8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 26, 2010

Luby’s, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-8308	74-1335253
(Commission File Number)	(IRS Employer Identification Number)

13111 Northwest Freeway, Suite 600

Houston, TX 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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

¨ 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))

On July 27, 2010, Luby’s, Inc. (the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8–K dated July 26, 2010 (the “Form 8–K”), in connection with the acquisition of substantially all of the assets of Fuddruckers, Inc., Magic Brands, LLC and certain of their affiliates (collectively, “Fuddruckers”) by the Company.

This Current Report on Form 8–K/A amends Item 9.01 of the Form 8–K to present certain financial statements of Fuddruckers and to present certain unaudited pro forma financial statements of the Company in connection with the Company’s acquisition of substantially all of the assets of Fuddruckers, which financial statements and unaudited pro forma financial information are filed as exhibits hereto. This Current Report on Form 8–K/A should be read in conjunction with the Form 8–K.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited combined balance sheets of Fuddruckers as of June 28, 2009 and June 29, 2008 and the related combined statements of operations, stockholders’/members’ equity, and cash flows for the years ended June 28, 2009 and June 29, 2008 and the notes to combined financial statements related thereto are filed as part of Exhibit 99.1 to this Current Report on Form 8-K/A.

The unaudited combined balance sheet of Fuddruckers as of March 28, 2010 and the related combined statement of operations and stockholders’/members’ equity, and cash flows for the three quarters ended March 28, 2010 and the notes to combined financial statements related thereto are filed as part of Exhibit 99.1 to this Current Report on Form 8-K/A.

(b) Pro Forma Financial Information

The unaudited pro forma combined financial statements with respect to the transaction are filed as Exhibit 99.2 to this Current Report on form 8-K/A.

(d) Exhibits

Exhibit Number	Description
99.1	Audited combined balance sheets of King Cannon, Inc., Fuddruckers, Inc., KCI, LLC and Magic Brands, LLC as of June 28, 2009 and June 29, 2008 and the related combined statements of operations, stockholders’/members’ equity, and cash flows for the years ended June 28, 2009 and June 29, 2008 and the notes to combined financial statements related thereto and the unaudited combined balance sheet of King Cannon, Inc., Fuddruckers, Inc., KCI, LLC and Magic Brands, LLC as of March 28, 2010 and the related combined statement of operations and stockholders’/members’ equity for the three quarters ended March 28, 2010 and the notes to combined financial statements related thereto.
99.2	Unaudited Pro Forma Condensed Combined Financial Statements of Luby’s, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 27, 2010	LUBY’S, INC.
	By:	/s/ Christopher J. Pappas
		Christopher J. Pappas
		President and Chief Executive Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Audited combined balance sheets of King Cannon, Inc., Fuddruckers, Inc., KCI, LLC and Magic Brands, LLC as of June 28, 2009 and June 29, 2008 and the related combined statements of operations, stockholders’/members equity, and cash flows for the years ended June 28, 2009 and June 29, 2008 and the notes to combined financial statements related thereto and the unaudited combined balance sheet of King Cannon, Inc., Fuddruckers, Inc., KCI, LLC and Magic Brands, LLC as of March 28, 2010 and the related combined statement of operations and stockholders’/members equity for the three quarters ended March 28, 2010 and the notes to combined financial statements related thereto.
99.2	Unaudited Pro Forma Condensed Combined Financial Statements of Luby’s, Inc.

EX-99.1

Exhibit 99.1

Report of Independent Certified Public Accountants

Board of Directors

King Cannon, Inc.

We have audited the accompanying combined balance sheets of King Cannon, Inc. and its wholly-owned subsidiary, Fuddruckers, Inc. and the affiliated company, KCI, LLC and its wholly-owned subsidiary, Magic Brands, LLC (the Company) as of June 28, 2009 and June 29, 2008, and the related combined statements of operations, stockholders’/members’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 28, 2009 and June 29, 2008, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Dallas, Texas

October 27, 2009

1

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

COMBINED BALANCE SHEET

ASSETS

	June 28, 2009			June 29, 2008
Current assets
Cash and cash equivalents	$	825,414		$	2,264,538
Accounts receivable, net		4,769,246			3,734,197
Inventories		821,480			866,817
Income tax receivable		513,113			1,074,255
Prepaid expenses and other		312,411			270,873
Total current assets		7,241,664			8,210,680
Property and equipment, net		42,469,195			43,785,447
Assets held for sale		1,550,000			3,079,117
Other assets
Intangible assets, net		6,139,526			7,160,623
Goodwill		2,595,188			2,595,188
Deferred financing costs, net		793,404			939,421
Deferred tax assets, net		5,657,855			5,657,855
Note receivable, deposits and other		698,631			770,020
Total other assets		15,884,604			17,123,107
Total assets	$	67,145,463		$	72,198,351
LIABILITIES AND STOCKHOLDERS’/MEMBERS’ EQUITY
Current liabilities
Accounts payable	$	5,128,906		$	5,539,937
Accrued expenses		15,771,318			18,369,351
Deferred revenue		4,276,356			4,645,906
Current maturities of long-term debt		1,066,667			1,066,667
Total current liabilities		26,243,247			29,621,861
Long-term debt, less current maturities		30,161,599			36,607,956
Commitments and contingencies
Stockholders’/members’ equity
Common stock/members’ interests		3,085,334			3,085,334
Preferred stock		2			2
Additional paid in capital		34,634,072			23,997,089
Treasury stock		(87,219	)		(87,219	)
Retained earnings/members’ equity		(26,891,572	)		(21,026,672	)
Total stockholders’/members’ equity		10,740,617			5,968,534
Total liabilities and stockholders’/members’ equity	$	67,145,463		$	72,198,351

The accompanying notes are an integral part of these statements.

2

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

COMBINED STATEMENTS OF OPERATIONS

	Years ended
	June 28, 2009			June 29, 2008
Revenue
Restaurant sales	$	135,372,597		$	143,204,862
Franchising and royalty income		7,333,774			7,743,502
Vending income		1,032,661			1,454,248
Total revenue		143,739,032			152,402,612
Costs and expenses
Costs of food and beverages sold		36,788,179			39,929,684
Restaurant labor		45,596,201			48,435,366
Restaurant operating expenses		43,241,041			44,793,387
Selling, general and administrative		11,839,859			12,541,091
Depreciation and amortization		7,745,400			7,271,387
Asset impairment		698,246			663,760
Exit costs for closed restaurants		518,854			750,000
Total costs and expenses		146,427,780			154,384,675
Operating loss from continuing operations		(2,688,748	)		(1,982,063	)
Other expense (income)
Interest expense		2,361,737			3,347,409
Interest income		(69	)		(53,415	)
Total other expense (income)		2,361,668			3,293,994
Loss from continuing operations before income taxes		(5,050,416	)		(5,276,057	)
Income taxes		814,484			5,235,844
Loss from continuing operations		(5,864,900	)		(10,511,901	)
Discontinued operations
Loss from discontinued operations		—			(826,511	)
Net loss	$	(5,864,900	)	$	(11,338,412	)

The accompanying notes are an integral part of these statements.

