Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, ~~and posted on its corporate Web site,~~ if any, every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“accelerated~~“large accelerated filer,” ~~“large accelerated~~“accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of ~~October 31, 2017~~July 29, 2019 was ~~31,278,209,~~30,128,548, which includes ~~1,184,629~~861,235 shares of unvested restricted stock.

	September 24,				December 25,			June 30,		December 30,
	2017				2016			2019		2018
Assets
Current assets:
Cash and cash equivalents	$	4,862			$	3,788		$	3,148	$	5,062
Accounts receivable, less allowance for doubtful accounts 2017 - $236; 2016 - $729		9,789				20,790
Accounts receivable, less allowance for doubtful accounts 2019 - $139; 2018 - $322									15,576		19,476
Inventory		7,247				7,396			8,545		9,296
Prepaid expenses and other		2,232				2,446			3,099		2,528
Total current assets		24,130				34,420			30,368		36,362
Property and equipment, net of accumulated depreciation 2017 - $143,034; 2016 - $132,817		103,518				103,041
Property and equipment, net of accumulated depreciation 2019 - $169,246; 2018 - $160,153									129,010		125,991
Right of use assets, net of accumulated amortization: operating leases 2019 - $7,820; 2018 - $0									191,847		—
Goodwill		24,293				24,293			36,522		36,522
Franchise rights, net of accumulated amortization 2017 - $218; 2016 - $218		32,200				32,200
Other intangibles, net of accumulated amortization 2017 - $1,238; 2016 - $1,179		2,836				2,895
Franchise rights, net of accumulated amortization 2019 - $3,226; 2018 - $2,299									43,991		44,919
Other intangibles, net of accumulated amortization 2019 - $1,375; 2018 - $1,395									4,038		4,862
Deferred income taxes		5,452				9,924			5,642		5,353
Other assets		643				699			573		604
Total assets	$	193,072		��	$	207,472		$	441,991	$	254,613
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	7,642			$	7,064		$	8,819		10,273
Accrued payroll		11,709				14,902			14,638		19,475
Accrued expenses		6,545				11,672			8,873		10,535
Deferred revenue		27,483				38,155			40,108		48,370
Current operating lease liabilities									13,440		—
Other current liabilities		4,962				7,622			2,532		6,619
Total current liabilities		58,341				79,415			88,410		95,272
Long-term debt		30,000				25,000			45,000		41,000
Operating lease liabilities									207,628		—
Deferred rent		22,230				21,737			—		23,692
Unearned franchise fees									2,797		2,680
Other liabilities		2,132				2,311			45		1,837
Total liabilities		112,703				128,463			343,880		164,481
Commitments and contingencies (Note 11)		—				—			—		—

Shareholders' equity:
Common stock, par value $.01 per share; 100,000,000 shares authorized, 30,093,180 shares issued and outstanding at September 24, 2017, 30,549,283 shares issued and outstanding at December 25, 2016		301				305
Common stock, par value $.01 per share; 100,000,000 shares authorized, 29,227,635 shares issued and outstanding at June 30, 2019, 29,268,776 shares issued and outstanding at December 30, 2018									292		293
Additional paid-in capital		84,643				95,266			55,738		61,819
Accumulated deficit		(4,575	)			(16,562	)
Treasury stock, at cost; 71,950 shares at September 24, 2017 and December 25, 2016		—				—
Retained earnings									42,081		28,020
Treasury stock, at cost; 71,950 shares at June 30, 2019 and December 30, 2018									—		—
Total shareholders' equity		80,369				79,009			98,111		90,132
Total liabilities and shareholders' equity	$	193,072			$	207,472		$	441,991	$	254,613

													13 Weeks Ended						26 Weeks Ended
	13 Weeks Ended						39 Weeks Ended						June 30,			July 1,			June 30,			July 1,
	September 24,			September 25,			September 24,			September 25,			2019			2018			2019			2018
	2017			2016			2017			2016
Revenues:
Restaurant sales	$	79,442		$	78,760		$	273,042		$	261,941		$	104,017		$	103,538		$	217,003		$	213,902
Franchise income		4,218			3,928			12,865			12,463			4,421			4,457			8,979			8,874
Other operating income		1,507			1,086			4,813			3,914			1,805			1,640			4,002			3,384
Total revenues		85,167			83,774			290,720			278,318			110,243			109,635			229,984			226,160

Costs and expenses:
Food and beverage costs		25,319			23,723			82,012			78,022			29,023			29,049			60,871			60,454
Restaurant operating expenses		42,595			40,549			133,046			127,026			51,156			50,022			104,759			101,702
Marketing and advertising		3,197			2,546			9,056			7,134			4,121			4,640			7,751			8,117
General and administrative costs		7,096			7,346			23,267			22,068			8,929			9,274			17,681			18,248
Depreciation and amortization expenses		3,852			3,435			11,089			9,907			5,124			4,673			10,092			9,134
Pre-opening costs		121			574			1,473			1,665			244			272			341			412
Total costs and expenses		82,180			78,173			259,943			245,822			98,597			97,930			201,495			198,067

Operating income		2,987			5,601			30,777			32,496			11,646			11,705			28,489			28,093

Other income (expense):
Interest expense, net		(197	)		(333	)		(521	)		(799	)		(417	)		(403	)		(822	)		(783	)
Other		(6	)		(92	)		33			60			13			22			15			34

Income from continuing operations before income tax expense		2,784			5,176			30,289			31,757			11,242			11,324			27,682			27,344
Income tax expense		1,017			1,668			9,632			10,410			1,933			1,763			4,462			4,147
Income from continuing operations		1,767			3,508			20,657			21,347			9,309			9,561			23,220			23,197
Income (loss) from discontinued operations, net of income taxes		(71	)		75			(101	)		(94	)
Income from discontinued operations, net of income taxes														—			12			—			22
Net income	$	1,696		$	3,583		$	20,556		$	21,253		$	9,309		$	9,573		$	23,220		$	23,219
Basic earnings (loss) per common share:

Basic earnings per common share:
Continuing operations	$	0.06		$	0.11		$	0.68		$	0.67		$	0.32		$	0.32		$	0.79		$	0.78
Discontinued operations		—			—			(0.01	)		—			—			—			—			—
Basic earnings per share	$	0.06		$	0.11		$	0.67		$	0.67		$	0.32		$	0.32		$	0.79		$	0.78
Diluted earnings (loss) per common share:

Diluted earnings per common share:
Continuing operations	$	0.06		$	0.11		$	0.67		$	0.66		$	0.31		$	0.32		$	0.78		$	0.76
Discontinued operations		(0.01	)		—			(0.01	)		—			—			—			—			—
Diluted earnings per share	$	0.05		$	0.11		$	0.66		$	0.66		$	0.31		$	0.32		$	0.78		$	0.76
Shares used in computing net income (loss) per common share:

Shares used in computing earnings per common share:
Basic		30,348,180			31,305,952			30,490,554			32,023,814			29,252,651			29,713,825			29,264,076			29,701,847
Diluted		30,877,192			31,737,036			31,040,640			32,437,142			29,726,102			30,375,306			29,768,702			30,377,194

Cash dividends declared per common share	$	0.09		$	0.07		$	0.27		$	0.21		$	0.13		$	0.11		$	0.26		$	0.22

Additional

Common Stock

Paid-in

Accumulated

Treasury Stock

Shareholders'

Shares

Value

Capital

Deficit

Shares

Value

Equity

Balance at December 25, 2016

30,549

$
305

$
95,266

$
(16,562
)

72

$
—

$
79,009

Net income

—

—

—

20,556

—

—

20,556

Cash dividends

—

—

—

(8,568
)

—

—

(8,568
)
Repurchase of common stock

(719
)

(7
)

(14,536
)

—

—

—

(14,543
)
Shares issued under stock compensation plan net
   of shares withheld for tax effects

263

3

(1,167
)

—

—

—

(1,164
)
Stock-based compensation

—

—

5,080

—

—

—

5,080

Balance at September 24, 2017

30,093

$
301

$
84,643

$
(4,575
)

72

$
—

$
80,369

Balance at December 27, 2015

33,146

$
331

$
135,403

$
(37,832
)

72

$
—

$
97,902

Net income

—

—

—

21,253

—

—

21,253

Cash dividends

—

—

—

(6,969
)

—

—

(6,969
)
Repurchase of common stock

(2,477
)

(25
)

(39,948
)

—

—

—

(39,973
)
Shares issued under stock compensation plan net
   of shares withheld for tax effects

213

3

(1,430
)

—

—

—

(1,427
)
Excess tax benefit from stock based
   compensation

—

—

395

—

—

—

395

Stock-based compensation

—

—

4,259

—

—

—

4,259

Balance at September 25, 2016

30,882

$
309

$
98,679

$
(23,548
)

72

$
—

$
75,440

							Additional
	Common Stock						Paid-in			Retained			Treasury Stock				Shareholders'
	Shares			Value			Capital			Earnings			Shares		Value		Equity
Balance at December 30, 2018		29,269		$	293		$	61,819		$	28,020			72	$	—	$	90,132
Net income		—			—			—			13,911			—		—		13,911
Cash dividends, $0.13 per common share		—			—			—			(3,967	)		—		—		(3,967	)
Repurchase of common stock		(26	)		—			(568	)		—			—		—		(568	)
Shares issued under stock compensation plan net of shares withheld for tax effects		133			1			(1,632	)		—			—		—		(1,631	)
Stock-based compensation		—			—			2,033			—			—		—		2,033
Cumulative effect of a change in accounting principle (Note 2)		—			—			—			(1,261	)		—		—		(1,261	)
Balance at March 31, 2019		29,376		$	294		$	61,652		$	36,703			72	$	—	$	98,649
Net income		—			—			—			9,309			—		—		9,309
Cash dividends, $0.13 per common share		—			—			—			(3,931	)		—		—		(3,931	)
Repurchase of common stock		(250	)		(3	)		(6,569	)		—			—		—		(6,572	)
Shares issued under stock compensation plan net of shares withheld for tax effects		102			1			(1,446	)		—			—		—		(1,445	)
Stock-based compensation		—			—			2,101			—			—		—		2,101
Balance at June 30, 2019		29,228		$	292		$	55,738		$	42,081			72	$	—	$	98,111

Balance at December 31, 2017		29,646		$	296		$	77,017		$	2,191			72	$	—	$	79,504
Net income		—			—			—			13,646			—		—		13,646
Cash dividends, $0.11 per common share		—			—			—			(3,390	)		—		—		(3,390	)
Shares issued under stock compensation plan net of shares withheld for tax effects		146			2			(1,689	)		—			—		—		(1,687	)
Stock-based compensation		—			—			1,841			—			—		—		1,841
Cumulative effect of a change in accounting principle (Note 3)		—			—			—			(2,324	)		—		—		(2,324	)
Balance at April 1, 2018		29,792		$	298		$	77,169		$	10,122			72	$	—	$	87,589
Net income		—			—			—			9,573			—		—		9,573
Cash dividends, $0.11 per common share		—			—			—			(3,397	)		—		—		(3,397	)
Repurchase of common stock		(225	)		(2	)		(5,941	)		—			—		—		(5,943	)
Shares issued under stock compensation plan net of shares withheld for tax effects		129			1			(2,063	)		—			—		—		(2,062	)
Stock-based compensation		—			—			2,029			—			—		—		2,029
Balance at July 1, 2018		29,696		$	297		$	71,194		$	16,298			72	$	—	$	87,789

