Luby's Reports First Quarter Fiscal 2020 Results

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February 3, 2020 8:30 AM EST

HOUSTON, Feb. 3, 2020 /PRNewswire/ -- Luby's, Inc. (NYSE: LUB) ("Luby's") today announced unaudited financial results for its sixteen-week first quarter fiscal 2020 referred to as "first quarter."  Comparisons in this earnings release are for the first quarter compared to the sixteen-week first quarter fiscal 2019.

Same-Store Sales Year-Over-Year Comparison

Q1

2020

Q1

2019

Luby's Cafeterias

1.7%

(3.0)%

Fuddruckers

0.1%

(11.2)%

Combo locations (1)

6.6%

(11.1)%

Cheeseburger in Paradise

(1.0)%

(0.6)%

Total same-store sales (2)

1.7%

(5.5)%

(1)

Combo locations consist of a side-by-side Luby's Cafeteria and Fuddruckers Restaurant at one property location.

(2)

Luby's includes a restaurant's sales results into the same-store sales calculation in the quarter after that store has been open for six complete consecutive quarters. In the first quarter, there were 72 Luby's Cafeterias locations, 34 Fuddruckers locations, all six Combo locations, and one Cheeseburger in Paradise location that met the definition of same-stores.

First Quarter Restaurant Sales:($ thousands)

Restaurant Brand

Q1

2020

Q1

2019

Change

($)

Change

(%)

   Luby's Cafeterias

$

60,785

$

62,643

$

(1,858)

(3.0)%

   Combo locations

6,359

5,964

395

6.6%

Luby's cafeteria segment

67,144

68,607

(1,463)

(2.1)%

Fuddruckers restaurants segment

15,569

21,533

(5,964)

(27.7)%

Cheeseburger in Paradise segment

845

959

(114)

(11.9)%

Total Restaurant Sales

$

83,558

$

91,099

$

(7,541)

(8.3)%

Note:  Luby's Cafeterias store count reduced from 78 at Q1 2019 start to 72 at Q1 2020 end; Fuddruckers store count reduced from 54 at Q1 2019 start to 34 at Q1 2020 end; Combo location count at six (12 restaurants) at Q1 2019 start and at Q1 2020 end; Cheeseburger in Paradise store count reduced from two at Q1 2019 start to one at Q1 2020 end.

Restaurant Counts:

August 28,2019

FY20 Q1Openings

FY20 Q1Closings

December 18,2019

Luby's Cafeterias(1)

79

—

(1)

78

Fuddruckers Restaurants(1)

44

—

(4)

40

Cheeseburger in Paradise

1

—

—

1

Total

124

—

(5)

119

(1)

Includes 6 restaurants that are part of Combo locations

Conference Call

Luby's will host a conference call on February 3, 2020 at 10:00 a.m. Central Time to discuss further its first quarter fiscal 2020 results. To access the call live, dial (412) 902-0030 and use the access code 13697984# at least 10 minutes prior to the start time, or listen live over the Internet by visiting the events page in the investor relations section of www.lubysinc.com. For those who cannot listen to the live call, a telephonic replay will be available through February 10, 2020 and may be accessed by calling (201) 612-7415 and using the access code 13697984#.  Also, an archive of the webcast will be available after the call for a period of 90 days on the "Investors" section of the Company's website.

About Luby's

Luby's, Inc. (NYSE: LUB) operates 119 restaurants nationally as of December 18, 2019: 78 Luby's Cafeterias, 40 Fuddruckers, one Cheeseburger in Paradise restaurants. Luby's is the franchisor for 97 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Colombia, and Panama. Luby's Culinary Contract Services provides food service management to 33 sites consisting of healthcare, corporate dining locations, sports stadiums, and sales through retail grocery stores.

This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical fact, are "forward-looking statements" for purposes of these provisions, including the statements under the caption "Outlook" and any other statements regarding scheduled openings of units, scheduled closures of units, sales of assets, expected proceeds from the sale of assets, expected levels of capital expenditures, effects of food commodity costs, anticipated financial results in future periods and expectations of industry conditions.

Luby's cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements, and other written communications, as well as oral statements made from time to time by representatives of Luby's. The following factors, as well as any other cautionary language included in this press release, provide examples of risks, uncertainties and events that may cause Luby's actual results to differ materially from the expectations Luby's describes in such forward-looking statements: general business and economic conditions; the impact of competition; our operating initiatives; fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese and produce; increases in utility costs, including the costs of natural gas and other energy supplies; changes in the availability and cost of labor; the seasonality of Luby's business; changes in governmental regulations, including changes in minimum wages; the effects of inflation; the availability of credit; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; the continued service of key management personnel; and other risks and uncertainties disclosed in Luby's annual reports on Form 10-K and quarterly reports on Form 10-Q.

