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FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the Quarter ended March 31, 2004

Commission File No. 0-10943


RYAN'S FAMILY STEAK HOUSES, INC.
(Exact name of registrant as specified in its charter)

South Carolina No. 57-0657895
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)


405 Lancaster Avenue (29650)
P. O. Box 100
Greer, South Carolina 29652
(Address of principal executive
offices, including zip code)

864-879-1000
(Registrant's telephone number, including area code)

--------------------------------------------------------------
---------

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

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule12b-2 of the Securities
Exchange Act of 1934).
Yes X No ________

At March 31, 2004, there were 42,057,000 shares outstanding of
the registrant's common stock, par value $1.00 per share.


RYAN'S FAMILY STEAK HOUSES, INC.

TABLE OF CONTENTS PAGE NO.


PART I --- FINANCIAL INFORMATION

Item 1. Financial Statements:

Consolidated Statements of Earnings (Unaudited) -
Quarters Ended March 31, 2004 and April 2, 20033

Consolidated Balance Sheets -
March 31, 2004 (Unaudited) and December 31, 2003 4

Consolidated Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 2004 and April 2, 2003
5

Consolidated Statement of Shareholders' Equity
(Unaudited) -
Three Months Ended March 31, 2004 6

Notes to Consolidated Financial Statements (Unaudited)
7 - 9

Item 2.Management's Discussion and Analysis of Financial
Condition
and Results of Operations 9 - 12

Item 3.Quantitative and Qualitative Disclosures About Market
Risk 13

Item 4.Controls and Procedures 13

Forward-Looking Information 13 - 14

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings
15

Item 2.Change in Securities, Use of Proceeds and Issuer
Purchases
of Equity Securities 15

Item 5. Other Information
15

Item 6. Exhibits and Reports on Form 8-K
16

SIGNATURES 17

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)

(In thousands, except per share data)

Quarter Ended
March 31, April 2,
2004 2003

Restaurant sales $211,657 193,192

Cost of sales:
Food and beverage 72,500 68,005
Payroll and benefits 66,870 60,948
Depreciation 8,557 7,948
Other restaurant expenses 28,812 27,212
Total cost of sales 176,739 164,113

General and administrative expenses 10,322 9,062
Interest expense 2,685 2,406
Revenues from franchised restaurants (363) (403)
Other income, net (928) (949)
Earnings before income taxes 23,202 18,963
Income taxes 7,842 6,865

Net earnings $ 15,360 12,098

Net earnings per common share:
Basic $ .37 .28
Diluted .35 .28

Weighted-average shares:
Basic 42,081 42,483
Diluted 43,910 43,707


See accompanying notes to consolidated financial statements.

RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

March 31, December 31,
2004 2003
ASSETS (Unaudited)

Current assets:
Cash and cash equivalents $ 22,395 8,617
Receivables 4,568 4,293
Inventories 6,406 5,648
Prepaid expenses 1,305 1,758
Deferred income taxes 5,150 5,150
Total current assets 39,824 25,466
Property and equipment:
Land and improvements 157,504 154,528
Buildings 458,434 449,561
Equipment 257,926 252,611
Construction in progress 21,178 25,789
895,042 882,489
Less accumulated depreciation 271,289 264,339
Net property and equipment 623,753 618,150
Other assets 8,307 8,073
Total assets $671,884 651,689

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 8,548 6,580
Current portion of long-term debt 34,750 -
Income taxes payable 7,283 1,288
Accrued liabilities 44,074 42,590
Total current liabilities 94,655 50,458
Long-term debt 156,250 196,000
Deferred income taxes 43,019 42,824
Other long-term liabilities 5,694 5,467
Total liabilities 299,618 294,749

Shareholders' equity:
Common stock of $1.00 par value;
authorized 100,000,000 shares;
issued 42,057,000 in 2004 and
41,843,000 shares in 2003 42,057 41,843
Additional paid-in capital 1,462 1,412
Retained earnings 328,747 313,685
Total shareholders' equity 372,266 356,940
Commitments and contingencies
Total liabilities and
shareholders' equity $671,884 651,689


See accompanying notes to consolidated financial statements.

RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(In thousands)

Three Months Ended
March 31, April 2,
2004 2003
Cash flows from operating activities:

Net earnings $ 15,360 12,098
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 9,020 8,364
Loss (gain) on sale of property
and equipment 657 (556)
Tax benefit from exercise of
stock options 1,462 62
Deferred income taxes 195 69
Decrease (increase) in:
Receivables (275) 16
Inventories (758) (345)
Prepaid expenses 453 34
Income taxes receivable - 2,739
Other assets (289) (550)
Increase (decrease) in:
Accounts payable 1,968 3,049
Income taxes payable 5,995 3,634
Accrued liabilities 1,484 (1,214)
Other long-term liabilities 227 387
Net cash provided by operating
activities 35,499 27,787

Cash flows from investing activities:
Proceeds from sale of property and
equipment 1,657 2,493
Capital expenditures (16,882) (18,471)
Net cash used in investing
activities (15,225) (15,978)

Cash flows from financing activities:
Net proceeds from (repayment of)
revolving credit facility (5,000) 10,000
Proceeds from stock options
exercised 3,014 502
Purchase of common stock (4,510) (7,084)
Net cash provided by (used in)
financing activities (6,496) 3,418

Net increase in cash and cash
equivalents 13,778 15,227

Cash and cash equivalents-beginning
of period 8,617 2,654

Cash and cash equivalents-end
of period $22,395 17,881

Supplemental disclosures
Cash paid during the period for:
Interest, net of amount capitalized $ 4,459 4,477
Income taxes 190 362


See accompanying notes to consolidated financial statements.

RYAN'S FAMILY STEAK HOUSES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)

(In thousands)

Three Months ended March 31, 2004

$1 Par Value Additional
Common Paid-In Retained
Stock Capital Earnings Total

Balances at December 31, 2003 $ 41,843 1,412 313,685 356,940

Net earnings - - 15,360 15,360
Issuance of common stock
under stock option plans 487 2,527 - 3,014
Tax benefit from exercise of
non-qualified stock options - 1,462 - 1,462
Purchases of common stock (273) (3,939) (298) (4,510)

Balances at March 31, 2004 $ 42,057 1,462 328,747 372,266


See accompanying notes to consolidated financial statements.


RYAN'S FAMILY STEAK HOUSES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2004
(Unaudited)

Note 1. Description of Business

Ryan's Family Steak Houses, Inc. operates a restaurant chain
consisting of 335 Company-owned restaurants located
principally in the southern and midwestern United States and
receives franchise royalties from an unrelated third-party
franchisee that operates 14 restaurants (as of March 31, 2004)
in Florida. Its restaurants operate under the Ryan's or Fire
Mountain brand names, but are viewed as a single business unit
for management and reporting purposes. A Fire Mountain
restaurant offers a selection of foods similar to a Ryan's
restaurant with display cooking and also features updated
interior furnishings, an upscale food presentation and a lodge-
look exterior. The Company was organized in 1977, opened its
first restaurant in 1978 and completed its initial public
offering in 1982. The Company does not operate or franchise
any international units.

Note 2. Basis of Presentation

The consolidated financial statements include the financial
statements of Ryan's Family Steak Houses, Inc. and its wholly-
owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim
financial information and the instructions to Form 10-Q and do
not include all of the information and footnotes required by
accounting principles generally accepted in the United States
of America for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have
been included. Consolidated operating results for the three
months ended March 31, 2004 are not necessarily indicative of
the results that may be expected for the fiscal year ending
December 29, 2004. For further information, refer to the
consolidated financial statements and footnotes included in
the Company's annual report on Form 10-K for the fiscal year
ended December 31, 2003.

Note 3. Relevant New Accounting Pronouncements

In December 2003, the Financial Accounting Standards Board
(FASB) revised Interpretation No. 46 (FIN 46), "Consolidation
of Variable Interest Entities," which was originally issued
in January 2003, to provide guidance regarding issues arising
from the implementation of FIN 46. This interpretation
addresses the consolidation by business enterprises of
variable interest entities, as defined in the interpretation,
and sets forth additional disclosure regarding such
interests. For entities acquired or created before February
1, 2003, this interpretation is effective no later than the
end of the first interim or reporting period ending after
March 15, 2004, except for those variable interest entities
that are considered to be special purpose entities, for which
the effective date is no later than the end of the first
interim or annual reporting period ending after December 15,
2003. For all entities that were acquired subsequent to
January 31, 2003, this interpretation is effective as of the
first interim or annual period ending after December 31,
2003. The implementation of FIN 46 has not had a material
effect on the Company's consolidated financial statements.

