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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 3, 2002 OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to

Commission file number 1-12454

RUBY TUESDAY, INC.
(Exact name of registrant as specified in charter)

GEORGIA 63-0475239
- ------------------------- -------------------------
(State of incorporation or (I.R.S. Employer identifi-
organization) cation no.)


150 West Church Avenue
Maryville, TN 37801
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (865) 379-5700
--------------

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 X . No .

63,854,494
----------
(Number of shares of $0.01 par value common stock outstanding as of
October 11, 2002)

Exhibit Index appears on page 14



INDEX
PAGE
NUMBER
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 3, 2002 (UNAUDITED) AND JUNE 4, 2002..... 3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) FOR THE THIRTEEN WEEKS ENDED
SEPTEMBER 3, 2002 AND SEPTEMBER 4, 2001............ 4

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED) FOR THE THIRTEEN WEEKS
ENDED SEPTEMBER 3, 2002 AND SEPTEMBER 4, 2001...... 5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)............................. 6-7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS...................................... 8-11

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK........................................ N/A

ITEM 4. CONTROLS AND PROCEDURES........................... 12

PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. LEGAL PROCEEDINGS.................................. 13

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.......... NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................... NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.................................. NONE

ITEM 5. OTHER INFORMATION.................................. NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................... 14

SIGNATURES................................................. 15

CERTIFICATIONS............................................. 16-17







PART I - FINANCIAL INFORMATION
ITEM 1
RUBY TUESDAY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER-SHARE DATA)



SEPTEMBER 3, JUNE 4,
2002 2002
(UNAUDITED) (NOTE A)
------------- ----------
Assets
Current assets:
Cash and short-term investments......... $ 17,263 $ 32,699
Accounts and notes receivable........... 15,928 15,671
Inventories:
Merchandise........................... 6,905 6,940
China, silver and supplies............ 4,327 3,336
Income tax receivable................... 7,877 15,050
Prepaid rent and other expenses......... 7,522 7,690
Deferred income taxes................... 2,924 4,248
Assets held for disposal................ 4,437 3,242
--------- ----------
Total current assets................ 67,183 88,876
--------- ----------

Property and equipment - at cost.............. 797,983 555,913
Less accumulated depreciation and
amortization.......................... (210,336) (203,992)
--------- ----------
587,647 351,921

Goodwill, net................................. 7,845 7,845
Notes receivable, net......................... 35,092 35,655
Other assets.................................. 38,385 36,030
--------- ----------
Total assets........................ $736,152 $520,327
========= ==========

Liabilities & shareholders' equity
Current liabilities:
Accounts payable........................ $ 38,371 $ 36,445
Accrued liabilities:
Taxes, other than income taxes........ 9,007 9,174
Payroll and related costs............. 16,008 21,233
Insurance............................. 5,895 5,793
Rent and other........................ 17,924 20,037
Current portion of long-term debt....... 608 601
--------- ---------
Total current liabilities........... 87,813 93,283
--------- ---------

Long-term debt, net of current portion........ 218,596 7,626
Deferred income taxes......................... 25,797 24,255
Deferred escalating minimum rent.............. 9,027 8,900
Other deferred liabilities.................... 51,593 51,857
Shareholders' equity:
Common stock, $0.01 par value;(authorized
100,000 shares; issued 63,802 @ 9/3/02;
64,188 @ 6/4/02)...................... 638 642
Capital in excess of par value.......... 3,064 12,951
Retained earnings....................... 344,657 325,902
--------- ---------
348,359 339,495
Deferred compensation liability payable
in Company stock...................... 4,870 4,766
Company stock held by Deferred
Compensation Plan..................... (4,870) (4,766)
Accumulated other comprehensive loss.... (5,033) (5,089)
--------- ---------

Total liabilities & shareholders'
equity........................ $736,152 $520,327
========= =========


The accompanying notes are an integral part of the condensed consolidated
financial statements.


