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 January 21, 2016 - 4:10 PM EST
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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."

 


Same-Store Sales Year-Over-Year Comparison



Q1

2016(3)

Q4

2015

Fiscal

2015

Luby's Cafeterias

1.2%

0.2%

0.6%

Fuddruckers Restaurants

1.3%

1.7%

1.1%

Combo Locations (1)

(Represents two locations)

(1.3%)

(6.4%)

(1.8%)

Cheeseburger in Paradise

5.5%

2.8%

(2.9%)

Total same-store sales (2)

1.4%

0.7%

0.5%

(1)

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

(2)

Note: Luby's includes a restaurant's sales results into the same-store sales calculation in the quarter after a store has been open for six complete consecutive quarters.  In the first quarter, there were 88 Luby's Cafeterias, 59 Fuddruckers Restaurants, 2 Combo locations, and 8 Cheeseburger in Paradise locations that met the definition of same-stores.

(3)

Q1 2016 same-store sales reflects the change in restaurant sales for the locations included in the same-store grouping for the 16-week first quarter relative to the comparable 16-week period in fiscal 2015.

 

First Quarter Restaurant Sales:

($ millions)

Restaurant Brand

Q1 2016

Q1 2015

Q1 2015

Comp Q1*

Change

Comp Q1*

Change (%)

Comp Q1*


(16 weeks)

(12 weeks)

(16 weeks)

(16 weeks)

(16 weeks)

Luby's Cafeterias

$   70,905

$  50,548

$   71,111

$      (206)

(0.3%)

Fuddruckers Restaurants

30,880

21,452

28,782

2,098

7.3%

Combo Locations

7,020

5,057

6,847

173

2.5%

Cheeseburger in Paradise

4,741

3,500

4,493

248

5.5%

Total Restaurant Sales

$  113,546

$  80,557

$  111,233

$     2,313

2.1%

Note: FY2016 Q1 includes high sales volume around Thanksgiving and Christmas holidays.  FY2015 Q1 ended the day prior to Thanksgiving

"Comp Q1" is the 16 week period in fiscal 2015 that is comparable to the 16 week period in fiscal 2016

 

  • 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. 

 

Reconciliation of loss from continuing operations to loss from continuing operations, before special items (1,2):




Q1 FY2016



Q1 FY2015


Item


Amount
($000s)



Per Share
($)



Amount
($000s)



Per Share
($)


Loss from continuing operations


$

(1,739)




(0.06)




(2,880)




(0.10)


Loss (gain) on asset disposals and impairments



(184)




(0.01)




191




0.01


Loss from continuing operations, before special items


$

(1,923)




(0.07)




(2,689)




(0.09)




(1)

Luby's uses income (loss) from continuing operations, before special items, in analyzing its results, which is a non-GAAP financial measure. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results. Luby's has reconciled loss from continuing operations, before special items, to loss from continuing operations, the nearest GAAP measure in context.

(2)

Per share amounts are per diluted share after tax.

 

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.

 


Restaurant Counts:




Fiscal 2016
Year Begin


2016 Q1
Openings


2016 Q1
Closings


Fiscal 2016
Q1 End

Luby's Cafeterias(1)


93






93

Fuddruckers(1)


75


2




77

Cheeseburger in Paradise


8






8

Other restaurants (2)


1






1

Total


177


2




179



(1)

Includes 6 restaurants that are part of Combo locations

(2)

Other restaurants include one Bob Luby's Seafood

 

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

 


Luby's, Inc.