	39 Weeks Ended						26 Weeks Ended
	September 24,			September 25,			June 30,			July 1,
	2017			2016			2019			2018
Cash flows from operating activities:
Net income	$	20,556		$	21,253		$	23,220		$	23,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,089			9,907			10,092			9,134
Deferred income taxes		4,472			6,065			124			(61	)
Non-cash interest expense		97			315			41			41
Debt issuance costs written-off		16			—
Gain on the disposal of property and equipment, net		—			(128	)
Amortization of below market lease								—			39
Stock-based compensation expense		5,080			4,259			4,134			3,870
Changes in operating assets and liabilities:
Accounts receivable		11,002			9,793			4,712			10,826
Inventories		149			341			752			583
Prepaid expenses and other		217			(2,012	)		(571	)		(291	)
Other assets		356			198			(10	)		—
Accounts payable and accrued expenses		(6,064	)		(10,731	)		(12,444	)		(8,600	)
Deferred revenue		(10,671	)		(11,736	)		(8,262	)		(8,996	)
Deferred rent		493			978			—			630
Lease liabilities								2,407			—
Other liabilities		(1,702	)		623			(1,040	)		(1,861	)
Net cash provided by operating activities		35,090			29,125			23,155			28,533
Cash flows from investing activities:
Acquisition of property and equipment		(14,326	)		(19,094	)		(10,955	)		(11,889	)
Proceeds from sale of property and equipment		—			802
Acquisition of intangible assets								—			(1,171	)
Net cash used in investing activities		(14,326	)		(18,292	)		(10,955	)		(13,060	)
Cash flows from financing activities:
Principal borrowings on long-term debt		26,000			47,000			14,000			15,000
Principal repayments on long-term debt		(21,000	)		(9,000	)		(10,000	)		(15,000	)
Repurchase of common stock		(14,543	)		(39,973	)		(7,140	)		(5,943	)
Cash dividend payments		(8,568	)		(6,969	)		(7,898	)		(6,787	)
Tax payments from the vesting of restricted stock and option exercises		(2,079	)		(1,503	)		(3,076	)		(3,759	)
Excess tax benefits from stock compensation		—			395
Proceeds from the exercise of stock options		913			76			—			10
Deferred financing costs		(413	)		—
Net cash used in financing activities		(19,690	)		(9,974	)		(14,114	)		(16,479	)
Net increase in cash and cash equivalents		1,074			859
Net decrease in cash and cash equivalents								(1,914	)		(1,006	)
Cash and cash equivalents at beginning of period		3,788			3,095			5,062			4,051
Cash and cash equivalents at end of period	$	4,862		$	3,954		$	3,148		$	3,045
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of capitalized interest	$	405		$	461		$	829		$	753
Income taxes	$	6,539		$	2,223		$	6,158		$	6,123
Noncash investing and financing activities:
Accrued acquisition of property and equipment	$	1,023		$	389		$	3,544		$	1,229

The accompanying unaudited condensed consolidated financial statements of Ruth’s Hospitality Group, Inc. and its subsidiaries (collectively, the Company) as of ~~September 24, 2017~~June 30, 2019 and December ~~25, 2016~~30, 2018 and for the thirteen and ~~thirty-nine~~twenty-six week periods ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). The condensed consolidated financial statements include the financial statements of Ruth’s Hospitality Group, Inc. and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Ruth’s Hospitality Group, Inc. is a restaurant company focused on the upscale dining segment. Ruth’s Hospitality Group, Inc. operates Company-owned Ruth’s Chris Steak House restaurants and sells franchise rights to Ruth’s Chris Steak House franchisees giving the franchisees the exclusive right to operate similar restaurants in a particular area designated in the franchise agreement. As of ~~September 24, 2017,~~June 30, 2019, there were ~~153~~157 Ruth’s Chris Steak House restaurants, including 7078 Company-owned restaurants, ~~two~~three restaurants operating under contractual agreements and 8176 franchisee-owned restaurants, including 21 international franchisee-owned restaurants in Aruba, Canada, China, Hong Kong, Indonesia, Japan, Mexico, ~~Panama,~~ Singapore ~~Taiwan~~ and ~~the United Arab Emirates.~~Taiwan. All Company-owned restaurants are located in the United States. New Company-owned Ruth’s Chris Steak House restaurants opened in Waltham, MA in January 2017 and Cleveland, OH in March 2017 and a new frachisee-owned Ruth’s Chris Steak House restaurant opened in Chengdu, China in September 2017. A new restaurant operated by the Company under a contractual agreement also opened in Tulsa, OK in January 2017. A franchisee-owned Ruth’s Chris Steak House restaurant was closed permanently in San Juan, Puerto Rico in September 2017 as a result of severe damage from Hurricane Maria.

The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments), which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. The interim results of operations for the periods ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018 are not necessarily indicative of the results that may be achieved for the full year. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the SEC’s rules and regulations. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~25, 2016.~~30, 2018.

The Company operates on a 52- or 53-week fiscal year ending on the last Sunday in December. The fiscal quarters ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018 each contained thirteen weeks and are referred to herein as the ~~third~~second quarter of fiscal year ~~2017~~2019 and the ~~third~~second quarter of fiscal year ~~2016,~~2018, respectively. Fiscal ~~year 2017 is a 53-week year. Fiscal year 2016 is a~~years 2019 and 2018 are both 52-week ~~year.~~years.

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reporting of revenue and expenses during the periods to prepare these condensed consolidated financial statements in conformity with ~~U.S. generally accepted accounting principles.~~GAAP. Significant items subject to such estimates and assumptions include the carrying amounts of property and equipment, goodwill, franchise rights, lease right of use assets and obligations related to gift cards, lease liabilities, incentive compensation, workers’ compensation and medical insurance. Actual results could differ from those estimates.

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, and will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for interim and annual periods in fiscal years beginning after December 15, 2017, which will require the Company to adopt these provisions in the first quarter of fiscal year 2018. The standard permits the use of either the retrospective or cumulative effect transition method and is expected to impact the Company’s recognition of revenue related to franchise development and site specific fees. The Company currently recognizes franchise development and site specific fees when new franchisee-owned restaurants open. Under ASU 2014-09, development and site specific fees will be recognized over the life of the applicable franchise agreements. The Company expects that the new standard will have a material effect on the consolidated financial statements. The Company now expects that the most significant change relates to an increase of approximately $3 million to $4 million to the deferred revenue liability on the consolidated balance sheet for previously recognized franchise development and site specific fees that will be recognized over the life of the applicable franchise agreements under the new standard. In addition, ASU 2014-09 is expected to impact the classification of advertising contributions from franchisees. The

Company currently records advertising contributions from franchisees as a liability against which specified advertising and marketing costs are charged. Under the new standard, advertising contributions from franchisees will be classified as franchise income on the consolidated statements of income. The Company recognized advertising contributions from franchisees totaling $1.3 million and $1.4 million during fiscal years 2016 and 2015, respectively, as a reduction to marketing and advertising expense on the consolidated statements of income. The Company is evaluating other potential effects that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method.

~~In February 2016, the FASB issued ASU~~ 2016-02, Leases (Topic 842)~~. This update~~, which requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company adopted this new lease standard on December 31, 2018. See Note 2 for further information about our transition to this new lease standard.

Effective December 31, 2018, the Company adopted Topic 842 using the modified retrospective method for all leases in effect at the date of adoption. This ~~update is~~new lease standard requires a lessee to recognize on the balance sheet a liability for future lease obligations and a corresponding right-of-use (ROU) asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. The Company chose the effective date as its initial date of adoption. Consequently, the comparative information has not been restated and continues to be reported under the accounting standards in effect for ~~annual and interim periods beginning after December 15, 2018,~~those periods.

The Company elected the package of practical expedients permitted under the transition guidance, which ~~will require~~allowed the Company to ~~adopt these provisions in the first quarter of fiscal year 2019 using a modified retrospective approach. The Company’s restaurants operate under facility~~carry forward prior conclusions regarding lease ~~agreements that provide~~identification, lease classification and initial indirect costs for ~~material future lease payments. The restaurant facility leases comprise the majority of the Company’s material lease agreements.~~existing leases. The Company ~~is currently evaluating~~did not elect the effect of the standard on its ongoing financial reporting, but expects that the adoption of ASU 2016-02 will have a material effect on its consolidated financial statements. The Company expects that the most significant changes relatehindsight practical expedient.

In addition to 1) the recognition of ~~new right–of–use assets~~a liability for future lease obligations and ~~lease liabilities on~~a corresponding ROU asset, upon adoption, the ~~consolidated balance sheet for restaurant facility operating leases; and 2) the derecognition of existing lease liabilities on the consolidated balance sheet related to scheduled rent increases.~~Company:

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (Topic 230). This update was issued to standardize how certain transactions are classified on the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. The adoption of ASU 2016-15 is not expected to have a significant impact of the Company’s ongoing financial reporting.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740). This update addresses the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice over the years for transfers of certain intangible and tangible assets. The amendments in the update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal year 2018 using a modified retrospective approach. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). This update eliminates the current two-step approach used to test goodwill for impairment and requires an entity to apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019 (upon the first goodwill impairment test performed during that fiscal year). Early adoption is permitted for interim or annual goodwill impairment tests after January 1, 2017. The Company ~~does~~did not ~~expect the adoption of ASU 2017-04~~experience material changes to ~~have a material impact on our consolidated financial statements.~~

~~As of December 28, 2014, the Company operated eighteen Mitchell’s Fish Markets and three Mitchell’s/Cameron’s Steakhouse restaurants (collectively, the Mitchell’s Restaurants).~~

In November 2014, the Company and Landry’s, Inc. and Mitchell’s Entertainment, Inc., an affiliate of Landry’s Inc. (together with Landry’s Inc., Landry’s), entered into an asset purchase agreement (the Agreement). Pursuant to the Agreement, the Company agreed to sell the Mitchell’s Restaurants and related assets to Landry’s for $10 million. The sale of the Mitchell’s Restaurants closed on January 21, 2015. The assets sold consisted primarily of leasehold interests, leasehold improvements, restaurant equipment and furnishings, inventory, and related intangible assets, including brand names and trademarks associated with the 21 Mitchell’s Restaurants. The results of operations have been classified as discontinued operations ineither the consolidated statements of income ~~for all periods presented. No amounts for shared general and administrative costs~~ or ~~interest expense were allocated to discontinued operations. Substantially all direct~~the consolidated statements of cash flows due to the adoption of Topic 842. The following table summarizes the impacts of adopting Topic 842 on the Company’s condensed consolidated balance sheet as of December 31, 2018 (in thousands):

	December 30,		Adjustments Due
	2018		to the Adoption			December 31,
	As Reported		of ASC 842			2018
Assets
Current assets:
Cash and cash equivalents	$	5,062	$	—		$	5,062
Accounts receivable, less allowance for doubtful accounts		19,476		812			20,288
Inventory		9,296		—			9,296
Prepaid expenses and other		2,528		(2,108	)		420
Total current assets		36,362		(1,296	)		35,066
Property and equipment, net of accumulated depreciation		125,991		—			125,991
Right of use assets, net of accumulated amortization: operating leases		—		166,040			166,040
Goodwill		36,522		—			36,522
Franchise rights, net of accumulated amortization		44,919		—			44,919
Other intangibles, net of accumulated amortization		4,862		(758	)		4,104
Deferred income taxes		5,353		413			5,766
Other assets		604		—			604
Total assets	$	254,613	$	164,399		$	419,012
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	10,273	$	—		$	10,273
Accrued payroll		19,475		—			19,475
Accrued expenses		10,535		—			10,535
Deferred revenue		48,370		—			48,370
Current operating lease liabilities		—		14,599			14,599
Other current liabilities		6,619		(1,698	)		4,921
Total current liabilities		95,272		12,901			108,173
Long-term debt		41,000		—			41,000
Operating lease liabilities		—		178,256			178,256
Deferred rent		23,692		(23,692	)		—
Unearned franchise fees		2,680		—			2,680
Other liabilities		1,837		(1,805	)		32
Total liabilities		164,481		165,660			330,141
Commitments and contingencies (Note 11)		—		—			—

Shareholders' equity:
Common stock, par value $.01 per share; 100,000,000 shares authorized, 29,268,776 shares issued and outstanding at December 30, 2018		293		—			293
Additional paid-in capital		61,819		—			61,819
Retained earnings		28,020		(1,261	)		26,759
Treasury stock, at cost; 71,950 shares at December 30, 2018		—		—			—
Total shareholders' equity		90,132		(1,261	)		88,871
Total liabilities and shareholders' equity	$	254,613	$	164,399		$	419,012

The Company leases restaurant facilities and equipment. The Company determines whether an arrangement is or contains a lease at contract inception. The Company’s leases are all classified as operating leases, which are included as ROU assets and operating lease liabilities in the Company’s condensed consolidated balance sheet. Operating lease liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. ROU assets are measured based on the operating lease liabilities adjusted for lease incentives, initial indirect costs and impairments of operating lease assets. Minimum lease payments include only the fixed lease components of the agreements, as well as any variable rate payments that depend on an index, which are measured initially using the index at the lease commencement dates. To determine the present value of future minimum lease payments, the Company estimates incremental secured borrowing rates based on the information available at the lease commencement dates, or the transition date at adoption. The expected lease terms include options to extend when it is reasonably certain the Company will exercise the options up to a total term of 20 years. For financial reporting purposes, minimum rent payments are expensed on a straight-line basis over the lives of the leases. Additionally, incentives received from landlords used to fund

leasehold improvements reduce the ROU assets related to ~~operating these restaurants were eliminated at~~those leases and are amortized as reductions to rent expense over the ~~closing date~~lives of the ~~sale.~~leases. Variable lease payments that do not depend on a rate or index, payments associated with non-lease components and short-term rentals (leases with terms less than 12 months) are expensed as incurred.

