Delaware | 001-8308 | 74-1335253 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification Number) |
13111 Northwest Freeway, Suite 600 Houston, Texas 77040 | ||
(Address of principal executive offices, including zip code) |
(713) 329-6800 | ||
(Registrant's telephone number, including area code) |
(Former name, former address and former fiscal year, if changed since last report) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Luby’s Press Release dated July 16, 2018 |
LUBY'S, INC. | |||||
(Registrant) | |||||
Date: | July 16, 2018 | By: | /s/Christopher J. Pappas | ||
Christopher J. Pappas | |||||
President and Chief Executive Officer |
Exhibit No. | Description |
Luby’s Press Release dated July 16, 2018 |
![]() | ||
For additional information contact: | ||
FOR IMMEDIATE RELEASE | Dennard-Lascar Associates | |
Rick Black / Ken Dennard | ||
Investor Relations | ||
713-529-6600 |
• | Total sales were $86.0 million, a decrease of 3.1% |
• | Same-store sales decreased 0.9% |
• | Culinary Contract Services sales increased $2.1 million |
• | Loss from continuing operations of $14.1 million in the third quarter compared to loss from continuing operations of $0.4 million in the third quarter fiscal 2017 |
• | Adjusted EBITDA decreased $5.6 million (see non-GAAP reconciliation below) |
Q1 2018(3) | Q2 2018(3) | Q3 2018(3) | YTD 2018 | |
Luby's Cafeterias | 1.5% | (1.8)% | 2.4% | 0.8% |
Fuddruckers | 0.6% | (6.4)% | (5.8)% | (3.6)% |
Combo locations (1) | 1.3% | (5.4)% | (3.3)% | (2.1)% |
Cheeseburger in Paradise | (10.5)% | (13.9)% | (11.7)% | (11.8)% |
Total same-store sales (2) | 0.8% | (3.7)% | (0.9)% | (1.0)% |
(1) | Combo locations consist of a side-by-side Luby’s Cafeteria and Fuddruckers Restaurant at one property location. |
(2) | Luby’s includes a restaurant’s sales results into the same-store sales calculation in the quarter after that store has been open for six complete consecutive quarters. In the third quarter, there were 80 Luby’s Cafeterias locations, 59 Fuddruckers locations, all six Combo locations, and all seven Cheeseburger in Paradise locations that met the definition of same-stores. |
(3) | Q1 2018, Q2 2018, Q3 2018 same-store sales reflect the change in restaurant sales for the locations included in the same-store grouping for each of the comparable periods. |
Restaurant Brand | Q3 2018 | Q3 2017 | Change ($) | Change (%) | |||||||
Luby’s Cafeterias | $ | 49,067 | $ | 49,746 | $ | (679 | ) | (1.4 | )% | ||
Fuddruckers | 20,622 | 23,713 | (3,091 | ) | (13.0 | )% | |||||
Combo locations | 4,821 | 4,988 | (167 | ) | (3.3 | )% | |||||
Cheeseburger in Paradise | 3,293 | 4,147 | (854 | ) | (20.6 | )% | |||||
Total Restaurant Sales | $ | 77,803 | $ | 82,594 | $ | (4,791 | ) | (5.8 | )% |
• | Luby’s Cafeterias sales decreased $0.7 million versus the third quarter fiscal 2017, due to the closure of four locations over the prior year partially offset by a 2.4% increase in Luby’s same-store sales. The 2.4% increase in same-store sales was the result of a 9.7% increase in average spend per guest, partially offset by a 6.6% decrease in guest traffic. |
• | Fuddruckers sales at company-owned restaurants decreased $3.1 million versus the third quarter fiscal 2017, due to five restaurant closings and a 5.8% decrease in same-store sales. The 5.8% decrease in same-store sales was the result of a 9.6% decrease in guest traffic, partially offset by a 4.2% increase in average spend per guest. |
• | Combo location sales decreased $0.2 million, or 3.3%, versus third quarter fiscal 2017. |
• | Cheeseburger in Paradise sales decreased $0.9 million. The closure of one location earlier in fiscal 2018 reduced sales by $0.4 million and declines in sales at the remaining seven locations reduced sales by $0.5 million. |
