x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
74-1335253
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
|
|
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13111 Northwest Freeway, Suite 600
Houston, Texas |
77040
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange at which registered
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Common Stock ($0.32 par value per share)
|
LUB
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New York Stock Exchange
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Common Stock Purchase Rights
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N/A
|
New York Stock Exchange
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Large accelerated filer
|
¨
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Accelerated filer
|
¨
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Non-accelerated filer
|
x
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Smaller reporting company
|
x
|
|
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Emerging growth company
|
¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
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Page
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December 18,
2019 |
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August 28,
2019 |
||||
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(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,734
|
|
|
$
|
3,640
|
|
Restricted cash and cash equivalents
|
9,646
|
|
|
9,116
|
|
||
Trade accounts and other receivables, net
|
10,471
|
|
|
8,852
|
|
||
Food and supply inventories
|
2,556
|
|
|
3,432
|
|
||
Prepaid expenses
|
1,350
|
|
|
2,355
|
|
||
Total current assets
|
27,757
|
|
|
27,395
|
|
||
Property held for sale
|
16,488
|
|
|
16,488
|
|
||
Assets related to discontinued operations
|
1,813
|
|
|
1,813
|
|
||
Property and equipment, net
|
119,202
|
|
|
121,743
|
|
||
Intangible assets, net
|
16,349
|
|
|
16,781
|
|
||
Goodwill
|
514
|
|
|
514
|
|
||
Operating lease right-of-use assets
|
24,781
|
|
|
—
|
|
||
Other assets
|
1,002
|
|
|
1,266
|
|
||
Total assets
|
$
|
207,906
|
|
|
$
|
186,000
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
7,553
|
|
|
$
|
8,465
|
|
Liabilities related to discontinued operations
|
25
|
|
|
14
|
|
||
Current portion of credit facility debt
|
3,399
|
|
|
—
|
|
||
Operating lease liabilities-current
|
5,921
|
|
|
—
|
|
||
Accrued expenses and other liabilities
|
26,251
|
|
|
24,475
|
|
||
Total current liabilities
|
43,149
|
|
|
32,954
|
|
||
Credit facility debt, less current portion
|
45,629
|
|
|
45,439
|
|
||
Operating lease liabilities-noncurrent
|
24,235
|
|
|
—
|
|
||
Other liabilities
|
844
|
|
|
6,577
|
|
||
Total liabilities
|
$
|
113,857
|
|
|
$
|
84,970
|
|
Commitments and Contingencies
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Common stock, $0.32 par value; 100,000,000 shares authorized; shares issued were 30,646,588 and 30,478,972; and shares outstanding were 30,146,588 and 29,978,972, at December 18, 2019 and August 28, 2019, respectively
|
$
|
9,807
|
|
|
$
|
9,753
|
|
Paid-in capital
|
35,146
|
|
|
34,870
|
|
||
Retained earnings
|
53,871
|
|
|
61,182
|
|
||
Less cost of treasury stock, 500,000 shares
|
(4,775
|
)
|
|
(4,775
|
)
|
||
Total shareholders’ equity
|
$
|
94,049
|
|
|
$
|
101,030
|
|
Total liabilities and shareholders’ equity
|
$
|
207,906
|
|
|
$
|
186,000
|
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
SALES:
|
|
|
|
||||
Restaurant sales
|
$
|
83,558
|
|
|
$
|
91,099
|
|
Culinary contract services
|
9,774
|
|
|
9,496
|
|
||
Franchise revenue
|
1,707
|
|
|
2,224
|
|
||
Vending revenue
|
110
|
|
|
99
|
|
||
TOTAL SALES
|
95,149
|
|
|
102,918
|
|
||
COSTS AND EXPENSES:
|
|
|
|
||||
Cost of food
|
23,942
|
|
|
25,083
|
|
||
Payroll and related costs
|
32,134
|
|
|
34,513
|
|
||
Other operating expenses
|
14,794
|
|
|
16,502
|
|
||
Occupancy costs
|
4,990
|
|
|
5,875
|
|
||
Opening costs
|
12
|
|
|
33
|
|
||
Cost of culinary contract services
|
8,948
|
|
|
8,815
|
|
||
Cost of franchise operations
|
565
|
|
|
273
|
|
||
Depreciation and amortization
|
3,762
|
|
|
4,903
|
|
||
Selling, general and administrative expenses
|
10,158
|
|
|
10,010
|
|
||
Other charges
|
1,238
|
|
|
1,214
|
|
||
Provision for asset impairments and restaurant closings
|
1,110
|
|
|
1,227
|
|
||