Note 4. Stock Options

As allowed by SFAS No. 123, "Accounting for Stock-Based
Compensation," the Company accounts for its stock option plans
in accordance with the intrinsic value provisions of
Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. As
such, compensation expense is recorded on the date of grant
only if the current market price of the underlying stock
exceeds the exercise price. No compensation cost has been
recognized for stock-based compensation in consolidated net
earnings for the periods presented as all options granted
under the Company's stock option plans had exercise prices
equal to the market value of the underlying common stock on
the date of the grant. Had the Company determined
compensation cost based on the fair value recognition
provisions of SFAS No. 123, the Company's net earnings and
earnings per share would have been reduced to the pro forma
amounts indicated in the following table:

Three Months Ended
(In thousands,
except earnings per share) March 31, April 2,
2004 2003

Net earnings, as reported $15,360 12,098
Less total stock-based compensation
expense determined under fair value
based method, net of related tax
effects (356) (325)

Pro forma net earnings $15,004 11,773
Earnings per share
Basic:
As reported .37 .28
Pro forma .36 .28
Diluted:
As reported .35 .28
Pro forma .34 .27


Note 5. Earnings per Share

Basic earnings per share ("EPS") excludes dilution and is
computed by dividing income available to common shareholders
by the weighted-average number of common shares outstanding
for the period. Diluted EPS includes common stock equivalents
that arise from the hypothetical exercise of outstanding stock
options using the treasury stock method. In order to prevent
antidilution, outstanding stock options to purchase 3,000 and
1,104,000 shares of common stock at March 31, 2004 and April
2, 2003, respectively, were not included in the computation of
diluted EPS.

Note 6. Legal Contingencies

In November 2002, a lawsuit was filed in the United States
District Court, Middle District of Tennessee, Nashville
Division, on behalf of three plaintiffs alleging various wage
and hour violations by the Company of the Fair Labor Standards
Act of 1938. The plaintiffs' attorneys are seeking collective-
action status on this complaint. In October 2003, the
presiding judge denied the Company's request to enforce the
arbitration agreements signed by the plaintiffs and also
ordered the Company to turn over certain employee addresses to
the plaintiffs' attorneys. The Company has appealed this
decision. As part of the appeal process, the presiding judge
stayed the order regarding the employee addresses. Due to the
evolving nature of this case, the potential financial impact
to the Company's financial results cannot be estimated at this
time. Accordingly, no accrual for a loss contingency has been
made in the accompanying consolidated financial statements.

In addition, from time to time, the Company is involved in
various legal claims and litigation arising in the normal
course of business. Based on currently-known legal actions,
management believes that, as a result of its legal defenses
and insurance arrangements, none of these actions should have
a material adverse effect on the Company's business or
financial condition, taken as a whole.

Note 7. Reclassifications

Certain 2003 incentive bonus amounts for store management and
hourly team members have been reclassified to store-level
payroll and benefits from general and administrative expenses
to conform to the 2004 presentation. These costs amounted to
$1,603,000 in 2004 and $752,000 in 2003. This
reclassification does not change either net earnings or
shareholders' equity for 2003.

Note 8. Subsequent Event

At the Annual Meeting of Shareholders that was held on May 5,
2004, shareholders approved a proposal to change the Company's
legal name to Ryan's Restaurant Group, Inc. Management
intends to implement this name change in the near future.