Consolidated Statements of Operations (unaudited)

(In thousands, except per share data)




Quarter Ended




December 16,
2015



November 19,
2014




(16 weeks)



(12 weeks)


SALES:









   Restaurant sales


$

113,546



$

80,557


   Culinary contract services



4,915




4,598


   Franchise revenue



2,125




1,581


   Vending revenue



158




125


TOTAL SALES



120,744




86,861


COSTS AND EXPENSES:









   Cost of food



32,434




23,484


   Payroll and related costs



39,424




28,686


   Other operating expenses



18,421




14,219


   Occupancy costs



6,642




4,942


   Opening costs



397




925


   Cost of culinary contract services



4,422




4,099


   Cost of franchise operations



612




384


   Depreciation and amortization



7,014




5,068


   Selling, general and administrative expenses



13,243




9,151


   Net (gain) loss on disposition of property and equipment



(279)




290


   Total costs and expenses



122,330




91,248


LOSS FROM OPERATIONS



(1,586)




(4,387)


   Interest income



1




1


   Interest expense



(696)




(456)


   Other income (expense), net



(118)




180


Loss before income taxes and discontinued operations



(2,399)




(4,662)


   Benefit for income taxes



(660)




(1,782)


Loss from continuing operations



(1,739)




(2,880)


   Loss from discontinued operations, net of income taxes



(72)




(139)


NET LOSS


$

(1,811)



$

(3,019)


Loss per share from continuing operations:









   Basic


$

(0.06)



$

(0.10)


   Assuming dilution



(0.06)




(0.10)


Loss per share from discontinued operations:









   Basic


$

(0.00)



$

(0.01)


   Assuming dilution



(0.00)




(0.01)


Net loss per share:









   Basic


$

(0.06)



$

(0.11)


   Assuming dilution



(0.06)




(0.11)


Weighted average shares outstanding:









   Basic



29,133




28,890


   Assuming dilution



29,133




28,890











 

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.

 



Quarter Ended




December 16,
2015



November 19,
2014



December 17,
2014




(16 weeks)



(12 weeks)



(16 weeks)






Restaurants sales













Culinary contract services



94.0

%



92.7

%



93.1

%

Franchise revenue



4.1

%



5.3

%



4.9

%

Vending revenue



1.8

%



1.8

%



1.8

%

TOTAL SALES



0.1

%



0.1

%



0.1

%




100.0

%



100.0

%



100.0

%














COST AND EXPENSES:













(As a percentage of restaurant sales)













Cost of food



28.6

%



29.2

%



29.4

%

Payroll and related costs



34.7

%



35.6

%



34.8

%

Other operating expenses



16.2

%



17.7

%



17.1

%

Occupancy costs



5.8

%



6.1

%



6.0

%

Vending income



(0.1)

%



(0.2)

%



(0.1)

%

Store level profit



14.8

%



11.6

%



12.8

%














(As a percentage of total sales)













Selling, general and administrative expenses



11.0

%



10.5

%



10.3

%

LOSS FROM OPERATIONS



(1.3)

%



(5.1)

%



(3.3)

%














 


Luby's, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)




December 16,
2015



August 26,
2015




(Unaudited)






ASSETS









Current Assets:









   Cash and cash equivalents


$

1,581



$

1,501


   Trade accounts and other receivables, net



4,949




5,175


   Food and supply inventories



4,948




4,483


   Prepaid expenses



2,881




3,402


   Assets related to discontinued operations



3




10


   Deferred income taxes



577




577


      Total current assets



14,939




15,148


Property held for sale



3,058




4,536


Assets related to discontinued operations



3,672




3,671


Property and equipment, net



199,754




200,202


Intangible assets, net



22,089




22,570


Goodwill



1,643




1,643


Deferred income taxes



13,844




12,917


Other assets



3,613




3,571


Total assets


$

262,612



$

264,258


LIABILITIES AND SHAREHOLDERS' EQUITY









Current Liabilities:









   Accounts payable


$

18,912



$

20,173


   Liabilities related to discontinued operations



438




408


   Accrued expenses and other liabilities



27,448




23,967


      Total current liabilities



46,798




44,548


Credit facility debt



35,000




37,500


Liabilities related to discontinued operations



17




182


Other liabilities



7,429




7,369


      Total liabilities



89,244




89,599


Commitments and Contingencies









SHAREHOLDERS' EQUITY









Common stock, $0.32 par value; 100,000,000 shares authorized; shares issued were 29,325,754 and 29,134,603, respectively; shares outstanding were 28,825,754 and 28,634,603, respectively



9,384




9,323


   Paid-in capital



29,465




29,006


   Retained earnings



139,294




141,105


   Less cost of treasury stock, 500,000 shares



(4,775)




(4,775)


      Total shareholders' equity



173,368




174,659


Total liabilities and shareholders' equity


$

262,612



$

264,258


 

Luby's, Inc.