At June 30, 2019, all of the Company-owned Ruth’s Chris Steak House restaurants operated in leased premises, with the exception of the restaurant in Ft. Lauderdale, FL, which is an owned property, and the restaurants in Anaheim, CA, Lake Mary, FL Princeton, NJ and South Barrington, IL, which operate on leased land. The ~~Company’s continuing involvement was limited to transition services up to four months~~leases generally provide for minimum annual rental payments with ~~minimal impact on cash flows.~~

~~Under~~scheduled minimum rent payments increases during the terms of the ~~Agreement, Landry’s assumed~~leases. Certain leases also provide for rent deferral during the ~~Mitchell’s Restaurants’ facility~~initial term, lease ~~obligations~~incentives in the form of tenant allowances to fund leasehold improvements, and/or contingent rent provisions based on the sales at the underlying restaurants. Most of the Company’s restaurant leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for 5 years or more. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The weighted average term and discount rate for operating leases is 13.3 years and 5.1%, respectively.

As of June 30, 2019, maturities of lease liabilities are summarized as follows (in thousands):

As previously disclosed in the ~~Company reimbursed Landry’s~~Company’s Annual Report on Form 10-K for ~~gift cards that were sold~~the fiscal year ended December 30, 2018, and under the previous lease accounting prior to the ~~closing date and used at~~adoption of ASC 842, future minimum annual rental commitments for operating leases as of December 30, 2018 were as follows (in thousands):

Supplemental cash flow information related to leases for the ~~Mitchell’s Restaurants during the eighteen months following the closing date.~~ second quarter of 2019 was as follows (in thousands):

In the ~~Agreement, the Company and Landry’s made customary representations and warranties and~~

agreed to customary covenants relating to the sale of the Mitchell’s Restaurants. The Company and Landry’s have agreed to indemnify each other for losses arising from certain breaches of the Agreement and for certain other liabilities.

The Company guaranteed Landry’s lease obligations aggregating $33.8 million under nine of the Mitchell’s Restaurants’ leases. The Company did not record a financial accounting liability for the lease guarantees, because the likelihood of Landry’s defaulting on the lease agreements was deemed to be remote. Landry’s also indemnified the Company in the event of a default under any of the leases.

The Company accounts for its closed restaurants in accordance with the provisions of FASB ASC Topic 360-10, “Property, Plant and Equipment.” As of December 29, 2014, the Company adopted ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which changed the criteria for reporting discontinued operations and requires additional disclosures about discontinued operations. ASU 2014-08 requires that an entity report as a discontinued operation only a disposal that represents a strategic shift in operations that has a major effect on its operations and financial results. Therefore, individual restaurants which are closed after December 28, 2014 will not be classified as discontinued operations. Prior tofollowing tables, the Company’s ~~adoption of ASU 2014-08, when a restaurant was closed or~~revenue is disaggregated by major component for each category on the restaurant was either held for sale or abandoned, the restaurant’s operations were eliminated from the ongoing operations. Accordingly, the operations of such restaurants, net of applicable income taxes, are presented as discontinued operations and prior period operations of such restaurants, net of applicable income taxes, were reclassified. For the thirteen and thirty-nine week periods ended September 24, 2017 and September 25, 2016, all restaurant sales, direct costs and expenses and income taxes attributable to restaurants classified as discontinued operations have been aggregated to a single caption entitled results from discontinued operations, net of income taxes in the condensed consolidated statements of income ~~for all periods presented. Results~~(in thousands).

13 Weeks Ended June 30, 2019:	Domestic		International		Total Revenue
Restaurant sales	$	104,017	$	—	$	104,017
Franchise income		3,718		703		4,421
Other operating income		1,805		—		1,805
Total revenue	$	109,540	$	703	$	110,243


13 Weeks Ended July 1, 2018:	Domestic		International		Total Revenue
Restaurant sales	$	103,538	$	—	$	103,538
Franchise income		3,754		703		4,457
Other operating income		1,640		—		1,640
Total revenue	$	108,932	$	703	$	109,635


26 Weeks Ended June 30, 2019:	Domestic		International		Total Revenue
Restaurant sales	$	217,003	$	—	$	217,003
Franchise income		7,537		1,442		8,979
Other operating income		4,002		—		4,002
Total revenue	$	228,542	$	1,442	$	229,984


26 Weeks Ended July 1, 2018:	Domestic		International		Total Revenue
Restaurant sales	$	213,902	$	—	$	213,902
Franchise income		7,457		1,417		8,874
Other operating income		3,384		—		3,384
Total revenue	$	224,743	$	1,417	$	226,160

The following table provides information about receivables and deferred revenue liabilities from ~~discontinued operations, net~~contracts with customers (in thousands).

Significant changes in the deferred revenue balance and the unearned franchise fees balance during the first twenty-six weeks of ~~income taxes is comprised of~~fiscal year 2019 are presented in the following table (in thousands):.

13 Weeks Ended

39 Weeks Ended

September 24,

September 25,

September 24,

September 25,

2017

2016

2017

2016

Revenues

Mitchell's Restaurants

$
—

$
—

$
—

$
—

Other Restaurants

—

—

—

—

Total revenues

—

—

—

—

Costs and expenses

Recurring costs and expenses

Mitchell's Restaurants

131

(448
)

220

(408
)
Other Restaurants

(17
)

325

(57
)

562

Total costs and expenses

114

(123
)

163

154

(Loss) income before income taxes

(114
)

123

(163
)

(154
)

Income tax (benefit) expense

(43
)

48

(62
)

(60
)

(Loss) income from discontinued operations, net of income taxes

$
(71
)

$
75

$
(101
)

$
(94
)

	Deferred			Unearned
	Revenue			Franchise Fees
Balance at December 30, 2018	$	48,370		$	2,680
Decreases in the beginning balance from gift card redemptions		(19,832	)		—
Increases due to proceeds received, excluding amounts recognized during the period		11,181			—
Decreases due to recognition of franchise development and opening fees		—			(133	)
Increases due to proceeds received for franchise development and opening fees		—			250
Other		389			—
Balance at June 30, 2019	$	40,108		$	2,797

Cash flows from discontinued operations are combined with the cash flows from continuing operations within each of the categories on our condensed consolidated statements of cash flows. We do not anticipate that the sale of the Mitchell’s Restaurants or any of our closed restaurants reported as discontinued operations will have a material impact on the Company’s cash flow during fiscal year 2017.

As of ~~September 24, 2017,~~June 30, 2019, the Company had ~~$30.0~~$45.0 million of outstanding indebtedness under its senior credit facility with approximately ~~$55.4~~$40.8 million of borrowings available, net of outstanding letters of credit of approximately ~~$4.6~~$4.2 million. As of ~~September 24, 2017,~~June 30, 2019, the weighted average interest rate on the Company’s outstanding debt was ~~2.7%~~3.9% and the weighted average interest rate on ~~our~~its outstanding letters of credit was 1.6%. In addition, the fee on the Company’s senior credit facility was 0.2%. ~~As of September 24, 2017, the Company was in compliance with all the covenants under its senior credit facility.~~

On February 2, 2017, the Company entered into a credit agreement with Wells Fargo Bank, National Association as administrative agent, and certain other lenders (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $90.0 million with a $5.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans. Subject to the satisfaction of certain conditions and lender consent, the revolving credit facility may be increased up to a maximum of $150.0 million. The Credit Agreement has a maturity date of February 2, 2022. At the Company’s option, revolving loans may bear interest at (i) LIBOR, plus an applicable margin or (ii) the highest of (a) the rate publicly announced by Wells Fargo as its prime rate, (b) the average published federal funds rate in effect on such day plus 0.50% and (c) one month LIBOR plus 1.00%, plus an applicable margin. The applicable margin is based on the Company’s actual leverage ratio, ranging (a) from 1.50% to 2.25% above the applicable LIBOR rate or (b) at the Company’s option, from 0.50% to 1.25% above the applicable base rate.

The Credit Agreement contains customary representations and affirmative and negative covenants (including limitations on indebtedness and liens) as well as financial covenants requiring a minimum fixed coverage charge ratio and limiting the Company’s consolidated leverage ratio. The Credit Agreement also contains events of default customary for credit facilities of this type (with customary grace periods, as applicable), including nonpayment of principal or interest when due; material incorrectness of representations and warranties when made; breach of covenants; bankruptcy and insolvency; unsatisfied ERISA obligations; unstayed material judgment beyond specified periods; default under other material indebtedness; and certain changes of control of the Company. If any event of default occurs and is not cured within the applicable grace period, or waived, the outstanding loans may be accelerated by lenders holding a majority of the commitments under the Credit Agreement and the lenders’ commitments may be terminated. The obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the Guarantors), and are secured by a lien on substantially all of the Company’s personal property assets other than any equity interest in current and future subsidiaries of the Company.

~~Subsequent to the end of the third quarter of fiscal year~~In October 2017, ~~the Company’s~~our Board of Directors approved a ~~new~~ share repurchase program ~~under which~~authorizing the Company ~~is authorized~~ to repurchase up to $60 million of outstanding common stock from time to time. The ~~new~~ share repurchase program ~~replaces~~replaced the previous share repurchase program announced in April 2016, which ~~has been~~was terminated. ~~The Company spent $48.0 million to repurchase 2.8 million shares of its common stock, at an average price of $17.05 per share, under its previous share repurchase program.~~ During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017, 719,442~~2019, 276,345 shares were repurchased at an aggregate cost of ~~$14.5~~$7.1 million, or an average cost of ~~$20.21~~$25.84 per share. ~~Share repurchases were accounted~~As of June 30, 2019, $25.0 million remained available for future purchases under the ~~cost method and all repurchased shares were retired and cancelled. The excess of the purchase price over the par value of the shares was recorded as a reduction in additional paid-in-capital.~~share repurchase program.

The Company’s Board of Directors declared the following dividends during the periods presented (amounts in thousands, except per share amounts):

Subsequent to the end of the ~~third~~second quarter of fiscal year ~~2017,~~2019, the Company’s Board of Directors declared a regular quarterly cash dividend of ~~$0.09~~$0.13 per common and restricted share, or approximately ~~$2.8~~$3.9 million in the aggregate based on the number of shares currently outstanding, payable on ~~November 22, 2017~~September 5, 2019 to stockholders of record as of the close of business on ~~November 9, 2017.~~August 22, 2019.

Outstanding unvested restricted stock is not included in common stock outstanding amounts. Restricted stock awards outstanding as of ~~September 24, 2017~~June 30, 2019 aggregated ~~1,184,629~~946,235 shares. Restricted stock units outstanding as of June 30, 2019 aggregated 22,908 shares.

The carrying amounts of cash and cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to their short duration. Borrowings classified as long-term debt as of ~~September 24, 2017~~June 30, 2019 and December ~~25, 2016~~30, 2018 have variable interest rates that reflect currently available terms and conditions for similar debt. The carrying amount of this debt is a reasonable estimate of its fair value (Level 2).

As of ~~September 24, 2017~~June 30, 2019, and December ~~25, 2016,~~30, 2018, the Company had no assets or liabilities measured on a recurring or nonrecurring basis subject to the disclosure requirements of “Fair Value Measurements and Disclosures,” FASB ASC Topic 820.