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


RESULTS OF OPERATIONS

Quarter ended March 31, 2004 versus April 2, 2003

Restaurant sales during the first quarter of 2004 increased by
9.6% over the first quarter of 2003. Average unit growth,
based on the average number of restaurants in operation,
amounted to 3.9% during the quarter. The Company owned and
operated 335 restaurants (307 Ryan's brand and 28 Fire
Mountain brand) at March 31, 2004 and 326 restaurants (322
Ryan's brand and 4 Fire Mountain brand) at April 2, 2003. In
comparison to the first quarter of 2003, average unit sales
("AUS"), or average weekly sales volumes per unit, for all
stores (including newly opened restaurants) increased by 5.4%
in 2004, and same-store sales increased by 4.8% in 2004. In
computing same-store sales, the Company averages weekly sales
for those units operating for at least 18 months. All
converted or relocated stores are included in the same-store
sales calculation, provided that the underlying stores were
operating for at least 18 months. Same-store sales and
related factors for the first quarters of 2004 and 2003, as
compared to their comparable prior years' quarters, were as
follows:


Same-store 2004 2003
Sales 4.8% (4.2%)
Customer count 1.1% (7.2%)
Menu factor 3.7% 3.0%


Management believes that an improving retail environment,
aided by the Company's local marketing program, favorably
affected sales during the first quarter of 2004. The local
marketing program, which was implemented in April 2003, trains
and encourages store managers to get the Ryan's and Fire
Mountain brand names in front of potential customers through
the use of both external merchandising and community
marketing. In addition, winter weather conditions were
generally less severe during the first quarter of 2004
compared to the first quarter of 2003.

Cost of sales includes food and beverage, payroll, payroll
taxes and employee benefits, depreciation, repairs,
maintenance, utilities, supplies, advertising, insurance,
property taxes and licenses at Company-owned restaurants.
Such costs, as a percentage of sales, were 83.5% during the
first quarter of 2004 compared to 84.9% during the first
quarter of 2003. Food and beverage costs amounted to 34.3% of
sales for 2004 and 35.2% of sales for 2003. In 2004, food and
beverage costs were adversely impacted by higher beef costs,
which were approximately 9% higher than the first quarter of
2003. However, the higher beef costs were more than offset by
better product utilization (less waste) resulting from the
higher AUS, the 3.7% menu factor and a heightened store-level
focus on food cost controls. Payroll and benefits increased
to 31.6% of sales in 2004 from 31.5% of sales in 2003 due
principally to higher store-level performance bonuses for
management and hourly team members, largely offset by lower
hourly payroll costs resulting from the higher sales volumes.
All other restaurant costs, including depreciation, decreased
to 17.6% of sales in 2004 from 18.2% of sales in 2003. This
decrease resulted principally from the favorable impact of the
higher AUS on the many fixed-cost items included in this
category, partially offset by higher natural gas costs. Based
on these factors, the Company's margins at the restaurant
level increased by 1.4% of sales to 16.5% of sales in 2004
from 15.1% of sales in 2003.

General and administrative expenses increased to 4.9% of sales
in 2004 from 4.7% of sales in 2003 due principally to higher
performance bonuses.

Interest expense for the first quarter of 2004 and 2003
amounted to 1.3% and 1.2% of sales, respectively. The
effective average interest rate increased to 6.1% during the
first quarter of 2004 from 5.1% in 2003, resulting principally
from the refinancing on July 25, 2003 of $100 million of lower-
cost variable-rate debt with 4.65% fixed-rate senior notes due
in 2013.

An effective income tax rate of 33.8% was used for the first
quarter of 2004 and 36.2% for the first quarter of 2003. The
decrease in rate resulted primarily from certain federal
income tax credit hiring programs, such as the Work
Opportunity Tax Credit program ("WOTC"), and lower state
income tax expense. Management believes that the tax rate for
2004 will gradually increase relative to 2003 during
subsequent quarters if these tax credit hiring programs are
not re-enacted by the U.S. Congress.

Net earnings for the first quarter amounted to $15.4 million
in 2004 compared to $12.1 million in 2003. Weighted-average
shares (diluted) increased slightly (less than 1%) as the
increased impact of the Company's outstanding stock options in
the weighted-average share calculation completely offset the
reduction in shares resulting from the Company's stock
repurchase program. In general, as the Company's stock price
increases, the number of shares related to stock options in
the weighted-average share calculation also increases.
Accordingly, earnings per share (diluted) amounted to 35 cents
for the first quarter of 2004 and 28 cents for the first
quarter of 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal source of liquidity is from its
restaurants sales, which are primarily derived from cash,
checks or credit / debit cards. Principal uses of cash are
operating expenses, which have been discussed in the preceding
section, capital expenditures and stock repurchases.