Net loss on disposition of property and equipment
|
30
|
|
|
149
|
|
||
Total costs and expenses
|
101,683
|
|
|
108,597
|
|
||
LOSS FROM OPERATIONS
|
(6,534
|
)
|
|
(5,679
|
)
|
||
Interest income
|
23
|
|
|
—
|
|
||
Interest expense
|
(1,962
|
)
|
|
(1,713
|
)
|
||
Other income, net
|
240
|
|
|
30
|
|
||
Loss before income taxes and discontinued operations
|
(8,233
|
)
|
|
(7,362
|
)
|
||
Provision for income taxes
|
94
|
|
|
121
|
|
||
Loss from continuing operations
|
(8,327
|
)
|
|
(7,483
|
)
|
||
Loss from discontinued operations, net of income taxes
|
(11
|
)
|
|
(6
|
)
|
||
NET LOSS
|
(8,338
|
)
|
|
(7,489
|
)
|
||
Loss per share from continuing operations:
|
|
|
|
||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
Assuming dilution
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
Loss per share from discontinued operations:
|
|
|
|
||||
Basic
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Assuming dilution
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
Net loss per share:
|
|
|
|
||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
Assuming dilution
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
30,054
|
|
|
30,059
|
|
||
Assuming dilution
|
30,054
|
|
|
30,059
|
|
|
Common Stock
|
|
|
|
|
|
Total
|
||||||||||||||||||
|
Issued
|
|
Treasury
|
|
Paid-In
|
|
Retained
|
|
Shareholders’
|
||||||||||||||||
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Equity
|
||||||||||
Balance at August 29, 2018
|
30,003
|
|
|
$
|
9,602
|
|
|
(500
|
)
|
|
$
|
(4,775
|
)
|
|
$
|
33,872
|
|
|
$
|
73,929
|
|
|
$
|
112,628
|
|
Cumulative effect of accounting changes from the adoption of ASC Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,479
|
|
|
2,479
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,489
|
)
|
|
(7,489
|
)
|
|||||
Share-based compensation expense
|
42
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|
—
|
|
|
439
|
|
|||||
Common stock issued under employee benefit plans
|
81
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|||||
Common stock issued under nonemployee benefit plans
|
38
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||||
Balance at December 19, 2018
|
30,164
|
|
|
$
|
9,653
|
|
|
(500
|
)
|
|
$
|
(4,775
|
)
|
|
$
|
34,260
|
|
|
$
|
68,919
|
|
|
$
|
108,057
|
|
|
Common Stock
|
|
|
|
|
|
Total
|
||||||||||||||||||
|
Issued
|
|
Treasury
|
|
Paid-In
|
|
Retained
|
|
Shareholders’
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Equity
|
||||||||||||
Balance at August 28, 2019
|
30,478
|
|
|
$
|
9,753
|
|
|
(500
|
)
|
|
$
|
(4,775
|
)
|
|
$
|
34,870
|
|
|
$
|
61,182
|
|
|
$
|
101,030
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,338
|
)
|
|
(8,338
|
)
|
|||||
Cumulative effect of accounting changes from the adoption of ASC Topic 842
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,027
|
|
|
1,027
|
|
|||||
Share-based compensation expense
|
58
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|
—
|
|
|
366
|
|
|||||
Common stock issued under employee benefit plans
|
45
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(36
|
)
|
|||||
Common stock issued under nonemployee benefit plans
|
64
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|||||
Balance at December 18, 2019
|
30,645
|
|
|
$
|
9,807
|
|
|
(500
|
)
|
|
$
|
(4,775
|
)
|
|
$
|
35,146
|
|
|
$
|
53,871
|
|
|
$
|
94,049
|
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(8,338
|
)
|
|
$
|
(7,489
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Provision for asset impairments and net losses on property sales
|
1,140
|
|
|
1,376
|
|
||
Depreciation and amortization
|
3,762
|
|
|
4,903
|
|
||
Amortization of debt issuance cost
|
339
|
|
|
449
|
|
||
Share-based compensation expense
|
366
|
|
|
439
|
|
||
Cash used in operating activities before changes in operating assets and liabilities
|
(2,731
|
)
|
|
(322
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Decrease (increase) in trade accounts and other receivables
|
(1,549
|
)
|
|
733
|
|
||
Decrease (increase) in food and supply inventories
|
369
|
|
|
(123
|
)
|
||
Decrease in prepaid expenses and other assets
|
804
|
|
|
1,881
|
|
||
Decrease in operating lease assets
|
1,922
|
|
|
—
|
|
||
Decrease in operating lease liabilities
|
(2,313
|
)
|
|
—
|
|
||
Increase (decrease) in accounts payable, accrued expenses and other liabilities
|
1,367
|
|
|