3

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

COMBINED STATEMENTS OF STOCKHOLDERS’/MEMBERS’ EQUITY

Years ended June 28, 2009 and June 29, 2008

	Common stock		Members’ interests		Preferred stock		Treasury stock			Additional paid-in capital		Retained earnings/ members’ equity			Total
Balance, July 1, 2007	$	1	$	3,085,333	$	2	$	(87,219	)	$	23,997,089	$	(9,688,260	)	$	17,306,946
Net loss		—		—		—		—			—		(11,338,412	)		(11,338,412	)
Balance, June 29, 2008		1		3,085,333		2		(87,219	)		23,997,089		(21,026,672	)		5,968,534
Conversion of long-term debt and accrued interest		—		—		—		—			10,636,983		—			10,636,983
Net loss		—		—		—		—			—		(5,864,900	)		(5,864,900	)
Balance, June 28, 2009	$	1	$	3,085,333	$	2	$	(87,219	)	$	34,634,072	$	(26,891,572	)	$	10,740,617

The accompanying notes are an integral part of these statements.

4

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

COMBINED STATEMENTS OF CASH FLOWS

	Years ended
	June 28, 2009			June 29, 2008
Cash flows from operating activities
Net loss before discontinued operations	$	(5,864,900	)	$	(10,511,901	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		7,745,400			7,271,387
Deferred income taxes		—			5,235,844
Asset impairment		698,246			663,760
Non-cash exit costs for closed restaurants		518,854			750,000
Bad debt expense		—			420,082
Non-cash interest expense		351,310			256,210
Changes in working capital components:
Accounts receivable		(1,035,049	)		(1,001,408	)
Inventories		45,337			27,930
Income tax receivable		561,142			1,193,817
Prepaid expenses and other current assets		(41,538	)		1,427,211
Accounts payable		(411,031	)		(1,334,762	)
Accrued expenses		(1,859,594	)		(1,055,255	)
Deferred revenue		(369,550	)		(80,221	)
Other		(164,938	)		313,113
Net cash provided by operating activities		173,689			3,575,807
Cash flows from investing activities
Purchases of property and equipment		(4,546,146	)		(2,510,505	)
Net cash used in investing activities		(4,546,146	)		(2,510,505	)
Cash flows from financing activities
Proceeds from parent		5,500,000			—
Proceeds from long-term borrowings		10,500,000			1,500,000
Principal payments on long-term debt		(13,066,667	)		(711,112	)
Net cash provided by financing activities		2,933,333			788,888
Cash flows from discontinued operations
Net loss from discontinued operations		—			(826,511	)
Depreciation and amortization		—			437,515
Net cash used in discontinued operations		—			(388,996	)
Net increase (decrease) in cash		(1,439,124	)		1,465,194
Cash and cash equivalents at the beginning of the year		2,264,538			799,344
Cash and cash equivalents at the end of the year	$	825,414		$	2,264,538
Supplemental disclosure of cash flow information:
Interest paid	$	2,094,650		$	1,207,479

See Note 1 for non-cash financing and investing activities.

The accompanying notes are an integral part of these statements.

5

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS

June 28, 2009 and June 29, 2008

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

In November 1998, King Cannon, Inc. (“King Cannon”) purchased all the issued and outstanding stock of Fuddruckers, Inc. and subsidiaries (“Fuddruckers”). Subsequent thereto, Fuddruckers sold certain of its intangible assets, consisting of intellectual property rights, including trademark and service mark registrations in the United States and Canada, trade secrets and franchise agreements to Magic Restaurants, LLC, an affiliated entity and wholly-owned subsidiary of KCI, LLC (“KCI”), and entered into a management agreement whereby Magic Restaurants, LLC would manage the operations of Fuddruckers. In May 2006 Magic Restaurants, LLC changed its name to Magic Brands, LLC (“Magic”). Fuddruckers owns and operates 104 restaurants throughout the United States and Magic franchises 142 restaurants both domestically and internationally.

All of the franchised restaurants operate under the trade name Fuddruckers®, as do 89 of the owned and operated restaurants. The Company owns and operates 15 restaurants in Southern California under the trade name Koo Koo Roo®.

Basis of Presentation

The accompanying combined financial statements include the consolidated accounts of King Cannon and its wholly-owned subsidiary, Fuddruckers, and the consolidated accounts of KCI and its wholly-owned subsidiary, Magic (collectively, the “Company”). All significant intercompany and intracompany balances and transactions have been eliminated in the accompanying combined financial statements.

Reclassifications

During 2009, the Company reclassified approximately $1,900,000 from smallwares (inventory) into property, plant and equipment. Amount has been reclassified in the 2008 balance as well to conform to 2009 presentation.

Fiscal Year

The Company utilizes a 52/53 week fiscal year with its fiscal year ending on the Sunday closest to the last day of June. References to years in these financial statements refer to these fiscal periods rather than calendar years. 2009 and 2008 each had 52 weeks.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents.

6

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Accounts Receivable

Accounts receivable, net of the allowance for doubtful accounts, represent their estimated net realizable value. Provisions for doubtful accounts are recorded based on management’s judgment regarding collectability of accounts. In determining the provision for doubtful accounts, management considers the customers credit-worthiness, past transaction history, and current economic trends. Accounts outstanding longer than contractual payment terms are considered past due. Accounts receivable are written off when they are deemed uncollectible. Subsequent collection of previously written-off accounts are credited back to bad debt expense in the period payment is received.

Inventories

Inventories consist of food, beverages, supplies, and smallwares, and are stated at lower of cost, (first-in, first-out method) or market.

Property and Equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful life of the improvement.

Useful lives of property and equipment are as follows:

Buildings and improvements	30 years
Furniture and equipment	3 - 7 years
Leasehold improvements	Lesser of expected lease term or useful life

The Company reviews its long-lived assets, including restaurant sites, leasehold improvements, and other fixed assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level. If such assets are determined to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined based on appraisals or sales prices of comparable assets. Restaurant sites and certain other assets to be disposed of are reported at the lower of their carrying amount or fair value, less estimated costs to sell. Restaurant sites and certain other assets to be disposed of are included in assets held for sale when certain criteria are met. These criteria include the requirement that the likelihood of disposing of these assets within one year is probable. Assets not meeting the “held for sale” criteria remain in land, buildings and equipment until their disposal is probable within one year. During 2009 and 2008, the Company recorded impairment charges of $698,246 and $663,760, respectively.

7

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Goodwill and Intangible Assets

Goodwill represents the cost of acquired assets in excess of values ascribed to identifiable net assets. SFAS No. 142, Goodwill and Other Intangible Assets, prescribes a two-step process for impairment testing of goodwill, which is performed annually, as well as when an event triggering impairment may have occurred. The first step tests for impairment, while the second step, if necessary, measures the impairment. The Company determined there was no impairment of goodwill for 2009 or 2008.