A comparison of the Company's sources and uses of funds for
the three month periods ended March 31, 2004 and April 2, 2003
follow (in thousands):


2004 2003 Change
Net cash provided by operating
activities $35,499 27,787 7,712
Net cash used in investing
activities (15,225) (15,978) 753
Net cash provided by (used in)
financing activities (6,496) 3,418 (9,914)
Net increase in cash and cash
equivalents $13,778 15,227 (1,449)


Net cash provided by operating activities increased $7.7
million mainly as a result of the higher cash flow generated
by the Company's operations during the first quarter of 2004,
as indicated by the higher net earnings and depreciation
amounts for 2004 in the accompanying consolidated statements
of cash flows. Net cash used in investing activities was
fairly level during the first quarters of both 2004 and 2003.
Finally, net cash provided by financing activities decreased
by $9.9 million as the Company repaid a portion of the
outstanding loans under its revolving credit facility during
the first quarter of 2004 due to (1) the increased cash flow
generated from operations and stock option exercises and (2) a
lesser amount of stock repurchases.

At March 31, 2004, the Company's working capital deficit
amounted to $54.8 million compared to a $25.0 million deficit
at December 31, 2004. This increase stems primarily from an
increase in the Company's current liabilities relating to
outstanding debt that is due within one year ($16.0 million
under the revolving credit facility and $18.7 million of the
9.02% senior notes). Management does not anticipate any
adverse effects from the current working capital deficit due
to the significant and steady level of cash flow provided by
operations.

Total capital expenditures for the first three months of 2004
amounted to $16.9 million. The Company opened five and closed
four restaurants during the first three months of 2004, which
included two openings and three closings for relocation
purposes. Management defines a relocation as a restaurant
opened within six months after closing another restaurant in
the same marketing area. A relocation represents a
redeployment of assets within a market. For the remainder of
2004, the Company plans to build and open 13 to 15 new
restaurants, including three potential relocations. All new
restaurants open with the display cooking/lodge-look format.
This format involves a glass-enclosed grill and cooking area
that extends into the dining room and the use of stone and
wood inside and outside the building in order to present an
atmosphere reminiscent of a mountain lodge. A variety of
meats are grilled daily and available to customers as part of
the buffet price. Customers go to the grill and can get hot,
cooked-to-order steak, chicken or other grilled items placed
directly from the grill onto their plates. Management also
intends to convert approximately 25 to 28 restaurants during
the remainder of 2004 to the display cooking/lodge-look
format. In this case, management believes that the exterior
package favorably impacts restaurant sales by signaling to
potential customers that changes have taken place inside the
restaurant. For the remainder of 2004, substantially all of
either the new or converted restaurants will operate under the
"Fire Mountain" brand name in order to differentiate them from
the older Ryan's and other restaurants that operate with a
more traditional family steakhouse format. Total 2004 capital
expenditures are estimated at $86 million. The Company is
currently concentrating its efforts on Company-owned
restaurants and is not actively pursuing any additional
franchised locations, either domestically or internationally.

The Company began a stock repurchase program in March 1996 and
is currently authorized to repurchase up to 55 million shares
of the Company's common stock through December 2004.
Repurchases may be made from time to time on the open market
or in privately negotiated transactions in accordance with
applicable securities regulations, depending on market
conditions, share price and other factors. During the first
three months of 2004, the Company purchased 272,666 shares at
an aggregate cost of $4.5 million. Through March 31, 2004,
approximately 43.5 million shares, or 54% of total shares
available at the beginning of the repurchase program, had been
purchased at an aggregate cost of $319.1 million. The Company
has purchased an additional 759,440 shares since March 31,
2004 at an aggregate cost of $13.7 million. Management
currently plans to additionally purchase up to approximately
$7 million of its common stock during the remainder of 2004
if, in management's opinion, the share price is at an
attractive level, subject to the continued availability of
capital, the limitations imposed by the Company's credit
agreements, applicable securities regulations and the other
factors described in "Forward-Looking Information."