For additional information contact:

Dennard Lascar Investor Relations Rick Black / Ken Dennard Investor Relations 713-529-6600

Luby's, Inc.

Consolidated Statements of Operations (unaudited)

(In thousands, except per share data)   

Quarter Ended

December 18,

 2019

December 19,

 2018

(16 weeks)

(16 weeks)

SALES:

Restaurant sales

$

83,558

$

91,099

Culinary contract services

9,774

9,496

Franchise revenue

1,707

2,224

Vending revenue

110

99

TOTAL SALES

95,149

102,918

COSTS AND EXPENSES:

Cost of food

23,942

25,083

Payroll and related costs

32,134

34,513

Other operating expenses

14,794

16,502

Occupancy costs

4,990

5,875

Opening costs

12

33

Cost of culinary contract services

8,948

8,815

Cost of franchise operations

565

273

Depreciation and amortization

3,762

4,903

Selling, general and administrative expenses

10,158

10,010

Other charges

1,238

1,214

Provision for asset impairments and restaurant closings

1,110

1,227

Net loss on disposition of property and equipment

30

149

Total costs and expenses

101,683

108,597

LOSS FROM OPERATIONS

(6,534)

(5,679)

Interest income

23

—

Interest expense

(1,962)

(1,713)

Other income, net

240

30

Loss before income taxes and discontinued operations

(8,233)

(7,362)

Provision for income taxes

94

121

Loss from continuing operations

(8,327)

(7,483)

Loss from discontinued operations, net of income taxes

(11)

(6)

NET LOSS

$

(8,338)

$

(7,489)

Loss per share from continuing operations:

Basic

$

(0.28)

$

(0.25)

Assuming dilution

$

(0.28)

$

(0.25)

Loss per share from discontinued operations:

Basic

$

(0.00)

$

(0.00)

Assuming dilution

$

(0.00)

$

(0.00)

Net loss per share:

Basic

$

(0.28)

$

(0.25)

Assuming dilution

$

(0.28)

$

(0.25)

Weighted average shares outstanding:

Basic

30,054

30,059

Assuming dilution

30,054

30,059

The following table contains information derived from the Company's Consolidated Statements of Operations expressed as a percentage of sales. Percentages may not total due to rounding.

Quarter Ended

December 18,

 2019

December 19,

 2018

(16 weeks)

(16 weeks)

Restaurant sales

87.8

%

88.5

%

Culinary contract services

10.3

%

9.2

%

Franchise revenue

1.8

%

2.2

%

Vending revenue

0.1

%

0.1

%

TOTAL SALES

100.0

%

100.0

%

COSTS AND EXPENSES:

(As a percentage of restaurant sales)

Cost of food

28.7

%

27.5

%

Payroll and related costs

38.5

%

37.9

%

Other operating expenses

17.7

%

18.1

%

Occupancy costs

6.0

%

6.4

%

Vending revenue

(0.1)

%

(0.1)

%

Store level profit

9.3

%

10.1

%

(As a percentage of total sales)

General and administrative expenses

9.0

%

8.8

%

Marketing and advertising expenses

1.7

%

0.9

%

Selling, general and administrative expenses

10.7

%

9.7

%

 

Luby's, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

December 18,

 2019

August 28,

 2019

 (Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

3,734

$

3,640

Restricted cash and cash equivalents

9,646

9,116

Trade accounts and other receivables, net

10,471

8,852

Food and supply inventories

2,556

3,432

Prepaid expenses

1,350

2,355

Total current assets

27,757

27,395

Property held for sale

16,488

16,488

Assets related to discontinued operations

1,813

1,813

Property and equipment, net

119,202

121,743

Intangible assets, net

16,349

16,781

Goodwill

514

514

Operating lease right-of-use assets

24,781

—

Other assets

1,002

1,266

Total assets

$

207,906

$

186,000

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$

7,553

$

8,465

Liabilities related to discontinued operations

25

14

Current portion of credit facility debt

3,399

—

Operating lease liabilities-current

5,921

—

Accrued expenses and other liabilities

26,251

24,475

Total current liabilities

43,149

32,954

Credit facility debt

45,629

45,439

Operating lease liabilities-noncurrent

24,235

—

Other liabilities

844

6,577

Total liabilities

$

113,857

$

84,970

Commitments and Contingencies

SHAREHOLDERS' EQUITY

Common stock, $0.32 par value; 100,000,000 shares authorized; shares issued were 30,646,588 and 30,478,972, respectively; shares outstanding were 30,146,588 and 29,978,972, at December 18, 2019 and August 28, 2019 respectively

9,807

9,753

Paid-in capital

35,146

34,870

Retained earnings

53,871

61,182

Less cost of treasury stock, 500,000 shares

(4,775)

(4,775)

Total shareholders' equity

94,049

101,030

Total liabilities and shareholders' equity

$

207,906

$

186,000

 

Luby's, Inc.