Intangible assets include trademark, trade names, franchise rights and leasehold interests. The intangible assets are being amortized over their useful lives using the straight-line method. For trademark, trade names and franchise rights, amortization is computed over fifteen years. Leasehold interests are amortized over the lease term (generally seven to fifteen years). Intangible assets are evaluated for impairment when conditions or events indicate carrying value may exceed fair value.

Deferred Financing Costs

Costs incurred in obtaining financing are capitalized and amortized over the term of the related debt.

Income Taxes

KCI, a limited liability corporation, elected on April 1, 2000, to be classified as an association taxable as a corporation.

King Cannon and KCI provide deferred taxes on a liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss carryforwards and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Self-Insurance Reserves

Through the use of insurance program deductibles and self-insurance, the Company retains a significant portion of expected losses under its workers’ compensation, employee medical and general liability programs. The Company mitigates its risk by carrying insurance for significant individual claims. Accrued liabilities have been recorded based on estimates of the anticipated ultimate costs to settle all claims, both reported and unreported.

Revenue Recognition

The Company records revenue from the sale of food, beverages and alcohol as products are sold. Initial fees received from a franchisee to establish a new franchise are recognized as income when the Company has performed its obligations required to assist the franchisee in opening the new restaurant, which is generally upon the opening of such restaurant. Continuing royalties, which are a percentage of net sales of franchised restaurants, are accrued as income when earned. Proceeds from the sale of gift cards are recorded as deferred revenue and recognized when redeemed by the holder.

8

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Non-cash Financing and Investing Activity

The Company is wholly-owned by Fuddruckers International, LLC (the “Parent”). On September 5, 2008 a financial restructuring of the Parent was completed, and as a result of this restructuring certain amounts recorded by the Company as long-term debt and due to the Parent (along with interest related thereto) were reclassified to equity. In total, $9,512,389 in long-term debt and $1,124,594 in accrued interest were reclassified by the Company as a result of this restructuring.

Related Party Transactions

During 2009, the Company received additional advances from the Parent totaling $5,500,000. The Company has subordinated notes payable to the Parent totaling $3,050,000, which is included in long-term debt, and related accrued interest of $13,573 as of June 28, 2009. During 2009, there was interest expense of $89,410 related to this debt.

Sales Taxes

Sales taxes collected from customers are excluded from revenues. The obligation is included in accrued liabilities until the taxes are remitted to the appropriate taxing authorities.

Advertising

Advertising production costs are charged to operations in the fiscal period that the advertising is first aired. The costs of programming and other advertising, promotion and marketing programs are charged to operations in the fiscal period incurred. Advertising expense included in selling, general and administrative expenses during 2009 and 2008 were approximately $674,000 and $702,000, respectively.

Operating Leases

Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that the renewal appears reasonably assured. Contingent rents are generally amounts due as a result of sales in excess of amounts stipulated in certain restaurant leases and are included in rent expense as they are incurred. Landlord contributions are recorded when received as a deferred rent liability and amortized as a reduction of rent expense on a straight-line basis over the lease term.

Profit Sharing Plan

The Company maintains a 401(k) savings and retirement plan for the benefit of substantially all of its employees. Participants may elect to make contributions to the plan up to an amount equal to the lesser of 15% of their earnings or the maximum allowable by law. Company contributions are discretionary and vest over five years. The Company made contributions of approximately $85,000 and $105,000 to the 401(k) savings and retirement plan during 2009 and 2008, respectively.

9

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Financial Instruments

Due to their short maturity, the carrying amounts of accounts and notes receivable, accounts payable, accrued liabilities, and short-term borrowings approximated their fair values at June 28, 2009. The fair value of the Company’s long-term debt is estimated based on the current rates offered to the Company for debt of the same remaining maturities with similar collateral requirements. The carrying amounts of the long-term debt approximated their fair values at each of the balance sheet dates.

NOTE 2 - RESTAURANT CLOSURES

Since October 2006, the Company has closed a total of 14 Fuddruckers® restaurants, with one closure in 2009 and four in 2008. In addition, as of June 28, 2009, three restaurants in Texas and six restaurants in Minnesota are being operated under management agreements with franchisees, and it is the Company’s expectation that these locations will be formally sold to the current operators in 2010. The sale of the Texas locations was completed on August 21, 2009. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”), the Company has recorded the assets of these restaurants at fair value (determined as estimated sales values less projected costs to sell) and the long-lived assets have been reclassified to “assets held for sale” on the balance sheet.

The Company accrues for exit or disposal activities, including restaurant closures. Such costs include the cost of disposing of the assets as well as other facility-related expenses from previously closed restaurants. These facility-related costs are generally expensed as incurred. Additionally, at the date a restaurant is closed a liability is recorded for the net present value of any remaining lease obligations, net of estimated sublease income. Any subsequent adjustments to that liability as a result of lease termination or changes in estimates of sublease income are recorded in the period incurred. Due to revised estimates of future lease obligations, the Company has recorded additional charges related to exit activities of $518,854 during 2009. As of June 28, 2009 and June 29, 2008, the Company had accrued $2,249,728 and $3,729,588, respectively, to cover estimated future disbursements related to its exit from closed restaurants. During 2009, the Company paid approximately $2,000,000 related to these exit activities.

The Company has reported in discontinued operations the activities of four restaurants closed in 2008. In accordance with SFAS 144, the Company has included in discontinued operations the results of closed restaurants that had been owned and operated by the Company for which the Company will not have continuing involvement in operations as franchisor. Sales for these restaurants totaled approximately $1,700,000 in 2008 and the net loss from discontinued operations before taxes was approximately $826,000.

10

NOTE 3 - ACCOUNTS RECEIVABLE

Accounts receivable, net of an allowance for doubtful accounts, consists of the following:

	2009			2008
Credit card receivables	$	1,048,760		$	1,178,568
Rebate receivables		381,470			476,434
Due from franchise owners		3,665,417			2,813,580
Other		1,146,784			738,800
		6,242,431			5,207,382
Less allowance for doubtful accounts		(1,473,185	)		(1,473,185	)
Total	$	4,769,246		$	3,734,197

NOTE 4 - INVENTORIES

Inventories consist of the following:

	2009		2008
Food	$	526,295	$	587,321
Beverages		121,101		119,518
Supplies		174,084		159,978
Total	$	821,480	$	866,817

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:

	2009			2008
Land	$	8,970,835		$	8,970,835
Buildings and improvements		13,843,747			13,658,095
Leasehold improvements		27,035,974			24,553,120
Furniture, fixtures and equipment		45,382,579			43,174,288
		95,233,135			90,356,338
Less accumulated depreciation		(52,763,940	)		(46,570,891	)
Total	$	42,469,195		$	43,785,447

The Company recorded depreciation expense of approximately $6,700,000 and $6,500,000 for the years ended June 28, 2009 and June 29, 2008, respectively.

