Soliciting Material under Rule 14a-12

 

 

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the registrant  x                            Filed by a party other than the registrant  ¨

Check the appropriate box:

 

¨ Preliminary Proxy Statement

 

¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨ Definitive Proxy Statement

 

¨ Definitive Additional Materials

 

x Soliciting Material under Rule 14a-12

RUTH’S HOSPITALITY GROUP, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of filing fee (Check the appropriate box.):

 

x No fee required

 

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

 

  (1) Title of each class of securities to which transaction applies:

 

 
  (2) Aggregate number of securities to which transaction applies:

 

 
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated, and state how it was determined.):

 

 
  (4) Proposed maximum aggregate value of transaction:

 

 

  (5) Total fee paid:

 

 

 

¨ Fee paid previously with preliminary materials:

 

¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2), and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration number or the form or schedule and the date of its filing.

 

  (1) Amount previously paid:

 

 
  (2) Form, schedule, or registration statement no.:

 

 
  (3) Filing party:

 

 
  (4) Date filed:

 

 

 

 

 

This filing consists of a presentation prepared by Ruth’s Hospitality Group, Inc. (the “Company”) to explain certain aspects of the proposed financing transactions announced on December 22, 2009.

Additional Information

The Company has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the “SEC”) (File No. 333-160231) and intends to file a prospectus supplement with respect to the proposed rights offering. Before you invest, you should read the prospectus and, when filed, the prospectus supplement and other documents the Company has filed with the SEC for more complete information about the Company and the rights offering.

In connection with the proposed financing transactions announced on December 22, 2009, the Company intends to file a definitive proxy statement with the SEC and to mail the definitive proxy statement to the Company’s shareholders. The Company and its directors and officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders in connection with the financing transactions. Information about the Company’s directors and executive officers and their ownership of its securities will be set forth in the definitive proxy statements to be filed by the Company with the SEC.

Stockholders and investors should read the definitive proxy statement and the prospectus supplement carefully before making any voting or other investment decision because these documents will contain important information.

January 2010
Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Statement No. 333-160231

Disclaimer
This
presentation
contains
“forward-looking
statements”
that
reflect,
when
made,
the
expectations
of
Ruth’s
Hospitality
Group, Inc. ("Ruth's" or the “Company”) or beliefs concerning future events that involve risks and uncertainties. Forward-
looking
statements
frequently
are
identified
by
the
words
“believe,”
“anticipate,”
“expect,”
“estimate,”
“intend,”
“project,”
“will
be,”
“will continue,”
“will likely result”
or other similar words and phrases. Similarly, statements herein that describe the
Company’s objectives, plans or goals also are forward-looking statements. Actual results could differ materially from those
projected, implied or anticipated by the Company’s forward-looking statements. Some of the factors that could cause actual
results to differ include the risk factors identified in the reports the Company files with the Securities and Exchange
Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 28, 2008 and
subsequently
filed
Quarterly
Reports
on
Form
10-Q,
all
of
which
are
available
on
the
SEC’s
website
at
www.sec.gov.
All
forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no
obligation to revise or update this presentation after the date hereof.
The Company has filed a registration statement (including a prospectus) with the SEC (File No. 333-160231) and intends to
file
a
prospectus
supplement
with
respect
to
its
proposed
common
stock
rights
offering.
Before
you
invest,
you
should
read
the prospectus and, when filed, the prospectus supplement and other documents the Company has filed with the SEC for
more complete information about the Company and the rights offering.
In connection with the Company’s proposed private placement transaction, the Company has filed a preliminary proxy
statement with the SEC and intends to file a definitive proxy statement and to mail the definitive proxy statement to the
Company’s shareholders. The Company and its directors and officers may be deemed to be participants in the solicitation of
proxies from the Company’s shareholders in connection with the private placement transaction. Information about the
Company’s directors and executive officers and their ownership of its securities will be set forth in the definitive proxy
statement to be filed by the Company with the SEC.
When available, you may obtain the foregoing documents, including the prospectus supplement and the preliminary and
definitive
proxy
statements,
for
free
by
visiting
the
SEC’s
website
at
www.sec.gov.
In
addition,
copies
of
the
prospectus
and
prospectus supplement for the rights offering may be obtained, when available, from the information agent to be identified in
the prospectus supplement. Investors should read the definitive proxy statement and the prospectus and prospectus
supplement carefully before making any voting or investment decision because these documents will contain important
information.
1