RUBY TUESDAY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER-SHARE DATA)
(UNAUDITED)






THIRTEEN WEEKS ENDED
SEPTEMBER 3, SEPTEMBER 4,
2002 2001
------------- -------------
Revenues:
Restaurant sales and operating revenues $218,713 $199,692
Franchise revenues..................... 3,799 3,292
--------- ---------
222,512 202,984
Operating costs and expenses:
Cost of merchandise.................... 58,865 53,369
Payroll and related costs.............. 74,439 64,737
Other restaurant operating costs....... 38,451 40,327
Depreciation and amortization.......... 9,999 8,084
Selling, general and administrative,
net of support service fee income
totaling $3,634 in 2003 and $2,852
in 2002............................. 10,864 11,608
Equity in (earnings)/loss of
Unconsolidated franchises........... (565) 41
Interest income, net................... (506) (1,383)
--------- ---------
191,547 176,783
--------- ---------

Income before income taxes and cumulative
effect of change in accounting
principle................................. 30,965 26,201
Provision for income taxes.................. 10,776 9,302
--------- --------
20,189 16,899
Cumulative effect of change in accounting
principle, net of tax..................... - 58
--------- --------


Net income.................................. $ 20,189 $ 16,841
========= =========
Earnings per share:

Basic.................................. $ 0.32 $ 0.27
========= =========
Diluted................................ $ 0.31 $ 0.26
========= =========

Weighted average shares:

Basic.................................. 63,818 63,245
========= =========
Diluted................................ 65,101 65,187
========= =========

Cash dividends declared per share........ 2.25(cents) 2.25(cents)
=========== ===========


The accompanying notes are an integral part of the condensed consolidated
financial statements.


RUBY TUESDAY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)



THIRTEEN WEEKS ENDED
SEPTEMBER 3, SEPTEMBER 4,
2002 2001
------------ ------------
Operating activities:
Net income........................................ $ 20,189 $ 16,841
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................... 9,999 8,084
Amortization of intangibles..................... 44 1
Cumulative effect of accounting change, net
of tax....................................... - 58
Deferred income taxes........................... 2,829 (54)
Loss on impairment and disposition of assets.... 506 1,359
Loss (gain) on derivatives ..................... 83 (79)
Equity in earnings of unconsolidated franchises. (565) 41
Other........................................... 95 78
Changes in operating assets and liabilities:
Receivables.................................. 306 (1,533)
Inventories.................................. (956) (211)
Income tax receivable........................ 7,174 10,812
Prepaid and other assets..................... 215 1,353
Accounts payable,
accrued and other liabilities............... (4,907) (1,365)
--------- --------
Net cash provided by operating activities....... 35,012 35,385
--------- --------

Investing activities:
Purchases of property and equipment............... (40,295) (20,171)
Proceeds from disposal of assets.................. 158 4
Acquisition of an additional 49% interest in
unconsolidated franchises....................... (500) (500)
Other, net........................................ 243 (1,595)
-------- --------
Net cash used in investing activities........... (40,394) (22,262)
-------- --------

Financing activities:
Net change in short-term borrowings............... - (14,200)
Proceeds from long-term debt...................... 1,451 -
Principal payments on long-term debt.............. (147) (121)
Proceeds from issuance of stock, including
treasury stock.................................. 1,755 5,914
Stock repurchases, net of changes in the
Deferred Compensation Plan...................... (11,681) (3,308)
Dividends paid.................................... (1,432) (1,423)
-------- --------
Net cash used in financing activities........... (10,054) (13,138)
-------- --------

Decrease in cash and short-term investments....... (15,436) (15)
Cash and short-term investments:
Beginning of year............................... 32,699 10,636
--------- ----------
End of quarter.................................. $ 17,263 $ 10,621
========= ==========


Supplemental disclosure of cash flow information-

Significant non-cash investing and financing
activity-
Acquisition of property and equipment through
refinancing of bank-financed operating lease
obligations with bank debt $209,673

The accompanying notes are an integral part of the condensed consolidated
financial statements.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A - BASIS OF PRESENTATION
Ruby Tuesday, Inc. (the "Company," "RTI," "we", "our") owns and operates Ruby
Tuesday(r) casual dining restaurants. We also franchise the Ruby Tuesday concept
in selected domestic and international markets. The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the thirteen weeks ended September 3, 2002 are not necessarily
indicative of results that may be expected for the year ending June 3, 2003. The
balance sheet at June 4, 2002 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. Certain prior year amounts
have been reclassified to conform to the current year presentation. These
reclassifications had no effect on previously reported net income.
For further information, refer to the consolidated financial statements and
footnotes thereto included in Ruby Tuesday, Inc.'s Annual Report on Form 10-K
for the fiscal year ended June 4, 2002.