11

NOTE 6 - INTANGIBLE ASSETS

Intangible assets are comprised of the following:

	2009			2008
Trademark, trade names and franchise rights	$	13,700,000		$	13,700,000
Leasehold interests		5,107,749			5,107,749
Other		720,000			720,000
		19,527,749			19,527,749
Less accumulated amortization		(13,388,223	)		(12,367,126	)
Total	$	6,139,526		$	7,160,623

Amortization expense related to intangible assets was approximately $1,000,000 and $800,000 for the years ended June 28, 2009 and June 29, 2008, respectively.

NOTE 7 - ACCRUED EXPENSES

Accrued expenses are comprised of the following:

	2009		2008
Straight-line rent liability	$	3,168,725	$	3,426,718
Closed restaurant reserves		2,249,728		3,729,588
Payroll and related taxes		2,031,122		1,877,221
Credit card fees		1,505,922		161,741
Property taxes		1,134,700		993,065
Sales taxes		980,418		974,044
Insurance reserves		967,744		1,841,109
Legal and professional costs		745,869		1,515,008
Gift card liability		520,580		526,831
Utilities		438,528		631,417
Interest		225,122		1,433,939
Other accrued expenses		1,802,860		1,258,670
Total	$	15,771,318	$	18,369,351

12

NOTE 8 - LONG-TERM DEBT

	2009		2008
Long-term debt at year end consists of the following:
Term note payable to bank, principal payable in monthly installments of $88,889, all unpaid principal and interest due November 30, 2011.	$	14,222,222	$	15,288,889
Revolving note payable to bank providing for aggregate borrowings of up to $10 million, all unpaid principal and interest due November 30, 2011.		8,456,044		9,823,345
Subordinated notes payable to parent, due no earlier than December 1, 2011.		3,050,000		3,050,000
Advances from parent		5,500,000		9,512,389
		31,228,266		37,674,623
Less current maturities		1,066,667		1,066,667
Total	$	30,161,599	$	36,607,956

Aggregate future maturities of long-term debt at June 28, 2009 are as follows:

Fiscal Year
2010	$	1,066,667
2011		1,066,667
2012		29,094,932
2013		—
2014		—
Thereafter		—
Total	$	31,228,266

The Company has agreements with a bank that provide for the term note and a revolving note (together the “Bank Notes”). The Bank Notes contain certain restrictive covenants and stipulate various financial and operating requirements. Included, among others, are covenants related to a trailing 12 month EBITDA requirement, a fixed charge coverage ratio, a leverage ratio requirement, and restrictions regarding capital expenditures. Failure to comply with the restrictive covenants may accelerate the due date of the outstanding principal and unpaid interest. Interest on borrowings outstanding pursuant to the Bank Notes is subject to adjustment should the Company violate certain covenants of the Bank Notes. At June 28, 2009, the Company was in compliance with all debt covenants.

13

NOTE 8 - LONG-TERM DEBT - Continued

The Bank Notes provide the Company with the opportunity to elect that all or a portion of its outstanding indebtedness accrue interest based upon LIBOR plus a percentage or upon the Prime lending rate as reported by the bank plus a percentage. As of June 28, 2009, outstanding debt under the Bank Notes totaled $22,678,266, of which $22,000,000 was accruing interest based upon LIBOR (7.0%) and the remainder of which was accruing interest based upon prime (7.5%).

Borrowings pursuant to the above agreement are collateralized by substantially all the assets of the Company.

NOTE 9 - STOCKHOLDERS’/MEMBERS’ EQUITY

The individual components of stockholders’/members’ equity for King Cannon and KCI at June 28, 2009 are as follows:

	King Cannon			KCI			Combined
Common Stock, $.01 Par Value; Authorized 2,500 Shares; Issued and Outstanding 98 Shares	$	1		$	—		$	1
Members’ Interests		—			3,085,333			3,085,333
Preferred Stock, $.01 Par Value, Authorized 500 Shares; Issued and Outstanding 225.9689 Shares		2			—			2
Additional Paid In Capital		34,634,072			—			34,634,072
Treasury Stock		(43,610	)		(43,609	)		(87,219	)
Retained Earnings/Members’ Equity		(36,823,788	)		9,932,216			(26,891,572	)
Total	$	(2,233,323	)	$	12,973,940		$	10,740,617

14

NOTE 9 - STOCKHOLDERS’/MEMBERS’ EQUITY - Continued

The individual components of stockholders’/members’ equity for King Cannon and KCI at June 29, 2008 are as follows:

	King Cannon			KCI			Combined
Common Stock, $.01 Par Value; Authorized 2,500 Shares; Issued and Outstanding 98 Shares	$	1		$	—		$	1
Members’ Interests		—			3,085,333			3,085,333
Preferred Stock, $.01 Par Value, Authorized 500 Shares; Issued and Outstanding 225.9689 Shares		2			—			2
Additional Paid In Capital		23,997,089			—			23,997,089
Treasury Stock		(43,610	)		(43,609	)		(87,219	)
Retained Earnings/Members’ Equity		(28,754,609	)		7,727,937			(21,026,672	)
Total	$	(4,801,127	)	$	10,769,661		$	5,968,534

NOTE 10 - MAJOR SUPPLIER

The Company currently purchases a significant portion of its food products and supplies under a distribution contract with a single vendor. Management believes that other suppliers could provide similar products on comparable terms without significantly impacting operations.

NOTE 11 - OPERATING LEASES

The Company has entered into lease agreements for certain restaurant facilities and office space. The terms of the leases range up to twenty years and, in general, contain multiple renewal options. Certain leases contain provisions which require additional payments based on sales performance and the payment of common area maintenance charges and real estate taxes.

Future minimum lease payments under significant noncancelable operating leases, with terms in excess of one year, are as follows at June 28, 2009:

2010	$	16,196,668
2011		13,244,881
2012		11,120,392
2013		9,674,959
2014		8,009,437
Thereafter		26,574,420
Total	$	84,820,757

15

NOTE 11 - OPERATING LEASES - Continued

Total rent expense was approximately $14,400,000 and $15,500,000 for the years ended June 28, 2009 and June 29, 2008, respectively.

NOTE 12 - INCOME TAXES

The provision for income taxes in the combined statements of income was comprised of the following:

	2009		2008
Current expense:
Federal	$	561,142	$	—
State		253,342		—
Deferred expense:
Federal		—		3,940,791
State		—		1,295,053
Total	$	814,484	$	5,235,844

The income tax provision, reconciled to the tax computed at the statutory Federal rate, is as follows:

	2009			2008
Tax benefit at federal statutory rate	$	(1,717,141	)	$	(1,793,859	)
State tax expense (benefit)		253,342			(461	)
Change in rate from previous year provision		—			(1,094,365	)
Change in valuation allowance		1,803,278			8,124,529
Change in tax refund receivable		561,142			—
Other		(86,137	)		—
Total	$	814,484		$	5,235,844

16

NOTE 12 - INCOME TAXES - Continued

Deferred tax assets and liabilities consist of the following:

	2009			2008
Current deferred tax assets:
Allowance for doubtful accounts	$	712,236		$	559,804
Accrued expenses		488,361			768,809
Accrued rent		1,265,848			1,302,139
Deferred revenue		1,609,315			—
		4,075,760			2,630,752
Depreciation and amortization		4,274,660			2,951,882
Tax benefit of operating loss carry forward		5,764,729			6,182,093
Lease loss reserves		898,726			1,436,228
Other taxable carryforwards and credits		581,428			581,428
Total deferred tax assets		15,595,303			13,782,383
Valuation allowance		(9,937,448	)		(8,124,528	)
Net deferred tax assets	$	5,657,855		$	5,657,855

At June 28, 2009, the Company determined, based upon all available information, that a valuation allowance of $9,937,448 was required to adjust the deferred tax assets to their estimated net realizable value. The allowance included an increase of $1,812,920 to reflect a change in the Company’s estimate about the realizability of previously recorded deferred tax assets. The remaining deferred tax assets are supported by a tax planning strategy. At June 28, 2009, the Company had net operating loss carryforwards of approximately $16,900,000 which expire beginning in 2026 through 2029 (subject to limitation).