• | Loss from continuing operations was $14.1 million, or a loss of $0.47 per diluted share, compared to a loss of $0.4 million, or a loss of $0.01 per diluted share, in the third quarter fiscal 2017. Excluding special non-cash items, loss from continuing operations was $4.0 million, or a loss of $0.13 per diluted share, in the third quarter compared to a loss of $0.1 million, or $0.00 per diluted share, in the third quarter fiscal 2017. Loss from continuing operations, excluding special items, is a non-GAAP measure, and reconciliation to loss from continuing operations is presented on page 10 of this release. |
• | 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 $6.6 million, or 8.5% of restaurant sales, in the third quarter compared to $11.6 million, or 14.0% of restaurant sales, during the third quarter fiscal 2017. The decline in store-level profit was primarily the result of expense increases in each of our major cost categories that exceeded our ability to grow restaurant sales quickly enough through menu pricing and increased guest visits. Food costs increased as a percentage of restaurant sales due to higher commodity pricing and change in mix of offerings. Labor costs increased as hourly wage rate increases accelerated and greater hours were deployed into our restaurants to maintain high levels of guest service. Within our other operating costs, repairs and maintenance continued to be at an elevated level as necessary to keep appealing restaurant appearances and all equipment functioning efficiently. Store level profit is a non-GAAP measure, and reconciliation to loss from continuing operations is presented after the financial statements. |
• | Culinary Contract Services revenues increased by $2.1 million to $6.6 million with 25 operating locations during the third quarter. New Culinary Contract Services locations contributed approximately $2.6 million (primarily driven by the addition of one higher sales volume location) in revenue which was partially offset by a $0.4 million decrease in revenue from locations that ceased operations and an approximate $0.1 million decrease in revenue at locations continually operated over the prior full year. Culinary Contract Services profit margin increased to 8.1% of Culinary Contract Services sales in the third quarter compared to 7.1% in the third quarter fiscal 2017. |
• | Franchise revenue decreased $33 thousand, or 2.2%, in the third quarter compared to the third quarter fiscal 2017. The decrease is due to a decrease in franchise royalty income, primarily related to a net decrease of four operating franchise locations compared to the prior year. In the third quarter, one franchise location closed in the Dominican Republic. |
August 30, 2017 | FY18 YTDQ3 Openings | FY18 YTDQ3 Closings | June 6, 2018 | ||||||||
Luby’s Cafeterias(1) | 88 | — | (2 | ) | 86 | ||||||
Fuddruckers Restaurants(1) | 71 | — | (4 | ) | 67 | ||||||
Cheeseburger in Paradise | 8 | — | (1 | ) | 7 | ||||||
Total | 167 | — | (7 | ) | 160 |
(1) | Includes 6 restaurants that are part of Combo locations |
Quarter Ended | Three Quarters Ended | ||||||||||||||
June 6, 2018 | June 7, 2017 | June 6, 2018 | June 7, 2017 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (40 weeks) | ||||||||||||
SALES: | |||||||||||||||
Restaurant sales | $ | 77,803 | $ | 82,594 | $ | 256,737 | $ | 271,741 | |||||||
Culinary contract services | 6,639 | 4,515 | 19,413 | 12,117 | |||||||||||
Franchise revenue | 1,444 | 1,477 | 4,732 | 5,167 | |||||||||||
Vending revenue | 118 | 133 | 412 | 417 | |||||||||||
TOTAL SALES | 86,004 | 88,719 | 281,294 | 289,442 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of food | 22,255 | 22,922 | 73,190 | 76,353 | |||||||||||
Payroll and related costs | 29,392 | 29,519 | 96,032 | 97,486 | |||||||||||
Other operating expenses | 15,023 | 13,796 | 48,881 | 47,207 | |||||||||||
