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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 30, 1998
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 0-10943
RYAN'S FAMILY STEAK HOUSES, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0657895
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
405 Lancaster Avenue, Greer, South Carolina 29650
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (864) 879-1000
Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of class) (Name of each exchange
on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
(Title of class)
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates
(shareholders holding less than 5% of the outstanding common stock,
excluding directors and officers), computed by reference to the average
high and low prices of such stock, as of March 3, 1999, was $474,321,000.
The number of shares outstanding of the registrant's Common Stock,
$1.00 Par Value, was 39,320,326 at March 3, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated Document Location in Form 10-K
Portions of 1998 Annual Report of Shareholders Parts I and II
Portions of Proxy Statement dated March 30, 1999 Part III
PART I
ITEM 1. BUSINESS.
General
Ryan's Family Steak Houses, Inc., the Registrant (together with its
subsidiaries referred to hereafter as the "Company"), is a South
Carolina corporation that operates a chain of restaurants located
principally in the southern and midwestern United States. At March 3,
1999, 280 Company-owned and 24 franchised Ryan's Family Steakhouse
restaurants (restaurants using the Ryan's Family Steakhouse format are
referred to hereafter as "Ryan's" or "Ryan's restaurant") were in
operation. System-wide sales, which include sales by franchised
restaurants, were approximately $675 million and $636 million in 1998
and 1997, respectively. Sales by Company-owned restaurants amounted
to approximately $637 million in 1998 and $599 million in 1997. The
Company, headquartered in Greer, South Carolina, was organized in
1977, opened its first restaurant in 1978 and completed its initial
public offering in 1982.
The following table indicates the number of Company-owned
restaurants opened each year, net of closings, and the total number of
Company-owned restaurants open at each year-end during the 5-year
period ending December 30, 1998:
Restaurant Total Open
Year Openings, Net at Year-End
1994 18 212
1995 19 231
1996 30 261
1997 9 270
1998 10 280
Restaurant Operations
General. A Ryan's restaurant is a family-oriented restaurant
serving a wide variety of foods from its Mega Barr as well as
traditional grilled entrees, such as charbroiled USDA Choice steaks,
hamburgers, chicken and seafood. The Mega Barr includes fresh and pre-
made salad items, soups, cheeses, a variety of hot meats and
vegetables, and hot yeast rolls prepared and baked daily on site. All
entree purchases include a trip to a bakery bar. Bakery bars feature
hot and fresh-from-the-oven cookies, brownies and other bakery
products as well as various dessert selections, such as ice cream,
frozen yogurt, fresh fruit, cakes, cobblers and several dessert
toppings. All Ryan's also offer a variety of non-alcoholic beverages.
All restaurants have their Mega Barsr in a scatter bar format. This
format breaks the Mega Barr into five island bars for easier customer
access and more food variety.
Most Ryan's are open seven days a week. Some new restaurants are
closed on Mondays for their first two to three months of operation.
Typical hours of operation are 11:00 a.m. to 9:30 p.m. Sunday through
Thursday and 11:00 a.m. to 10:30 p.m. Friday and Saturday. The
average customer count per restaurant during 1998 was approximately
7,000 per week, and the average meal price (per person) was $6.44
(including beverage). Management believes that the average table
turns over every 30 to 45 minutes.
Each Company-owned Ryan's is located in a free-standing masonry
building that may range in size from approximately 10,000 to 11,500
square feet. The interior of most restaurants contains two or three
dining rooms, seating approximately 300 to 500 persons in total, an
area where customers both order and pay for their meals and a kitchen.
The focal points of the main dining room are the centrally located
scatter bars (referred to in the restaurants as the Mega Barr) and
bakery bar. The parking lots at the restaurants can vary in size,
with available parking ranging from 125 to 200 cars.
Restaurant Management and Supervision. The Company emphasizes
standardized operating and control systems together with comprehensive
recruiting and training programs in order to maintain food and service
quality. In each Ryan's restaurant, the management team typically
consists of a general manager or operating partner (see third
succeeding paragraph); a manager; an assistant manager; and an
associate manager. Management personnel begin employment at the
manager trainee level and complete a formal five-week training program
at the Company's management training center in Greer, South Carolina,
prior to being placed in assistant manager positions.
Each restaurant management team reports to an area supervisor.