Positions Ruth’s as one of the best capitalized upscale steakhouse
chains
Provides
management
with
flexibility
to
operate
the
business
for
long-
term success
Provides approximately $50 million of available bank revolver capacity
at attractive rates and a 5-year term
Increases capital expenditure baskets to enable the Company to take
advantage of opportunistic growth opportunities
Brings in a successful, experienced restaurant investor, Bruckmann,
Rosser, Sherrill & Co. (“BRS”), whose representative will serve on the
board
Allows
current
shareholders
participating
in
the
rights
offering
to
limit
their dilution and allows all shareholders, if the transaction closes, to
benefit from the Company’s improved financial position
Rationale for Raising Additional Equity
2

Transaction Details
Sale to BRS in a private placement of Series A 10% Convertible Preferred Stock for an
aggregate purchase price of $25.0 million (the “Private Placement”)
–
Private Placement is conditioned upon:
Completing
a
Common
Stock
rights
offering
raising
at
least
$25.0
million
in
gross
proceeds (the “Rights Offering”)
Obtaining shareholder consent for the Private Placement
–
Private Placement conversion price will be set at a 15.0% premium to the Rights
Offering,
with
a
minimum
conversion
price
of
$2.90
per
share
and
a
maximum
conversion price of $3.25 per share
Conversion price subject to customary anti-dilution adjustments
–
BRS will be entitled to designate or nominate one board member so long as they own
at
least
5.0%
of
total
voting
power
of
the
common
stock
on
an
as
converted
basis
Company
will
conduct
the
Rights
Offering,
with
gross
proceeds
of
up
to
$35.0
million
in
cash assuming full participation
–
The Rights will be transferable and will allow for over-subscription in certain
circumstances
Net proceeds of the Private Placement and the Rights Offering will be used to repay debt
outstanding under the Company’s revolving credit facility
A bank amendment providing covenant relief and extending the maturity of the
Company’s credit agreement will become effective upon meeting certain conditions,
including obtaining at least $42.5 million in net proceeds from the Private Placement and
the Rights Offering
3

The Company has structured a portion of the equity raise in the
form of a Rights Offering in order to allow existing shareholders to
participate in its recapitalization and to minimize their ownership
dilution
Illustrative Ownership Analysis
(1)  Assumes
that
all
of
the
Rights
that
are
exercised
are
exercised
by
existing
shareholders,
all
of
whom
exercise
their
Rights
in
full.
4
Illustrative Assumptions
Current Common Shares Outstanding (in millions)
24.163
Current Stock Price (1/8/2010)
$2.77
Convertible Preferred Stock
$25.0
Implied Conversion Price of Convertible Preferred Stock Investment
$3.19
Common Shares Issuable upon Conversion of the Convertible Preferred Stock (in millions)
7.848
Illustrative Ownership Analysis
Minimum Rights Offering Proceeds ($ in millions)
$25.0
Ownership and Participation
Participating Shareholders and Exercised Rights Percentage
71.4%
Non-participating Shareholders and Non-exercised Rights Percentage
28.6%
Post Transaction Ownership (As Converted Basis)
Participating Holders
(1)
64.1%
Ownership Dilution from Convertible Preferred Stock Issuance
(7.4%)

Sources of Funds
Uses of Funds
BRS Investment
25.0
$            
Revolver Paydown
45.5
$            
Min. Rights Offering Proceeds
25.0
Estimated Fees & Expenses
4.5
                 
Total Sources of Funds
50.0
$            
Total Uses of Funds
50.0
$            
Debt Capitalization as of FYE 2009
Actual
Leverage
Ratio
(1)
Pro Forma
(2)
Leverage
Ratio
(1)
Revolving Credit Facility
125.5
$          
3.24x
80.0
$            
2.07x
Total Debt
125.5
$          
80.0
$            
Source: Company filings.
(1)
LTM 9/27/2009 Bank EBITDA of $38.7 million was used for the calculation of the actual and pro forma leverage ratio at FYE 2009, and was calculated in
accordance
with
the
terms
of
the
Company's
existing
credit
agreement.
The
debt
balance
used
in
the
calculation
of
the
actual
and
pro
forma
leverage
ratio at FYE 2009 was the actual and pro forma debt balance at FYE 2009, and was calculated in accordance with the Company's existing credit
agreement, as amended by the proposed bank amendment. For a reconciliation of Bank EBITDA, a non-GAAP financial measure, to net income, see
Appendix B.
(2)
The
pro
forma
debt
balance
gives
effect
to
the
application
of
the
net
proceeds
from
the
Private
Placement
and
Rights
Offering
to
repay
indebtedness
under the credit facility assuming that the transactions had been completed at FYE 2009.
The proposed Private Placement and Rights Offering consist of a minimum $50.0
million equity raise, with net proceeds used to pay down a portion of the
outstanding borrowings under the Company’s revolving credit facility
–
The equity raise will consist of a $25.0 million private investment by BRS and a
minimum $25.0 million Rights Offering
Pro Forma Transaction
In 2009, the Company reduced its outstanding debt by approximately $35.0
million
($ in millions)
5

