Ruby Tuesday (NYSE:RI) reported second-quarter results on Tuesday (when else?). In last week's Foolish Forecast, Rich Duprey asked whether the burgers-and-more joint would provide us with feast or famine. Let's just say the results left me with about the same feeling as eating a frozen veggie burger -- not quite satisfied.

The bun and toppings
The results start off well enough. Sales at the home of the Triple Prime burger were $337 million for the 13 weeks, up 14% from the prior year. Net income -- when adjusted for non-cash option expenses -- was also up slightly from the second quarter of last year. (For more details, please refer to our Fool by Numbers service.) But then same-store sales were roughly flat. And while there are signs that same-store sales are improving, it's still too early to tell whether management's new brand awareness strategy is enough to offset many of the headwinds the company continues to face moving forward.

The meat
As for the juicy part of the quarter's results, things turn bland. You would expect Ruby Tuesday to be awash in free cash flow after the company announced an increase in its share-buyback program, as well as an increased dividend payment. But that's not the case. The company is starting to use debt to fund those buybacks, and judging by the size of recent stock-option grants, a fair amount of the share buybacks are just to offset dilution.

Still, Ruby Tuesday is reinvesting most of its operating cash flows into growing the business. The company plans to open 45-50 new stores and to franchise another 25-30 for 2007. The growing store base, along with increased brand awareness, will help the company maintain its earnings growth as it generates more revenues and entices more customers to each store. Any increase in store traffic will also help the company leverage its fixed operating expenses, resulting in expanding margins -- always appealing to an investor's appetite.

The opinion
Ruby Tuesday's current valuation looks like it's cooked about medium -- not under- or overvalued. Based on trailing price-to-earnings, the company trades below its competitors, Brinker's International (NYSE:EAT) and Applebee's (NASDAQ:APPB). Ruby Tuesday's valuation based on assets also looks moderate. The market's enterprise-value-to-invested-capital ratio of 1.5 signifies that investors do expect moderate growth from the company.

However, if Ruby Tuesday continues to serve up veggie burgers, expect investors to satisfy their hunger somewhere else.

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Fool contributor Matthew Crews welcomes your feedback -- really! He has no financial position in any of the companies mentioned. The Motley Fool has a disclosure policy.