Area supervisors normally oversee the operations of four to eight
restaurants and report to one of eight regional directors, a position
that may be at the Vice President level and, in any case, reports to
the Vice President-Operations. Communication and support from all
corporate office departments are designed to assist the area
supervisors and regional directors to respond promptly to local
concerns.
All regional directors, area supervisors, general managers,
operating partners and managers participate in incentive bonus
programs. Bonuses paid to general managers and managers are based on
the monthly sales volume of their individual restaurant with
deductions for excess spending in key expense items, such as food
cost, payroll and cash shortages. The bonus program for area
supervisors and regional directors is based principally upon same-
store sales, profitability, "hidden shopper" (service feedback) scores
and certain qualitative factors.
In 1997, an Operating Partner Program was initiated in order to
provide general managers with an additional career path and an
opportunity to share in the profitability of their stores. After
being selected and upon a $10,000 investment in Ryan's common stock, a
general manager is promoted to Operating Partner and then shares in
both the profit improvement and overall profitability of the
restaurant. At December 30, 1998, Operating Partners were managing
102 restaurants. The Company's goal is to have approximately 150
Operating Partners in place by December 1999.
Advertising. The Company has not relied extensively on
advertising, expending less than one percent of restaurant sales
during each of the years 1998, 1997, and 1996. In 1998, the Company
ran advertising campaigns, consisting of both television and radio, in
13 markets covering 92 Ryan's. Newspaper ads and billboards were used
in certain other markets. Management believes that the restaurant
industry has become increasingly competitive over the past several
years and that advertising will become an important factor in the
development and retention of market share. Based on current budgets,
media campaigns are planned in 1999 for markets covering approximately
50% of all Company-owned Ryan's. Local store marketing will be used
in certain smaller markets
Expansion of Company-Owned Restaurants
General. At March 3, 1999, the Company owned and operated 280
Ryan's restaurants. During the remainder of 1999, 9 additional Ryan's
are scheduled to open, resulting in 10 new Company-owned Ryan's in
1999. Target sites for these new restaurants are spread throughout
the Company's current 22-state operating area. The Company also plans
to relocate 6 restaurants during 1999. Management defines a
relocation as a restaurant opened within 18 months after closing
another restaurant in the same marketing area. A relocation
represents a redeployment of assets within a market. The following
table summarizes the Company's openings, closings and relocations
during 1998, 1997 and 1996:
1998 1997 1996
Beginning of year 270 261 231
New restaurants 11 15 30
Relocations - opened 4 1 -
Closings - (6) -
Relocations - closed (5) (1) -
End of year 280 270 261
Site Selection. The Company employs a real estate manager and uses
independent real estate brokers to locate potential new sites and to
perform all preliminary site investigative work. Final approval is
made by the Company's executive management. Important factors in site
selection include population, demographics, proximity to both business
and residential areas, traffic count and site accessibility. In
addition, site selection for a Ryan's restaurant is also influenced by
the general proximity to other Ryan's in order to improve the
efficiency of the Company's area supervisors, advertising programs and
distribution network.
Construction. The Company presently acts as the general contractor
in the construction of substantially all of its restaurants.
Occasionally when determined to be cost beneficial, the Company
engages non-affiliated general contractors to construct restaurants on
a lump-sum contract basis. The Company requires performance and
payment bonds on certain building and site work contracts, depending
on the size and reputation of, as well as Company history with, the
contractor. The Company closely supervises and monitors the progress
of all construction projects. New restaurants are generally completed
approximately three to four months from the commencement of
construction. The average cost of a new Ryan's (land, building and
equipment) constructed in 1998 was approximately $2.3 million.
Restaurant Opening. When a new Ryan's is opened, all restaurant
management positions are staffed with personnel who have had prior
management experience in another of the Company's restaurants. Prior
to opening, all staff personnel at the new location undergo one week
of intensive training conducted by a new store opening team.
Franchising. While the Company has granted Ryan's franchises in
the past, management has not actively pursued new franchisees in
recent years in order to concentrate on the operation and development
of Company-owned restaurants. New franchises may be awarded to the
existing franchisee or to new franchisees proposing to operate in
regions significantly outside of the Company's existing or
contemplated operating areas.
The following table indicates the number of franchised restaurants
opened each year, net of closings, and the total number of franchised
restaurants open at each year-end during the 5-year period ending
December 30, 1998:
Net
Restaurants Total Open
Year Opened (Closed) at Year-End
1994 (4) 30
1995 (4) 26
1996 (1) 25
1997 - 25
1998 1 26
At December 30, 1998, the Company's sole franchise agreement was
with Family Steak Houses of Florida, Inc. ("Family") which, at that
date, operated 26 Ryan's in central and northern Florida. The present
franchise agreement expires in 2010 with a 10-year renewal option.