Current Management Team Accomplishments
Hired new Chief Operating Officers (Kevin Toomy
and Sam Tancredi)
Launched brand positioning study
Implemented initiatives to drive traffic and top-line sales
Generated labor and operating expense savings
Generated G&A expense reductions through re-aligning corporate
support and restructuring field supervision
Established focus on generation of cash flow and reduction of balance
sheet leverage
–
Completed sale-leaseback transaction of 5 Company-owned
restaurants
–
Sold corporate headquarters building
–
Eliminated new Company-owned restaurant development
6

Company Overview
7

Ruth’s Hospitality Group Highlights
Iconic Upscale
Steakhouse
Brand
Broad
Demographic
Appeal
Strong
Restaurant Base
with Solid Unit
Economics
Highly
Experienced and
Committed
Management
Team
Premier Upscale-
casual Seafood
Concept
Stable Franchise
Base Generating
Consistent
Revenue Stream
8

Ruth’s Chris history
–
44+ years in business as segment leader
–
64 Company-owned and 66 franchisee-owned restaurants in 30 states
–
2008 / 2009 Recognition
Best
Restaurant
to
Seal
the
Deal
-
Orlando
Magazine
Best Steakhouse Runner-up, Best Place Special Occasion -
Sacramento Magazine
Best
Overall,
Best
Steakhouse
-
Seminole
Magazine
Best
Food, Best Overall -
Open Table Diner Choice,
Phoenix/Scottsdale
Best Steakhouse -
VisitDetroit.com
92 Locations Awarded the Wine Spectator Award of Excellence
Best of the Best -
Luxury Institute Survey
Ruth’s Chris Steak House Segment Overview
9

Largest Upscale Steakhouse
Restaurant Locations versus Competitors
Average Check Per Customer versus Competitors
$
70
97
81
73 –
74
79
70 –
75
60
79
105
Source: Company filings, Wall Street research and Company presentations. Ruth’s Chris data as of year-end 2009.
10
130

Ruth’s Chris Steak House Footprint
HI
Company-owned Ruth’s Chris Steak House Locations
Franchisee-owned Ruth’s Chris Steak House Locations
International Locations:
Aruba
Calgary, Canada
Edmonton, Canada
Mississauga, Canada
Toronto, Canada
Hong Kong
Queensway, Hong Kong
Tokyo, Japan
Cabo San Lucas, Mexico
Cancun, Mexico
San Juan, Puerto Rico
Kaohsiung, Taiwan
Taichung, Taiwan
Taipei, Taiwan
Dubai, UAE
11

Broad Appeal of Concept
Purpose of Visit
Appeals to Men and Women
Appeals to Wide Age Demographic
Source: Based on an independent survey conducted in 2007.
12

Attractive Sales Mix
Ruth’s Chris Steak
House’s higher
margin wine and
alcoholic beverage
sales have
remained stable
since 2008,
generating
approximately 25%
of revenues
Ruth’s Chris Steak House’s signature steaks, diverse accompaniments
and extensive wine and liquor offerings drive guest appeal and generate
an attractive sales mix
Source: Company data for LTM 9/27/2009.
13

Strong Franchise Positioning
Strength of franchise system
–
27 franchisees operating 51 domestic and 15 international locations in
21 states and 8 countries
–
All franchisees are current on their royalty payments as of FYE 2009
–
Recent growth
7 new franchised restaurants in 2008 and 6 new franchised
restaurants in 2009
International
market
expansion
–
Aruba
2008,
Dubai
2009,
San
Juan
2009
–
Business model with both Company-owned and franchisee-owned
restaurants is unique in the upscale steakhouse segment
Provides
approximately
$10
–
$12
million
in
aggregate
annual
royalty
fees
Allows system growth without additional Company capital
14

Profile of Franchise System
First franchise opened in 1976 in Baton Rouge, LA
Unlevered
franchise
system
provides
stability
and
enables
future
growth
Allows for development in secondary and tertiary markets
Recurring, high margin revenue stream
Franchise
Breakdown
Franchisees
Units Owned
by
Franchisees
% of
Franchised
Units
Average
Tenure
Single Unit
15
15
22.7%
14 years
2 –
3 Units
6
14
21.2%
14 years
4 –
8 Units
6
37
56.1%
17 years
Total
27
66
100.0%
Note:  Data as of year-end 2009.
15