Occupancy costs | 4,609 | 4,923 | 15,577 | 16,720 | |||||||||||
Opening costs | 85 | 134 | 490 | 431 | |||||||||||
Cost of culinary contract services | 6,104 | 4,194 | 18,113 | 10,966 | |||||||||||
Cost of franchise operations | 341 | 361 | 1,198 | 1,378 | |||||||||||
Depreciation and amortization | 4,050 | 4,639 | 13,402 | 15,977 | |||||||||||
Selling, general and administrative expenses | 8,507 | 6,764 | 29,219 | 29,531 | |||||||||||
Provision for asset impairments and restaurant closings | 4,464 | 869 | 6,716 | 7,120 | |||||||||||
Net loss (gain) on disposition of property and equipment | 154 | (195 | ) | 172 | 219 | ||||||||||
Total costs and expenses | 94,984 | 87,926 | 302,990 | 303,388 | |||||||||||
INCOME (LOSS) FROM OPERATIONS | (8,980 | ) | 793 | (21,696 | ) | (13,946 | ) | ||||||||
Interest income | 1 | 3 | 12 | 5 | |||||||||||
Interest expense | (1,042 | ) | (569 | ) | (2,235 | ) | (1,898 | ) | |||||||
Other income (expense), net | 9 | (173 | ) | 317 | (312 | ) | |||||||||
Income (loss) before income taxes and discontinued operations | (10,012 | ) | 54 | (23,602 | ) | (16,151 | ) | ||||||||
Provision for income taxes | 4,121 | 431 | 7,494 | 2,576 | |||||||||||
Loss from continuing operations | (14,133 | ) | (377 | ) | (31,096 | ) | (18,727 | ) | |||||||
Loss from discontinued operations, net of income taxes | (463 | ) | (19 | ) | (608 | ) | (434 | ) | |||||||
NET LOSS | $ | (14,596 | ) | $ | (396 | ) | $ | (31,704 | ) | $ | (19,161 | ) | |||
Loss per share from continuing operations: | |||||||||||||||
Basic | $ | (0.47 | ) | $ | (0.01 | ) | $ | (1.04 | ) | $ | (0.64 | ) | |||
Assuming dilution | $ | (0.47 | ) | $ | (0.01 | ) | $ | (1.04 | ) | $ | (0.64 | ) | |||
Loss per share from discontinued operations: | |||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||
Assuming dilution | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||
Net loss per share: | |||||||||||||||
Basic | $ | (0.49 | ) | $ | (0.01 | ) | $ | (1.06 | ) | $ | (0.65 | ) | |||
Assuming dilution | $ | (0.49 | ) | $ | (0.01 | ) | $ | (1.06 | ) | $ | (0.65 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Basic | 30,005 | 29,536 | 29,863 | 29,453 | |||||||||||
Assuming dilution | 30,005 | 29,536 | 29,863 | 29,453 |
Quarter Ended | Three Quarters Ended | ||||||||||
June 6, 2018 | June 7, 2017 | June 6, 2018 | June 7, 2017 | ||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (40 weeks) | ||||||||
Restaurant sales | 90.5 | % | 93.1 | % | 91.3 | % | 93.9 | % | |||
Culinary contract services | 7.7 | % | 5.1 | % | 6.9 | % | 4.2 | % | |||
Franchise revenue | 1.7 | % | 1.7 | % | 1.7 | % | 1.8 | % | |||
Vending revenue | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | |||
TOTAL SALES | 100.0 | % | 100.0 | % | 100.0 | % | 100.1 | % | |||
COSTS AND EXPENSES: | |||||||||||
(As a percentage of restaurant sales) | |||||||||||
Cost of food | 28.6 | % | 27.8 | % | 28.5 | % | 28.1 | % | |||
Payroll and related costs | 37.8 | % | 35.7 | % | 37.4 | % | 35.9 | % | |||
Other operating expenses | 19.3 | % | 16.7 | % | 19.0 | % | 17.4 | % | |||
Occupancy costs | 5.9 | % | 6.0 | % | 6.1 | % | 6.2 | % | |||
Vending revenue | (0.2 | )% | (0.2 | )% | (0.2 | )% | (0.2 | )% | |||
Store level profit | 8.5 | % | 14.0 | % | 9.1 | % | 12.7 | % | |||
(As a percentage of total sales) | |||||||||||
Marketing and advertising expenses | 0.8 | % | 0.9 | % | 1.0 | % | 1.6 | % | |||
General and administrative expenses | 9.1 | % | 6.7 | % | 9.4 | % | 8.6 | % | |||
Selling, general and administrative expenses | 9.9 | % | 7.6 | % | 10.4 | % | 10.2 | % | |||
INCOME (LOSS) FROM OPERATIONS | (10.4 | )% | 0.9 | % | (7.7 | )% | (4.8 | )% |
June 6, 2018 | August 30, 2017 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,509 | $ | 1,096 | |||
Trade accounts and other receivables, net | 7,868 | 8,011 | |||||