The Company has two reportable segments – the Company-owned steakhouse segment and the franchise operations segment. The Company does not rely on any major customers as a source of revenue. The Company-owned Ruth’s Chris Steak House restaurants, all of which are located in North America, operate within the full-service dining industry, providing similar products to similar customers. Revenues are derived principally from food and beverage sales. As of ~~September 24, 2017,~~June 30, 2019, (i) the Company-owned steakhouse restaurant segment included 7078 Ruth’s Chris Steak House restaurants and ~~two~~three Ruth’s Chris Steak House restaurants operating under contractual agreements and (ii) the franchise operations segment included 8176 franchisee-owned Ruth’s Chris Steak House restaurants. Segment profits for the Company-owned steakhouse restaurant segments equal segment revenues less segment expenses. Segment revenues for the Company-owned steakhouse restaurants include restaurant sales, management agreement income and other restaurant income. Gift card breakage revenue is not allocated to operating segments. Not all operating expenses are allocated to operating segments. Segment expenses for the Company-owned steakhouse segment include food and beverage costs and restaurant operating expenses. No other operating costs are allocated to the Company-owned steakhouse segment for the purpose of determining segment profits because such costs are not directly related to the operation of individual restaurants. The accounting policies applicable to each segment are consistent with the policies used to prepare the consolidated financial statements. The profit of the franchise operations segment equals franchise income, which consists of franchise royalty fees and franchise opening fees. No costs are allocated to the franchise operations segment.

Segment information related to the Company’s two reportable business segments follows (in thousands):

	13 Weeks Ended						39 Weeks Ended						13 Weeks Ended						26 Weeks Ended
	September 24,			September 25,			September 24,			September 25,			June 30,			July 1,			June 30,			July 1,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenues:
Company-owned steakhouse restaurants	$	80,390		$	79,360		$	275,732		$	263,907		$	105,079		$	104,499		$	219,263		$	215,700
Franchise operations		4,218			3,928			12,865			12,463			4,421			4,457			8,979			8,874
Unallocated other revenue and revenue discounts		559			486			2,123			1,948			743			679			1,742			1,586
Total revenues	$	85,167		$	83,774		$	290,720		$	278,318		$	110,243		$	109,635		$	229,984		$	226,160

Segment profits:
Company-owned steakhouse restaurants	$	12,476		$	15,088		$	60,674		$	58,859		$	24,900		$	25,428		$	53,633		$	53,544
Franchise operations		4,218			3,928			12,865			12,463			4,421			4,457			8,979			8,874
Total segment profit		16,694			19,016			73,539			71,322			29,321			29,885			62,612			62,418

Unallocated operating income		559			486			2,123			1,948			743			679			1,742			1,586
Marketing and advertising expenses		(3,197	)		(2,546	)		(9,056	)		(7,134	)		(4,121	)		(4,640	)		(7,751	)		(8,117	)
General and administrative costs		(7,096	)		(7,346	)		(23,267	)		(22,068	)		(8,929	)		(9,274	)		(17,681	)		(18,248	)
Depreciation and amortization expenses		(3,852	)		(3,435	)		(11,089	)		(9,907	)		(5,124	)		(4,673	)		(10,092	)		(9,134	)
Pre-opening costs		(121	)		(574	)		(1,473	)		(1,665	)		(244	)		(272	)		(341	)		(412	)
Interest expense, net		(197	)		(333	)		(521	)		(799	)		(417	)		(403	)		(822	)		(783	)
Other income		(6	)		(92	)		33			60			13			22			15			34
Income from continuing operations before income tax expense	$	2,784		$	5,176		$	30,289		$	31,757		$	11,242		$	11,324		$	27,682		$	27,344

Capital expenditures:
Company-owned steakhouse restaurants	$	3,600		$	5,238		$	13,592		$	18,351		$	4,594		$	6,162		$	9,690		$	11,041
Corporate assets		77			387			734			743			501			222			1,265			848
Total capital expenditures	$	3,677		$	5,625		$	14,326		$	19,094		$	5,095		$	6,384		$	10,955		$	11,889

As of December 26, 2016 (the first day of fiscal year 2017), the Company adopted ASU 2016-09, Compensation – Stock Compensation (Topic 718), which affects all entities that issue share-based compensation to their employees. The amendments in this ASU cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. Therefore, for the thirty-nine weeks of fiscal year 2017, the recognition of excess tax benefits and deficiencies were recognized as income tax benefits or expense on the consolidated statement of income and as an operating activity on the statement of cash flows. Prior toOn May 15, 2018, the Company’s ~~adoption of ASU 2016-09, these tax benefits and deficiencies were recognized as additional paid-in capital on the balance sheet and as~~stockholders approved a ~~financing activity on the statement of cash flows.~~

~~Under~~new 2018 Omnibus Incentive Plan (“2018 Plan”) which replaced the Amended and Restated 2005 Equity Incentive Plan ~~at September 24, 2017,~~(“2005 Plan”), which expired on May 30, 2018. The 2018 Plan authorizes 2.5 million shares reserved for future grants. Awards that were previously awarded under the 2005 Plan that are forfeited or cancelled in the future will be made available for grant or issuance under the 2018 Plan. The 1,649,394 shares that were authorized but unissued under the 2005 Plan as of May 15, 2018 were cancelled. As of June 30, 2019, there were ~~19,250~~5,073 shares of common stock issuable upon exercise of currently outstanding options, ~~1,184,629~~and 586,186 currently outstanding unvested restricted stock awards under the 2005 Plan. As of June 30, 2019, there were 360,049 currently outstanding unvested restricted stock awards and ~~1,806,516~~22,908 restricted stock units under the 2018 Plan. As of June 30, 2019, the 2018 Plan has 2,337,385 shares available for future grants. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017,~~2019, the Company issued ~~251,512~~252,208 restricted stock awards and units to directors, officers and other employees of the Company. Of the ~~251,512~~252,208 restricted stock awards and units issued during the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017, 38,220 shares will vest in fiscal year 2018, 135,073 shares will vest in fiscal year~~ 2019, ~~48,219~~42,504 shares will vest in fiscal year 2020, ~~10,000~~138,859 shares will vest in fiscal year 2021, ~~10,000~~52,191 shares will vest in fiscal year 2022 and ~~10,000~~18,654 shares will vest in ~~2023.~~

fiscal year 2024. Total stock compensation expense recognized during the first ~~thirty-nine~~twenty-six weeks of fiscal years ~~2017~~2019 and ~~2016~~2018 was ~~$5.1~~$4.1 million and ~~$4.3~~$3.8 million, respectively.

Income tax expense differs from amounts computed by applying the federal statutory income tax rate to income from continuing operations before income taxes as follows:

The Company utilizes the federal FICA tip credit to reduce its periodic federal income tax expense. A restaurant company employer may claim a credit against the company’s federal income taxes for FICA taxes paid on certain tip wages (the FICA tip credit). The credit against income tax liability is for the full amount of eligible FICA taxes. Employers cannot deduct from taxable income the amount of FICA taxes taken into account in determining the credit.

The Company files consolidated and separate income tax returns in the United States federal jurisdiction and many state jurisdictions, respectively. With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations for years before ~~2012.~~2014.

The following table sets forth the computation of earnings per share (amounts in thousands, except share and per share amounts):

	13 Weeks Ended					39 Weeks Ended						13 Weeks Ended				26 Weeks Ended
	September 24,			September 25,		September 24,			September 25,			June 30,		July 1,		June 30,		July 1,
	2017			2016		2017			2016			2019		2018		2019		2018
Income from continuing operations	$	1,767		$	3,508	$	20,657		$	21,347		$	9,309	$	9,561	$	23,220	$	23,197
Income (loss) from discontinued operations, net of income taxes		(71	)		75		(101	)		(94	)
Income from discontinued operations, net of income taxes													—		12		-		22
Net income	$	1,696		$	3,583	$	20,556		$	21,253		$	9,309	$	9,573	$	23,220	$	23,219
Shares:
Weighted average number of common shares outstanding - basic		30,348,180			31,305,952		30,490,554			32,023,814			29,252,651		29,713,825		29,264,076		29,701,847
Weighted average number of common shares outstanding - diluted		30,877,192			31,737,036		31,040,640			32,437,142			29,726,102		30,375,306		29,768,702		30,377,194

Basic earnings (loss) per common share:
Basic earnings per common share:
Continuing operations	$	0.06		$	0.11	$	0.68		$	0.67		$	0.32	$	0.32	$	0.79	$	0.78
Discontinued operations		—			—		(0.01	)		—			—		—		—		—
Basic earnings per common share	$	0.06		$	0.11	$	0.67		$	0.67		$	0.32	$	0.32	$	0.79	$	0.78

Diluted earnings (loss) per common share:
Diluted earnings per common share:
Continuing operations	$	0.06		$	0.11	$	0.67		$	0.66		$	0.31	$	0.32	$	0.78	$	0.76
Discontinued operations		(0.01	)		—		(0.01	)		—			—		—		—		—
Diluted earnings per common share	$	0.05		$	0.11	$	0.66		$	0.66		$	0.31	$	0.32	$	0.78	$	0.76

Diluted earnings per share for the ~~third quarters~~second quarter of fiscal year ~~2017 and 2016~~2019 excludes ~~stock options and~~ restricted shares of 018,671 which were outstanding during the period but were anti-dilutive and ~~31,845,~~had a weight average exercise price of $0 per share. There were no anti-dilutive shares for the second quarter of fiscal year 2018. Diluted earnings per share for the first twenty-six weeks of fiscal year 2019 and 2018 excludes restricted shares of 23,195 and 679, respectively, which were outstanding during the period but were ~~anti-dilutive. The~~anti-dilutive and had a weighted average exercise ~~prices~~price of ~~the anti-dilutive stock options for the third quarters of fiscal years 2017 and 2016 were~~ $0 per ~~share and $19.14 per~~ share. ~~Dilutive~~

earnings per share for the first thirty-nine weeks of fiscal years 2017 and 2016 excludes stock options and restricted shares of 857 and 24,981, respectively, which were outstanding during the period but were anti-dilutive. The weighted average exercise prices of the anti-dilutive stock options for the first thirty-nine weeks of fiscal years 2017 and 2016 were $21.60 per share and $19.04 per share, respectively.

The Company is subject to various claims, possible legal actions and other matters arising in the normal course of business. Management does not expect disposition of these other matters to have a material adverse effect on the financial position, results of operations or liquidity of the Company. The Company expenses legal fees as incurred.

The legislation and regulations related to tax and unclaimed property matters are complex and subject to varying interpretations by both government authorities and taxpayers. The Company remits a variety of taxes and fees to various governmental authorities, including excise taxes, property taxes, sales and use taxes, and payroll taxes. The taxes and fees remitted by the Company are subject to review and audit by the applicable governmental authorities which could assert claims for additional assessments. Although management believes that the tax positions are reasonable and consequently there are no accrued liabilities for claims which may be asserted, various taxing authorities may challenge certain of the positions taken by the Company which may result in additional liability for taxes and interest. These tax positions are reviewed periodically based on the availability of new information, the lapsing of applicable statutes of limitations, the conclusion of tax audits, the identification of new tax contingencies, or the rendering of relevant court decisions. An unfavorable resolution of assessments by a governmental authority could negatively impact the Company’s results of operations and cash flows in future periods.

The Company is subject to unclaimed or abandoned property (escheat) laws which require the Company to turn over to certain state governmental authorities the property of others held by the Company that has been unclaimed for specified periods of time. The Company is subject to audit by individual U.S. states with regard to its escheatment practices.

On February 26, 2018, a former restaurant hourly employee filed a class action lawsuit in the Superior Court of the State of California for the County of Riverside, alleging that the Company violated the California Labor Code and California Business and Professions Code, by failing to pay minimum wages, pay overtime wages, permit required meal and rest breaks and provide accurate wage statements, among other claims. This lawsuit seeks unspecified penalties under the California’s Private Attorney’s General Act in addition to other monetary payments (Quiroz Guerrero v. Ruth’s Hospitality Group, Inc., et al.; Case No RIC1804127). Although the ultimate outcome of this matter, including any possible loss, cannot be predicted or reasonably estimated at this time, we intend to vigorously defend this matter.

The Company currently buys a majority of its beef from two suppliers. Although there are a limited number of beef suppliers, management believes that other suppliers could provide similar product on comparable terms. A change in suppliers, however, could cause supply shortages and a possible loss of sales, which would affect operating results adversely.

