Reportable Segments

4 Months Ended

Dec. 16, 2020

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

As more fully described at Note 1. Basis of Presentation, through November 18, 2020, we had five reportable segments: Luby’s Cafeterias, Fuddruckers Restaurants, Cheeseburger in Paradise Restaurants, Fuddruckers franchise operations, and CCS. In connection with our Plan of Liquidation, we have one reportable segment as of November 19, 2020.

Company-owned restaurants

Company-owned restaurants consisted of Luby’s Cafeterias, Fuddruckers Restaurants and Cheeseburger in Paradise Restaurant reportable segments. We considered each restaurant to be an operating segment because operating results and cash flow could be determined for each restaurant. We aggregated our restaurant operating segments into reportable segments by restaurant brand because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the long-term store level profit margins, and the nature of the regulatory environment were similar. The chief operating decision maker analyzed store level profit which is defined as restaurant sales and vending revenue, less cost of food, payroll and related costs, other operating expenses and occupancy costs. All Company-owned Luby’s cafeterias, Fuddruckers and Cheeseburger in Paradise restaurants are casual dining restaurants.

The Luby’s Cafeterias segment included the results of our company-owned Luby’s Cafeterias restaurants. The total number of Luby’s cafeterias operating at November 18, 2020 and August 26, 2020 were 60 and 61, respectively.

The Fuddruckers restaurant segment included the results of our company-owned Fuddruckers restaurants. The total number of Fuddruckers restaurants operating at November 18, 2020 and August 26, 2020 were 24 and 24, respectively.

Included in the restaurant counts above are five Combo units, where a Luby's cafeteria and a Fuddruckers restaurant occupy the same location. The Combo units are included in the above counts for both Luby's cafeteria and Fuddruckers restaurants.

We operated one Cheeseburger in Paradise restaurant during the quarter ended December 16, 2019, which was closed permanently in March 2020.

CCS

CCS, branded as Luby’s Culinary Services, consists of a business line servicing healthcare, sport stadiums, corporate dining clients, and sales through retail grocery stores. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service, and retail dining. CCS had contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, retail grocery stores, behavioral hospitals, a senior living facility, sports stadiums, government, and business and industry clients. CCS has the unique ability to deliver quality services that include facility design and procurement as well as nutrition and branded food services to our clients. The cost of CCS on our consolidated statements of operations includes all food, payroll and related costs, other operating expenses, and other direct general and administrative expenses related to CCS sales. The total number of CCS contracts at November 18, 2020 and August 26, 2020 were 26 and 26, respectively.

Fuddruckers Franchise Operations

We only offer franchises for the Fuddruckers brand. Initial franchise agreements generally have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area.

Franchisees bear all direct costs involved in the development, construction, and operation of their restaurants. In exchange for a franchise fee, we provide franchise assistance in the following areas: site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, assistance by a Fuddruckers “opening team” at the time a franchised restaurant opens, and operations and accounting guidelines set forth in various policies and procedures manuals.

All franchisees are required to operate their restaurants in accordance with Fuddruckers standards and specifications, including controls over menu items, food quality, and preparation. The Company requires the successful completion of its training program by a minimum of three managers for each franchised restaurant. In addition, franchised restaurants are evaluated regularly by the Company for compliance with franchise agreements, including standards and specifications through the use of periodic, unannounced, on-site inspections and standards evaluation reports.

We had 71 franchised restaurants at both November 18, 2020 and August 26, 2020.

Segment Table

The tables below show segment financial information under the going concern basis of accounting. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, restricted cash, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets, and prepaid expenses.

	Period Ended November 18, 2020		Quarter Ended December 18, 2019
	(12 weeks)		(16 weeks)
	(In thousands)
Sales:
Luby's cafeterias	$	31,949	$	67,144
Fuddruckers restaurants	4,550		15,679
Cheeseburger in Paradise restaurants	—		845
Culinary contract services	4,918		9,774
Fuddruckers franchise operations	530		1,707
Total	$	41,947	$	95,149
Segment level profit:
Luby's cafeterias	$	4,896	$	7,909
Fuddruckers restaurants	(412)		(33)
Cheeseburger in Paradise restaurants	(85)		(67)
Culinary contract services	451		826
Fuddruckers franchise operations	236		1,141
Total	$	5,086	$	9,776
Depreciation and amortization:
Luby's cafeterias	$	1,530	$	2,451
Fuddruckers restaurants	167		550
Cheeseburger in Paradise restaurants	—		28
Culinary contract services	8		10
Fuddruckers franchise operations	1		236
Corporate	436		487
Total	$	2,142	$	3,762
Capital expenditures:
Luby's cafeterias	$	416	$	587
Fuddruckers restaurants	17		55
Cheeseburger in Paradise restaurants	—		1
Fuddruckers franchise operations	—		7
Corporate	—		44
Total	$	433	$	694

	Period Ended November 18, 2020		Quarter Ended December 18, 2019
	(12 weeks)		(16 weeks)
	(In thousands)
Loss before income taxes and discontinued operations:
Segment level profit	$	5,086	$	9,776
Opening costs	—		(12)
Depreciation and amortization	(2,142)		(3,762)
Selling, general and administrative expenses	(4,267)		(10,158)
Other charges	(416)		(1,238)
Net provision for asset impairments and restaurant closings	85		(1,110)
Net loss on disposition of property and equipment	(117)		(30)
Interest income	8		23
Interest expense	(1,212)		(1,962)
Other income, net	30		240
Total	$	(2,945)	$	(8,233)

	August 26, 2020
	(in thousands)
Total assets:
Luby's cafeterias	$	90,349
Fuddruckers restaurants (1)	26,502
Cheeseburger in Paradise restaurants (2)	164
Culinary contract services	4,744
Fuddruckers franchise operations (3)	8,973
Corporate	46,671
Total	$	177,403

(1) Includes Fuddruckers trade name intangible of $6.9 million at August 26, 2020.

(2) Includes Cheeseburger in Paradise liquor licenses, and Jimmy Buffett intangibles of $34 thousand at August 26, 2020.

(3) Fuddruckers franchise operations segment includes royalty intangibles of $8.4 million at August 26, 2020.