Lubys, Inc. (LUB) Reports Q1 Loss of $0.25 on Revenues on $102.95M

Lubys, Inc. (NYSE: LUB) reported Q1 EPS of ($0.25), versus ($0.19) reported last year. Revenue for the quarter came in at $102.92 million, versus $113.5 million reported last year.

• Total sales were $102.9 million
• Same-store sales decreased 5.5%
• Culinary Contract Services sales increased $2.6 million to $9.5 million
• Loss from continuing operations of $7.5 million in the first quarter compared to loss from continuing operations of $5.5 million in the first quarter fiscal 2018
• Adjusted EBITDA decreased $0.8 million (see non-GAAP reconciliation below)

Chris Pappas, President and CEO, commented, "Our turn-around of the business is underway. While sales pressure persisted in the first quarter, we reduced our food and operating costs at a greater percentage than the sales declined. In addition, we have taken substantial actions to restructure our corporate overhead that will result in more than $3.0 million of annual savings in selling, general, and administrative costs.

"We also continue to make positive progress with our property asset sales program, and as of this announcement, we have generated proceeds of $26.8 million, or about 60%, of our $45 million asset sales program. In addition, we refinanced our credit facility on December 13, 2018, providing $60.0 million of debt financing. As a result of this refinancing, we put close to $20.0 million of cash on the balance sheet ($8.7 million in available for use cash and another $11.1 million in restricted cash that has been set aside for future interest payments and other short term commitments). As of the date of this announcement, we have already repaid $9.1 million on our debt balance utilizing proceeds from the sale of property.

"Our new Chief Operating Officer, Todd Coutee, is leveraging his three decades of restaurant experience to increase efficiency throughout our operations. He is realigning our organization by getting the right people in the right positions, coaching restaurant managers and inspiring our front-line employees by setting the right tone and leading by example. This leadership is driving positive changes in our menu offering, marketing efforts and customer service initiatives.

"From a marketing perspective, we are deploying technology and making improvements in mobile ordering, utilizing third party delivery platforms, and other services, to meet the modern needs/desires of our customers. We are utilizing more measurable digital marketing campaigns in conjunction with traditional media outlets. Our intention is to highlight our differentiation with respect to our competitors"

"Subsequent to the first quarter, through January 20, 2019, our total same-store sales have turned to a positive 0.7% with our cafeteria brand achieving a robust positive 2.8% compared to same period last year.

"Lastly, we plan to re-franchise many of our company-owned Fuddruckers as we transition to primarily a franchise model for Fuddruckers, while retaining company-owned stores in our core market of Houston."

For earnings history and earnings-related data on Lubys, Inc. (LUB) click here.

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