On ~~November 2, 2017~~July 29, 2019, the Company entered into an asset purchase agreement with Desert Island Restaurants, L.L.C., Honolulu Steak House, LLC, Maui Steak House LLC, Wailea Steak House LLC, Beachwalk Steak House LLC, Lava Coast Steak House, LLC and Kauai Steak House, LLC (collectively,completed the ~~“Sellers”) to acquire~~acquisition of substantially all of the ~~six franchised~~assets of three franchisee-owned Ruth’s Chris Steak House restaurants located in ~~Hawaii~~Philadelphia, PA, King of Prussia, PA and Garden City, NY for a cash purchase price of ~~$35 million, subject to certain adjustments.~~$18.6 million. The ~~transaction has been approved by our Board of Directors and is subject to~~acquisition was funded with borrowings under the ~~satisfaction of customary closing conditions and may be terminated by the Company or the Sellers if closing has not occurred on or before 120 days following the date of the asset purchase agreement.~~Company’s senior credit facility.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements” that reflect, when made, the Company’s expectations 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,” “targeting,” “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, including with respect to new restaurant openings, ~~strategy, financial outlook,~~ capital expenditures, ~~liquidity and capital resources, the~~ impact of healthcare inflation, and ~~minimum wage legislation, the expected timing of the closing of the Hawaii franchisee acquisition and the expected benefits of the Hawaii franchisee acquisition~~recent accounting pronouncements, 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: reductions in the availability of, or increases in the cost of, USDA Prime grade beef, fish and other food items; changes in economic conditions and general trends; the loss of key management personnel; the effect of market volatility on the Company’s stock price; health concerns about beef or other food products; the effect of competition in the restaurant industry; changes in consumer preferences or discretionary spending; labor shortages or increases in labor costs; the impact of federal, state or local government regulations relating to income taxes, unclaimed property, Company employees, the sale or preparation of food, the sale of alcoholic beverages and the opening of new restaurants; harmful actions taken by the Company’s franchisees; the inability to successfully integrate franchisee acquisitions into the Company’s business operations;a material failure, interruption or security breach of the Company’s information technology network; ~~repeal or reduction of the federal FICA tip credit;~~ the Company’s indemnification obligations in connection with its sale of the Mitchell’s Restaurants; the Company’s ability to protect

its name and logo and other proprietary information; an impairment in the financial statement carrying value of our goodwill, other intangible assets or property; the impact of litigation; the restrictions imposed by the Company’s ~~credit agreement;~~Credit Agreement; and changes in, or

the discontinuation of, the Company’s quarterly cash dividend payments or share repurchase program; the failure or the inability of the parties to satisfy the closing conditions for the Hawaii franchisee acquisition; unanticipated transaction costs for the Hawaii franchisee acquisition; unexpected delays in closing the Hawaii franchisee acquisition; and the Company’s inability to successfully integrate the Hawaii franchisee restaurants into its operations.program. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~25, 2016,~~30, 2018, which is 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 Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof. You should not assume that material events subsequent to the date of this Quarterly Report on Form 10-Q have not occurred.

Unless the context otherwise indicates, all references in this report to the “Company,” “Ruth’s,” “we,” “us,” “our” or similar words are to Ruth’s Hospitality Group, Inc. and its subsidiaries. ~~Ruth’s Hospitality Group, Inc. is a Delaware corporation formerly known as Ruth’s Chris Steak House, Inc., and was founded in 1965.~~

The Ruth’s Chris menu features a broad selection of USDA Prime- and other high quality steaks and other premium offerings served in Ruth’s Chris’ signature fashion—“sizzling” and topped with butter—complemented by other traditional menu items inspired by our New Orleans heritage. The Ruth’s Chris restaurants reflect over 50 years committed to the core values instilled by our founder, Ruth Fertel, of caring for our guests by delivering the highest quality food, beverages and service in a warm and inviting atmosphere.

All Company-owned Ruth’s Chris Steak House restaurants are located in the United States. The franchisee-owned Ruth’s Chris Steak House restaurants include 21 international franchisee-owned restaurants in Aruba, Canada, China, Hong Kong, Indonesia, Japan, Mexico, ~~Panama,~~ Singapore ~~Taiwan~~ and the United Arab Emirates. New Company-owned Ruth’s Chris Steak House restaurants opened in Waltham, MA in January 2017 and Cleveland, OH in March 2017 and a new frachisee-owned Ruth’s Chris Steak House restaurant opened in Chengdu, China in September 2017. A new Ruth’s Chris Steak House restaurant operating under a contractual agreement also opened in Tulsa, OK in January 2017. A franchisee-owned Ruth’s Chris Steak House restaurant was closed in San Juan, Puerto Rico in September 2017.Taiwan.

Our business is subject to seasonal fluctuations. Historically, our first and fourth quarters have tended to be the strongest revenue quarters due largely to the year-end holiday season and the popularity of dining out during the fall and winter months.Consequently, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year and comparable restaurant sales for any particular period may decrease.

Our Annual Report on Form 10-K for the fiscal year ended December ~~25, 2016~~30, 2018 provides additional information about our business, operations and financial condition.

The table below sets forth certain operating data expressed as a percentage of total revenues for the periods indicated, except as otherwise noted. Our historical results are not necessarily indicative of the operating results that may be expected in the future.

	13 Weeks Ended						39 Weeks Ended						13 Weeks Ended						26 Weeks Ended
	September 24,			September 25,			September 24,			September 25,			June 30,			July 1,			June 30,			July 1,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenues:
Restaurant sales		93.2	%		94.0	%		93.9	%		94.1	%		94.4	%		94.4	%		94.4	%		94.6	%
Franchise income		5.0	%		4.7	%		4.4	%		4.5	%		4.0	%		4.1	%		3.9	%		3.9	%
Other operating income		1.8	%		1.3	%		1.7	%		1.4	%		1.6	%		1.5	%		1.7	%		1.5	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Costs and expenses:
Food and beverage costs (percentage of restaurant sales)		31.9	%		30.1	%		30.0	%		29.8	%		27.9	%		28.1	%		28.1	%		28.3	%
Restaurant operating expenses (percentage of restaurant sales)		53.6	%		51.5	%		48.7	%		48.5	%		49.2	%		48.3	%		48.3	%		47.5	%
Marketing and advertising		3.8	%		3.0	%		3.1	%		2.6	%		3.7	%		4.2	%		3.4	%		3.6	%
General and administrative costs		8.3	%		8.8	%		8.0	%		7.9	%		8.1	%		8.5	%		7.7	%		8.1	%
Depreciation and amortization expenses		4.5	%		4.1	%		3.8	%		3.6	%		4.6	%		4.3	%		4.4	%		4.0	%
Pre-opening costs		0.1	%		0.7	%		0.5	%		0.6	%		0.2	%		0.2	%		0.1	%		0.2	%
Total costs and expenses		96.5	%		93.3	%		89.4	%		88.3	%		89.4	%		89.3	%		87.6	%		87.6	%
Operating income		3.5	%		6.7	%		10.6	%		11.7	%		10.6	%		10.7	%		12.4	%		12.4	%

Other income (expense):
Interest expense, net		(0.2	%)		(0.4	%)		(0.2	%)		(0.3	%)		(0.4	%)		(0.4	%)		(0.4	%)		(0.3	%)
Other		-			(0.1	%)		-			-			0.0	%		0.0	%		0.0	%		0.0	%
Income from continuing operations before income tax expense		3.3	%		6.2	%		10.4	%		11.4	%		10.2	%		10.3	%		12.0	%		12.1	%
Income tax expense		1.2	%		2.0	%		3.3	%		3.7	%		1.8	%		1.6	%		1.9	%		1.8	%
Income from continuing operations		2.1	%		4.2	%		7.1	%		7.7	%		8.4	%		8.7	%		10.1	%		10.3	%
Loss from discontinued operations, net of income taxes		(0.1	%)		0.1	%		-			-			0.0	%		0.0	%		0.0	%		0.0	%
Net income		2.0	%		4.3	%		7.1	%		7.7	%		8.4	%		8.7	%		10.1	%		10.3	%

~~Third~~Second Quarter Ended ~~September 24, 2017~~June 30, 2019 (13 Weeks) Compared to ~~Third~~Second Quarter Ended ~~September 25, 2016~~July 1, 2018 (13 Weeks)

Overview. Operating income decreased by ~~$2.6 million,~~$59 thousand, or ~~46.7%~~0.5%, to ~~$3.0~~$11.6 million for the ~~third~~second quarter of fiscal year ~~2017~~2019 from the ~~third~~second quarter of fiscal year ~~2016.~~2018. Operating income for the ~~third~~second quarter of fiscal year ~~2017~~2019 was favorably impacted by a ~~$682~~$479 thousand increase in restaurant sales, a $519 thousand decrease in marketing and advertising expenses and a $345 thousand decrease in general and administrative costs, which were offset by a ~~$2.0~~$1.1 million increase in restaurant operating expenses and a ~~$1.6 million~~$451 thousand increase in ~~food~~depreciation and ~~beverage costs.~~amortization. Income from continuing operations decreased from the ~~third~~second quarter of fiscal year ~~2016~~2018 by ~~$1.7 million~~$252 thousand to ~~$1.8~~$9.3 million. Net income ~~for~~decreased from the ~~third~~second quarter of fiscal year ~~2017 decreased from the third quarter of fiscal year 2016~~2018 by ~~$1.9 million~~$264 thousand to ~~$1.7~~$9.3 million.

Segment Profits. Segment profitability information is presented in Note 7 to the condensed consolidated financial statements. Not all operating expenses are allocated to operating segments. The Ruth’s Chris Steak House Company-owned restaurants, which are all located in the United States, are managed as an operating segment. The Ruth’s Chris concept operates within the full-service dining industry, providing similar products to similar customers. The franchise operations are reported as a separate operating segment. Segment profits for the ~~third~~second quarter of fiscal year ~~2017~~2019 for the Company-owned steakhouse restaurant segment decreased by ~~$2.6 million~~$528 thousand to ~~$12.5~~$24.9 million from the ~~third~~second quarter of fiscal year ~~2016.~~2018. The decrease was driven primarily by a ~~$1.0 million~~$580 thousand increase in ~~restaurant sales~~revenues offset by a ~~$2.0~~$1.1 million increase in restaurant operating ~~expenses and a $1.6 million increase in food and beverage costs.~~expenses. Franchise income ~~increased $290~~decreased $36 thousand in the ~~third~~second quarter of fiscal year ~~2017~~2019 compared to the ~~third~~second quarter of fiscal year ~~2016 primarily due to franchise opening fees of $200 thousand.~~2018.

Restaurant Sales. Restaurant sales increased by ~~$682~~$479 thousand, or ~~0.9%~~0.5%, to ~~$79.4~~$104.0 million in the ~~third~~second quarter of fiscal year ~~2017~~2019 from the ~~third~~second quarter of fiscal year 2016. The increase was attributable to a $1.9 million increase in restaurant sales at new restaurants offset by a decrease in Company-owned comparable restaurant sales of $1.2 million. Excluding discontinued operations, total

~~operating weeks during the third quarter of fiscal year 2017 increased to 910 from 877 in the third quarter of fiscal year 2016.~~ 2018. Company-owned comparable restaurant sales decreased ~~1.6%, driven~~ by 0.5% which consisted of a 1.3% decrease in traffic and an average check ~~decrease~~increase of ~~0.1%~~0.9%. Comparable restaurant sales and a traffic ~~decrease~~were positively affected by approximately 50 to 70 basis points due to the shift of ~~1.5%. During~~Easter into the ~~third~~second quarter of ~~2017 Hurricanes Harvey and Irma negatively impacted Company-owned comparable restaurant sales by approximately 150-200 basis points, driven by 64 lost operating days.~~ 2019 from the first quarter of 2018.

Franchise Income. Franchise income ~~increased $290 thousand~~ in the ~~third~~second quarter of fiscal year ~~2017~~2019 decreased $36 thousand compared to the ~~third~~second quarter of fiscal year ~~2016.~~2018. The ~~increase~~decrease was primarily ~~due~~driven by lower franchise development and site specific fees of $118 thousand recognized in the second quarter of fiscal year 2019 compared to anthe second quarter of fiscal year 2018 offset by a 1.1% increase in comparable franchise ~~opening fees of $200 thousand.~~restaurant sales.

Other Operating Income. Other operating income increased ~~$421~~$165 thousand in the ~~third~~second quarter of fiscal year ~~2017~~2019 compared to the ~~third~~second quarter of fiscal year ~~2016. The increase~~2018. During the second quarter of fiscal year 2019 the Tulsa location was closed for 29 days due to flooding resulting in a decrease in other operating income of $93 thousand. This decrease was ~~primarily due to~~offset by an increase ~~of $371 thousand~~ in income from other restaurants operating under contractual agreements, including the new location in ~~Tulsa, OK.~~Reno, NV.