NOTE 13 - CONTINGENCIES

The Company is subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of its business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry. While the resolution of a lawsuit, proceeding or claim may have an impact on the financial results for the period in which it is resolved, the Company believes that the final disposition of the lawsuits, proceedings and claims in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or liquidity.

17

NOTE 14 - SUBSEQUENT EVENTS

On October 27, 2009, the Company executed an amendment to its Bank Notes through which certain financial covenants were adjusted, making them less restrictive in future periods. In exchange for these modifications, the Parent has agreed to advance $3 million to the Company in 2010.

18

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

UNAUDITED COMBINED BALANCE SHEET

	March 28, 2010
ASSETS
Current assets
Cash and cash equivalents	$	2,462,041
Accounts receivable, net of allowance of $1,822,686		3,574,256
Inventories		808,137
Income tax receivable		404,202
Prepaid expenses and other		442,909
Total current assets		7,691,545
Property and equipment, net		35,080,510
Note receivable, deposits and other		530,784
Total assets	$	43,302,839
LIABILITIES AND STOCKHOLDERS’/MEMBERS’ EQUITY
Current liabilities
Accounts payable	$	5,129,133
Accrued expenses		19,472,489
Deferred revenue		4,347,817
Debt		33,721,098
Total current liabilities		62,670,537
Commitments and contingencies
Stockholders’/members’ equity
Common stock/members’ interests		3,085,334
Preferred stock		2
Additional paid in capital		34,634,072
Treasury stock		(87,219	)
Accumulated deficit/members’ equity		(56,999,887	)
Total stockholders’/members’ equity		(19,367,698	)
Total liabilities and stockholders’/members’ equity	$	43,302,839

The accompanying notes are an integral part of these statements.

19

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

UNAUDITED COMBINED STATEMENT OF OPERATIONS

	Three quarters ended March 29, 2010			Three quarters ended March 28, 2009
Revenue
Restaurant sales	$	91,439,970		$	101,961,341
Franchising and royalty income		5,260,858			5,482,432
Vending income		610,316			807,754
Total revenue		97,311,144			108,251,527
Costs and expenses
Costs of food and beverages sold		24,063,034			27,962,531
Restaurant labor		31,705,749			34,398,934
Restaurant operating expenses		31,139,581			32,680,106
Selling, general and administrative		8,053,615			8,057,125
Depreciation and amortization		6,653,941			5,642,991
Asset impairment		11,591,025			—
Exit costs for closed restaurants		6,250,000			—
Total costs and expenses		119,456,945			108,741,687
Operating loss from operations		(22,145,801	)		(490,160	)
Other expense (income)
Interest expense		2,303,111			1,824,876
Interest income		(1,392	)		(69	)
Total other expense		2,301,719			1,824,807
Loss from operations before income taxes		(24,447,520	)		(2,314,967	)
Income taxes		5,660,795			(1,407	)
Net loss	$	(30,108,315	)	$	(2,313,560	)

The accompanying notes are an integral part of these statements.

20

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

UNAUDITED COMBINED STATEMENT OF STOCKHOLDERS’/MEMBERS’ EQUITY

Three quarters ended March 28, 2010

	Common stock		Members’ interests		Preferred stock		Treasury stock			Additional paid-in capital		Accumulated deficit members’ equity			Total
Balance, June 28, 2009	$	1	$	3,085,333	$	2	$	(87,219	)	$	34,634,072	$	(26,891,572	)	$	10,740,617
Net loss		—		—		—		—			—		(30,108,315	)		(30,108,315	)
Balance, March 28, 2010	$	1	$	3,085,333	$	2	$	(87,219	)	$	34,634,072	$	(56,999,887	)	$	(19,367,698	)

The accompanying notes are an integral part of these statements.

21

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

UNAUDITED COMBINED STATEMENT OF CASH FLOWS

	Three quarters ended March 29, 2010			Three quarters ended March 28, 2009
Cash flows from operating activities
Net loss	$	(30,108,315	)	$	(2,313,560	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		6,653,941			5,642,991
Deferred income taxes		5,657,855			—
Gain on sale of assets		(74,171	)		—
Asset impairment		11,591,025			—
Exit costs for closed restaurants		6,250,000			—
Non-cash interest expense		793,404			266,303
Changes in working capital components:
Accounts receivable		1,194,990			(545,429	)
Inventories		13,343			30,345
Income tax receivable		108,911			(306	)
Prepaid expenses and other current assets		(86,047	)		(391,439	)
Accounts payable		227			(253,690	)
Accrued expenses		(2,586,039	)		(3,957,660	)
Deferred revenue		71,461			(101,897	)
Net cash used in operating activities		(519,415	)		(1,624,342	)
Cash flows from investing activities
Purchases of property and equipment		(1,924,000	)		(3,277,000	)
Proceeds from sale of property and equipment		1,550,000			—
Net cash used in investing activities		(374,000	)		(3,277,000	)
Cash flows from financing activities
Proceeds from parent		2,000,000			3,500,000
Proceeds from borrowings		17,750,000			6,500,000
Principal payments on borrowings		(17,219,958	)		(6,800,000	)
Net cash provided by financing activities		2,530,042			3,200,000
Net increase (decrease) in cash		1,636,627			(1,701,342	)
Cash and cash equivalents at the beginning of the period		825,414			2,264,538
Cash and cash equivalents at the end of the period	$	2,462,041		$	563,196
Supplemental disclosure of cash flow information:
Interest paid	$	1,575,831		$	1,542,104

The accompanying notes are an integral part of these statements.

22

King Cannon, Inc., Fuddruckers, Inc.,

KCI, LLC and Magic Brands, LLC

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS

Three quarters ended March 28, 2010

NOTE 1 - BASIS OF PRESENTATION

In November 1998, King Cannon, Inc. (“King Cannon”) purchased all the issued and outstanding stock of Fuddruckers, Inc. and subsidiaries (“Fuddruckers”). Subsequent thereto, Fuddruckers sold certain of its intangible assets, consisting of intellectual property rights, including trademark and service mark registrations in the United States and Canada, trade secrets and franchise agreements to Magic Restaurants, LLC, an affiliated entity and wholly-owned subsidiary of KCI, LLC (“KCI”), and entered into a management agreement whereby Magic Restaurants, LLC would manage the operations of Fuddruckers. In May 2006 Magic Restaurants, LLC changed its name to Magic Brands, LLC (“Magic”). As of March 28, 2010, Fuddruckers owns and operates 102 restaurants throughout the United States (of which 13 use the trade name Koo Koo Roo).