At March 31, 2004, the Company's outstanding debt consisted of
$75 million of 9.02% senior notes, $100 million of 4.65%
senior notes and a $100 million revolving credit facility of
which $16 million was outstanding at that date. After
allowances for letters of credit and other items, there were
approximately $73 million in funds available under the
revolving credit facility. The Company's ability to draw on
these funds may be limited by the financial covenants in the
agreements governing both the senior notes and the revolving
credit facility. At March 31, 2004, the Company was in
compliance with all covenants under the loan agreements.
Management believes that, based on its current plans, these
restrictions will not impair the Company's operations during
2004. The current revolving credit facility expires in
January 2005, and management intends to refinance the facility
during 2004. Based on preliminary discussions with banks,
management believes that the facility will be refinanced in a
manner that appropriately supports the Company's current
operations and growth plans. However, since final
negotiations have not commenced, there can be no assurance
that the refinancing will occur on anticipated terms or at
all.

Management believes that its current capital structure is
sufficient to meet its 2004 cash requirements. The Company
has entered into interest rate hedging transactions in the
past, and although no such agreements are currently
outstanding, management intends to continue monitoring the
interest rate environment and may enter into such transactions
in the future if deemed advantageous.

SUBSEQUENT EVENT

At the Annual Meeting of Shareholders that was held on May 5,
2004, shareholders approved a proposal to change the Company's
legal name to Ryan's Restaurant Group, Inc. Management
intends to implement this name change in the near future.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that have a
significant impact on the Company's financial statements and
involve difficult or subjective estimates of future events by
management. Management's estimates could differ significantly
from actual results, leading to possible significant
adjustments to future financial results. The following
policies are considered by management to involve estimates
that most critically impact reported financial results.

Asset Lives Property and equipment are recorded at cost, less
accumulated depreciation. Buildings and land improvements are
depreciated over estimated useful lives ranging from 25 to 39
years, and equipment is depreciated over estimated useful
lives ranging from 3 to 20 years. Depreciation expense for
financial statement purposes is calculated using the straight-
line method. Management is responsible for estimating the
initial useful lives and any revisions thereafter and bases
its estimates principally on historical usage patterns of the
assets. Material differences in the amount of reported
depreciation could result if different assumptions were used.

Impairment of Long-Lived Assets Long-lived assets, which
consist principally of restaurant properties, are reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable. Management reviews restaurants for possible
impairment if the restaurant has had cash flows of $50,000 or
less in the aggregate over the previous 12 months or if it has
been selected for relocation and the new site is under
construction. For restaurants that will continue to be
operated, the carrying amount is compared to the undiscounted
future cash flows, including proceeds from future disposal,
over the remaining useful life of the restaurant. The
estimate of future cash flows is based on management's review
of historical and current sales and cost trends of both the
subject and similar restaurants. The estimate of proceeds
from future disposal is based on management's knowledge of
current and planned development near the restaurant site and
on current market transactions. Each of these estimates is
based on assumptions, such as with respect to future sales and
costs, that may differ materially from actual results. If the
carrying amount exceeds the sum of the undiscounted future
cash flows, the carrying value is reduced to the restaurant's
current fair value. If the decision has been made to close
and sell a restaurant, the carrying value of that restaurant
is reduced to its current fair value less costs to sell and is
no longer depreciated.

Self-Insurance Liabilities The Company self-insures a
significant portion of expected losses from its workers'
compensation, general liability and team member medical
programs. For workers' compensation and general liability
claims, the portion of any individual claim that exceeds
$250,000 is covered by insurance purchased by the Company.
Accrued liabilities are recorded for the estimated,
undiscounted future net payments, or ultimate costs, to settle
both reported claims and claims that have been incurred but
not reported. On a quarterly basis, management reviews claim
values as estimated by a third-party claims administrator
("TPA") and then adjusts these values for estimated future
increases in order to record ultimate costs. Both current and
prior years' claims are reviewed because estimated claim
values are frequently adjusted by the TPA as new information,
such as updated medical reports or settlements, is received.
Management reviews the relationship between historical claim
estimates and payment history, overall number of accidents and
historical claims experience in order to make an ultimate cost
estimate. For team member medical claims, the portion of any
individual claim that exceeds $300,000 is covered by insurance
purchased by the Company. Accruals are based on management's
review of historical claim experience. Unexpected changes in
any of these factors could result in costs that are materially
different than initially reported.

