and up demographic, as measured for now currently versus several years ago? How much has the advertising resonated with them? And give us some feel for what you think your ability to really change behavior in that demographic can be.

Sandy Beall

I think I’ll have Mark talk about the brand perception study by NPD, which of course is perception, probably more driven by advertising, but our improvements on that have been pretty much across the board, from ’06 to ’07. Mark, do you want to talk about that?

Mark Young

Not a whole lot different out there at this point. We are attracting a little bit more on the higher income in some areas in medium and heavy users, lost a little bit on lower income, like Sandy said. But if you look at the NPD data, we are performing better than what we were last year across the board and we are -- if you look at ourselves against the bar and grill group, it’s at parity as well.

Bryan Elliot - Raymond James

What percentage of customers today would be in that 75K demographic?

Mark Young

Probably 35%.

Bryan Elliot - Raymond James

And how would that compare to two or three years ago?

Mark Young

I don’t have that, Bryan. I’ve got a year ago. We’re a little higher than what we were. We’re about 38%, 39% right now and we were about 36% a year ago.

Sandy Beall

And our average income on our food study, our income has shifted up about what, was it $3,000 or $4,000?

Mark Young

$2,000 or $3,000.

Sandy Beall

$2,000 or $3,000, so we are making some progress.

Bryan Elliot - Raymond James

Typically, would it be reasonable to assume that a customer in that demographic would have a higher incidence of adult beverages, appetizers, and buy up more on the menu?

Sandy Beall

I don’t know. I mean, $75,000, when you go $75,000, targeting $75,000 and above, I think you get some of that. When you are looking at a $65,000 household income average, I am not sure that that’s -- that they spend that much more. They are spending more on beverages. We aren’t selling say anymore beverage products but we are selling many more premium products. We are selling more wine than we used to, so I guess that would play to what you are talking about.

They are buying the premium products and they are buying more wine, yes. On appetizers, they are not buying anymore appetizers right now but I think that’s more maybe offset by the lower income who are buying dramatically less appetizers, possibly.

Bryan Elliot - Raymond James

Okay, so on the surface with the check average, et cetera, it wouldn’t appear that with this point, there’s no macro or average, evidence in the average numbers but if you peel it back, you are comfortable that you are seeing some evidence that you are increasing the demographic and that that higher demographic is spending in the manner necessary to pay for all this essentially down the road?

Sandy Beall

I think it will pay for all of it. Do we wish there was a lot more of it? Yes, but then we also have to keep in perspective, keep it in perspective that we just now started remodeling and Bryan, you’ve been in a Ruby Tuesday and although the people look a lot better, I think we have better service, our products’ better, plates are better but it is still an old-looking Ruby Tuesday.

We know that once we remodel them, our scores across the board are higher and I think we can still get them higher. I mean, our job isn’t done. If it was, I guess we wouldn’t even have the sales issue. It is not done but there is nothing we see that is negative to our brand repositioning and I still think the future is only positive, especially as compared to versus staying the way we were two or three years ago and staying stuck in the ‘80s with a 35-year old brand.

Bryan Elliot - Raymond James

One last question to clarify, the 2.5% same-store sales improvement at the 50 remodels that were completed by the end of July, is that a comparative number or is that actual nominally positive same-store sales at those 50 stores?

Sandy Beall

That is nominally positive same-store sales. If you include all of the intrusion, competitive intrusion, et cetera. If you pull out just clean remodels, it’s like at least that -- yes, it’s 2.5 points and the trends look good on it.

So as we start promoting it, I think what we told you all last time is hey, we think it will build over time. We’ve told you this before. We think if we get 1% initially, we think with just a little bit promotion, we can get it up to 2%. I think we are seeing that. We feel comfortable still with that and it will build over time. But there’s nothing -- the main thing is there is nothing negative there for sure, and it does enhance the brand and I think it helped enhanced the longevity of our long-term cash flow.

Bryan Elliot - Raymond James

I’m sorry, just to clarify too, those 50 remodels are somewhat disparate geography, right? They are not in several markets but they are sort of spread across the system, right?

Sandy Beall

They were all over. They were a test to see how we could roll it out and implement it.

Bryan Elliot - Raymond James

Okay. Thanks a lot.

Sandy Beall

Yeah, there are small markets and some large markets, but next.

Operator

Your next question comes from Jeff Omohundro.