The agreement provides that the Company will furnish Family all the
necessary information to construct, equip, manage and operate a
restaurant under the Ryan's Family Steakhouse name or derivative
thereof. The agreement generally provides for the construction and
operation of one restaurant with exclusive territorial protection
within a one to five mile radius. The franchise agreement with Family
provides for exclusive territorial protection in certain Florida
counties as long as Family operates a specified number of Ryan's
restaurants. At December 30, 1998, Family was required to have 26
restaurants in operation and was therefore in compliance at that date.
Under the current agreement, the number of Ryan's required to be
operated by Family increases to 27 by year-end 1999 and then increases
by one restaurant per year thereafter.
At March 3, 1999, Family operated 24 Ryan's, having closed two
restaurants after December 30, 1998. The Company has been holding
discussions with Family regarding Family's plans for 1999 and onward.
Such discussions may lead to a change in the number of Ryan's required
to be operated by Family.
Sources and Availability of Raw Materials
The Company has a centralized purchasing program which is designed
to ensure uniform product quality in all restaurants as well as
reduced food, beverage and supply costs. The Company's management
establishes contracts for approximately 90% of its food and other
products from a variety of major suppliers under competitive terms.
Purchases under these contracts are delivered to one of three
warehouses operated by the Company's principal distributor and then
delivered to the restaurants by the distributor. The remaining 10% of
the Company's products (principally fresh produce) are purchased
locally by restaurant management. The beef used by the Company is
obtained from four western suppliers based on price and availability
of product. To ensure against interruption in the flow of beef
supplies due to unforeseen or catastrophic events and to take
advantage of favorable purchasing opportunities, the Company
stockpiles four to eight weeks supply of sirloin at the distributor.
The Company believes that satisfactory sources of supply are generally
available for all the items regularly used.
Working Capital Requirements
Working capital requirements for continuing operations are not
significant. The Company's restaurant sales are primarily derived
from cash sales, and inventories are purchased on credit and are
rapidly converted to cash. Therefore, the Company does not maintain
significant receivables or inventories.
Trademarks and Service Marks
The Company has registered various trademarks and service marks,
including "Ryan's Family Steak Houser" and "Mega Barr", and their
related designs with the United States Patent and Trademark Office.
All trademarks and service marks have stated expiration dates ranging
from December 2001 to October 2008. However, they are renewable for
an unlimited number of additional 10-year terms at the option of the
Company.
Competition
The food service business is highly competitive and is often
impacted by changes in the taste and eating habits of the public,
economic conditions affecting spending habits, population and traffic
patterns. The principal bases of competition in the industry are the
quality and price of the food products offered. Location, speed of
service and attractiveness of facilities are also important factors.
Ryan's restaurants are in competition with many units operated or
franchised by national, regional and local restaurant companies that
offer steak or buffet-style meals. Although the Company believes that
its price/value to its customers places it in an excellent competitive
posture, it should be noted that during the last few years many
operators have upgraded their restaurants to more closely match the
Ryan's format and particularly the Mega Barr. The Company is also in
competition with many specialty food outlets and other food vendors.
Seasonality
The Company's operations are subject to some seasonal fluctuations.
Average sales per restaurant run approximately 5% less than the
company-wide annual per restaurant average during the first and fourth
quarters and 5% more than the company-wide annual average during the
second and third quarters.
Research
The Company maintains ongoing research programs relating to the
development of new products and evaluation of marketing activities.
The Company's management staff includes a Director of Research and
Development, whose responsibilities include enhancing and updating the
Mega Barr and entree selections. While research and development
activities are important to the Company, past expenditures have not
been and future expenditures are not expected to be material to the
Company's financial results.
Customers
No material part of the Company's business is dependent upon a
single customer or a specific group of customers.
Regulation
The Company is subject to licensing and regulation by health,
sanitation, safety and fire agencies in the state and/or
municipalities in which its restaurants are located. The Company's
restaurants are constructed to meet local and state building code
requirements and are operated in material accordance with state and
local regulations relating to the preparation and service of food.
The Company has not encountered any difficulties or failures in
obtaining the required licenses or approvals that would significantly
delay or prevent the opening of new restaurants. More stringent and
varied requirements of local and state governmental bodies could delay
or prevent development of new restaurants in particular locations.