Food and Beverage Costs. Food and beverage costs ~~increased $1.6 million~~were flat in the ~~third~~second quarter of fiscal year ~~2017~~2019 compared to the ~~third~~second quarter of fiscal year ~~2016.~~2018 at $29.0 million. As a percentage of restaurant sales, food and beverage costs ~~increased~~decreased to ~~31.9%~~27.9% in the ~~third~~second quarter of fiscal year ~~2017~~2019 from ~~30.1%~~28.1% in the ~~third~~second quarter of fiscal year ~~2016.~~2018. The ~~increase~~decrease in food and beverage costs as a percentage of restaurant sales was primarily due to ~~a 10.9%~~an increase in average check of 0.9% which was partially offset by a 0.8% increase in total beef costs.

Restaurant Operating Expenses. Restaurant operating expenses increased ~~$2.0~~$1.1 million, or ~~5.0%~~2.3%, to ~~$42.6~~$51.2 million in the ~~third~~second quarter of fiscal year ~~2017~~2019 from the ~~third~~second quarter of fiscal year ~~2016.~~2018. Restaurant operating expenses, as a percentage of restaurant sales, increased to ~~53.6%~~49.2% in the ~~third~~second quarter of fiscal year ~~2017~~2019 from ~~51.5%~~48.3% in the ~~third~~second quarter of fiscal year ~~2016.~~2018. The increase in restaurant operating expenses as a percentage of restaurant sales was primarily due to ~~storm~~higher occupancy costs as well as increases in labor related ~~inefficiencies~~expenses.

Marketing and Advertising. Marketing and advertising expenses decreased $519 thousand to $4.1 million in the ~~resulting sales deleveraging. The third~~second quarter of fiscal year ~~2017 had a $1.2 million increase in labor related costs and a $335 thousand benefit in~~2019 from the ~~third~~second quarter of fiscal year ~~2016 related to the settlement of disputed rent costs.~~

~~Marketing and Advertising.~~ ~~Marketing and advertising expenses increased $651 thousand to $3.2 million in the third quarter of fiscal year 2017 from the third quarter of fiscal year 2016.~~2018. The ~~increase~~decrease in marketing and advertising expenses in the ~~third~~second quarter of fiscal year ~~2017~~2019 was ~~primarily~~ attributable to a planned ~~increase~~decrease in ~~advertising spending.~~advertising.

General and Administrative Costs. General and administrative costs decreased ~~$250~~$345 thousand to ~~$7.1~~$8.9 million in the ~~third~~second quarter of fiscal year ~~2017~~2019 from the ~~third~~second quarter of fiscal year ~~2016.~~2018. The decrease in general and administrative costs was primarily attributable to a decrease in ~~performance-based compensation.~~franchisee acquisition costs of $338 thousand compared to the second quarter of fiscal year 2018.

Depreciation and Amortization Expenses. Depreciation and amortization expense increased ~~$417~~$451 thousand to ~~$3.9~~$5.1 million in the ~~third~~second quarter of fiscal year ~~2017~~2019 from the ~~third~~second quarter of fiscal year ~~2016~~2018 primarily due to depreciation on new restaurant and remodel assets placed in service within the last twelve months.

Pre-opening Costs. Pre-opening costs were ~~$121~~$244 thousand in the ~~third~~second quarter of fiscal year ~~2017 primarily due to the planned opening of a Ruth’s Chris Steak House Restaurant in Denver, CO. Pre-opening costs were $574 thousand in the third quarter of fiscal year 2016~~2019 primarily due to the planned openings of three Ruth’s Chris Steak House restaurants in Washington, DC, Somerville, MA and Columbus, OH. Pre-opening costs were $272 thousand in the second quarter of 2018 primarily due to the openings of two Ruth’s Chris Steak House ~~Restaurants, including El Paso, TX, which opened~~restaurants in Jersey City, NJ and Paramus, NJ.

Interest Expense. Interest expense remained relatively flat at $417 thousand in the ~~third~~second quarter of fiscal year ~~2016.~~

~~Interest Expense.~~ ~~Interest expense decreased $136 thousand~~2019 compared to ~~$197~~$403 thousand in the ~~third~~second quarter of fiscal year ~~2017 from~~2018.

Other Income and Expense. During the ~~third~~second quarter of fiscal year ~~2016 primarily due to $78 thousand in lower amortization~~2019, we recognized other income of ~~capitalized debt costs during~~$13 thousand. During the ~~third~~second quarter of fiscal year ~~2017 compared to the third quarter~~2018 we recognized other income of ~~2016.~~$22 thousand.

~~Other~~ Income ~~and Expense.~~Tax Expense. During the ~~third~~second quarter of fiscal year ~~2017, we recognized other expense of $6 thousand. During the third quarter of fiscal year 2016 we recognized other expense of $92 thousand.~~

~~Income Tax Expense. During the third quarter of fiscal year 2017,~~2019, we recognized income tax expense of ~~$1.0~~$1.9 million. During the ~~third~~second quarter of fiscal year ~~2016,~~2018, we recognized income tax expense of ~~$1.7~~$1.8 million. The effective tax rate, including the impact of discrete items, increased to ~~36.5%~~17.2% for the ~~third~~second quarter of fiscal year ~~2017~~2019 compared to ~~32.2%~~15.6% for the ~~third~~second quarter of fiscal year ~~2016. The effective tax rate increased in the third quarter of fiscal year 2017~~2018 primarily due to ~~a discrete state income~~additional tax ~~reserve recognized~~benefit for the vesting of restricted stock in the ~~quarter.~~second quarter of 2018. Fiscal year ~~2017~~2019 discrete items and other unexpected changes impacting the annual tax expense may cause the effective tax rate for fiscal year ~~2017~~2019 to differ from the effective tax rate for the ~~third~~second quarter ~~2017.~~of fiscal year 2019.

Income from Continuing Operations. Income from continuing operations of ~~$1.8~~$9.3 million in the ~~third~~second quarter of fiscal year ~~2017~~2019 decreased by ~~$1.7 million~~$252 thousand compared to the ~~third~~second quarter of fiscal year ~~2016~~2018 due to the factors noted above.

Income or Loss from Discontinued Operations, net of income taxes. ~~Loss~~The Company did not have any income or loss from discontinued operations ~~net of income taxes, for~~during the ~~third~~second quarter of fiscal year ~~2017 was $71 thousand~~2019 compared to income of ~~$75~~$12 thousand during the ~~third~~second quarter of fiscal year ~~2016.~~ 2018.

~~The loss~~Net Income. Net income was $9.3 million in the ~~third~~second quarter of fiscal year ~~2017 was primarily due~~2019 which decreased by $264 thousand compared to Mitchell’s Restaurants. The income in the third quarter of 2016 was primarily attributable to a $466 thousand benefit from the extinguishment of a liability related to Mitchell’s Restaurant gift cards, partially offset by occupancy costs of $335 thousand from a closed Ruth’s Chris Steak House restaurant.

~~Net Income.~~ ~~Net income was $1.7~~$9.6 million in the ~~third~~second quarter of fiscal year ~~2017 and decreased by $1.9 million compared to $3.6 million in the third quarter of fiscal year 2016.~~2018. The ~~decrease~~increase was ~~largely~~ attributable to the factors noted above.

~~Thirty-nine~~Twenty-six Weeks Ended ~~September 24, 2017~~June 30, 2019 Compared to ~~Thirty-nine~~Twenty-six Weeks Ended ~~September 25, 2016~~July 1, 2018

Overview. Operating income ~~decreased~~increased by ~~$1.7 million,~~$396 thousand, or ~~5.3%~~1.4%, to ~~$30.8~~$28.5 million for the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. Operating income for the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 was favorably impacted by a ~~$11.1~~$3.1 million increase in restaurant sales, ana $618 thousand increase in other operating income ~~of $899~~and a $567 thousand decrease in general and ~~an increase in franchise income of $402 thousand~~administrative expenses offset by a ~~$6.0~~$3.1 million increase in restaurant operating expenses, ~~a $4.0 million increase in food and beverage costs, a $1.9 million increase in marketing and advertising, a $1.2 million increase in general and administrative costs~~ and a ~~$1.2 million~~$958 thousand increase in depreciation and amortization. Income from continuing operations ~~decreased~~increased from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016~~2018 by ~~$690~~$23 thousand to ~~$20.7~~$23.2 million. Net income ~~for~~was flat from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 decreased from the first thirty-nine weeks of fiscal year 2016 by $697 thousand to $20.6~~2018 at $23.2 million.

Segment Profits. Segment profitability information is presented in Note 7 to the condensed consolidated financial statements. Not all operating expenses are allocated to operating segments. The Ruth’s Chris Steak House Company-owned restaurants, which are all located in the United States, are managed as an operating segment. The Ruth’s Chris concept operates within the full-service dining industry, providing similar products to similar customers. The franchise operations are reported as a separate operating segment. Segment profits for the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 for the Company-owned steakhouse restaurant segment increased by ~~$1.8 million~~$89 thousand to ~~$60.7~~$53.6 million from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The increase was driven primarily by a ~~$11.8~~$3.6 million increase in ~~restaurant sales partially~~revenues offset by a ~~$6.0~~$3.1 million increase in restaurant operating expenses and a ~~$4.0 million~~$417 thousand increase in food and beverage costs. Franchise income increased ~~$402~~$105 thousand in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 compared to the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016 primarily due to royalties from a 4.5% increase in franchise restaurant sales.~~2018.

Restaurant Sales. Restaurant sales increased by ~~$11.1~~$3.1 million, or ~~4.2%~~1.4%, to ~~$273.0~~$217.0 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year 2016. The increase was attributable to a $1.8 million increase in Company-owned comparable restaurant sales and a $9.3 million increase in restaurant sales at new restaurants. Excluding discontinued operations, total operating weeks during the first thirty-nine weeks of fiscal year 2017 increased to 2,715 from 2,605 in the first thirty-nine weeks of fiscal year 2016.2018. Company-owned comparable restaurant sales increased ~~0.7%, driven~~ by 0.9% which consisted of a 1.1% decrease in traffic and an average check increase of ~~1.1% and a traffic decrease of 0.4%~~2.2%.

Franchise Income. Franchise income ~~increased $402 thousand~~ in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 increased $105 thousand compared to the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The increase was primarily ~~due to an~~driven by a 2.1% increase in ~~royalties from a 4.5% increase in~~comparable franchise restaurant ~~sales.~~sales and partially offset by lower franchise development and site specific fees of $103 thousand recognized in the first twenty-six weeks of fiscal year 2019 compared to the first twenty-six weeks of fiscal year 2018.

Other Operating Income. Other operating income increased ~~$899~~$618 thousand in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 compared to the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016. The increase~~2018. During the first twenty-six weeks of fiscal year 2019 the Tulsa location was closed for 29 days due to flooding resulting in a decrease in other operating income of $93 thousand. This decrease was ~~primarily due to~~offset by an increase ~~of $687 thousand~~ in income from other restaurants ~~operated~~operating under contractual agreements, including the new location in ~~Tulsa, OK and increased gift card breakage revenue of $175 thousand.~~ Reno, NV.

Food and Beverage Costs. Food and beverage costs increased ~~$4.0~~$417 thousand, or 0.7%, to $60.9 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 compared to the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. As a percentage of restaurant sales, food and beverage costs ~~increased~~decreased to ~~30.0%~~28.1% in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from ~~29.8%~~28.3% in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The ~~increase~~decrease in food and beverage costs as a percentage of restaurant sales was primarily due to an increase in average check of 2.2% and a decrease in beef ~~costs.~~costs of 1.1% which were partially offset by an increase in seafood costs of 4.2% and an increase in the remaining market basket of 1.1%.

Restaurant Operating Expenses. Restaurant operating expenses increased ~~$6.0~~$3.1 million, or ~~4.7%~~3.0%, to ~~$133.0~~$104.8 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. Restaurant operating expenses, as a percentage of restaurant sales, increased to ~~48.7%~~48.3% in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from ~~48.5%~~47.6% in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The increase in restaurant operating expenses as a percentage of restaurant sales was primarily due to ~~an increase~~higher occupancy costs as well as increases in labor related expenses.