Consolidated Statements of Cash Flows (unaudited)

(In thousands)




Quarter Ended




December 16,
2015



November 19,
2014




(16 weeks)



(12 weeks)


CASH FLOWS FROM OPERATING ACTIVITIES:









   Net loss


$

(1,811)



$

(3,019)


Adjustments to reconcile net loss to net cash provided by operating activities:









   Net (gain) loss on disposition of property and equipment



(279)




290


   Depreciation and amortization



7,021




5,073


   Amortization of debt issuance cost



148




36


   Non-cash compensation expense



75





   Share-based compensation expense



445




322


   Other non-cash compensation expense



74





   Deferred tax benefit



(927)




(2,028)


Cash provided by operating activities before changes in operating assets and liabilities



4,746




674


   Changes in operating assets and liabilities:









   Decrease (Increase) in trade accounts and other receivables



226




(690)


   Increase in food and supply inventories



(968)




(1,998)


   Decrease in prepaid expenses and other assets



364




1,118


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



1,975




(3,431)


Net cash provided by (used in) operating activities



6,343




(4,327)


CASH FLOWS FROM INVESTING ACTIVITIES:









   Proceeds from disposal of assets and property held for sale



1,916




692


   Decrease in notes receivable



17





   Purchases of property and equipment



(5,729)




(3,589)


Net cash used in investing activities



(3,796)




(2,897)


CASH FLOWS FROM FINANCING ACTIVITIES:









   Credit facility borrowings



27,000




25,800


   Credit facility repayments



(29,500)




(19,500)


   Debt issuance costs



(42)




(50)


   Proceeds received on the exercise of employee stock options



75





Net cash provided by (used in) financing activities



(2,467)




6,250


Net increase (decrease) in cash and cash equivalents



80




(974)


Cash and cash equivalents at beginning of period



1,501




2,788


Cash and cash equivalents at end of period



1,581



$

1,814


Cash paid for:









   Income taxes


$



$


   Interest



520




451


 

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:

 




Quarter Ended




December 16,


November 19,


December 17,




2015


2014


2014




(16 weeks) 


(12 weeks) 


(16 weeks) 






Store level profit


$

16,783


$

9,351


$

14,218













Plus:











Sales from culinary contract services



4,915



4,598



5,908


Sales from franchise revenue



2,125



1,581



2,136













Less:











Opening costs



397



925



1,024


Cost of culinary contract services



4,422



4,099



5,302


Cost of franchise operations



612



384



539


Depreciation and amortization



7,014



5,068



6,664


Selling, general and administrative expenses



13,243



9,151



12,262


Net (gain) loss on disposition of property and equipment



(279)



290



363


Interest income



(1)



(1)



(1)


Interest expense



696



456



629


Other income (expense), net



118



(180)



(230)


Benefit for income taxes



(660)



(1,782)



(1,776)


     Loss from continuing operations


$

(1,739)


$

(2,880)


$

(2,514)













 

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.

 



Quarter Ended




December 16,


November 19,


December 17,




2015


2014


2014




(16 weeks)


(12 weeks)


(16 weeks)






Loss from continuing operations


$

(1,739)


$

(2,880)


$

(2,514)


     Benefit for income taxes



(660)



(1,782)



(1,776)


     Depreciation and amortization



7,014



5,068



6,664


     Interest expense, net



696



455



628


     Net loss (gain) on disposition of assets



(279)



290



363


     Employee stock-based compensation expense



529



154



194


     Less:  Other income (expense), net



118



(180)



(230)


Adjusted EBITDA


$

5,679


$

1,125


$

3,329


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lubys-reports-first-quarter-fiscal-2016-results-300208116.html

SOURCE Luby's, Inc.


Source: PR Newswire (January 21, 2016 - 4:10 PM EST)

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