Food and supply inventories | 4,830 | 4,453 | |||||
Prepaid expenses | 3,356 | 3,431 | |||||
Total current assets | 17,563 | 16,991 | |||||
Property held for sale | 20,703 | 3,372 | |||||
Assets related to discontinued operations | 1,813 | 2,755 | |||||
Property and equipment, net | 147,827 | 172,814 | |||||
Intangible assets, net | 18,508 | 19,640 | |||||
Goodwill | 555 | 1,068 | |||||
Deferred income taxes | — | 7,254 | |||||
Other assets | 1,982 | 2,563 | |||||
Total assets | $ | 208,951 | $ | 226,457 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 16,230 | $ | 15,937 | |||
Liabilities related to discontinued operations | 9 | 367 | |||||
Credit facility debt | 44,028 | — | |||||
Accrued expenses and other liabilities | 28,092 | 28,076 | |||||
Total current liabilities | 88,359 | 44,380 | |||||
Credit facility debt, less current portion | — | 30,698 | |||||
Liabilities related to discontinued operations | 16 | 16 | |||||
Other liabilities | 6,537 | 7,311 | |||||
Total liabilities | $ | 94,912 | $ | 82,405 | |||
Commitments and Contingencies | |||||||
SHAREHOLDERS’ EQUITY | |||||||
Common stock, $0.32 par value; 100,000,000 shares authorized; shares issued were 29,975,193 and 29,624,083, respectively; shares outstanding were 29,475,193 and 29,124,083, respectively | 9,592 | 9,480 | |||||
Paid-in capital | 33,429 | 31,850 | |||||
Retained earnings | 75,793 | 107,497 | |||||
Less cost of treasury stock, 500,000 shares | (4,775 | ) | (4,775 | ) | |||
Total shareholders’ equity | 114,039 | 144,052 | |||||
Total liabilities and shareholders’ equity | $ | 208,951 | $ | 226,457 |
Three Quarters Ended | |||||||
June 6, 2018 | June 7, 2017 | ||||||
(40 weeks) | (40 weeks) | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (31,704 | ) | $ | (19,161 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Provision for asset impairments and net losses (gains) on property sales | 6,599 | 7,338 | |||||
Depreciation and amortization | 13,402 | 15,977 | |||||
Amortization of debt issuance cost | 438 | 316 | |||||
Share-based compensation expense | 1,691 | 1,203 | |||||
Deferred tax provision | 8,026 | 2,922 | |||||
Cash provided by (used in) operating activities before changes in operating assets and liabilities | (1,548 | ) | 8,595 | ||||
Changes in operating assets and liabilities: | |||||||
Increase in trade accounts and other receivables | (264 | ) | (460 | ) | |||
Decrease in insurance receivables | 407 | — | |||||
Decrease (Increase) in food and supply inventories | (376 | ) | 68 | ||||
Decrease (Increase) in prepaid expenses and other assets | 575 | (5 | ) | ||||
Insurance proceeds | 276 | — | |||||
Decrease in accounts payable, accrued expenses and other liabilities | (3,948 | ) | (4,522 | ) | |||
Net cash provided by (used in) operating activities | (4,878 | ) | 3,676 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds from disposal of assets and property held for sale | 3,363 | 3,640 | |||||
Insurance proceeds | 756 | — | |||||
Purchases of property and equipment | (11,730 | ) | (10,114 | ) | |||
Net cash used in investing activities | (7,611 | ) | (6,474 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Revolver borrowings | 83,200 | 94,400 | |||||
Revolver repayments | (68,600 | ) | (122,900 | ) | |||
Proceeds from term loan | — | 35,000 | |||||
Term loan repayments | (1,415 | ) | (3,063 | ) | |||
Debt issuance costs | (213 | ) | (652 | ) | |||
Taxes paid for shares withheld | (70 | ) | — | ||||
Net cash provided by financing activities | 12,902 | 2,785 | |||||
Net increase (decrease) in cash and cash equivalents | 413 | (13 | ) | ||||
Cash and cash equivalents at beginning of period | 1,096 | 1,339 | |||||
Cash and cash equivalents at end of period | $ | 1,509 | $ | 1,326 | |||
Cash paid for: | |||||||
Income taxes | $ | — | $ | — | |||