NOTE B - EARNINGS PER SHARE
Basic earnings per share is calculated using the weighted average number of
shares outstanding during each period. The computation of diluted earnings per
share gives effect to options outstanding during the applicable periods. The
effect of stock options increased the diluted weighted average shares
outstanding by approximately 1.3 million and 1.9 million for the thirteen weeks
ended September 3, 2002 and September 4, 2001, respectively.

NOTE C - ALLOWANCE FOR DOUBTFUL NOTES
Amounts reflected for long-term notes receivable at September 3, 2002 and
June 4, 2002 are net of a $19.5 million allowance for doubtful notes.

NOTE D - OTHER DEFERRED LIABILITIES
Other deferred liabilities at September 3, 2002 and June 4, 2002 included $15.2
million and $15.6 million, respectively, for the liability due to participants
in our Deferred Compensation Plan and $9.8 million and $9.6 million,
respectively, for the liability due to participants of the Company's Executive
Supplemental Pension Plan.

NOTE E - FRANCHISE PROGRAMS
On July 9, 2002, RTI acquired an additional 49% equity interest in a sixth
franchise for $0.5 million pursuant to the terms of the Limited Partnership
Agreement, bringing the Company's equity interest in the franchise to 50%.
We currently hold a 50% equity interest in six franchises which collectively
operate 61 Ruby Tuesday restaurants. We apply the equity method of accounting
to all 50%-owned franchises.

NOTE F - COMPREHENSIVE INCOME
Comprehensive income includes net income adjusted for certain revenues,
expenses, gains and losses that are excluded from net income in accordance with
accounting principles generally accepted in the United States of America, such
as adjustments to the minimum pension liability and interest rate swaps. Total
comprehensive income for the thirteen weeks ended September 3, 2002 and
September 4, 2001 are as follows (in thousands):



THIRTEEN WEEKS ENDED
SEPTEMBER 3, 2002 SEPTEMBER 4, 2001
------------------ ------------------

Net income................................ $ 20,189 $ 16,841
Other comprehensive income:
Cumulative effect of change in account-
ing principle, net of taxes of $663... - (1,032)
Change in current period market value.... (604) (773)
Losses reclassified into the consolidated
statement of income................... 659 143
--------- ---------
Total comprehensive income................. $ 20,244 $ 15,179
========= =========




NOTE G - REFINANCE OF OUR BANK-FINANCED OPERATING LEASE OBLIGATIONS
On July 26, 2002, RTI entered into a transaction to refinance its bank-financed
(also called "synthetic") operating lease obligations and revolving credit
facility with traditional bank debt through RTI's existing bank group. The new
Revolving Credit and Term Loan Agreement (the "Credit Agreement") consists of
approximately $200.6 million revolving credit facility and approximately $70.4
million term loan. The term loan portion of the new Credit Agreement is
scheduled to mature on October 2, 2003. The revolving credit portion of the new
Credit Agreement will mature on October 10, 2005.