Mitchell’s Fish Market
16

Why Mitchell’s Fish Market
Expansion into the seafood segment was a logical move for Ruth’s
–
For health and other reasons, fish consumption has increased in the
U.S., notably among higher-income households
–
National chains are increasingly taking market share away from
independent operators: the segment is consolidating
Core competencies are very similar to Ruth’s Chris:
–
Corporate culture
–
High quality menu
–
Commitment to service
–
Attractive unit level economics
17

Mitchell’s Fish Market Segment Overview
Mitchell’s Fish Market
–
Acquired by Ruth’s Hospitality Group in February 2008
–
Celebrated 10 year anniversary in 2008
–
19 restaurants in 9 states
2009 Recognition
Best Seafood
Best Seafood
Columbus Alive
City Beat Cincinnati
Best Seafood
Best Seafood / Best Fish Market
Metro Times
Hour Detroit Magazine
Best Food
Best Seafood Selection
Stamford Plus Magazine
Tampa Bay Magazine
18

Mitchell’s Fish Market Summary
Upscale-casual seafood restaurant
19 locations in 9 states
Menu offers over 80 dishes with
creative presentations and a focus on
always fresh
A specialized fish preparation room
ensures
all
fish
is
maintained
at
36
o
F
until it is cooked
Average lunch check of approximately
$22.00, and average dinner check of
approximately $38.00
(1)
Recent menu changes, Fresh Bar
program and branding campaign have
improved same store sales and unit
volumes
Restaurant Highlights
Proven success in multiple markets
Seafood consumption tends to be higher
on the coasts, which are a relatively
untapped market for the Mitchell’s
concept
Seafood consumption as a whole has
been increasing; focus on freshest
possible seafood is a competitive
advantage
Popular concept appeals to developers,
providing access to prime locations
Economies of scale as restaurant base
increases
Potential for franchising
Growth Opportunities
(1)
Mitchell’s Fish Market average lunch and dinner checks per the Company’s 2008 10-K.
19

Mitchell’s Fish Market Atmosphere
20

Significant Expansion Opportunity
Restaurant Locations versus Competitors
Average Check Per Customer versus Competitors
$
19
24 –
25
37 –
38
37
34
Source:
Company
filings,
Wall
Street
research
and
Company
presentations.
Mitchell’s
Fish
Market
data
as
of
year-end
2009.
21

Mitchell’s Fish Market Footprint
Company-owned Mitchell’s Fish Market Locations
22

Mitchell’s Fish Market Business Update
Installed new leadership at the time of the
acquisition
Completed integration  
Implementing new marketing initiatives
–
Fixed price menu offerings
–
Marketing spend of 2.5-3.5% of sales
Pursuing franchising opportunities
(1)Sales summary reflects year over year comparisons.
(2)Comparable Company Index is based on an equal weighted average of the same store sales of Bonefish Grill and McCormick & Schmick’s
per their public SEC filings.
Sales Summary
(1)
Q3 09
Q4 09
Mitchell’s Fish Market
-10.1%
-2.6%
Comparable
Company
Index
(2)
-12.3%
N/A
23

Financial Overview
24

Financial Performance Overview
Despite pressure on the top-line, the Company has successfully increased
its Adjusted EBITDA margin during the periods shown below
The Company has also exceeded its goals of generating free cash flow
and paying down debt
Revenue
and Adjusted EBITDA Margin Comparison
Free Cash Flow
(2)
and Debt Comparison
FCF
$5.1
$20.8
($3.7)
$12.0
Debt
$160.3
$148.5
$166.9
$148.5
(1)
For a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income, see Appendix B. Adjusted EBITDA has not been adjusted for
severance
payments,
hurricane
and
relocation
costs
and
other
costs,
cash
write-offs
of
the
Manhattan
UN
Facility
and
Mitchell's
Fish
Market
pro
forma
EBITDA prior to acquisition.
(2)
Free
Cash
Flow
represents
net
cash
provided
from
operating
activities
minus
acquisition
of
property
and
equipment.
Data
is
as
of
period
end.
See
Appendix C for a reconciliation of Free Cash Flow to cash flows from operating activities.
($ in millions)
25