The Company is subject to the Fair Labor Standards Act which
regulates matters such as minimum wage requirements, overtime and
other working conditions, along with the Americans with Disabilities
Act and various family leave mandates. 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. The most recent change in the Federal
minimum wage occurred on September 1, 1997 when the wage rate
increased from $4.75 per hour to $5.15. The $2.13 rate for servers
was not affected. Although no additional increases have been
legislated, the possibility is mentioned frequently in various
political discussions. The Company has in the past typically been
able to increase menu prices to cover most of the payroll rate
increases.
Environmental Matters
While the Company is not aware of any federal, state or local
environmental regulations which will materially affect its operations
or competitive position or result in material capital expenditures, it
cannot predict the impact of possible future legislation or regulation
on its operations.
Employees
At March 3, 1999, the Company employed approximately 18,000
persons, of whom approximately 17,700 were restaurant personnel. The
Company strives to maintain low turnover by offering all full-time
employees a very competitive benefit package, which includes life and
health insurance, vacation pay and a defined contribution retirement
plan. Part-time employees who work at least 25 hours per week are
eligible to participate in the Company's life and health insurance
plans and also receive vacation pay.
None of the Company's employees are represented by a union. The
Company has experienced no work stoppages attributable to labor
disputes and considers its employee relations to be good.
Information as to Classes of Similar Products or Services
The Company operates in only one industry segment. All significant
revenues and pre-tax earnings relate to retail sales of food to the
general public through either Company-operated or franchised
restaurants. At March 3, 1999, the Company had no operations outside
the continental United States.
Information regarding the Company's restaurant sales and assets is
included in the Company's financial statements, which are incorporated
by reference into Part II, Item 8 of this Form 10-K.
ITEM 2. PROPERTIES.
The Company owns substantially all of its restaurant properties,
each of which is a free-standing masonry building that covers
approximately 10,000 to 11,500 square feet, with seating for
approximately 300 to 500 persons and parking for approximately 125 to
200 cars on sites of approximately 75,000 to 130,000 square feet. At
March 3, 1999, all restaurant sites, except 13 properties under land
leases, were owned by the Company.
A listing of the number of Ryan's restaurant locations by state as
of December 30, 1998 appears on page 5 of the Company's 1998 Annual
Report to Shareholders and is incorporated herein by reference. A
detailed listing of Ryan's restaurant locations may be obtained
without charge by writing to the Company's principal executive
offices, Attention: Corporate Secretary.
The Company's corporate offices consist of two office buildings
(30,000 square feet and 16,000 square feet) and a 10,000 square foot
warehouse facility, all of which are located in Greer, SC. The office
buildings (land and building) are owned by the Company. The warehouse
facility is leased with an initial term ending in October 2000 and
annual renewal terms ending in October 2005.
From time to time, the Company offers for sale excess land that was
acquired in connection with its restaurant properties. Also, at March
3, 1999, five closed restaurant properties were offered for sale. The
Company believes that the eventual disposition or non-disposition of
all such properties will not materially affect its business or
financial condition, taken as a whole.
ITEM 3. LEGAL PROCEEDINGS.
From time to time, the Company is a defendant in legal actions
arising in the normal course of its business. Based on those legal
actions currently known to its management, the Company believes that,
as a result of its legal defenses and insurance arrangements, none of
these actions, if decided adversely, would have a material effect on
its business or financial condition, taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information regarding trading of the Company's common stock,
quarterly market prices and dividends appears under "Common Stock
Data" and "Market Price of Common Stock" on page 27 of the Company's
1998 Annual Report to Shareholders and is incorporated herein by
reference.
At March 3, 1999, the Company's common stock was held by
approximately 13,000 stockholders of record through nominee or street
name accounts with brokers.