The accompanying combined financial statements include the consolidated accounts of King Cannon and its wholly-owned subsidiary, Fuddruckers, and the consolidated accounts of KCI and its wholly-owned subsidiary, Magic (collectively, the “Company”). All significant intercompany and intracompany balances and transactions have been eliminated in the accompanying combined financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These interim combined financial statements do not include all of the information and footnotes required by GAAP for an annual filing of complete financial statements. Therefore, these financial statements should be read in conjunction with the combined financial statements for the fiscal year ended June 28, 2009.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

The FASB issued Accounting Standards Update (ASU) 2009-05, 2009-12 and 2010-06 amending certain disclosure requirements regarding fair value measurements. The new guidance requires more robust disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, the activity in Level 3 fair value measurements, and the transfers between Levels 1, 2, and 3. The expanded disclosures of Level 1 and 2 are required for reporting periods beginning after December 15, 2009. The expanded disclosures for Level 3 activity are required for reporting periods beginning after December 15, 2010. These updates will not materially impact the Company’s consolidated financial statements.

On June 29, 2009, the Company adopted the FASB Accounting Standards Codification (“ASC”) Topic 105, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162” (“ASC 105”). ASC 105 provides for the FASB Accounting Standards Codification (the “Codification”) to become the single source of authoritative, nongovernmental U.S. GAAP. The Codification did not change or alter GAAP but reorganizes the literature and changes the referencing of financial standards. The Codification is effective for interim and annual periods ending after September 15, 2009.

23

NOTE 3 - INCOME TAXES

Deferred tax assets and liabilities are recorded based on differences between the financial reporting basis and the tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent future taxable income is expected to be sufficient to utilize those assets prior to their expiration. If current available information and projected future results raises doubt about the realization of the deferred tax assets, a valuation allowance is necessary. Such a valuation allowance was established through a charge to income tax expense which adversely affected the Company’s reported operating results. Management concluded that for the three quarters ended March 28, 2010 a charge of $5,657,855 to the valuation allowance was necessary.

The Company adopted “FIN” 48, Accounting for Uncertain Tax Positions, on June 29, 2009. Management does not believe the impact of adoption had a material impact to these interim financial statements and footnotes.

NOTE 4 - CONTINGENCIES

The Company is subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of its business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry. While the resolution of a lawsuit, proceeding or claim may have an impact on the financial results for the period in which it is resolved, the Company believes that the final disposition of the lawsuits, proceedings and claims in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on the financial position, results of operations or liquidity.

NOTE 5 - SUBSEQUENT EVENTS AND IMPAIRMENT CHARGES

On April 21, 2010 the Company filed for Chapter 11 bankruptcy protection in the state of Delaware. This action became necessary when the Company failed to meet certain debt covenants with its bank and was unable to garner additional support from its parent, Fuddruckers International, LLC. During the three quarters ended March 28, 2010, Fuddruckers International, LLC did loan $2 million to the Company, but this amount was insufficient for the purposes of sustaining operations. Borrowings at March 28, 2010 were included in current liabilities and consisted of the following:

Term note payable to bank	$	13,422,222
Revolving note payable to bank		9,748,876
Subordinated notes payable to parent		3,050,000
Advances from parent		7,500,000
	$	33,721,098

24

NOTE 5 - SUBSEQUENT EVENTS AND IMPAIRMENT CHARGES - Continued

By the end of April 2010 the Company had closed 38 restaurants that were open as of March 28, 2010. These closures brought the total number of restaurants down to 61 Fuddruckers restaurants and 3 Koo Koo Roo restaurants. The nature and speed with which these closures took place led to material losses, and fixed asset impairments of $3,670,556 were recorded as of March 28, 2010 to reflect the loss in fair value. Due to the bankruptcy filing the Company also recorded impairment charges to write off its goodwill ($2,595,188) and other intangibles assets ($5,325,281).

In addition to the asset impairment charges, the Company also accelerated the amortization of deferred financing costs as of March 28, 2010. This adjustment resulted in a noncash interest charge of $538,381 during the period.

A court-ordered auction took place in June 2010 to determine which of the three companies interested in purchasing the assets of the Company would prevail, and at what price. On June 24, 2010, the court named Luby’s, Inc., a Texas-based restaurant company, as the winner with a final bid of approximately $63.1 million plus the assumption of certain liabilities. The sale to Luby’s, Inc. was completed in late July 2010.

Through negotiation with a landlord with whom the Company has a master lease agreement covering multiple restaurant locations, a settlement was reached in April 2010 through which the Company agreed to pay $6.25 million in order to modify the master lease by eliminating further obligations related to closed restaurant sites. The Company has recorded this charge in the statement of operations as exit costs for closed restaurants and has increased its accrued liabilities accordingly. The settlement was paid upon completion of the sale to Luby’s, Inc.

25

EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF LUBY’S, INC.

Luby’s, Inc. (the “Company”) purchased substantially all of the assets of Fuddruckers, Inc., Magic Brands, LLC and certain of their affiliates (collectively, “Fuddruckers”) effective July 26, 2010. The Company assumed certain of Fuddruckers’ obligations, real estate leases and contracts. The Company funded the purchase with cash and an expansion of its credit facility.

The following unaudited pro forma condensed combined financial information is based on the historical consolidated financial statements of the Company and Fuddruckers and gives effect to the following transactions:

• the Company’s acquisition of substantially all of the assets of Fuddruckers;

• the closure of 25 under-performing Luby’s cafeteria restaurants in the first quarter of fiscal year 2010, which is reflected in the Discontinued Operations Adjustment column on the pro forma schedule for the fiscal year 2009;

• proceeds from the sale of securities subsequent to May 5, 2010; and

• borrowings of $51.3 million from the Company’s credit facility.

The Company and Fuddruckers have different fiscal year ends. Accordingly, the unaudited pro forma condensed combined consolidated balance sheet as of May 5, 2010 combines the Company’s historical unaudited consolidated balance sheet as of May 5, 2010 and Fuddruckers’ historical unaudited combined balance sheet as of March 28, 2010 and is presented as if the transactions had occurred on May 5, 2010. The unaudited pro forma condensed combined income statement for the three quarters ended May 5, 2010 combines the unaudited historical results of the Company for the three quarters ended May 5, 2010 and the unaudited historical results of Fuddruckers for the three quarters ended March 28, 2010. The unaudited pro forma condensed combined income statement for the fiscal year ended August 28, 2009 combines the historical results of the Company for the year ended August 28, 2009 and the historical results of Fuddruckers for the year ended June 28, 2009. The unaudited pro forma condensed combined income statements are presented as if the acquisition had occurred on August 28, 2008.