Terms of the new Credit Agreement are in many instances similar to the previous
revolving credit facility. As with the previous revolving credit facility,
interest rates charged on borrowings can vary depending on the interest rate
option we choose to utilize. Our options for the rate can either be the Base
Rate or LIBOR plus applicable margin. The Base Rate is defined to be the higher
of the issuing bank's prime lending rate or the Federal Funds rate plus 0.5%.
Our other choice is to use the LIBOR rate plus the Applicable Margin, which is a
percentage ranging from 0.875% to 1.50%. The Applicable Margin percent is based
on a bank-defined financial ratio computed quarterly. We pay commitment fees
quarterly ranging from 0.15% to 0.25% on the unused portion of the new credit
facility. The new Credit Agreement contains restrictions on obtaining additional
debt, the payment of dividends and has certain covenants regarding funded debt,
net worth, and fixed charge coverage. At July 26, 2002, we refinanced $208.2
million of bank-financed operating lease obligations with $139.3 million and
$70.4 million of the revolving credit facility and the term loan, respectively
(debt amounts include fees). The result of the refinancing was to put property
and equipment and debt on our balance sheet and, therefore, depreciation and
interest expense will be higher and rent expense lower than in prior periods.

NOTE H - ADOPTION OF NEW ACCOUNTING STANDARDS
In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("SFAS 144") which supersedes
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
Among other changes, SFAS 144 provides updated guidance concerning the
recognition and measurement of an impairment loss for certain types of
long-lived assets. We adopted SFAS 144 during the current quarter. Adoption of
this new accounting standard did not have a significant impact on net income
during the current quarter and is not expected to significantly impact net
income in the future.

In April 2002, the FASB issued Statement of Financial Accounting Standards No.
145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Corrections" ("SFAS 145"). Under SFAS 145, gains
and losses on extinguishments of debt are to be classified as income or loss
from continuing operations rather than extraordinary items. Adoption of this
Statement is required for fiscal years beginning after May 15, 2002. We adopted
SFAS 145 during the current quarter. Adoption of this new accounting standard
did not have a significant impact on net income during the current quarter and
is not expected to significantly impact net income in the future.

NOTE I - NEW ACCOUNTING STANDARDS NOT YET ADOPTED

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" ("SFAS 143") which addresses
the financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. The provisions of this Statement are effective for the Company beginning
fiscal year 2004, with early application encouraged. We do not expect the
adoption of this Statement to have a material impact on our financial condition
or results of operations.

In July 2002, the FASB issued Statement of Financial Accounting Standards No.
146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS
146") which addresses financial accounting and reporting for costs associated
with exit or disposal activities. SFAS 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred. This Statement also establishes that fair value is the objective for
initial measurement of the liability. Severance pay under SFAS 146, in many
cases, would be recognized over time rather than up front. The provisions of
this Statement are effective for exit or disposal activities that are initiated
after December 31, 2002, with early application encouraged. We do not expect the
adoption of this Statement to have a material impact on our financial condition
or results of operations.



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

General:
RTI generates revenues from the sale of food and beverages at our restaurants
and revenues received from our franchisees. Franchise revenue is recognized when
we have performed all material services and the restaurant has opened for
business. Franchise revenue includes royalty, development and operating
agreement fees. The following is an overview of the thirteen weeks ended
September 3, 2002.

OVERVIEW:
During the thirteen weeks ended September 3, 2002,
- Net income increased 19.9% to $20.2 million from $16.8 million.
- Diluted earnings per share increased 19.2% to $0.31 from $0.26.
- Same-store sales for Company-owned Ruby Tuesday restaurants
increased 1.1%.
- 13 Company-owned Ruby Tuesday restaurants were opened.
- Five Company-owned Ruby Tuesday restaurants were closed. Each
of these restaurants was closed as part of upgrading our
portfolio of restaurants.
- Six franchise restaurants were opened, two of which were
international franchise units. Two domestic franchise units
were closed.
- We purchased 548,000 shares of our common stock. We have
5.3 million shares remaining authorized for repurchase under
our ongoing share repurchase program.

Results of Operations:
The following table sets forth selected restaurant operating data as a
percentage of total revenues, except where otherwise noted, for the periods
indicated. All information is derived from our unaudited condensed consolidated
financial statements located within this Form 10-Q.




