Luby's Reports First Quarter Fiscal 2016 Results

HOUSTON, Jan. 21, 2016 /PRNewswire/ -- Luby's, Inc. (NYSE: LUB) ("Luby's") today announced unaudited financial results for its sixteen-week first quarter fiscal 2016, which ended on December 16, 2015. As announced in the company's fourth quarter fiscal 2015 earnings press release, Luby's has changed the number of reporting weeks included in the first fiscal quarter from 12 weeks to 16 weeks. This change is in part to minimize the Thanksgiving calendar shift by extending the first fiscal quarter until after Thanksgiving. The company now reports 16 weeks in its first fiscal quarter, and the remaining three quarters will typically include 12 weeks. Comparisons in this press release for the first quarter fiscal year 2016 are referred to as "first quarter."

First Quarter Highlights

• Total same-store sales increased 1.4%
• Luby's Cafeterias same-store sales increased 1.2%
• Fuddruckers same-store sales increased 1.3%
• Cheeseburger in Paradise same-store sales increased 5.5%
• Total restaurant sales increased 2.1%
• Opened two company-owned Fuddruckers restaurants located in Wisconsin and Indiana
• Opened six new Fuddruckers franchise restaurants
• Store Level Profit grew to 14.8% compared to 12.8% during the comparable 16 weeks last year
• Expenses declined in Cost of food, Payroll and related costs, Other operating and Occupancy costs
• Combo location sales grew to $7.0 million, representing 6.2% of total restaurant sales
• Adjusted EBITDA increased to $5.7 million compared to $3.3 million during the comparable 16 weeks last year

Chris Pappas, President and CEO, commented, "In the first quarter, same store-sales growth and lower expenses increased our store-level profit margin and improved earnings year over year. Our team continues to execute on our strategy to enhance store level performance across all of our brands through a defined process of investing, coaching, training, and building our leadership throughout the organization. We are focused on driving value through achieving operational excellence and efficient cost management to grow profitability and enhance shareholder value."

 

 

 

• Total Restaurant sales in the first quarter increased to $113.5 million, an increase of $2.3 million versus the comparable 16 weeks of fiscal 2015.  
• Luby's Cafeterias sales decreased $0.2 million versus the comparable 16 weeks of fiscal 2015, due to the closure of two Luby's Cafeterias, offset by a 1.2% increase in same-store sales. The 1.2% increase in Cafeteria same-store sales was the result of a 0.8% increase in guest traffic and a 0.4% increase in average spend per guest. 
• Fuddruckers restaurant sales increased $2.1 million versus the comparable 16 weeks of fiscal 2015, due to a net increase of four operating Fuddruckers restaurants and a 1.3% increase in same-store sales. The 1.3% increase in Fuddruckers same-store sales was the result of a 4.5% increase in average spend per guest offset by a 3.2% decrease in guest traffic. 
• Combo location sales increased $0.2 million in the first quarter due to the addition of our sixth Combo location, offset by a net decrease in sales at other Combo locations. Combo locations together represented 6.2% of total restaurant sales in the first quarter.
• Cheeseburger in Paradise restaurant sales increased 5.5% with all eight Cheeseburger in Paradise locations in operation included in our same-store grouping.
• Store level profit, defined as restaurant sales plus vending revenue less cost of food, payroll and related costs, other operating expenses, and occupancy costs, was $16.8 million, or 14.8% of restaurant sales, in the first quarter compared to $14.2 million, or 12.8% of restaurant sales, during the comparable 16 weeks of fiscal 2015.  Lower overall cost of food, payroll and related costs, other operating expenses and occupancy costs led to this increase in profitability. Store level profit is a non-GAAP measure, and reconciliation to income from continuing operations is presented after the financial statements.
• Culinary Contract Services revenues decreased to $4.9 million with 28 operating locations in the first quarter compared to $5.9 million during the comparable 16 weeks of fiscal 2015 with 26 operating locations. The decrease in Culinary Contract Services revenue was the result of higher sales volume locations ceasing operations over the past 12 months, replaced with lower sales volume locations.  Culinary profit was 10.0% of Culinary Contract Services sales in the first quarter and 10.3% of Culinary Contract Sales in the comparable 16-week period of fiscal 2015.  Both quarters exceeded our profit targets for the business segment.
• Franchise revenue was $2.1 million in the first quarter and in the comparable 16-week period of fiscal 2015.  In the first quarter, franchisees opened six restaurants: internationally in Italy, Colombia, and Mexico and domestically in Michigan, California, and Florida. 
• Income from continuing operations was a loss of $1.7 million, or $0.06 per diluted share compared to a loss of $2.9 million, or a loss of $0.10 per diluted share, in the first quarter fiscal 2015. Excluding special items, loss from continuing operations was $1.9 million, or a loss of $0.07 per diluted share, in the first quarter fiscal 2016 compared to a loss of $2.7 million, or a loss of $0.09 per diluted share, in the first quarter fiscal 2015. 

 

 

Balance Sheet and Capital Expenditures

We ended the first quarter with a debt balance outstanding of $35.0 million, down from $37.5 million at the end of the fourth quarter fiscal 2015.  During the first quarter, our capital expenditures were $5.7 million, compared to $3.6 million in the 12-week first quarter fiscal 2015. At the end of the first quarter, we had $1.6 million in cash and $173.4 million in total shareholders' equity.

 

 

Conference Call

Luby's will host a conference call on January 22, 2016 at 10:00 a.m. Central Time to discuss further its first quarter fiscal 2016 results. To access the call live, dial (412) 902-0030 and use the access code 13627673# 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 January 29, 2016 and may be accessed by calling (201) 612-7415 and using the access code 13627673#.  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 179 restaurants nationally: 93 Luby's Cafeterias, 77 Fuddruckers, 8 Cheeseburger in Paradise and one Bob Luby's Seafood Grill. The Company is the franchisor for 111 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Italy, the Dominican Republic, Panama, Chile, and Colombia. Additionally, a licensee operates 35 restaurants with the exclusive right to use the Fuddruckers proprietary marks, trade dress, and system in certain countries in the Middle East.  The Company does not receive revenue or royalties from these Middle East restaurants.  Luby's Culinary Contract Services provides food service management to 28 sites consisting of healthcare, higher education and corporate dining locations

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 Associates713-529-6600Rick Black / Ken DennardInvestor Relations

 

 

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

 

 

 

 

Although store level profit, defined as restaurant sales 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 segment.   The following table reconciles between store level profit, a non-GAAP measure to loss from continuing operations, a GAAP measure:

 

 

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 gain (loss) on disposing of property and equipment, provision for asset impairments, non-cash compensation expense, and other income (expense).

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.

 

 

 

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SOURCE Luby's, Inc.