The Company is party to a long-term credit agreement, expiring in
June 2003, with a group of banks that contains, among other
provisions, requirements for the Company to maintain a minimum net
worth level and certain financial ratios. While not specifically
prohibiting the payment of dividends, the aforementioned provisions
represent a limitation on the Company's ability to do so. At December
30, 1998, the Company exceeded the most restrictive minimum net worth
covenant by approximately $25.4 million.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the last five years is included in the
"Five-Year Financial Summary" on page 15 of the Company's 1998 Annual
Report to Shareholders and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" is included on pages 8 through 14 of the
Company's 1998 Annual Report to Shareholders and is incorporated
herein by reference.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURE 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 commodities used in the preparation of food at the
Company's restaurants are not under purchase contract for more than
one year in advance. All of the Company's outstanding long-term debt
is variable rate debt. The Company uses an interest rate swap
agreement to reduce its exposure to interest rate fluctuations. The
swap agreement, which effectively converts $25 million of the variable
rate debt to a fixed-rate obligation, runs through October 2000 and
can be terminated by the issuing counterparty, a major regional bank,
at any time. The Company does not enter into financial instrument
agreements for trading or speculative purposes.
The following table presents information regarding the Company's
outstanding long-debt and interest rate swap agreement as of December
30, 1998. For the long-term debt, the table presents the
contractually required principal repayments and their related average
interest rate by maturity date. Average interest rate is based on the
three-month London Interbank Offered Rate ("LIBOR") as of December 30,
1988 plus the contractual margin. For the interest rate swap
agreement, the table presents the notional amount, the contractual
average pay rate and the average receive rate, which is based on three-
month LIBOR as of December 30, 1998. At December 30, 1998, the fair
value of the agreement was $302,000 unfavorable to the Company as
determined by the issuing counterparty using its internal valuation
models and assumptions and available market data.
As of December 30, 1998
Expected Maturity Date
There- Fair
1999 2000 2001 2002 2003 after Total Value
Liabilities
(in millions)
Long-term debt -
Variable rate $11.6 23.3 23.3 23.3 11.5 - 93.0 93.0
Average interest
rate 5.7% 5.8% 5.8% 5.8% 5.8% - 5.8%
Interest Rate
Derivatives
(in millions)
Interest rate swap
- variable to fixed
Notional amount $25.0 25.0 - - - - 25.0 (0.3)
Average pay rate 5.5% 5.5% - - - - 5.5%
Average receive
rate 5.1% 5.1% - - - - 5.1%
The Company is exposed to credit loss in the event of
nonperformance by the issuing counterparty to the interest rate swap
agreement. However, as noted above, the counterparty is a major
regional bank and, accordingly, the Company has not required any
collateralization and does not anticipate any nonperformance issues
during the term of the agreement.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's financial statements, unaudited quarterly financial
information and the independent auditors' report are included on pages
16 through 25 of the Company's 1998 Annual Report to Shareholders and
are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors", "Executive Officers" and "Section
16(a) Beneficial Ownership Reporting Compliance."
ITEM 11.EXECUTIVE COMPENSATION.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors - Compensation of Directors",
"Compensation Committee Interlocks, Insider Participation and Related
Party Transactions", "Executive Compensation and Other Information",
"Report of the Compensation Committee" and "Performance Graph."
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Election of Directors", "Certain Beneficial Owners of Common
Stock" and "Executive Officers."
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required under this item is incorporated herein by
reference to the Ryan's Family Steak Houses, Inc. Proxy Statement for
the Annual Meeting of Shareholders to be held May 5, 1999 under the
headings "Compensation Committee Interlocks, Insider Participation and
Related Party Transactions" and "Executive Compensation and Other
Information - Deferred Compensation - Salary Continuation Agreement."
PART IV
ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-
K.
(a)1-2Financial statements filed as part of this Form 10-K are
listed in the "Index to Financial Statements", at page 16.
(a)3 Exhibits (numbered in accordance with Item 601 of Regulation
S-K):
Exhibit # Description
3.1 Articles of Incorporation of the Company,
as amended through April 24, 1986: Incorporated by
reference to Exhibit 4(a) to the Registration
Statement of the Company filed with the SEC on Form S-
3 (Commission file no. 33-7245) (the "Form S-3").
3.1.1 Articles of Amendment to the Articles of
Incorporation, dated April 22, 1987: Incorporated by
reference to Exhibit 3.2 to the Annual Report on Form
10-K for the period ended January 1, 1992 (Commission
file no. 0-10943) (the "1991 10-K").
3.1.2 Articles of Amendment to the Articles of
Incorporation, dated May 25, 1989: Incorporated by
reference to Exhibit 4.3 to the Registration
Statement of the Company filed with the SEC on Form S-
8 (Commission file no. 33-53834).
3.2 Bylaws of the Company: Incorporated by
reference to Exhibit 4(b) to the Form S-3.
3.2.1 Amendment to By-Laws of the Company, dated
October 25, 1990: Incorporated by reference to
Exhibit 3.3 to the 1991 10-K.