The unaudited pro forma condensed combined financial information was prepared using the purchase method of accounting. Accordingly, the Company’s acquisition of Fuddruckers has been allocated to the assets acquired and liabilities assumed based upon the Company’s estimate of their fair values as of May 5, 2010. The final allocation will be based on a complete evaluation of the assets acquired and liabilities assumed on July 26, 2010. Accordingly, the information presented herein may differ materially from the final purchase price allocation. Those allocations are required to be finalized within one year after the acquisition.

The unaudited pro forma condensed combined financial information has been prepared based on assumptions deemed appropriate by the Company. The pro forma adjustments and certain assumptions are described in the accompanying notes. The unaudited pro forma condensed and combined financial information is for informational purposes only. The unaudited pro forma condensed and combined financial information does not purport to reflect the results of operations or financial position that would have occurred if the pro forma transactions had been consummated on the date indicated above, nor does it purport to represent the financial position or results of operations of the Company for any future periods.

Future results may vary significantly from the information reflected in the following unaudited pro forma condensed combined income statements due to factors beyond control of the Company.

The unaudited pro forma condensed combined financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes of the Company in its Annual Report on Form 10-K for the year ended August 26, 2009 and its Quarterly Reports on Form 10-Q for the quarterly periods ended November 18, 2009, February 10, 2010 and May 5, 2010 and are incorporated herein by reference.

1

Preliminary Purchase Price Allocation

On July 26, 2010, the Company completed the acquisition of substantially all of the assets of Fuddruckers for $63.1 million in cash and assumed $4.3 million in liabilities. The allocation of the purchase price for acquisition requires extensive use of accounting estimates and judgments to allocate the purchase price to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The purchase price for the Company’s acquisition of Fuddruckers tangible and intangible assets and the assumption of certain liabilities is based on preliminary estimates of fair values at the acquisition date. Such valuations requires significant estimates and assumptions. The Company believes the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions. The fair value estimates for the purchase price allocation for the Company’s acquisition are preliminary and may change if additional information becomes available.

The following table summarizes the estimated fair values of net assets acquires and liabilities assumed, in thousands:

Property and equipment	$	36,302
Trade name		13,300
Franchise agreements		16,100
Accounts receivable		599
Inventories		477
Cash and cash equivalents		130
Other current assets		166
Other intangible assets		50
Goodwill		192
Unfavorable lease liability		(2,900	)
Unredeemed gift card liability		(640	)
Property and real estate tax liability		(712	)
Net cash paid for acquisition	$	63,064

2

Luby’s, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

(In thousands)

	May 5, 2010 Luby’s, Inc.			March 28, 2010 Fuddruckers, Inc.			Pro Forma			Pro Forma
	(Historical)			(Historical)			Adjustments			Combined
ASSETS
Current assets:
Cash and cash equivalents	$	7,698		$	2,462		$	(10,160	)(1)	$	—
Trade accounts and other receivables, net		1,495			3,574			(2,975	)(2)		2,094
Short-term investments		5,725			—			(3,936	)(1)		1,789
Food and supply inventories		2,770			808			(331	)(2)		3,247
Prepaid expenses and other		612			443			(277	)(2)		778
Income tax receivable		—			404			(404	)(2)		—
Assets related to discontinued operations		90			—			—			90
Deferred income taxes		26			—			—			26
Total current assets		18,416			7,691			(18,083	)		8,024
Property and equipment, net		136,908			35,081			1,221	(3)		173,210
Note receivable, deposits and other		—			531			(531	)(2)		—
Deferred income taxes		6,017			—			—			6,017
Property held for sale		2,075			—			—			2,075
Intangible assets, net		—			—			29,450	(3)		29,450
Goodwill		—			—			192	(3)		192
Assets related to discontinued operations		23,919			—			—			23,919
Other assets		397			—			—			397
Total assets	$	187,732		$	43,303		$	12,249		$	243,284
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,913		$	5,129		$	(5,129	)(2)	$	8,913
Deferred revenue		—			4,348			(4,348	)(4)		—
Current maturities of long-term debt		—			33,721			(33,721	)(2)		—
Liabilities related to discontinued operations		695			—			—			695
Accrued expenses and other liabilities		12,855			19,473			4,348	(4)
								(22,469	)(2)		14,207
Total current liabilities		22,463			62,671			(61,319	)		23,815
Long-term debt, less current maturities		—			—			51,300	(1)		51,300
Liabilities related to discontinued operations		971			—			—			971
Other liabilities		3,241			—			2,900	(3)		6,141
Total liabilities		26,675			62,671			(7,119	)		82,227
Shareholders’ equity		—			—			—			—
Common stock		9,137			3,085			(3,085	)(5)		9,137
Preferred stock		—			—			—			—
Paid in capital		22,859			34,634			(34,634	)(5)		22,859
Retained earnings		133,391			(57,000	)		57,000	(5)		133,391
Accumulated other comprehensive income		445			—			—			445
Less cost of treasury stock		(4,775	)		(87	)		87	(5)		(4,775	)
Total shareholders’ equity		161,057			(19,368	)		19,368			161,057
Total liabilities and shareholders’ equity	$	187,732		$	43,303		$	12,249		$	243,284

3

(1) Reflects the following:

Cash proceeds from debt	$	51,300
Elimination of cash not acquired		(2,332	)
Cash proceeds from sale of short term investments		3,936
Cash paid to Fuddruckers, Inc.		(63,064	)
	$	(10,160	)

(2) Reflects the elimination of assets not acquired or liabilities not assumed.

(3) Reflects the allocation of the purchase price.

(4) Reclassifies deferred gift card revenue to accrued expenses and other liabilities.

(5) Reflects the elimination of Fuddruckers equity.

4

Luby’s, Inc.

Unaudited Pro Forma Condensed Combined Income Statement

(In thousands)