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 Quarter Ended

December 18,

 2019

December 19,

 2018

(16 weeks)

(16 weeks)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(8,338)

$

(7,489)

Adjustments to reconcile net loss to net cash used in operating activities:

Provision for asset impairments and net losses on property sales

1,140

1,376

Depreciation and amortization

3,762

4,903

Amortization of debt issuance cost

339

449

Share-based compensation expense

366

439

Cash used in operating activities before changes in operating assets and liabilities

(2,731)

(322)

Changes in operating assets and liabilities:

Decrease (increase) in trade accounts and other receivables

(1,549)

733

Decrease (increase) in food and supply inventories

369

(123)

Decrease in prepaid expenses and other assets

804

1,881

Decrease in operating lease assets

1,922

—

Decrease in operating lease liabilities

(2,313)

—

Increase (decrease) in accounts payable, accrued expenses and other liabilities

1,367

(912)

Net cash provided by (used in) operating activities

(2,131)

1,257

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of assets and property held for sale

149

171

Purchases of property and equipment

(694)

(1,119)

Net cash used in investing activities

(545)

(948)

CASH FLOWS FROM FINANCING ACTIVITIES:

Revolver borrowings

3,300

18,506

Revolver repayments

—

(38,500)

Proceeds from term loan

—

58,400

Term loan repayments

—

(19,506)

Debt issuance costs

—

(3,155)

Taxes paid on equity withheld

—

(8)

Net cash provided by financing activities

3,300

15,737

Net increase in cash and cash equivalents and restricted cash

624

16,046

Cash and cash equivalents and restricted cash at beginning of period

12,756

3,722

Cash and cash equivalents and restricted cash at end of period

$

13,380

$

19,768

Cash paid for:

Income taxes, net of (refunds)

$

(17)

$

29

Interest

1,302

1,637

Store Level Profit

Although store level profit, defined as restaurant sales plus vending revenue, less cost of food, payroll and related costs, other operating expenses, and occupancy costs, is a non-GAAP measure, we believe its presentation is useful because it explicitly shows the results of our most significant reportable segments.   The following table reconciles between store level profit, a non-GAAP measure to loss from continuing operations, a GAAP measure:

($ thousands)

Quarter Ended

December 18,

 2019

December 19,

 2018

(16 weeks)

(16 weeks)

Store level profit

$

7,808

$

9,225

Plus:

Sales from culinary contract services

9,774

9,496

Sales from franchise operations

1,707

2,224

Less:

Opening costs

12

33

Cost of culinary contract services

8,948

8,815

Cost of franchise operations

565

273

Depreciation and amortization

3,762

4,903

Selling, general and administrative expenses

10,158

10,010

Other charges

1,238

1,214

Provision for asset impairments and restaurant closings

1,110

1,227

Net loss on disposition of property and equipment

30

149

Interest income

(23)

—

Interest expense

1,962

1,713

Other income, net

(240)

(30)

Provision for income taxes

94

121

Loss from continuing operations

$

(8,327)

$

(7,483)

Adjusted EBITDA

Adjusted EBITDA is defined as income (loss) from continuing operations before interest, provision (benefit) for income taxes, and depreciation and amortization, and excluding net loss (gain) on disposing of property and equipment, provision for asset impairments and restaurant closings, other charges,  non-cash compensation expense, franchise taxes, and decrease / (increase) in fair value of derivatives.

Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with GAAP. We believe Adjusted EBITDA  provides useful information to management and investors in valuing the Company and evaluating ongoing operating results and trends and in comparing our results to other competitors. Our management uses Adjusted EBITDA in evaluating management's performance when determining incentive compensation.

Adjusted EBITDA, as defined, may not be comparable to other similarly titled measures as computed by other companies. These measures should be considered supplemental and not a substitute or superior to other GAAP performance measures.

($ thousands)

Quarter Ended

December 18,

 2019

December 19,

 2018

(16 weeks)

(16 weeks)

Loss from continuing operations

$

(8,327)

$

(7,483)

Depreciation and amortization

3,762

4,903

Provision for income taxes

94

121

Interest expense

1,962

1,713

Interest income

(23)

—

Other charges

1,238

1,214

Net loss on disposition of property and equipment

30

149

Provision for asset impairments and restaurant closings

1,110

1,227

Non-cash compensation expense

366

425

Franchise taxes

55

67

Increase in fair value of derivative

—

88

Adjusted EBITDA

$

267

$

2,424

 

Cision View original content:http://www.prnewswire.com/news-releases/lubys-reports-first-quarter-fiscal-2020-results-300997391.html

SOURCE Luby's, Inc.


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