Q3 2009 and Q3 2009 YTD Review
Food and Beverage Cost Improvement
–
Primarily driven by favorable beef costs
Restaurant Operating Expense Improvement
–
Execution of operations initiatives
Reduced Capital Expenditures
–
Spent $0.5 million in Q3 2009, $3.3 million through Q3 2009 YTD
Stable Leverage Ratio
(1)
–
At 3.92x at end of Q3 2009
Maximum leverage ratio under the credit agreement was 4.80x as of
that date
EPS
–
($0.04) in Q3 2009 versus ($0.02) in Q3 2008
–
$0.22
(2)
in Q3 2009 YTD versus $0.29 in Q3 2008 YTD
(1)
Leverage
ratio
is
defined
as
outstanding
borrowings
under
the
Company’s
revolving
credit
facility
and
outstanding
letters
of
credit
at
period
end
divided
by
LTM
Bank
EBITDA (calculated in accordance with the terms of the credit agreement). Excluding the $3.2 million of outstanding letters of credit (as permitted under the terms of the
proposed amendment to the credit agreement), the leverage ratio would have been 3.84x at 9/27/2009. For a reconciliation of LTM Bank EBITDA to net income, see
Appendix B.
(2)
Q3 2009 YTD EPS included a one-time expense related to a loss on the disposal of property and equipment of $1.0 million due to the sale of the Company’s former
home office land and building in Metairie, Louisiana, which represented a decrease in earnings of approximately $0.03 per share.
26

Performance on Key Company Initiatives
Cost Savings Initiatives
–
Introduced staggered scheduling, changed menu and preparation
process, achieved concessions on pricing, eliminated services and
implemented internal programs for utilities
–
Eliminated approximately 60 corporate positions by re-aligning
corporate support and restructuring field supervision
–
Established a new approval system for all capital and travel
expenditures
–
Reduced G&A expense by approximately $6.9 million during the first
nine months of 2009 (versus prior year)
Focus on Cash Flow Generation and Balance Sheet Leverage Reduction
Menu and Marketing Strategy
–
No 2009 Company development; total capital expenditures expected
to be $5.0 to 6.0 million for 2009, down from $32.0 million in 2008
–
Opened 6 new franchise locations during 2009
–
Paid down approximately $35 million in debt in 2009
Includes $9.7 million debt paydown from net proceeds of recent
sale of corporate headquarters building
–
Capital expenditure
reduction:
–
New franchise location
openings:
–
Debt reduction:
–
Introduced a Value menu, a Bistro menu, early week promotions and
a private dining satellite program
–
Labor and operating
expense savings:
–
G&A expense
reductions:
–
Initiatives to drive traffic
and top-line sales:
27

Ruth’s Chris Steak House SSS Comparison
Comparable Sales
FY 2008
Q1 09
Q2 09
Q3 09
Q4 09
Ruth’s Chris SSS
-10.2%
-18.6%
-24.3%
-23.9%
-11.2%
Knapp Track
(1)
SSS
-9.6%
-19.0%
-22.9%
-20.6%
-9.7%
Ruth’s SSS vs.
Knapp Track
(1)
SSS
-0.6%
0.4%
-1.4%
-3.3%
-1.5%
(1)
Upscale steak segment index, which includes Ruth’s Chris, Flemings, Smith & Wollensky, Sullivan’s, Del Frisco, Capital Grille, Three Forks, Cool River
and Silver Fox.
Ruth’s Chris Steak House Company-owned Comparable Restaurant
Sales
Traffic
Comparison
FY 2008
Q1 09
Q2 09
Q3 09
Q4 09
Ruth’s Traffic vs.
Knapp Track
(1)
Traffic
+0.7%
+2.6%
+0.7%
-5.4%
-4.5%
Ruth’s Chris Steak House Company-owned Comparable
Restaurant Traffic
28

Continued interest in franchise ownership remains strong
–
6 new openings in 2009:
Greenville, SC
Dubai, UAE
St. Louis, MO
Durham, NC
Kennesaw, GA
San Juan, Puerto Rico –
signed a two unit franchise development agreement
(the first restaurant opened in San Juan on November 23, 2009)
–
Salt Lake City –
new franchisee agreement signed
Stable Revenue Stream from Franchise System
Franchise Royalties and Restaurant Count
($ in millions)
29