Interest | 1,717 | 1,228 |
($ thousands) | Quarter Ended | Three Quarters Ended | |||||||||||||
June 6, 2018 | June 7, 2017 | June 6, 2018 | June 7, 2017 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (40 weeks) | ||||||||||||
Store level profit | $ | 6,642 | $ | 11,567 | $ | 23,469 | $ | 34,392 | |||||||
Plus: | |||||||||||||||
Sales from culinary contract services | 6,639 | 4,515 | 19,413 | 12,117 | |||||||||||
Sales from franchise operations | 1,444 | 1,477 | 4,732 | 5,167 | |||||||||||
Less: | |||||||||||||||
Opening costs | 85 | 134 | 490 | 431 | |||||||||||
Cost of culinary contract services | 6,104 | 4,194 | 18,113 | 10,966 | |||||||||||
Cost of franchise operations | 341 | 361 | 1,198 | 1,378 | |||||||||||
Depreciation and amortization | 4,050 | 4,639 | 13,402 | 15,977 | |||||||||||
Selling, general and administrative expenses | 8,507 | 6,764 | 29,219 | 29,531 | |||||||||||
Provision for asset impairments and restaurant closings | 4,464 | 869 | 6,716 | 7,120 | |||||||||||
Net loss (gain) on disposition of property and equipment | 154 | (195 | ) | 172 | 219 | ||||||||||
Interest income | (1 | ) | (3 | ) | (12 | ) | (5 | ) | |||||||
Interest expense | 1,042 | 569 | 2,235 | 1,898 | |||||||||||
Other income (expense), net | (9 | ) | 173 | (317 | ) | 312 | |||||||||
Provision for income taxes | 4,121 | 431 | 7,494 | 2,576 | |||||||||||
Loss from continuing operations | $ | (14,133 | ) | $ | (377 | ) | $ | (31,096 | ) | $ | (18,727 | ) |
Q3 FY2018 | Q3 FY2017 | ||||||||||||||||
Item | Amount ($000s) | Per Share ($) | Amount ($000s) | Per Share ($) | |||||||||||||
Loss from continuing operations | $ | (14,133 | ) | $ | (0.47 | ) | $ | (377 | ) | $ | (0.01 | ) | |||||
Provision for asset impairments | 3,527 | 0.12 | 574 | 0.02 | |||||||||||||
Net loss (gain) on disposition of property and equipment | 122 | 0.00 | (129 | ) | (0.00 | ) | |||||||||||
Deferred tax valuation allowance | 6,579 | 0.22 | 626 | 0.02 | |||||||||||||
Fair value adjustment to performance awards liability | (101 | ) | (0.00 | ) | (772 | ) | (0.03 | ) | |||||||||
Loss from continuing operations, before special items | $ | (4,006 | ) | $ | (0.13 | ) | $ | (78 | ) | $ | (0.00 | ) |
(1) | We use income (loss) from continuing operations, before special items, in analyzing 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 (adjustments assume an effective 21% tax rate in third quarter fiscal 2018 and an effective 34% tax rate in third quarter fiscal 2017 ) |
($ thousands) | Quarter Ended | Three Quarters Ended | |||||||||||||
June 6, 2018 | June 7, 2017 | June 6, 2018 | June 7, 2017 | ||||||||||||
(12 weeks) | (12 weeks) | (40 weeks) | (40 weeks) | ||||||||||||
Loss from continuing operations | $ | (14,133 | ) | $ | (377 | ) | $ | (31,096 | ) | $ | (18,727 | ) | |||
Depreciation and amortization | 4,050 | 4,639 | 13,402 | 15,977 | |||||||||||
Provision for income taxes | 4,121 | 431 | 7,494 | 2,576 | |||||||||||
Interest expense | 1,042 | 569 | 2,235 | 1,898 | |||||||||||
Interest income | (1 | ) | (3 | ) | (12 | ) | (5 | ) | |||||||
Net loss (gain) on disposition of property and equipment | 154 | (195 | ) | 172 | 219 | ||||||||||
Provision for asset impairments and restaurant closings | 4,464 | 869 | 6,716 | 7,120 | |||||||||||
Non-cash compensation expense | 311 | (584 | ) | 1,160 | 874 | ||||||||||
Franchise taxes | 71 | 49 | 172 | 146 | |||||||||||
Decrease / (Increase) in Fair Value of Derivative | (73 | ) | 176 | (701 | ) | 221 | |||||||||
Adjusted EBITDA | $ | 6 | $ | 5,574 | $ | (458 | ) | $ | 10,299 |
39]J2&$6 MLJ=79*E05:I*JF9SJU>AEGW?Y9UA5"-:^&ZN0\8:33HB)6:X^MG2W]RJUN$0>L MJZ-=9!$XV7+>A%)N.55H"RLRK&ZVAS MJE<2A931FO*PK!MN[&F;6CC ,E9& MK5V>;E,T6U(:C+5SO=!"QRA#D.H6+[#B:F6EQC+B%M>@JH5C!ZW85M5.][HL M-9IUL JOSRO>KV;WO6Z%[.>?:]ZKRK?^H[7J_;- -KUKSR]^NVA5^ 0$ .P$! end