Jeff Omohundro - Wachovia

Thanks. I wonder if I could get a little more details on this advertising shift, and specifically around the spending and advertising as a percentage of sales. Is the increase in the print and couponing and so forth, are you taking that out of the TV budget or is there an incremental spend associated with this?

Sandy Beall

We have incremental spend. I mean, if you count the coupon costs, the administration costs, the TV spend that we have, et cetera, in our second quarter, we’ve probably increased our budget, Margie, by what -- $5 million, from memory. It will probably be about the same thing in third quarter, so we are investing. We are investing without a doubt. You can’t have -- you can’t get your profits back until you get your sales back; you really can’t get your sales back until you get your traffic back. And we think we’ve got a plan to do that on a pretty fast-track basis.

Mark, why don’t you talk about -- Jeff, what more detail do you want to know on the advertising? Mark will address it.

Jeff Omohundro - Wachovia

If you have anything in terms of a percentage of sales, any kind of ballpark, how that would -- or a total dollar spending number. Maybe that would be even better, given how the sales mimic.

Sandy Beall

For the year or for the quarter?

Marguerite N. Duffy

Advertising by itself, Jeff, is about 3.2% and the coupons you know are up in sales, so that is not included in the 3.2%.

Mark Young

We count it when we look at our marketing budgets, but --

Marguerite N. Duffy

Right, but maybe that would have another three quarters impact as a percent.

Jeff Omohundro - Wachovia

Okay, and then another area I wanted to touch on would be if there is any change in your commodity expectations in this updated guidance and what your thoughts might be right now.

Marguerite N. Duffy

No, not commodity pricing. We did indicate a higher food cost but that’s as much about some of our pricing on the combos.

Sandy Beall

Some of our new offerings in January that we’re doing, as far as the value strategy.

Jeff Omohundro - Wachovia

Thanks.

Operator

Your next question comes from Keith Siegner.

Keith Siegner - Credit Suisse

Given the performance of the store sales lately, the investments in the food and other, or food and labor, I was wondering if you could talk about the returns on the new stores, the new company-owned stores, and whether or not you considered maybe slowing or even stopping the unit growth potentially, at least until the repositioning is complete and maybe using that cash to buy back more shares, given where the share price is. How have you though about that?

Sandy Beall

We think about it a lot and that’s a good question. We are only opening approximately 20 stores this year, down from 65. We think that that’s a reasonable amount at this point in time.

As you know, we have sites, because you have sites going forward, so even if you don’t open them, you pay for at least half of them regardless.

I think the key question in determining how many you open is are you getting a return on the -- well, two key questions, actually; is it distracting you from getting more out of existing assets focusing on the repositioning of the brand? At 20 stores, we don’t think that is. At 60 stores or 45 stores, it definitely is.

The other question is are you getting a return on it? And we feel good about, as we expressed on the last meeting, we feel better about our new openings over the next 24 months than we ever have as far as volumes go, because we’ve been much more selective.

So at this time, we still think it’s appropriate. Naturally, if we didn’t get our sales back in the second quarter as we’ve talked about, of course you have to reconsider that and how you allocate your capital but right now, I think it’s still reasonable.

Keith Siegner - Credit Suisse

Are you willing at least at this point in time to give any update to the longer term, free cash flow targets? I know in the past you talked about a $200 million free cash flow target and that is CapEx. Are you willing to update that at this time?

Marguerite N. Duffy

It would be in that hundred-and-a-quarter --

Sandy Beall

We update our models all the time, so you said is it down some? Yes, but it is probably $150 million, and we update that all the time. Get ourselves back, that might change, but if you said current model projection, that’s about what it is.

Keith Siegner - Credit Suisse

Thank you.

Operator

Your next question comes from Chris O'Cull.

Chris O'Cull - SunTrust Robinson Humphrey

Good afternoon. Mark, could you give us some color in terms of just mix shift when you promoted combos with the garden fresh bar and when you promote something without the garden fresh bard, do you see a higher mix shift with promotions with it?

Mark Young

Well, we ran steak with a free fresh garden bar and we did see movement into the steak category. We saw the trade around from other entrees into that, and we did see a significant shift in people that were taking advantage of the salad bar for sure.

Chris O'Cull - SunTrust Robinson Humphrey

Was it better than --

Sandy Beall

Chris, what we also learned I think is that although we shifted probably a lot of internal people there, doing a proposition like that without a real price on it doesn’t attract a lot of new guests, but the price and heavy value is probably what attracts new guests versus just discounting to your existing guests.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, that was my question, was when you ran the steak promotion at $9.99, was it a better mix than when you ran it with the garden fresh bar.