Thirteen weeks ended
---------------------------
September 3, September 4,
2002 2001
---------------------------
Revenues:
Company restaurant sales............... 98.3% 98.4%
Franchise revenues..................... 1.7 1.6
------ ------
Total revenues....................... 100.0 100.0
Operating costs and expenses:
Cost of merchandise (1)................ 26.9 26.7
Payroll and related costs (1).......... 34.0 32.4
Other restaurant operating costs (1)... 17.6 20.2
Depreciation and amortization (1)...... 4.6 4.0
Selling, general and administrative.... 4.9 5.7
Equity in earnings of unconsolidated
franchises........................ (0.3) -
Interest income, net................... (0.2) (0.7)
------- ------
Income before income taxes.................. 13.9 12.9

Provision for income taxes.................. 4.8 4.6
------- -------
Net income.................................. 9.1% 8.3%
======= =======



(1) As a percentage of Company restaurant sales.



The following table shows year-to-date Company-owned and franchised restaurant
openings and closings, and total restaurants as of the end of the first quarter.

Year-to-date Year-to-date Total Open at End
Openings Closings of First Quarter
-------------- -------------- -----------------
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2003 2002 2003 2002 2003 2002
------ ------ ------ ------ ------- -----
Company-owned 13 14 5 4 405 384
Domestic franchise 4 6 2 1 185 156
International franchise 2 2 0 0 18 14

We estimate that approximately 35 to 40 additional Company-owned Ruby Tuesday
restaurants will be opened during the remainder of Fiscal 2003. Additionally, we
expect franchisees to open approximately 18 to 22 Ruby Tuesday restaurants
during the remainder of Fiscal 2003.

Revenues
RTI's restaurant sales increased $19.0 million (9.5%) to $218.7 million for the
thirteen weeks ended September 3,2002 compared to the same period of the prior
year. This increase primarily results from a 1.1% increase in same store sales
and a 3.2% increase in average unit volumes coupled with a net increase of 19
units. Franchise revenues totaled $3.8 million for the thirteen weeks ended
September 3, 2002 compared to $3.3 million for the same period in the prior
year. Franchise revenues are predominately comprised of domestic and
international royalties, which totaled $3.4 million and $2.9 million for the
thirteen week periods ending September 3, 2002 and September 4, 2001,
respectively.

Pre-tax Income
Pre-tax income increased $4.8 million for the thirteen weeks ended September 3,
2002 to $31.0 million, an 18.2% increase over the corresponding period of the
prior year. The increase was due to positive same store sales for the Ruby
Tuesday concept; increases in average unit volumes, number of units and in
franchise revenues; increased income from our equity in earnings of
unconsolidated franchises; and a reduction, as a percentage of revenues, of
other restaurant operating costs, selling, general and administrative expenses
as discussed below.

Cost of Merchandise
Cost of merchandise, as a percentage of Company restaurant sales, increased 0.2%
for the thirteen weeks ended September 3, 2002 compared to the same period of
the prior year. The increase is due to promotional programs, which ran higher
food costs in the current quarter coupled with lower vendor rebate income having
been recorded during the quarter. The higher food cost items contributed to
higher margins. Current year food cost percentage is comparable to that of the
fourth quarter of the prior fiscal year.

Payroll and Related Costs
Payroll and related costs increased 1.6% as a percentage of Company restaurant
sales for the thirteen weeks ended September 3, 2002 as compared to the same
period of the prior year attributable to an increase in hourly labor due to our
continued focus on increasing staffing levels (average staffing per unit is
seven team members higher than the prior year). We believe that increasing
staffing levels will better allow us to drive same-store sales, margins and
returns through better operations.

Other Restaurant Operating Costs
Other restaurant operating costs, as a percentage of Company restaurant sales,
decreased 2.6% for the thirteen weeks ended September 3, 2002 as compared to the
same period of the prior year. The reduction is primarily due to a decrease in
rent expense which resulted from the July 26, 2002 refinancing of our
bank-financed operating leases, lower utilities as a result of favorable weather
and market conditions, and lower asset impairment charges, due to greater
charges for under-performing Ruby Tuesday units recorded during the prior year's
first quarter.

Depreciation and Amortization
Depreciation and amortization, as a percentage of Company restaurant sales,
increased 0.6% for the thirteen weeks ended September 3, 2002, as compared to
the same period of the prior year as a result of the refinancing of the
bank-financed operating leases with traditional bank debt as mentioned above.
The impact of the additional depreciation expense in Fiscal 2003 from the
refinancing is expected to be $5.5 million.