(1)
For a reconciliation of Adjusted EBITDA and Bank EBITDA to net income, see Appendix B.
(2)
Bank EBITDA is Adjusted EBITDA, a non-GAAP financial measure, further adjusted to exclude severance payments, hurricane and relocation costs and
other
costs,
cash
write-offs
of
the
Manhattan
UN
Facility
and
Mitchell's
Fish
Market
pro
forma
EBITDA
prior
to
acquisition,
each
of
which
are
excluded
pursuant to the terms of the Company’s credit agreement. For a reconciliation of Bank EBITDA to net income, see Appendix B.
(3)
Excluding
letters
of
credit
in
the
amount
of
$3.2
million
at
the
end
of
Q3
2008
and
Q3
2009,
the
leverage
ratio
would
have
been
3.25x
and
3.84x
at
the
end of Q3 2008 and Q3 2009, respectively.
Fiscal Year Q3 2009 and Q3 2009 YTD Review
($ in millions)
30
Ruth's Hospitality Group's Year-to-Date Performance Comparison
Actual
Actual
Prior
Q3 2009
Q3 2009 YTD
Q3 2008 YTD
B(W)
Revenues
Total Restaurant Revenues
$75.6
$253.8
$291.8
($38.1)
Franchise and Other Revenues
2.2
9.5
12.4
(2.9)
Total Revenues
$77.8
$263.2
$304.2
($41.0)
Food and Beverage Costs
21.5
72.5
91.9
19.4
Restaurant Operating Expenses
43.4
139.3
147.1
7.8
Marketing
1.8
8.2
10.9
2.7
G&A
5.4
16.7
23.6
7.0
Depreciation
4.1
12.4
12.3
(0.1)
Pre-opening
0.0
0.0
2.5
2.4
Loss on Impairment
0.0
0.3
0.0
(0.3)
Restructuring Expenses
0.4
0.4
0.0
(0.4)
Loss on Disposal of Property and Equipment
0.1
1.0
0.1
(0.9)
Operating Income
$1.0
$12.4
$15.8
($3.4)
Adjusted EBITDA
(1)
$6.2
$29.2
$31.9
($2.7)
LTM Bank EBITDA
(1) (2)
$38.7
$38.7
$51.4
($12.7)
Debt
$151.7
$151.7
$170.1
$18.4
Debt / LTM Bank EBITDA
(1) (2) (3)
3.92x
3.92x
3.31x
(0.61x)

Financial Guidance
FY 2009 guidance provided to the Street (as of October 30, 2009)
–
Comparable sales of high negative double digits
–
Cost
of
sales
of
28.5%
–
29.5%
–
Marketing
spend
of
3.0%
–
3.3%
of
sales
–
G&A
expense
of
$22.5
–
$24.0
million
–
Tax
rate
of
17%
–
20%
–
Capital
expenditures
of
$5
–
$6
million
for
maintenance
and
remodels
Reported comparable store sales of -11.2% for Q4 2009 (vs. Q4 2008)
31

Appendix A
32

Rights Offering Size:
Maximum gross proceeds of $35.0 million
Subscription Price:
TBD
Current Shares Outstanding:
24,162,893 shares (including 484,000 shares of unvested restricted stock)
Securities Offered:
Each
Transferable
Subscription
Right
will
represent
the
right
to
purchase
a
number of shares of Common Stock to be determined subject to
adjustments to eliminate fractional shares
Basic Subscription Privilege:
Each Right will give shareholders of record the opportunity to purchase a
number of shares of the Company’s Common Stock to be determined at the
Subscription Price
Over-Subscription Privilege:
If a shareholder exercises its basic subscription privilege in full, it will also
have an over-subscription privilege in certain circumstances
Transferability:
The
Rights
will
be
transferable
and
are
expected
to
be
listed
on
NASDAQ
Key Closing Conditions:
Raising at least $25.0 million in gross proceeds in the Rights Offering and
obtaining shareholder approval for the Private Placement
Use of Proceeds:
Net
proceeds
from
the
Rights
Offering
will
be
used
to
reduce
the
Company’s
outstanding indebtedness under its revolving credit facility, which will reduce
its
future
interest
expense,
increase
its
operating
flexibility,
provide
covenant
relief and extend the maturity of the indebtedness under its credit agreement
until
the
earlier
of
the
fifth
anniversary
of
the
effective
date
of
the
credit
agreement amendment or February 15, 2015
Key Terms of Rights Offering
33

Key Terms of Private Placement
Aggregate face amount of $25.0 million of Series A 10.0% Convertible Preferred Stock
–
Dividends payable quarterly in cash or, at the Company’s option, by PIK
Conversion price will be set at a 15.0% premium to the Rights Offering subscription price, with a
minimum conversion price of $2.90 per share and a maximum conversion price of $3.25 per
share
–
Conversion price subject to customary anti-dilution adjustments in the future
Optional Company redemption right after 5 years
Company conversion right after 2 years if the stock price is equal to or greater than 225% of the
then
applicable
conversion
price
for
a
period
of
20
trading
days
over
any
30
consecutive
days
Mandatory redemption obligation after 7 years or upon a change of control event
BRS will be entitled to designate or nominate one board member so long as they own at least
5.0% of total voting power of the common stock on an as converted basis
The Private Placement will vote on an as converted basis and will be granted certain registration
and information rights
Proceeds to be used to repay outstanding indebtedness under the Company’s revolving credit
facility
Private Placement issuance conditioned upon:
–
The Rights Offering raising at least $25.0 million in gross proceeds
–
Obtaining shareholder consent for the Private Placement
The Company and BRS have various termination rights; closing is conditioned upon certain
ownership and dilution thresholds after giving effect to the transactions
34