3.2.2 Amendment to By-Laws of the Company, dated
January 28, 1999.
4.1 Specimen of Company common stock
certificate: Incorporated by reference to Exhibit
4.1 to the 1991 10-K.
4.2 See Exhibits 3.1, 3.1.1, 3.1.2, 3.2, 3.2.1
and 3.2.2.
4.3 See Exhibit 10.24.
*10.1 Ryan's Family Steak Houses, Inc. Incentive
Stock Option Plan: Incorporated by reference to the
Registration Statement of the Company filed with the
SEC on Form S-8 (Commission file no. 2-83987).
*10.2 Ryan's Family Steak Houses, Inc. 1987
Stock Option Plan: Incorporated by reference to
Exhibit 4 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 33-15924).
*10.3 Ryan's Family Steak Houses, Inc. 1991
Stock Option Plan: Incorporated by reference to
Exhibit 4.4 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 33-53834).
*10.4 Ryan's Family Steak Houses, Inc. 1998
Stock Option Plan: Incorporated by reference to
Exhibit 99.1 to the Registration Statement of the
Company filed with the SEC on Form S-8 (Commission
file no. 333-67165).
*10.5 Ryan's Employee Retirement Savings Plan,
dated March 1, 1992: Incorporated by reference to
Exhibit 10.4 to the 1991 10-K.
*10.6 Salary Continuation Agreement, dated April
22, 1987, between the Company and Alvin A. McCall,
Jr.; as amended on October 26, 1989: Incorporated by
reference to Exhibit 10.5 to the 1991 10-K.
*10.7 Deferred Compensation - Salary
Continuation Agreement, dated April 22, 1987, between
the Company and Charles D. Way: Incorporated by
reference to Exhibit 10.6 to the 1991 10-K.
*10.8 Agreement and Plan of Restructuring:
Incorporated by reference to Exhibit A to the Proxy
Statement of the Company, dated March 25, 1993, filed
with respect to the Annual Meeting of Shareholders to
be held on April 28, 1993 (Commission file no. 0-
10943).
*10.9 Split Dollar Agreement by and between the
Company and Charles D. Way dated September 1, 1993:
Incorporated by reference to Exhibit 10.8 to the
Annual Report on Form 10-K for the period ended
December 29, 1993 (Commission file no. 0-10943) (the
"1993 10-K").
*10.10 Split Dollar Agreement by and between the
Company and G. Edwin McCranie dated November 12,
1993: Incorporated by reference to Exhibit 10.9 to
the 1993 10-K.
*10.11 Split Dollar Agreement by and between the
Company and John C. Jamison dated November 12, 1993:
Incorporated by reference to Exhibit 10.10 to the
1993 10-K.
*10.12 Split Dollar Agreement by and between the
Company and James R. Hart dated August 8, 1993:
Incorporated by reference to Exhibit 10.11 to the
1993 10-K.
*10.13 Split Dollar Agreement by and between the
Company and Fred T. Grant, Jr. dated November 12,
1993: Incorporated by reference to Exhibit 10.12 to
the 1993 10-K.
*10.14 Split Dollar Agreement by and between the
Company and Alan E. Shaw dated November 12, 1993:
Incorporated by reference to Exhibit 10.13 to the
1993 10-K.
*10.15 Split Dollar Agreement by and between the
Company and Morgan A. Graham dated November 12, 1993:
Incorporated by reference to Exhibit 10.15 to the
Annual Report on Form 10-K for the period ended
December 31, 1997 (Commission file no. 0-10943) (the
"1997 10-K").
*10.16 Split Dollar Agreement by and between the
Company and Janet J. Gleitz dated November 12, 1993:
Incorporated by reference to Exhibit 10.16 to the
1997 10-K.
*10.17 Split Dollar Agreement by and between the
Company and Ilene T. Turbow dated November 12, 1995:
Incorporated by reference to Exhibit 10.17 to the
1997 10-K.
*10.18 Deferred Compensation Plan by and between
the Company and Morgan A. Graham dated November 1,
1997: Incorporated by reference to Exhibit 10.18 to
the 1997 10-K.
*10.19 Deferred Compensation Plan by and between
the Company and Janet J. Gleitz dated November 1,
1997: Incorporated by reference to Exhibit 10.19 to
the 1997 10-K.