IMPACT OF INFLATION

The Company's operating costs that may be affected by
inflation consist principally of food, payroll and utility
costs. A significant number of the Company's restaurant team
members are paid at the Federal minimum wage and accordingly,
legislated changes to the minimum wage affect the Company's
payroll costs. Although no minimum wage increases have been
signed into law, legislation proposing to increase the minimum
wage by $1.85 to $7.00 per hour over a two-year period is
currently under consideration by the U.S. Congress. Subject
to competitive market factors, the Company is typically able
to increase menu prices to cover most of the payroll rate
increases.

The Company considers its current price structure to be very
competitive. This factor, among others, is considered by the
Company when passing cost increases on to its customers.
Annual menu price increases during the last five years have
generally ranged from 2% to 4%.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

The Company's exposure to market risk relates primarily to
changes in interest rates. Foreign currencies are not used in
the Company's operations, and approximately 90% of the
products used in the preparation of food at the Company's
restaurants are not under purchase contract for more than one
year in advance.

The Company is exposed to interest rate risk on its variable-
rate debt, which is composed entirely of outstanding debt
under the Company's revolving credit facility (see "Liquidity
and Capital Resources"). At March 31, 2004, there was $16
million in outstanding debt under this facility. Interest
rates for the facility generally change in response to LIBOR.
Management estimates that a one-percent change in interest
rates throughout the quarter ended March 31, 2004 would have
impacted interest expense by approximately $46,000 and net
earnings by $30,000.

While the Company has entered into interest rate derivative
agreements in the past, there were no such agreements
outstanding during the three months ended March 31, 2004. The
Company does not enter into financial instrument agreements
for trading or speculative purposes.


Item 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of the
Company's management, including its principal executive
officer and principal financial officer, the Company conducted
an evaluation of the effectiveness of the design and operation
of its disclosure controls and procedures, as defined in rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended, as of the end of the period covered by this
report (the "Evaluation Date"). Based on this evaluation, the
Company's principal executive officer and principal financial
officer concluded as of the Evaluation Date that the Company's
disclosure controls and procedures were effective such that
the information relating to the Company, including its
consolidated subsidiaries, required to be disclosed in its
Securities and Exchange Commission ("SEC") reports (i) is
recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms, and (ii) is
accumulated and communicated to the Company's management,
including its principal executive officer and principal
financial officer, as appropriate to allow timely decisions
regarding required disclosure.

During the first quarter of 2004, the Company did not make any
changes in its internal controls over financial reporting that
have materially affected, or are reasonably likely to affect,
those controls.