Sandy Beall

Better preference mix?

Chris O'Cull - SunTrust Robinson Humphrey

Right.

Mark Young

No, it wasn’t a whole lot difference in it from that perspective. It was -- discounting, trading up inside the restaurant.

Sandy Beall

We have flirted around this summer, tested a couple of different ads. We flirted with value but we really haven’t gotten into the value game. We’ve have been doing it understanding what didn’t work and with our concept test and so forth, we think that putting value with variety, with quality, with a strong price -- a strong value price on TV, we think will drive the traffic in and that’s the piece that we’ve got to get. And that’s what our strategy will be beginning next week.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, and next week when it comes on air, will it be more prime and late night spots, or will we see cable or --

Sandy Beall

You will see a mixture of all of it still. It is similar to plans we’ve had, with just that more weight level than what we’ve done in the past but it is utilizing cable, prime and late night.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, and the weight level compared to last year?

Sandy Beall

The weight levels compared to last year? They will be higher than what they were last year at this time period, for sure. They will be some of the highest weight levels we’ve done in the last 12 months.

Mark Young

About 200 points.

Sandy Beall

Yeah, which is very strong.

Chris O'Cull - SunTrust Robinson Humphrey

And then my next question pertains to the company’s CapEx plans I guess for the next couple of years. Margie, is it possible to break out the new unit CapEx for fiscal ’08?

Marguerite N. Duffy

For ’08? I guess we have about $20 million in maintenance CapEx, so if that helps any. The rest would be new.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, and then Sandy, would you give us a sense for if there is any remodeling CapEx plans for ’09, fiscal ’09? Should we expect another phase?

Sandy Beall

No, everything is going to be finished this year, so everything is in this year and then we are clean and any of that remodeling would have been in the maintenance CapEx that Margie was talking about, $30-ish million.

Chris O'Cull - SunTrust Robinson Humphrey

Margie, I know you provided some leverage ratios at the end of the quarter. Are those based on the definitions in your credit facility?

Marguerite N. Duffy

Debt to EBITDA is what I gave you, but no, that’s not that definition or not the ratios in the credit facility. It’s not debt to EBITDA.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, can you help us understand cushion levels in your facility? Is there a lot of opportunity, given your covenants in the facility to continue?

Sandy Beall

It wouldn’t be a lot of opportunity, if you are talking about like buying back stock or something?

Chris O'Cull - SunTrust Robinson Humphrey

Right, right.

Sandy Beall

We are talking to the banks because that’s one of the things that we’d like to do but there is not a lot right now.

Chris O'Cull - SunTrust Robinson Humphrey

Okay, great. Thanks, guys.

Operator

Your next question comes from Joe Fischer.

Joe Fischer - Bear Stearns

Hi, everyone, I’m calling in for Joe Buckley today. I was wondering if the timeline for the national advertising around the remodel, the refreshed units has changed as you’ve pulled up the March 1st deadline from May.

Sandy Beall

Actually, we never had -- we did not anticipate -- that’s one of the things we fast-forwarded some here over the last month or so but we didn’t ever anticipate having everything totally done and having a relaunch campaign.

Mark Young

Yeah, the plan was to support it on a market-by-market basis with a lot of local stuff or direct mail and support in that way. We didn’t really have a national plan because we weren’t going to have everybody with some form or fashion of touch points with the remodel piece.

Now that we’ve made that decision, it allows us an opportunity to do a national campaign and that’s what we will do now, and build on the plans to support that with the launch in March.

Joe Fischer - Bear Stearns

Okay, so you are looking at a March timeframe for that?

Sandy Beall

Yes, we think it’s more critical with the -- the environment is not going to be great next year either. We think it is critical that we get the new look, the fresh new look, fresh new feel, fresh food, et cetera, communicated to the consumer who has the old Ruby Tuesday stuck in their mind.

Mark Young

The campaign will be -- it will be a national basis and a lot of local emphasis on it too, market-by-market, so --

Sandy Beall

There are about what, Mark, five elements of the launch?

Mark Young

Yes.

Sandy Beall

Five different forms of communication.

Joe Fischer - Bear Stearns

Okay, and had there been any changes to the remodels in the company stores?

Sandy Beall

No.

Joe Fischer - Bear Stearns

Still the same plan?

Sandy Beall

Same thing.