Selling, General and Administrative Expenses
Selling, general and administrative expenses, as a percentage of total revenues,
decreased 0.8% for the thirteen weeks ended September 3, 2002 as compared to the
same period of the prior year. The decrease is attributable to higher average
unit volumes, a decrease in Neighborhood Marketing expense, and lower
information technology expenses due to taking unit level technology projects
in-house, and increased support service fees in the current year which reduced
selling, general and administrative costs.

Equity in Earnings of Unconsolidated Franchises
Our equity in the earnings of unconsolidated franchises increased to 0.3% for
the thirteen weeks ended September 3, 2002 as compared to the same period of the
prior year, due to additional investments in franchisees that were made in
Fiscal 2002 and the current quarter. As of September 3, 2002, we held 50% equity
investments in six franchises operating (collectively) 61 Ruby Tuesday
restaurants. As of September 4, 2001, we held 50% equity investments in two
franchises operating (collectively) 22 Ruby Tuesday restaurants.

Net Interest Income/Expense
Net interest income decreased $0.9 million for the thirteen weeks ended
September 3, 2002, as compared to the same period of the prior year due to the
failure of Specialty Restaurant Group, LLC to pay interest on its note payable
to us, which we wrote off during Fiscal 2002, and an increase in interest
expense due to refinancing of the bank-financed operating leases with the new
credit facility during the current quarter. Provision for Income Taxes The
effective tax rate for the current quarter was 34.8%, down from 35.5% for the
same period of the prior year. The change in the effective rate was due to tax
savings strategies implemented in Fiscal 2002 and continued in Fiscal 2003.

Liquidity and Capital Resources

Sources and Uses of Cash
The following table presents a summary of the Company's cash flows from
operating, investing, and financing activities for the periods indicated (in
thousands).



Thirteen Weeks Ended Thirteen Weeks Ended
September 3, 2002 September 4, 2001
-------------------- --------------------
Net cash provided by operating
activities $ 35,012 $ 35,385
Net cash used by investing activities (40,394) (22,262)
Net cash used by financing activities (10,054) (13,138)
--------- ---------
Net decrease in cash and short-term
investments $(15,436) $ (15)
========= =========



Operating activities provided $0.4 million less for the thirteen weeks ended
September 3, 2002 primarily due to a decrease in the net cash provided by the
change in operating assets and liabilities of $7.2 million (due to timing of
income tax payments and greater settlement of accounts payable during the
current quarter) and an increase in the equity earnings of unconsolidated
franchises of $0.6 million, offset by increases in net income of $3.3 million,
deferred income taxes of $2.8 million and depreciation expense of $1.9 million
due to the unwinding of the bank-funded operating lease agreements.

Investing activities used an additional $18.1 million in the current quarter due
to increased property and equipment purchases with cash from operations as the
Company no longer utilizes bank-funded operating lease agreements.

Financing activities used $3.1 million less in the current quarter due to the
repayment of outstanding short-term borrowings in the prior quarter and
increased long-term borrowings in the current quarter ($15.6 million) offset by
a decrease in proceeds from issuance of stock of $4.2 million due to fewer
employee stock option exercises, and an increase in stock repurchases during the
current quarter as compared to the prior quarter of $8.4 million.

Capital Expenditures
We require capital principally for new restaurant construction,
equipment replacement, and remodeling of existing restaurants. Property and
equipment expenditures during the current quarter were $40.3 million. Capital
expenditures for the remainder of Fiscal 2003 are projected to be approximately
$130.0 to $135.0 million which we intend to fund with cash provided by
operations and financing activities. See "Special Note Regarding Forward-Looking
Information."