*10.20 Deferred Compensation Plan by and between
the Company and Ilene T. Turbow dated November 1,
1997: Incorporated by reference to Exhibit 10.20 to
the 1997 10-K.
*10.21 Executive Bonus Plan, commencing in fiscal
year 1997: Incorporated by reference to Exhibit
10.15 to the Annual Report on Form 10-K for the
period ended January 1, 1997 (Commission file no. 0-
10943) (the "1996 10-K").
*10.22 Executive Bonus Plan, commencing in fiscal
year 1998: Incorporated by reference to Exhibit
10.23 to the 1997 10-K.
10.23 Agreement between Ryan's Properties, Inc.
and Family Steak Houses of Florida, Inc. dated July
11, 1994 and as amended on October 17, 1994:
Incorporated by reference to Exhibit 10.15 to the
Annual Report on Form 10-K for the period ended
December 28, 1994 (Commission file no. 0-10943).
10.24 Ryan's Family Steak Houses, Inc. and
Wachovia Bank of North Carolina, N.A., as Rights
Agent, Shareholder Rights Agreement dated as of
January 26, 1995: Incorporated by reference to
Exhibit 2 to the report on Form 8-K filed with the
Commission on February 9, 1995 (Commission file no. 0-
10943).
10.25 Credit Agreement dated as of June 5, 1996
among Ryan's Family Steak Houses, Inc., Wachovia Bank
of Georgia, N.A., as Agent, and certain other banks
signatory thereto: Incorporated by reference to
Exhibit 10.18 to the 1996 10-K.
10.251 First Amendment to the Credit Agreement
referred to at Exhibit 10.25, dated as of October 9,
1998.
13.1 Ryan's Family Steak Houses, Inc. 1998
Report to Shareholders (except for those portions
that are expressly incorporated by reference in this
Report on Form 10-K, this exhibit is furnished for
the information of the Commission and is not deemed
to be filed as a part hereof).
21.1 Subsidiaries of the Company.
23.1 Consent of Independent Auditors.
27 Financial Data Schedule (electronic filing
only).
99.1 Ryan's Family Steak Houses, Inc. Proxy
Statement for the Annual Meeting of Shareholders,
dated March 30, 1999.
* This is a management contract or
compensatory plan or arrangement.
(b) On October 5, 1998, November 9, 1998, December 8, 1998,
January 4, 1999, February 8, 1999 and March 8, 1999, the
Company filed reports on Form 8-K regarding sales information
for September 1998, October 1998, November 1998, December
1998, January 1999, and February 1999, respectively.
(c) The response to this portion of Item 14 is submitted as a
separate section of this report.
(d) The response to this portion of Item 14 is submitted as a
separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
March 30, 1999
By:/s/Fred T. Grant, Jr.
Fred T. Grant, Jr.
Vice President - Finance,
Treasurer and Assistant
Secretary (Principal
Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
/s/Charles D. Way Chairman, President and March 30, 1999
Charles D. Way Chief Executive Officer
/s/G. Edwin McCranie Director and Executive March 30, 1999
G. Edwin McCranie Vice President
/s/James D. Cockman Director March 30, 1999
James D. Cockman
/s/Barry L. Edwards Director March 30, 1999
Barry L. Edwards
/s/Brian S. MacKenzie Director March 30, 1999
Brian S. MacKenzie
/s/Harold K. Roberts, Jr. Director March 30, 1999
Harold K. Roberts, Jr.
/s/James M. Shoemaker, Jr. Director March 30, 1999
James M. Shoemaker, Jr.
/s/Fred T. Grant, Jr. Vice President - Finance, March 30, 1999
Fred T. Grant, Jr. Treasurer and Assistant
Secretary (Principal Financial
and Accounting Officer)
RYAN'S FAMILY STEAK HOUSES, INC.
INDEX TO FINANCIAL STATEMENTS
The following financial statements of the Registrant included in
the Annual Report to Shareholders for the year ended December 30,
1998, are incorporated herein by reference. With the exception of the
pages listed below and other information incorporated in this report
on Form 10-K, the 1998 Annual Report to Shareholders is not deemed
"filed" as part of this report.
Page Reference
in Annual Report
Independent Auditors' Report 25
Consolidated Statements of Earnings 16
Consolidated Balance Sheets 17
Consolidated Statements of Cash Flows 18
Notes to Financial Statements 19-25
All financial statement schedules have been omitted since the
required information is not applicable or the information required is
included in the consolidated financial statements or the notes
thereto.