Joe Fischer - Bear Stearns

I guess the other thing, the other question I had was on pricing. I was wondering if you could tell us what the effective pricing is in the menu right now and how you expect that to change next week or the week after when you go into the more value-based promotions?

Sandy Beall

We are only up -- this week we bounced between 1% and 1.5% on total check and price. Kimberly, it’s what -- it’s less than 1% to 1.5%. We don’t know what it is, and then I think actually, as we roll into the fall, we said we were going to be flat to down. I would say in October, we will be -- well, probably flat to down October and November, so -- I mean, that’s -- it makes it more challenging for profit but then you saw, profits aren’t any good anyway.

But the way we projected it out, our traffic -- we are giving up price but we are going to get traffic. That is more important right now.

Joe Fischer - Bear Stearns

You talked a lot about the lunch strategy. Is the dinner strategy still to increase check or are there traffic initiatives there?

Sandy Beall

Very definitely, it’s traffic and check.

Mark Young

There’s some traffic initiative centered around our freestanding insert strategy and everything else will be geared towards dinner.

Sandy Beall

And the traffic component of our freestanding insert and those different coupon cards that are after 5:00 p.m., so you’ve got a lunch attack and a dinner attack to get guests back and sales at dinner.

Joe Fischer - Bear Stearns

And just one last thing; the same-store sales trend kind of through the quarter and into September was kind of progressively -- kind of worsened progressively. I wonder if you had any thoughts on that and the confidence of reversing that?

Sandy Beall

As far as it getting worse, traffic didn’t change, really. Sales got worse but traffic I don’t think really got worse. As far as confidence in changing it, right now it is purely mathematical. To take the effect of your different coupon initiatives and your television, that’s what it should be.

We could be off but it is our best guess and we are generally not off more than what -- well, I take that back. We were off in August and September.

We’ll see. I mean, it’s our best guess. It’s what we think we’ll get.

Joe Fischer - Bear Stearns

So from the 10.5 in September, that wasn’t traffic related?

Sandy Beall

It was traffic related. What I was saying is I don’t think the traffic was any really worse than all --

Joe Fischer - Bear Stearns

Okay, I understand. Okay, great. Thank you.

Sandy Beall

Could be off a little bit on that, but I think that’s --

Mark Young

I think the big thing, as Sandy said earlier on the traffic piece, is what went on in Q1 and how aggressive the competitive set was on value for sure. They hit it pretty hard with a lot of media as well as -- I mean, some very good advertising that had very compelling price points and some variety out there.

Sandy Beall

Olive Garden, Friday’s, and Applebee’s have done a very good job on promoting value and I would say that their traffic and sales are a lot better because of it.

Operator

(Operator Instructions) Your next question comes from Stephen Rees.

Stephen Rees - J.P. Morgan

Can you hear me now, Sandy?

Sandy Beall

Yes.

Stephen Rees - J.P. Morgan

I wanted to ask, when you were developing the new brand position a couple years back and you did a lot of research in terms of what your consumer wanted, how they wanted to use the brand, how important was value back then as a metric to them? And I guess in hindsight, why were the new menus able to perform relatively well over the last couple of years versus the competition without a real value message?

Sandy Beall

What we were hoping to do is not have to go overboard on value at that point in time, and I think that was okay until last Spring when the consumer decided well, value last year isn’t the same as value this year because I have less, I feel worse, and I’m just generally in a different situation. So I think the definition of value has changed a lot and it’s just that -- it’s what QSR did in the late 90s. They redefined value to get their traffic going again. I think that bar grill and Olive Garden have really pushed value to achieve sales and traffic.

We haven’t been that fanatical on traffic. We are more money people. Of course, we are not making money right now either but we are shifting our focus now to adding that compelling value because it is critical on long-term.

When you look at the sales trends for Knapp Track on casual dining or bar grill, or you look at Ruby’s, Applebee’s and Chili’s, for that matter, for the last four or five years, it can get a little scary. All those reasons, those reasons are why we came up with our strategy in the first place.

We just think it is a lot safer. It is better for our workforce, better for our customer base, better for our shareholders to be more aligned with the restaurant of the level of Carrabba’s, Outback and we are getting there and I think it will pay off. But we are going to have to do it with better value too.

Stephen Rees - J.P. Morgan

Okay, and how are you thinking about these temporary price reductions on some of the key items? Are they temporary or just more of a kind of a wait-and-see?