Marketing and Advertising. Marketing and advertising expenses ~~increased $1.9 million~~decreased $366 thousand to ~~$9.1~~$7.8 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The ~~increase~~decrease in marketing and advertising expenses in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 was ~~primarily~~ attributable to a planned ~~increase~~decrease in ~~advertising spending.~~advertising.

General and Administrative Costs. General and administrative costs ~~increased $1.2 million~~decreased $567 thousand to ~~$23.3~~$17.7 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The ~~increase~~decrease in general and administrative costs was

primarily attributable to ~~an increase of $2.0 million in compensation expense partially offset by~~ a decrease in ~~professional fees~~franchisee acquisition costs of ~~$997 thousand.~~$751 thousand compared to the first twenty-six weeks of fiscal year 2018.

Depreciation and Amortization Expenses. Depreciation and amortization expense increased ~~$1.2 million~~$958 thousand to ~~$11.1~~$10.1 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 from the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016~~2018 primarily due to depreciation on new restaurant and remodel assets placed in service within the last twelve months.

Pre-opening Costs. Pre-opening costs were ~~$1.5 million~~$341 thousand in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 primarily due to the planned openings of three Ruth’s Chris Steak House restaurants in Washington, DC, Somerville, MA and Columbus, OH and the recent opening of the Ruth’s Chris Steak House restaurant in Reno, NV. Pre-opening costs were $412 thousand in the first twenty-six weeks of 2018 primarily due to the openings of two Ruth’s Chris Steak House restaurants in ~~Waltham, MA~~Jersey City, NJ and ~~Cleveland, OH which opened~~Paramus, NJ.

Interest Expense. Interest expense remained relatively flat at $822 thousand in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 and the anticipated opening of our second Denver, CO opening planned for the fourth quarter of 2017. Pre-opening costs were $1.7 million~~2019 compared to $783 thousand in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016 primarily due to the anticipated openings of four new Company-owned restaurants, including Albuquerque, NM, which opened in May 2016~~2018.

~~Interest~~ Expense.~~Interest expense decreased $278 thousand to $521 thousand in~~ During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 from~~2019, we recognized other income of $15 thousand. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016 primarily due to lower amortization~~2018 we recognized other income of ~~capitalized debt costs during~~$34 thousand.

Income Tax Expense. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017.~~

~~Other Income and Expense.~~ ~~Other income remained relatively unchanged for the first thirty-nine weeks of fiscal year 2017, compared to the first thirty-nine weeks of fiscal year 2016.~~

~~Income Tax Expense. During the first thirty-nine weeks of fiscal year 2017,~~2019, we recognized income tax expense of ~~$9.6~~$4.5 million. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016,~~2018, we recognized income tax expense of ~~$10.4~~$4.1 million. The effective tax rate, including the impact of discrete items, ~~decreased~~increased to ~~31.8%~~16.1% for the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 compared to ~~32.8%~~15.2% for the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016.~~2018. The increase in the effective tax rate ~~decreased~~ in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 is primarily due to ~~lower~~an increase in state income ~~taxes recognized in the first thirty-nine weeks.~~taxes. Fiscal year ~~2017~~2019 discrete items and other unexpected changes impacting the annual tax expense may cause the effective tax rate for fiscal year ~~2017~~2019 to differ from the effective tax rate for the first ~~thirty-nine~~twenty-six weeks of ~~2017.~~fiscal year 2019.

Income from Continuing Operations. Income from continuing operations of ~~$20.7~~$23.2 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 decreased by $690~~2019 increased $23 thousand compared to the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016~~2018 due to the factors noted above.

Income or Loss from Discontinued Operations, net of income taxes. ~~Loss~~The Company did not have any income or loss from discontinued operations ~~net of income taxes, for~~during the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 was $101 thousand~~2019 compared to ~~a loss~~income of ~~$94~~$22 thousand during the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016. The loss~~2018.

Net Income. Net income was $23.2 million in both the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017 was primarily attributable to Mitchell’s Restaurants. The loss in~~2019 and the first thirty-nine weeks of 2016 was primarily attributable to occupancy costs of $581 thousand from a closed Ruth’s Chris Steak House restaurant, partially offset by a benefit of $466 thousand from the extinguishment of a liability related to Mitchell’s Restaurant gift cards.

~~Net Income.~~ ~~Net income was $20.6 million in the first thirty-nine~~twenty-six weeks of fiscal year ~~2017 and decreased by $697 thousand compared to $21.3 million in the first thirty-nine weeks of fiscal year 2016. The decrease was largely attributable to the factors noted above.~~2018.

Our principal sources of cash ~~during~~have been historically provided by our operating activities as well as periodic borrowings from our senior credit facility. During the first ~~thirty-nine~~twenty-six weeks of ~~2017 were net cash provided by operating activities and borrowings under~~fiscal year 2019 our ~~prior and current senior credit facilities. Our~~ principal uses of cash ~~during the first thirty-nine weeks of 2017~~flow from operations were ~~for~~ capital expenditures, ~~principal~~debt repayments, ~~under our senior credit facility,~~the repurchase of common stock ~~repurchases~~ and dividend payments. Cash flows from discontinued operations are combined with the cash flows from continuing operations within each of the categories on our ~~statement~~condensed consolidated statements of cash flows.

~~Subsequent to the end of the third quarter of fiscal year~~In October 2017, our Board of Directors approved a new share repurchase program authorizing us to repurchase up to $60 million of outstanding common stock from time to time. The new share repurchase program ~~replaces~~replaced the previous share repurchase program announced in April 2016, which ~~has been retired. We spent $48.0 million to repurchase 2.8 million shares of its common stock, at an average price of $17.02 per share, under its previous share repurchase program.~~ was terminated. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017, we~~2019, the Company repurchased ~~719,442~~276,345 shares at an aggregate cost of ~~$14.5~~$7.1 million or an average cost of ~~$20.21~~$25.84 per share. All repurchased shares were retired and cancelled. As of June 30, 2019, $25.0 million remained available for future repurchases under the share repurchase program.

During the second quarter of fiscal year 2013, we commenced paying quarterly cash dividends to holders of common and restricted stock. We paid a quarterly cash dividend of ~~$0.09~~$0.13 per share, or ~~$2.9~~$3.9 million in the aggregate, during the ~~first and~~ second quarter of fiscal year ~~2017 and $2.8 million in the third quarter of fiscal year 2017.~~2019. On ~~November 3, 2017,~~August 2, 2019, we announced that our Board of Directors declared a quarterly cash dividend of ~~$0.09~~$0.13 per share, or ~~$2.8~~$3.9 million in the aggregate, to be paid on ~~November 22, 2017~~September 5, 2019 to common and restricted stockholders of record as of the close of business on ~~November 9, 2017.~~August 22, 2019. Future dividends will be subject to the approval of our Board of Directors.

We believe that our borrowing ability under our ~~new~~ senior credit facility coupled with our anticipated cash flow from operations should provide us with adequate liquidity for the next 12 months.

As of ~~September 24, 2017,~~June 30, 2019, we had ~~$30.0~~$45.0 million of outstanding indebtedness under our senior credit facility with approximately ~~$55.4~~$40.8 million of ~~borrowings available,~~availability, net of outstanding letters of credit of approximately ~~$4.6~~$4.2 million. As of ~~September 24, 2017,~~June 30, 2019, the weighted average interest rate on our outstanding debt was ~~2.7%~~3.9% and the weighted average interest rate on our outstanding letters of credit was 1.6%. In addition, the fee on the unused portion of our senior credit facility was 0.2%.

On February 2, 2017, we entered into a credit agreement with Wells Fargo Bank, National Association as administrative agent, and certain other lenders (the Credit Agreement) governing a ~~new~~ senior credit facility that replaced ~~the~~our prior credit facility. The Credit Agreement provides for a revolving credit facility of $90.0 million with a $5.0 million subfacility for letters of credit and a $5.0 million subfacility for swingline loans. Subject to the satisfaction of certain conditions and lender consent, the revolving credit facility may be increased up to a maximum of $150.0 million. The Credit Agreement has a maturity date of February 2, 2022. At our option, revolving loans may bear interest at (i) LIBOR, plus an applicable margin or (ii) the highest of (a) the rate publicly announced by Wells Fargo as its prime rate, (b) the average published federal funds rate in effect on such day plus 0.50% and (c) one month LIBOR plus 1.00%, plus an applicable margin. The applicable margin is based on our actual leverage ratio, ranging (a) from 1.50% to 2.25% above the applicable LIBOR rate or (b) at our option, from 0.50% to 1.25% above the applicable base rate.

The Credit Agreement contains customary representations and affirmative and negative covenants (including limitations on indebtedness and liens) as well as financial covenants requiring a minimum fixed coverage charge ratio and limiting our consolidated leverage ratio. As of ~~September 24, 2017,~~June 30, 2019, we were in compliance with all of the covenants in the Credit Agreement. The Credit Agreement also contains events of default customary for credit facilities of this type (with customary grace periods, as applicable), including nonpayment of principal or interest when due; material incorrectness of representations and warranties when made; breach of covenants; bankruptcy and insolvency; unsatisfied ERISA obligations; unstayed material judgment beyond specified periods; default under other material indebtedness; and certain changes of control of the Company. If any event of default occurs and is not cured within the applicable grace period, or waived, the outstanding loans may be accelerated by lenders holding a majority of the commitments under the Credit Agreement and the lenders’ commitments may be terminated. The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries (the Guarantors), and are secured by a lien on substantially all of our personal property assets other than any equity interest in current and future subsidiaries of the Company.

Under the Credit Agreement, restricted junior payments, which include cash dividend payments, repurchases of our equity securities and payments and prepayments of subordinated indebtedness, made subsequent to February 2, 2017 are limited to $100.0 million if our consolidated leverage ratio is greater than or equal to 2.00:1.00, and are not limited in amount if our consolidated leverage ratio is less than 2.00:1.00. As of the date of this Quarterly Report on Form 10-Q, ~~$23.1~~$82.4 million in junior restricted payments have been made since February 2, 2017. The Company does not expect that its consolidated leverage ratio will exceed 2.00:1.00 in fiscal year 2019.

The following table presents a summary of our net cash provided by (used in) operating, investing and financing activities (in thousands):

Operating Activities. Operating cash inflows pertain primarily to restaurant sales and franchise income. Operating cash outflows pertain primarily to expenditures for food and beverages, restaurant operating expenses, marketing and advertising, general and administrative costs and income taxes. During the first twenty-six weeks of fiscal year 2018 the Company collected an additional $3.3 million in receivables related to restaurant sales compared to the first twenty-six weeks of fiscal year 2019 due to the fiscal year calendar shift. In addition, incentive compensation paid during the first twenty-six weeks of 2019 increased $1.9 million compared to the first twenty-six weeks of 2018. Operating activities provided cash flow during the first ~~thirty-nine~~twenty-six weeks of both fiscal years ~~2017~~2019 and ~~2016~~2018 primarily because operating revenues exceeded cash-based expenses.

Investing Activities. Cash used in investing activities aggregated ~~$14.3~~$11.0 million in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 compared with ~~$18.3~~$13.1 million cash used in the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016. Investing cash outflows during the first thirty-nine weeks of both fiscal years 2017 and 2016 pertained primarily to capital expenditure projects.~~2018. Cash used in investing projects during the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017~~2019 primarily pertained to ~~$6.7~~$7.3 million for restaurant remodel and capital replacement projects,

and $2.4 million for new restaurants that are anticipated to open in 2019. Cash used in investing activities during the first twenty-six weeks of fiscal year 2018 primarily pertained to $4.1 million for restaurant remodel and capital replacement projects and ~~$6.8~~$5.0 million for new restaurants. ~~Cash used in investing activities during the first thirty-nine weeks of fiscal year 2016 primarily pertained to $8.6 million for restaurant remodel projects and $9.5 million for new restaurants.~~

Financing Activities. Financing activities used cash during the first ~~thirty-nine~~twenty-six weeks of both fiscal years ~~2017~~2019 and ~~2016.~~2018. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017,~~2019, we: paid dividends of $7.9 million; used ~~$14.5 million~~$7.1 thousand to repurchase common stock; paid ~~dividends of $8.6 million; increased the debt outstanding under our senior credit facility by $5.0 million; and paid $2.1~~$3.1 million in employee taxes in connection with the vesting of restricted ~~stock~~stock; and ~~the exercise of stock options.~~increased debt by $4.0 million. We paid the ~~$2.1~~$3.1 million in taxes in connection with the vesting of restricted stock ~~and the exercise of stock options~~ because some recipients elected to satisfy their individual tax withholding obligations by having us withhold a number of vested shares of restricted ~~stock and/or a number of shares otherwise issuable pursuant to stock options.~~stock. During the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2016,~~2018, we: paid dividends of $6.8 million; used ~~$40.0~~$5.9 million to repurchase common stock; ~~increased the debt outstanding under our senior credit facility by $38.0 million; paid dividends of $7.0 million;~~ and paid ~~$1.5~~$3.8 million in ~~employee~~ taxes ~~related to~~in connection with the vesting of restricted stock ~~based compensation.~~and the exercise of stock options.