Borrowings and Credit Facilities
On July 26, 2002, RTI entered into a transaction to refinance all of our
bank-financed operating lease obligations and our revolving credit facility with
traditional bank debt through our existing bank group. The new Revolving Credit
and Term Loan Agreement (the "Credit Agreement") consists of a $200.6 million
revolving credit facility and a $70.4 million term loan. Terms of the Credit
Agreement are in many instances similar to the previous revolving credit
facility. As with the previous revolving credit facility, interest rates charged
on borrowings can vary depending on the interest rate option we choose to
utilize. Our options for the rate can either be the Base Rate or LIBOR plus
applicable margin. The Base Rate is defined to be the higher of the issuing
bank's prime lending rate or the Federal Funds rate plus 0.5%. Our other choice
is the LIBOR rate plus the Applicable Margin, which is a percentage ranging from
0.875% to 1.50%. The Applicable Margin percent is based on a bank-defined
financial ratio computed quarterly. We pay commitment fees quarterly ranging
from 0.15% to 0.25% on the unused portion of the new credit facility. The new
Credit Agreement contains restrictions on obtaining additional debt, the payment
of dividends and has certain covenants regarding funded debt, net worth, and
fixed charge coverage. The term loan portion of the new Credit Agreement is
scheduled to mature on October 2, 2003. The revolving credit portion of the new
Credit Agreement will mature on October 10, 2005. At September 3, 2002, we had a
total of $211.1 million of borrowings outstanding under the new Credit
Agreement, $140.7 million of borrowings under the revolving credit portion and
$70.4 million under the term loan portion.

We also have five interest rate swap agreements with notional amounts
aggregating $125.0 million. These swap agreements fix the interest rate on an
equivalent amount of our floating-rate obligations of rates ranging from 5.05%
to 5.73%, plus applicable spreads ranging from 0.875% to 1.75%, for periods up
through December 8, 2003 (See Note G to the Condensed Consolidated Financial
Statements).

During the remainder of Fiscal 2003, we expect to fund operations, capital
expansion, the repurchase of common stock, and the payment of dividends from
operating cash flows, our new Credit Agreement, and through operating leases.
See "Special Note Regarding Forward-Looking Information."

Total long-term debt including current maturities and short-term borrowings
increased a net $211.0 million during the current quarter in conjunction with
refinancing the bank-financed operating lease agreements with traditional bank
debt.

New Accounting Standards
See Note I to the Condensed Consolidated Financial Statements.


KNOWN EVENTS, UNCERTAINTIES AND TRENDS

Financial Strategy and Stock Repurchase Plan
Our financial strategy is to utilize a prudent amount of debt, including
operating leases, to minimize the weighted average cost of capital while
allowing financial flexibility and the equivalent of an investment-grade bond
rating. This strategy allows us to repurchase RTI common stock at times when
cash flow exceeds capital expenditures and other funding requirements. During
the thirteen weeks ended September 3, 2002, we purchased 0.5 million shares of
RTI common stock for a total purchase price of $11.7 million. The total number
of remaining shares authorized to be repurchased, as of September 3, 2002, is
5.3 million. To the extent not funded with cash from operating activities,
additional repurchases may be funded by borrowings on the credit facilities.

Dividends
During Fiscal 1997, our Board of Directors approved a dividend policy as an
additional means of returning capital to RTI's shareholders. This policy calls
for payment of semi-annual dividends of 2.25(cent) per share. In accordance with
this policy, we paid dividends of $1.4 million in the current quarter. The
payment of a dividend in any particular future period and the actual amount
thereof remain, however, at the discretion of the Board of Directors and no
assurance can be given that dividends will be paid in the future. Additionally,
our credit facilities contain certain limitations on the payment of dividends.
See "Special Note Regarding Forward-Looking Information."


SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
The foregoing section contains various "forward-looking statements," which
represent the Company's expectations or beliefs concerning future events,
including the following: future financial performance and restaurant growth
(both Company-owned and franchised), future capital expenditures, future
borrowings and repayment of debt, and payment of dividends. The Company cautions
that a number of important factors could, individually or in the aggregate,
cause actual results to differ materially from those included in the
forward-looking statements, including, without limitation, the following:
consumer spending trends and habits; mall-traffic trends; increased competition
in the casual dining restaurant market; weather conditions in the regions in
which Company-owned and franchised restaurants are operated; consumers'
acceptance of our development prototypes; laws and regulations affecting labor
and employee benefit costs; costs and availability of food and beverage
inventory; our ability to attract qualified managers, franchisees and team
members; changes in the availability of capital; and general economic
conditions.



ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of
the Company's management, including the Chief Executive Officer ("CEO") and
Chief Financial Officer ("CFO"), of the effectiveness of the
design and operation of the Company's disclosure controls and procedures within
90 days of this report. Based on that evaluation, the Company's management,
including the CEO and CFO, concluded that the Company's disclosure controls and
procedures were effective as of September 3, 2002.

Changes in Internal Controls

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of their evaluation.



PART II - OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
We are presently, and from time to time, subject to pending claims and lawsuits
arising in the ordinary course of business. In the opinion of management, the
ultimate resolution of these pending legal proceedings will not have a material
adverse effect on our operations, financial position or liquidity.

In addition, the Company, as successor to Morrison Restaurants Inc.
("Morrison"), is a party to a case (Morrison Restaurants Inc. v. United States
of America, et al.,) originally filed by Morrison in 1994 to claim a refund of
taxes paid in the amount of approximately $3,000 and abatement of taxes assessed
by the Internal Revenue Service ("IRS") against Morrison on account of the
employer's share of FICA taxes on unreported tips allegedly received by
employees. The IRS filed a counterclaim for approximately $7,000 in additional
taxes. The case was decided by the U.S. District Court in favor of the Company
in February 1996 on summary judgment. The IRS appealed the District Court's
decision and, in August 1997, the U.S. Court of Appeals for the Eleventh Circuit
reversed the award of summary judgment and remanded the case to the District
Court for proceedings consistent with the court's opinion. In its reversal, the
Eleventh Circuit upheld the IRS' enforcement policy with respect to the
employer's share of FICA taxes on allegedly unreported tips. The Company
subsequently petitioned the U.S. Court of Appeals for a review of the matter by
the full Court. Such petition was denied. To date, no additional liability,
based on comparable assessments for the Company's other units, has been pursued
by the IRS. On June 17, 2002, the U.S. Supreme Court, in United States v. Fior d
Italia, upheld the IRS' enforcement policy. Notwithstanding the ruling in Fior,
it is our position that additional assessments are unlikely. We believe that a
dollar-for-dollar business tax credit would be available to the Company to
offset, over a period of years, a majority of any additional taxes determined to
be due. Moreover, we have, since January 1997, been a participant in the IRS'
enforcement program which would eliminate the risk of additional assessments in
return for our proactive role in promoting employee tip reporting. We believe
that the protection against additional assessments afforded by this agreement
would be available to the Company.






ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS
The following exhibits are filed as part of this report:

Exhibit
No.
- -------

99.1 First Amendment to Amended and Restated Loan Facility Agreement and
Guaranty.
99.2 Second Amendment to Amended and Restated Loan Facility Agreement and
Guaranty.
99.3 Third Amendment to Amended and Restated Loan Facility Agreement and
Guaranty.
99.4 Fourth Amendment to Amended and Restated Loan Facility Agreement and
Guaranty.
99.5 Certification of Chairman of the Board and Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.6 Certification of Senior Vice President and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.



REPORTS ON FORM 8-K

On July 29, 2002, we filed a current report on Form 8-K to report the
refinancing of our synthetic lease facilities as of July 26, 2002.





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

RUBY TUESDAY, INC.
-------------------
(Registrant)

10 / 16 / 2002 By: /s/ Marguerite N. Duffy
- --------------- ----------------------------
DATE Marguerite N. Duffy
Senior Vice President and
Chief Financial Officer





CERTIFICATIONS

I, Samuel E. Beall, III, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: October 16, 2002

/s/ Samuel E. Beall, III
- ------------------------
Samuel E. Beall, III
Chairman of the Board
and Chief Executive Officer


I, Marguerite N. Duffy, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Ruby Tuesday, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: October 16, 2002


/s/ Marguerite N. Duffy
- -----------------------
Marguerite N. Duffy
Senior Vice President
and Chief Financial Officer