FORWARD-LOOKING INFORMATION

In accordance with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
that the statements in this quarterly report and elsewhere
that are forward-looking involve risks and uncertainties that
may impact the Company's actual results of operations. All
statements other than statements of historical fact that
address activities, events or developments that the Company
expects or anticipates will or may occur in the future,
including such things as Company plans or strategies,
deadlines for completing projects, expected financial results,
expected regulatory environment and other such matters, are
forward-looking statements. The words "estimates", "plans",
"anticipates", "expects", "intends", "believes" and similar
expressions are intended to identify forward-looking
statements. All forward-looking information reflects the
Company's best judgment based on current information.
However, there can be no assurance that other factors will not
affect the accuracy of such information. While it is not
possible to identify all relevant factors, the following could
cause actual results to differ materially from expectations:
general economic conditions including consumer confidence
levels; competition; developments affecting the public's
perception of buffet-style restaurants; real estate
availability; food and labor supply costs; food and labor
availability; an adverse food safety event; weather
fluctuations; interest rate fluctuations; stock market
conditions; political environment (including acts of terrorism
and wars); and other risks and factors described from time to
time in the Company's reports filed with the Securities and
Exchange Commission, including the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2003. The
ability of the Company to open new restaurants depends upon a
number of factors, including its ability to find suitable
locations and negotiate acceptable land acquisition and
construction contracts, its ability to attract and retain
sufficient numbers of restaurant managers and team members and
the availability of reasonably priced capital. The extent of
the Company's stock repurchase program during 2004 and future
years depends upon the financial performance of the Company's
restaurants, the investment required to open new restaurants,
share price, the availability of reasonably priced capital,
the financial covenants contained in the Company's loan
agreements that govern both the senior notes and the revolving
credit facility, and the maximum debt and stock repurchase
levels authorized by the Company's Board of Directors.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In November 2002, a lawsuit was filed in the United
States District Court, Middle District of Tennessee,
Nashville Division, on behalf of three plaintiffs
alleging various wage and hour violations by the
Company of the Fair Labor Standards Act of 1938. The
plaintiffs' attorneys are seeking collective-action
status on this complaint. In October 2003, the
presiding judge denied the Company's request to
enforce the arbitration agreements signed by the
plaintiffs and also ordered the Company to turn over
certain employee addresses to the plaintiffs'
attorneys. The Company has appealed this decision.
As part of the appeal process, the presiding judge
stayed the order regarding the employee addresses.
Due to the evolving nature of this case, the potential
financial impact to the Company's financial results
cannot be estimated at this time. Accordingly, no
accrual for a loss contingency has been made in the
accompanying consolidated financial statements.

In addition, from time to time, the Company is
involved in various legal claims and litigation
arising in the normal course of business. Based on
currently-known legal actions, management believes
that, as a result of its legal defenses and insurance
arrangements, none of these actions should have a
material adverse effect on the Company's business or
financial condition, taken as a whole.

Item 2. Changes in Securities, Use of Proceeds and Issuer
Purchases of Equity Securities.


Period Total Average Total Maximum
Number Price Number Number of
of Paid of Shares that
Shares Per Shares May Yet Be
Purchased Share Purchased Purchased
as Under the
Part of Plan
Publicly
Announced
Plan
January 0 - 43,185,600 11,814,400
(01/01/04
-
02/04/04)
February 8,000 $16.48 43,193,600 11,806,400
(02/05/04
-
03/03/04)
March 264,666 $16.54 43,458,266 11,541,734
(03/04/04
-
03/31/04)
Total 272,666 $16.54 43,458,266 11,541,734


The Company commenced its stock repurchase program in
March 1996 and is currently authorized to repurchase
up to 55 million shares of its common stock through
December 2004. There were no purchases of the
Company's common stock by or on behalf of the Company
or any "affiliated purchaser" during the first quarter
of 2004 other than through this stock repurchase
program.

Item 5. Other Information.

During the quarterly period covered by this filing,
the Company's Audit Committee did not approve the
engagement of KPMG LLP, the Company's external
auditor, for any non-audit services, and KPMG LLP did
not perform any such services.
Item 6. Exhibits and Reports
on Form 8-K.

(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K):
Exhibit # Description
31.1 Section 302 Certification of Chief
Executive Officer

31.2 Section 302 Certification of Chief
Financial Officer

32.1 Section 906 Certification of Chief
Executive Officer

31.2 Section 906 Certification of Chief
Financial Officer

(b) Reports on Form 8-K:

On January 28, 2004, the Company furnished a report
on Form 8-K regarding the press release on the
Company's financial results as of and for the year
ended December 31, 2003.

On April 21, 2004, the Company furnished a report on
Form 8-K regarding the press release on the
Company's financial results as of and for the
quarter ended March 31, 2004.

Items 3 and 4 are not applicable and have been omitted.

SIGNATURES

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


RYAN'S FAMILY STEAK HOUSES, INC.
(Registrant)



May 10, 2004 /s/Charles D. Way
Charles D. Way
Chairman, President and
Chief Executive Officer



May 10, 2004 /s/Fred T. Grant, Jr.
Fred T. Grant, Jr.
Senior Vice President-Finance and
Treasurer and Assistant Secretary
(Principal Financial and Accounting
Officer)



May 10, 2004 /s/Richard D. Sieradzki
Richard D. Sieradzki
Vice President-Accounting and
Corporate Controller