As of ~~September 24, 2017,~~June 30, 2019, we did not have any off-balance sheet arrangements.

The preparation of our financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the periods presented. Our Annual Report on Form 10-K for the fiscal year ended December ~~25, 2016~~30, 2018 includes a summary of the critical accounting policies and estimates that we believe are the most important to aid in the understanding our financial results. ~~There~~Other than the adoption of Topic 842 (see Note 2), there have been no material changes to these critical accounting policies and estimates that impacted our reported amounts of assets, liabilities, revenues or expenses during the first ~~thirty-nine~~twenty-six weeks of fiscal year ~~2017.~~2019.

The Company is exposed to market risk from fluctuations in interest rates. For fixed rate debt, interest rate changes affect the fair market value of such debt but do not impact earnings or cash flows. Conversely, for variable rate debt, including borrowings under the Company’s senior credit facility, interest rate changes generally do not affect the fair market value of such debt, but do impact future earnings and cash flows, assuming other factors are held constant. At ~~September 24, 2017,~~June 30, 2019, the Company had ~~$30.0~~$45.0 million in variable rate debt outstanding. The Company currently does not use financial instruments to hedge its risk to market fluctuations in interest rates.Holding other variables constant (such as debt levels), a hypothetical immediate one percentage point change in interest rates would be expected to have an impact on pre-tax earnings and cash flows for fiscal year ~~2017~~2019 of approximately ~~$300~~$450 thousand.

The Company believes that fluctuations in foreign exchange rates do not present a material risk to its operations due to the relatively small amount of franchise income it receives from outside the U.S. During the first ~~thirty-nine~~twenty-six weeks of fiscal years ~~2017~~2019 and ~~2016,~~2018, franchise income attributable to international locations was approximately ~~$2.1~~$1.4 million, ~~in each year.~~which is less than 1% of total annual revenue.

The Company is exposed to market price fluctuations in beef and other food product prices, which in the past have been volatile and have impacted the Company’s food and beverage costs. As the Company typically sets its menu prices in advance of its beef and other food product purchases, the Company cannot quickly react to changing costs of beef and other food items. To the extent that the Company is unable to pass the increased costs on to its guests through price increases, the Company’s results of operations would be adversely affected. ~~As of September 24, 2017, the~~The Company has ~~entered into~~ negotiated set pricing ~~for~~on approximately ~~25%~~70% of ~~its~~our tenderloin supply from August into mid-February 2020. This represents approximately 35% of the Company’s total beef

~~requirements for~~ supply. The contract price during the ~~remainder of fiscal year 2017.~~entire period will be down 1% over prices paid in the previous year. The market for USDA Prime grade beef is particularly volatile. If prices increase, or the supply of beef is reduced, operating margin could be materially adversely affected. Holding other variables constant, a hypothetical 10% fluctuation in beef prices would have an approximate impact on pre-tax earnings ~~ranging from $0.5 million to $1.0~~of approximately $4.0 million for ~~the remainder of~~ fiscal year ~~2017.~~2019.

From time to time, the Company enters into purchase price agreements for other lower-volume food products, including seafood. In the past, certain types of seafood have experienced fluctuations in availability. Seafood is also subject to fluctuations in price based on availability, which is often seasonal. If certain types of seafood are unavailable, or if the Company’s costs increase, the Company’s results of operations could be adversely affected.

The Company is exposed to market price fluctuations related to the cost of providing healthcare to its employees. Claim trends are predicted to outpace inflation throughout the ~~upcoming~~ year. Pharmacy costs are also rising in excess of general and medical cost inflation. If prices increase, or the Company experiences significantly more claims, operating margin could be materially adversely affected.Holding other variables constant, a hypothetical 10% fluctuation in healthcare costs would have an approximate impact on pre-tax earnings of approximately ~~$250~~$700 thousand for ~~the remainder of 2017.~~fiscal year 2019.

The Company believes that general inflation, excluding increases in food, employee wages and employee health plan costs, has not had a material impact on its results of operations in recent years. Additionally, increases in statutory minimum wage rates may increase our operating costs. Recently, governmental entities acted to increase minimum wage rates in states where Company-owned restaurants are located. The increased minimum wage rates are expected to increase employee compensation and related taxes by approximately $1.2 million in fiscal year ~~2017~~2019 compared to fiscal year ~~2016.~~2018. Also, the U.S. government may consider legislation to increase the federal minimum wage rate, which, if enacted, would further increase employee compensation and related taxes.

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of ~~September 24, 2017.~~June 30, 2019. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~September 24, 2017~~June 30, 2019 to ensure that information required to be disclosed in reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by the Company is accumulated and communicated to the Company’s management to allow timely decisions regarding the required disclosure.

During the fiscal quarter ended ~~September 24, 2017,~~June 30, 2019, except for the addition of internal controls around the adoption of Topic 842, there was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that in the Company’s judgment has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~From time to time, the Company is involved in various disputes and litigation matters that arise~~See Note 11 in the ~~ordinary course~~notes to the condensed consolidated financial statements included in Item 1. “Financial Statements” for a summary of ~~business. While litigation is subject to uncertainties and the outcome of litigated matters is not predictable with assurance, the Company is not aware of any~~ legal ~~proceedings pending or threatened against it that it expects to have a material adverse effect on its financial condition or results of operations.~~proceedings.

There have been no material changes in the risk factors included in the Company’s Annual Report on Form 10-K for the fiscal year ended December ~~25, 2016.~~30, 2018. The impact of circumstances and events described in such risk factors could result in significant adverse effects on our financial position, results of operations and cash flows.

Stock repurchase activity during the fiscal quarter ended ~~September 24, 2017~~June 30, 2019 was as follows:

~~Subsequent to the end of the third quarter of fiscal year~~On November 3, 2017, the ~~Company’s~~Company announced that its Board of Directors approved a ~~new~~ share repurchase program under which the Company is authorized to repurchase up to $60 million of outstanding common stock from time to time in the open market, through negotiated transactions or otherwise (including, without limitation, the use of Rule 10b5-1 plans), depending on share price, market conditions and other factors. The ~~new~~ share repurchase program ~~replaces~~replaced the Company’s previous share repurchase program announced in April 2016, which has been retired. The previous share repurchase program had permitted the repurchase of up to $60 million of outstanding common stock, of which approximately $12.0 million remained unused upon its retirement.was terminated. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and has no termination date. The Company intends to conduct any open market share repurchase activities in compliance with the safe harbor provisions of Rule 10b-18 of the Exchange Act. During the fiscal quarter ended September 24, 2017, 319,442 shares were repurchased via open market transactions at an aggregate cash cost of $6.1 million. During the fiscal quarter ended September 25, 2016, 553,341 shares were repurchased via open market transactions at an aggregate cash cost of $8.3 million. The Company’s ability to make future stock purchases under the program is currently limited by our Credit Agreement. Under our Credit Agreement, we are limited to $100.0 million of junior stock payments, which include cash dividends, repurchases of common stock and prepayments of subordinated indebtedness, if our consolidated leverage ratio is greater than or equal to 2.00:1.00. As of ~~September 24, 2017, $23.1~~June 30, 2019, $82.4 million of such payments had been made.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware	72-1060618
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1030 W. Canton Avenue, Suite 100, Winter Park, FL	32789
(Address of principal executive offices)	(Zip code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RUTH	Nasdaq

Large accelerated filer	☐☒	Accelerated ~~filer~~Filer	☒☐

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐

		Emerging growth company	☐


		Page
Part I — Financial Information		3

Item 1	Financial Statements:	3

	Condensed Consolidated Balance Sheets as of ~~September 24, 2017~~June 30, 2019 and December ~~25, 2016~~30, 2018	3

	Condensed Consolidated Statements of Income for the Thirteen and ~~Thirty-nine~~Twenty-six Week Periods ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018	4

	Condensed Consolidated Statements of Shareholders’ Equity for the ~~Thirty-nine~~Thirteen and Twenty-six Week Periods ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018	5

	Condensed Consolidated Statements of Cash Flows for the ~~Thirty-nine~~Twenty-six Week Periods ended ~~September 24, 2017~~June 30, 2019 and ~~September 25, 2016~~July 1, 2018	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1416

Item 3	Quantitative and Qualitative Disclosures about Market Risk	21

~~Item 4~~	~~Controls and Procedures~~	22

~~Part II — Other Information~~		22

~~Item 1~~	~~Legal Proceedings~~	22

~~Item 1A~~	~~Risk Factors~~	22

~~Item 2~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	23

~~Item 3~~	~~Defaults Upon Senior Securities~~	23

Item 4	~~Mine Safety Disclosures~~Controls and Procedures	2324

Part II — Other Information		24

Item 1	Legal Proceedings	24

Item 1A	Risk Factors	24

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3	Defaults Upon Senior Securities	25

Item 4	Mine Safety Disclosures	25

Item 5	Other Information	2325

Item 6	Exhibits	2325

Signatures		2526

		13 Weeks Ended		26 Weeks Ended
	Classification	June 30, 2019		June 30, 2019
Operating lease cost	Restaurant operating expenses and General and administrative costs	$	6,704	$	13,093
Variable lease cost	Restaurant operating expenses and General and administrative costs		2,596		5,353
Total lease cost		$	9,300	$	18,446

	Operating Leases
2019, excluding first twenty-six weeks ended June 30, 2019	$	13,306
2020		27,244
2021		26,085
2022		24,956
2023		22,045
Thereafter		200,242
Total future minimum rental commitments	$	313,878

	Operating Leases
2019	$	25,767
2020		24,177
2021		22,520
2022		21,388
2023		18,858
Thereafter		154,661
Total future minimum rental commitments	$	267,371

	26 Weeks Ended
	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13,054
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	33,658

Declaration Date	Dividend per Share		Record Date	Total Amount		Payment Date
Fiscal Year 2017
February 17, 2017	$	0.09	February 23, 2017	$	2,862	March 9, 2017
May 5, 2017	$	0.09	May 18, 2017	$	2,862	June 1, 2017
July 28, 2017	$	0.09	August 10, 2017	$	2,844	August 24, 2017

Fiscal Year 2016
February 12, 2016	$	0.07	February 25, 2016	$	2,350	March 10, 2016
April 28, 2016	$	0.07	May 12, 2016	$	2,338	May 26, 2016
July 29, 2016	$	0.07	August 11, 2016	$	2,282	August 25, 2016

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Maximum Dollar Value that May Yet be Purchased under the Program – Amounts in thousands

June 26, 2017 to July 30, 2017	—		—		—		$	18,158
July 31, 2017 to August 27, 2017		6,845	$	19.52		6,845	$	18,025
August 28, 2017 to September 24, 2017		312,597	$	19.12		312,597	$	12,047
Totals for the fiscal quarter		319,442	$	19.13		319,442	$	12,047


10.1		Asset Purchase Agreement, dated May 1, 2019, by and among RCSH Operations, LLC, Marsha Brown Restaurants, L.P., Marsha Brown Restaurants, Inc., M.R. Brown, Inc., Marsha Brown Development Corporation, and Ophelia May LLC and the individuals listed on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 3, 2019).

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.


	RUTH’S HOSPITALITY GROUP, INC.

	By:	/S/ M~~ICHAEL~~ ~~P. O’DONNELL~~CHERYL J. HENRY
		~~Michael P. O’Donnell~~Cheryl Henry
		~~Chairman of the Board~~President and Chief Executive Officer
		(Principal Executive Officer)

	By:	/S/ ARNE G. HAAK
		Arne G. Haak
		Executive Vice President and Chief Financial Officer ~~of Ruth’s Hospitality Group, Inc.~~ (Principal Financial Officer)