Sandy Beall

No, I think those are basically permanent. The value we are putting in -- I mean, we didn’t want to play the value game but the value we are putting in isn’t going to be a temporary thing. It’s got to be a compelling part of the brand proposition. As painful as that is on profit, I think we have to do that and just live with it.

Stephen Rees - J.P. Morgan

And then just perhaps Margie can review the commodity contracts for the key proteins that you have in place. If I remember correctly, it was relatively favorable I think pretty far out. Is that still the case?

Marguerite N. Duffy

That is still the case. Some of them two years, some of them 18 months, some 15 months, but yes, still in very good shape.

Stephen Rees - J.P. Morgan

Okay, like just beef and chicken, can you review that?

Marguerite N. Duffy

Beef is -- that one’s got at least 18 more months on it and chicken --

Sandy Beall

There’s a couple of different chicken categories. Ask another question while she’s looking, if you have another one, Steve.

Stephen Rees - J.P. Morgan

I think there was just --

Marguerite N. Duffy

It’s 15 months, basically.

Stephen Rees - J.P. Morgan

Fifteen months, and those are relatively flat prices?

Sandy Beall

Steak is flat and chicken, I can’t remember.

Stephen Rees - J.P. Morgan

Okay, and then on the remodel process, is there any disruption to the stores when you do those? Or what sort of timeframe do they occur?

Sandy Beall

Kimberly.

Kimberly Grant

The remodel actually takes approximately five to six weeks and the disruption, obviously the biggest disruption is just the coordination of the different work being completed, because we are managing the re-imaging in the restaurant with the unit managers and directors in the field.

Sandy Beall

And the disruption to the guests is just seeing an empty, ugly restaurant part of the time for three or four weeks.

Kimberly Grant

Exactly, and as Sandy mentioned earlier, we saw about a 1% decline in sales during the four to six weeks of the re-imaging, but then it bounced back just a couple of weeks after the re-image was complete.

Stephen Rees - J.P. Morgan

Okay, and that was that 2.5 points that you had mentioned? You just talked --

Kimberly Grant

Yes, to the increase, correct.

Stephen Rees - J.P. Morgan

Okay, and could you just talk about some of the initial remodels that you performed earlier on, are those sales still building or how do they build over time?

Sandy Beall

They are still all so early, really. I mean, we had five that we did research on, really in one market but the first real group we have is these 50 or so that are spread out throughout the country and we still monitor those every week and there is nothing negative there. It’s only positive, especially in the last four weeks or so.

Kimberly Grant

We have about 12 weeks of history with that first group of 50 or so restaurants that we are evaluating every week.

Sandy Beall

The last four or five weeks were definitely better than the previous four or five weeks.

Stephen Rees - J.P. Morgan

Okay, and then at what point do you think the television advertising will start to focus on these new, more appealing interiors?

Sandy Beall

It won’t be until March that we really focus into the fresh new look. That’s when that will come into play.

Stephen Rees - J.P. Morgan

Okay, great. Thank you very much.

Operator

Your next question comes from Joe Fischer.

Joe Fischer - Bear Stearns

I just wanted to ask you real quick about if you are still seeing the 90-day kind of timeframe after a remodel before you really get the bounce, as you mentioned in the last quarter?

Sandy Beall

Well, it’s not really a bounce, per se. They’ve been building. What we said last quarter was at that time, we were getting about 1% and we were just starting to introduce it to the community and we thought we would get 2%. I think we feel good with that.

It’s building and that’s over about 45 or 60 days, and then we will see how it goes next month too, so it’s still early on but there is nothing negative about it at all. There’s positive there.

Joe Fischer - Bear Stearns

Okay, great. Thank you.

Sandy Beall

We know it’s the right thing to do, whether we get any bounce out of it or not but we are getting positive impact from it.

Operator

Your next question comes from Conrad Lyon.

Conrad Lyon - FTN Midwest Securities

Good afternoon. My question surrounds about how far out do you think that you need to go to the point where you really distance yourself from the competition and you think that you’d have less of an impact from your competitive tactics? Are you talking like 12 to 18 months out from now, do you think?

Sandy Beall

I think so, because I think once you have them, that doesn’t mean everybody realizes it. It’s only your existing guests, and so then it’s got word of mouth. I think that the March advertisement will help us but it is not going to be solved over night. It is still going to be a long-term journey and it will build over time, which is perfectly fine.

But I think the first thing we have to do is make sure we are significantly better on food and service in place and value from our competition and that will build over time.