	Fiscal Year August 26, 2009 Luby’s, Inc.			Discontinued Operations			Fiscal Year August 26, 2009 Luby’s, Inc.			Fiscal Year June 28, 2009 Fuddruckers, Inc.			Pro Forma			Pro Forma
	(Historical)			Adjustments			Adjusted			(Historical)			Adjustments			Combined
SALES:
Restaurant sales	$	279,893		$	(32,439	)	$	247,454		$	135,373		$	(41,100	)(1)	$	341,727
Franchising and royalty income		—			—			—			7,334			—			7,334
Vending income		—			—			—			1,033			(1,033	)(2)		—
Culinary contract services		12,970			—			12,970			—			—			12,970
TOTAL SALES		292,863			(32,439	)		260,424			143,740			(42,133	)		362,031
COSTS AND EXPENSES:
Cost of food and beverages		78,254			(9,842	)		68,412			36,788			(11,792	)(3)		93,408
Payroll and related costs		104,223			(14,241	)		89,982			45,596			(19,004	)(3)		116,574
Other operations costs		67,402			(10,403	)		56,999			43,243			(17,400	)(7)		82,842
Opening costs		1,021			(853	)		168			—			—			168
Cost of culinary contract services		11,747			—			11,747			—			—			11,747
Depreciation and amortization		18,918			(2,748	)		16,170			7,745			(3,574	)(4)		20,341
General and administrative expenses		24,724			—			24,724			11,840			—			36,564
Provision for asset impairments, net		19,261			(12,594	)		6,667			698			(698	)(3)		6,667
Exit costs for closed restaurants		—			—			—			519			(519	)(3)		—
Net gain on disposition of property and equipment		(824	)		(92	)		(916	)		—			—			(916	)
Total costs and expenses		324,726			(50,773	)		273,953			146,429			(52,987	)		367,395
INCOME (LOSS) FROM OPERATIONS		(31,863	)		18,334			(13,529	)		(2,689	)		10,854			(5,364	)
Interest income		200			—			200			—			—			200
Interest expense		(389	)		—			(389	)		(2,362	)		359	(5)		(2,392	)
Impairment charge for decrease in fair value of investments		(997	)		—			(997	)		—			—			(997	)
Other income, net		1,068			—			1,068			—			—			1,068
Income (loss) before income taxes and discontinued operations		(31,981	)		18,334			(13,647	)		(5,051	)		11,213			(7,485	)
Provision (benefit) for income taxes		(5,778	)		6,239			461			814			(814	)(6)		461
Income (loss) from continuing operations		(26,203	)		12,095			(14,108	)		(5,865	)		12,027			(7,946	)
Loss from discontinued operations, net of income taxes		(215	)		(12,095	)		(12,310	)		—			—			(12,310	)
NET INCOME (LOSS)	$	(26,418	)	$	—		$	(26,418	)	$	(5,865	)	$	12,027		$	(20,256	)
Income (loss) per share from continuing operations:
Basic	$	(0.93	)				$	(0.50	)							$	(0.28	)
Assuming dilution		(0.93	)					(0.50	)								(0.28	)
Loss per share from discontinued operations:
Basic	$	(0.01	)				$	(0.44	)							$	(0.44	)
Assuming dilution		(0.01	)					(0.44	)								(0.44	)
Net income (loss) per share:
Basic	$	(0.94	)				$	(0.94	)							$	(0.72	)
Assuming dilution		(0.94	)					(0.94	)								(0.72	)
Weighted average shares outstanding:
Basic		27,969						27,969									27,969
Assuming dilution		27,969						27,969									27,969

5

(1) Reflects the elimination of revenues for restaurants not acquired.

(2) Reclassifies vending machine revenue into restaurant sales.

(3) Reflects the elimination of expenses for restaurants not acquired.

(4) Reflects the elimination of depreciation expense for restaurants not acquired net of adjustments to depreciation and amortization expenses due to changes in asset value of property, equipment and intangible assets as a result of the purchase price allocation.

(5) Reflects the elimination of Fuddruckers, Inc debt, replaced by $51,300 debt incurred by Luby’s Inc. Additional pro forma interest expense includes interest of $1,772 and amortized debt issuance costs of $231.

(6) The income tax calculated on the additional income from Fuddruckers would be offset by the recognition of Luby’s deferred tax assets (net operating losses) that have been reserved by a valuation allowance.

(7) Reflects the elimination of expenses for restaurants not acquired and a credit of $272 rent expense due to net unfavorable acquired leases.

6

Luby’s, Inc.

Unaudited Pro Forma Condensed Combined Income Statement

(In thousands)

	Three Quarters Ended May 5, 2010 Luby’s, Inc.			Three Quarters Ended March 28, 2010 Fuddruckers, Inc.			Pro Forma			Pro Forma
	(Historical)			(Historical)			Adjustments			Combined
SALES:
Restaurants sales	$	153,399		$	91,440		$	(27,117	)(1)	$	217,722
Franchising and royalty income		—			5,261			—			5,261
Vending income		—			610			(610	)(2)		—
Culinary contract services		9,514			—			—			9,514
TOTAL SALES:		162,913			97,311			(27,727	)		232,497
COSTS AND EXPENSES:
Cost of food and beverages		41,781			24,063			(7,672	)(3)		58,172
Payroll and related costs		55,587			31,706			(13,197	)(3)		74,096
Other operations costs		33,208			31,139			(12,589	)(7)		51,758
Opening costs		183			—			—			183
Cost of culinary contract services		8,660			—			—			8,660
Depreciation and amortization		10,461			6,654			(3,767	)(4)		13,348
General and administrative expenses		15,648			8,053			—			23,701
Exit costs for closed locations		—			6,250			(6,250	)(3)		—
Provision for asset impairments, net		32			11,591			(11,591	)(3)		32
Net gain on disposition of property and equipments		(965	)		—			—			(965	)
Total costs and expenses		164,595			119,456			(55,066	)		228,985
INCOME (LOSS) FROM OPERATIONS:		(1,682	)		(22,145	)		27,339			3,512
Interest income		23			1			—			24
Interest expense		(300	)		(2,303	)		759	(5)		(1,844	)
Gains on sales and redemptions( impairments in fair value) of investments		(438	)		—			—			(438	)
Other income, net		617			—			—			617
Income (loss) before income taxes and discontinued operations		(1,780	)		(24,447	)		28,098			1,871
Provision (benefit) for income taxes		(240	)		5,661			(5,661	)(6)		(240	)
Income (loss) from continuing operations		(1,540	)		(30,108	)		33,759			2,111
Loss from discontinued operations, net of income taxes		(1,869	)		—			—			(1,869	)
NET INCOME (LOSS)	$	(3,409	)	$	(30,108	)	$	33,759		$	242
Income (loss) per share from continuing operations:
Basic	$	(0.05	)							$	0.08
Assuming dilution	$	(0.05	)							$	0.08
Loss per share from discontinued operations:
Basic	$	(0.07	)							$	(0.07	)
Assuming dilution	$	(0.07	)							$	(0.07	)
Net income (loss) per share:
Basic	$	(0.12	)							$	0.01
Assuming dilution	$	(0.12	)							$	0.01
Weighted average shares outstanding:
Basic		28,125									28,125
Assuming dilution		28,125									28,131

7

(1) Reflects the elimination of revenues for restaurants not acquired.

(2) Reclassifies vending machine revenue into restaurant sales.

(3) Reflects the elimination of expenses for restaurants not acquired.

(4) Reflects the elimination of depreciation expense for restaurants not acquired net of adjustments to depreciation and amortization expenses due to changes in asset value of property, equipment and intangible assets as a result of the purchase price allocation.

(5) Reflects the elimination of Fuddruckers, Inc debt, replaced by $51,300 debt incurred by Luby’s Inc. Additional pro forma interest expense includes interest of $1,384 and amortized debt issuance costs of $160.

(6) The income tax calculated on the additional income from Fuddruckers would be offset by the recognition of Luby’s deferred tax assets (net operating losses) that have been reserved by a valuation allowance.

(7) Reflects the elimination of expenses for restaurants not acquired and a credit of $189 rent expense due to net unfavorable acquired leases.

8