Existing Credit Agreement Terms
Proposed Amended Terms
Facility:
$175MM reducing Revolver ($5MM every 6 months commencing 12/31/09)
$130MM Revolving Credit Facility
Maturity:
February 2013
February 2015 or 5 Year Anniversary
Pricing:
Leverage Covenant:
No covenants for one year. First covenant measurement date FYE2010
Incurrence test for revolver at 3.75x during FY2010
Covenants as follows (tested quarterly):  
FYE2010 –
3.80x
FY2011 –
3.75x
FY2012
Q1
&
Q2
–
3.60x
FY2012
Q3
&
Q4
–
3.40x
FY2013 –
3.10x
FY2014 –
2.75x
Fixed Charge Covenant:
1.40x for Q1 09-Q4 2009
1.45x for Q1 10-Q2 2010
1.50x thereafter
No covenants for one year. First covenant measurement date FYE2010
Covenants as follows:
FY2010
through
FY2014
-
1.35x
Minimum EBITDA Covenant:
YTD adjusted EBITDA test through Q3 2009 at the following levels: $8.25MM in
Q1 2009, $17.0MM YTD Q2 2009, $24.0MM YTD Q3 2009
Thereafter,
TTM
EBITDA
test
of
$33.5MM
in
Q4
2009,
$34.0mm
in
Q1
2010,
$35.0MM in Q2 2010, $35.5MM in Q3 2010 & Q4 2010
No minimum EBITDA covenant
CapEx
Limit
$12.0MM for FY2009
$10.0MM for FY2010 and thereafter
Additional
growth
CapEx
available
subject
to
passing
an
incurrence
test
for
two
consecutive quarters for FY2010 and annually through maturity:
–
Leverage
<
3.35x
-
$5.0MM
–
Leverage
<
3.25x
-
$10.0MM
$12.0MM for FY2009
$12.5MM for FY2010 and thereafter
Additional
growth
CapEx
available
subject
to
passing
an
incurrence
test
for
two
consecutive
quarters
for
FY2010
and
annually
through
maturity:
–
Leverage
<
3.25x
-
$7.5MM
–
Leverage
<
3.00x
-
$12.5MM
–
Leverage
<
2.50x
-
$17.5MM
Additional Baskets
None
No stock buy-back basket for FY2010; for FY2011-maturity: $25.0MM aggregate
for stock buy-backs subject to pro-forma incurrence test of 3.0x leverage ratio and
minimum $15MM Revolver availability
No
acquisitions
in
FY2010,
thereafter
acquisitions
governed
by
CapEx
test
Closing Condition
At least $42.5MM in net proceeds in the Private Placement and the Rights
Offering
Key Terms of Credit Agreement Amendment
Leverage
LIBOR
Margin (bps)
Base Rate
Margin (bps)
Commitment
Fee (bps)
>= 4.00x
500
375
50
>=3.50x<4.00x
425
300
50
>=3.00x<3.55x
375
250
37.5
<3.00x
325
200
37.5
Leverage
LIBOR
Margin (bps)
Base Rate
Margin (bps)
Commitment
Fee (bps)
>= 4.00x
425
300
50
>=3.25x<4.00x
350
225
50
>=2.50x<3.25x
300
175
37.5
<2.50x
250
125
37.5
Q1
Q2
Q3
Q4
2008
3.75x
2009
4.75x
4.80x
4.80x
4.50x
2010
4.25x
3.85x
3.50x
3.50x
3.5x thereafter through maturity
35