Conrad Lyon - FTN Midwest Securities

This is kind of a follow-on, there was an earlier question about how perhaps doing more mailers and coupons, that might retrain your customers for these things. A little different but do you think that might diminish this upscale strength that you are trying to develop at all in the near term?

Sandy Beall

Well, we are trying to be very careful on that and that’s why we talk about the high quality, very expensive direct mail pieces that align yourself more with Saks or Neiman Marcus or Carrabba’s, that kind of thing, versus a coupons in envelopes kind of mentality.

Mark Young

I think the difference where we are today versus where we were three or four years ago is the fact that we were in the blue envelope in the mailboxes with 30 or 40 other people in there.

Strategically, what we are trying to do is use the FSI as a strategic measure to introduce dinner items and talk about dinner to the masses. And then what we are trying to do is really leverage high quality, direct mail programs to those right consumers, customers that we are looking for with the right message and the right feel for the brand.

So I think it is a completely different strategy than what we did in the past and I think it is done in a way that will enhance the brand image versus taking it back to more of a coupon, low-end strategy.

Sandy Beall

Another example of that is when you see the TV ad next week, and you’ve seen some of our TV in the past year, the type of creative is more aligned -- it is about uncompromising freshness and quality, although we don’t screen that. You can tell it is more aligned with what you would see in an Olive Garden ad or if Carrabba’s did an ad, something like that versus your traditional bar grill yelling, screaming, bouncing monkeys or whatever ad.

Operator

Your next question comes from Fitzhugh Taylor.

Sandy Beall

Our last question.

Fitzhugh Taylor - Banc of America

Thank you. Sandy, when you look at the comps for the third quarter, I mean -- I’m sorry, the second quarter, going from 10.5 down to negative 3 or 4; is that solely based on the confidence in more value messaging and more weighting, or is there other structural stuff in September that maybe made that look a little worse? You mentioned Florida and the Gulf Coast.

Sandy Beall

We are certainly getting drilled in some markets right now, but I assume that others have that kind of weight down there. Maybe they do, maybe they don’t.

Marguerite N. Duffy

I think one other thing to mention is being on off air three weeks more this September than last year, so --

Sandy Beall

That’s a good point, too. That’s a good point, too. Actually, that’s a very good point. We should have mentioned that.

Fitzhugh Taylor - Banc of America

I’m sorry, you said you were off the air three weeks?

Sandy Beall

Yes, we were off the air the majority of September.

Marguerite N. Duffy

Right, so we were on the air two weeks this September versus five weeks last September.

Sandy Beall

And the two weeks of ads were not a value proposition, really, and didn’t compete very effectively versus the other ads on the air.

Fitzhugh Taylor - Banc of America

And the mailers start concurrently with the ads that are coming out next week?

Sandy Beall

One mailer will -- the FSI will fall at the end of the October and then the direct mail piece will fall at the beginning of November, so it is staggered a little bit.

Marguerite N. Duffy

We’re going to send you all a sample of that, too, just so you can see how --

Sandy Beall

You have heavy TV in October/November, you have promotions starting in October with heavy in November, and then you go into December and you have modest TV but at good weights, and you have promotional carryover. So it is a very strong program through mid-December.

Fitzhugh Taylor - Banc of America

Lastly, I know you’ve been, and it’s certainly less weighted, given everything else that is going on, but you’ve been pretty excited about the new units. Are they still opening up where you would like them to or are they showing a little weakness with the economy and everything?

Sandy Beall

We’ve only opened four in this fiscal year of the new type unit. One of them is Manhattan, which is doing incredibly well and the other three are doing well -- there is one weak one and the other two I think are doing well. In America’s Georgia, we’re even averaging probably since we opened about $40,000 a week for dinner only, so what we are doing right now, Fitzhugh, also I think we talked about before, we opened up for dinner only, sometimes the first three to six months, just to make sure we really have operations right. Most of them we haven’t even opened for lunch yet for this year.

But we still feel good about them, but it is early on in the year.

Fitzhugh Taylor - Banc of America

Sure. Thank you.

Operator

There are no further questions at this time.

Sandy Beall

Thank you for joining us today. You can call Shannon if you have any questions and -- where, Margie, on her cell phone? Okay, you know where to call her. Thank you.

Operator

This concludes today’s conference call. You may now disconnect.

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Source: Ruby Tuesday F1Q08 (Qtr End 9/4/07) Earnings Call Transcript
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