Appendix B
EBITDA Reconciliation
36

Ruth's Hospitality Group EBITDA Reconciliation
FY 2008
Q3 2008
YTD
Q3 2009
YTD
Q3 2009
LTM
Net income (loss)
($53.9)
$6.8
$5.1
($55.5)
Interest expense
10.3
6.9
6.1
9.5
Provisions for taxes
(27.5)
2.4
1.2
(28.7)
Depreciation expense
17.0
12.5
12.4
16.9
Non-cash write-offs or impairment of restaurant assets
88.5
0.1
1.9
90.2
Ongoing non-cash GAAP costs (stock-based compensation, bank fees and other)
3.7
3.2
2.6
3.1
Adjusted EBITDA
$38.2
$31.9
$29.2
$35.4
Severance payments, hurricane and relocation costs and other
3.0
0.9
0.1
2.1
Cash write-offs of the Manhattan UN Facility
1.1
0.1
0.1
1.1
Mitchell's Fish Market pro forma EBITDA prior to acquisition
1.9
1.9
0.0
0.0
Bank EBITDA
(1)
$44.2
$34.9
$29.4
$38.7
Ruth's Hospitality Group EBITDA Reconciliation
(1)
Calculated pursuant to the terms of the Company’s existing credit agreement.
($ in millions)
37

Ruth's Hospitality Group EBITDA Reconciliation
Adjusted EBITDA is a supplemental measure of the Company's performance that is not required by, or presented in
accordance with, generally accepted accounting principles (“GAAP”). Adjusted EBITDA is not a measurement of the
Company's financial performance under GAAP and should not be considered as an alternative to revenue, net income
(loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from
operating activities as a measure of its liquidity. Adjusted EBITDA is defined as net income (loss), plus interest expense
net of interest income, income tax provision (benefit), depreciation and amortization, and adjusted for non-cash write-offs
or impairment of restaurant asset charges, stock based compensation and non-cash bank fees. Management believes
that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to
provide additional information to investors about one of the principal internal measures of performance used by them.
Management uses the Adjusted EBITDA measure to evaluate the Company's performance and to facilitate a comparison
of operating performance on a consistent basis from period to period. The Adjusted EBITDA measure has limitations as
an analytical tool, and should not be considered in isolation, or as a substitute for analysis of the results as reported under
GAAP. This measure may not be comparable to similarly titled measures reported by other companies.
Adjusted EBITDA per the Company's credit agreement, which we refer to as Bank EBITDA, is a supplemental measure of
the Company's performance that is not required by, or presented in accordance with, GAAP. Bank EBITDA is not a
measurement of the Company's financial performance under GAAP and should not be considered as an alternative to
revenue, net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to
cash flow from operating activities as a measure of its liquidity. Bank EBITDA is defined as Adjusted EBITDA, further
adjusted for severance payments, hurricane and relocation costs and other costs, cash write-offs of the Company's
Manhattan UN Facility and Mitchell's Fish Market pro forma EBITDA prior to acquisition. Bank EBITDA is used by the
Company's creditors in assessing debt covenant compliance and management believes its inclusion is appropriate to
provide additional information to investors about certain covenants required pursuant to the Company's indebtedness.
The Bank EBITDA measure has limitations as an analytical tool, and should not be considered in isolation, or as a
substitute for analysis of the results as reported under GAAP. This measure may not be comparable to similarly titled
measures reported by other companies.
38

Appendix C
FCF Reconciliation
39

Ruth's Hospitality Group FCF Reconciliation
($ in millions)
Source: Per Company filings.
40
Ruth's Hospitality Group FCF Reconciliation
FY 2008
Q3 2008
YTD
Q3 2009
YTD
Q3 2009
LTM
Cash
flows
from
operating
activities:
Net income
($53.9)
$6.8
$5.1
($55.5)
Depreciation and amortization
17.0
12.5
12.4
16.9
Deferred income taxes
(29.5)
(0.9)
(0.2)
(28.8)
Non-
cash interest expense
0.3
0.2
0.9
1.0
Loss on sale or disposition of assets
0.5
0.1
1.0
1.4
Loss on impairment
81.3
0.0
0.3
81.6
Amortization of below market lease
0.2
0.0
0.1
0.3
Restructuring
8.9
0.0
0.4
9.3
Non-
cash compensation expense
2.6
2.5
1.6
1.7
Changes
in
operating
assets
and
liabilities:
Accounts receivables
(1.5)
(2.5)
5.2
6.2
Inventories
1.1
0.9
1.8
2.0
Prepaid expenses and other
(0.6)
(0.7)
0.3
0.4
Other assets
0.3
0.2
0.1
0.1
Accounts payable and accrued expenses
3.3
9.0
(4.3)
(10.0)
Deferred revenue
1.7
(7.7)
(8.6)
0.8
Deferred rent
4.8
4.9
0.4
0.3
Other liabilities
0.7
(0.0)
(1.4)
(0.6)
Net cash provided from operating activities
$37.1
$25.2
$15.3
$27.2
Acquisition of property and equipment
32.0
28.9
3.3
6.4
Free Cash Flow
$5.1
($3.7)
$12.0
$20.8