(912
|
)
|
||
Net cash provided by (used in) operating activities
|
(2,131
|
)
|
|
1,257
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Proceeds from disposal of assets and property held for sale
|
149
|
|
|
171
|
|
||
Purchases of property and equipment
|
(694
|
)
|
|
(1,119
|
)
|
||
Net cash used in investing activities
|
(545
|
)
|
|
(948
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Revolver borrowings
|
3,300
|
|
|
18,506
|
|
||
Revolver repayments
|
—
|
|
|
(38,500
|
)
|
||
Proceeds from term loan
|
—
|
|
|
58,400
|
|
||
Term loan repayments
|
—
|
|
|
(19,506
|
)
|
||
Debt issuance costs
|
—
|
|
|
(3,155
|
)
|
||
Taxes paid on equity withheld
|
—
|
|
|
(8
|
)
|
||
Net cash provided by financing activities
|
3,300
|
|
|
15,737
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
624
|
|
|
16,046
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
12,756
|
|
|
3,722
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
13,380
|
|
|
$
|
19,768
|
|
Cash paid for:
|
|
|
|
||||
Income taxes, net of (refunds)
|
$
|
(17
|
)
|
|
$
|
29
|
|
Interest
|
1,302
|
|
|
1,637
|
|
|
Balance at August 28, 2019
|
ASC 842 Adjustment
|
Balance at August 29, 2019
|
||||||
|
(In thousands)
|
||||||||
ASSETS
|
|
|
|
||||||
Trade accounts and other receivables, net
|
$
|
8,852
|
|
$
|
70
|
|
$
|
8,922
|
|
Prepaid expenses
|
2,355
|
|
(225
|
)
|
2,130
|
|
|||
Total Current Assets
|
27,395
|
|
(155
|
)
|
27,240
|
|
|||
Intangible assets, net
|
16,781
|
|
(190
|
)
|
16,591
|
|
|||
Operating lease right-of-use assets, net
|
—
|
|
27,191
|
|
27,191
|
|
|||
Total Assets
|
$
|
186,000
|
|
$
|
26,846
|
|
$
|
212,846
|
|
LIABILITIES
|
|
|
|
||||||
Operating lease liabilities-current
|
$
|
—
|
|
$
|
8,061
|
|
$
|
8,061
|
|
Accrued expenses and other liabilities
|
24,475
|
|
(1,002
|
)
|
23,473
|
|
|||
Total Current Liabilities
|
32,954
|
|
7,059
|
|
40,013
|
|
|||
Operating lease liabilities-non-current
|
—
|
|
24,360
|
|
24,360
|
|
|||
Other liabilities
|
6,577
|
|
(5,600
|
)
|
977
|
|
|||
Total Liabilities
|
$
|
84,970
|
|
$
|
25,819
|
|
$
|
110,789
|
|
SHAREHOLDERS’ EQUITY
|
|
|
|
||||||
Retained earnings
|
$
|
61,182
|
|
$
|
1,027
|
|
$
|
62,209
|
|
Total Shareholders Equity
|
101,030
|
|
1,027
|
|
102,057
|
|
|||
Total Liabilities and Shareholders Equity
|
$
|
186,000
|
|
$
|
26,846
|
|
$
|
212,846
|
|
|
December 18,
2019 |
|
August 28,
2019 |
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
3,734
|
|
|
$
|
3,640
|
|
Restricted cash and cash equivalents
|
9,646
|
|
|
9,116
|
|
||
Total cash and cash equivalents shown in our consolidated statements of cash flows
|
$
|
13,380
|
|
|
$
|
12,756
|
|
|
|
Gift Cards, net of discounts
|
|
Franchise Fees
|
||||
|
|
(In thousands)
|
||||||
Balance at August 28, 2019
|
|
$
|
2,882
|
|
|
$
|
1,287
|
|
Revenue recognized that was included in the contract liability balance at the beginning of the year
|
|
(657
|
)
|
|
(12
|
)
|
||
Increase, net of amounts recognized as revenue during the period
|
|
1,593
|
|
|
—
|
|
||
Balance at December 18, 2019
|
|
$
|
3,818
|
|
|
$
|
1,275
|
|
|
|
Franchise Fees
|
||
|
(In thousands)
|
|||
Remainder of fiscal 2020
|
|
$
|
38
|
|
Fiscal 2021
|
|
37
|
|
|
Fiscal 2022
|
|
38
|
|
|
Fiscal 2023
|
|
37
|
|
|
Fiscal 2024
|
|
38
|
|
|
Thereafter
|
|
332
|
|
|
Total operating franchise restaurants
|
|
520
|
|
|
Franchise restaurants not yet opened(1)
|
|
755
|
|
|
Total
|
|
$
|
1,275
|
|
Operating Leases
|
|
Classification
|
|
December 18, 2019
|
||
|
|
|
|
(in thousands)
|
||
Right-of-use assets
|
|
Operating lease right-of-use assets
|
|
$
|
24,781
|
|
|
|
|
|
|
||
Current lease liabilities
|
|
Operating lease liabilities-current
|
|
$
|
5,921
|
|
Non-current lease liabilities
|
|
Operating lease liabilities-noncurrent
|
|
24,235
|
|
|
Total lease liabilities
|
|
|
|
$
|
30,156
|
|
Weighted-average remaining lease term
|
|
6.09 years
|
|
|
|
Weighted-average discount rate
|
|
9.18%
|
|
|
16 Weeks Ended
|
||
|
|
December 18, 2019
|
||
|
|
(in thousands)
|
||
Operating lease expense
|
|
$
|
2,597
|
|
Variable lease expense
|
|
296
|
|
|
Short-term lease expense
|
|
63
|
|
|
Sublease expense
|
|
221
|
|
|
Total lease expense
|
|
$
|
3,177
|
|
|
|
16 Weeks Ended
|
||
|
|
December 18, 2019
|
||
|
|
(in thousands)
|
||
Operating lease income
|
|
$
|
290
|
|
Sublease income
|
|
172
|
|
|
Variable lease income
|
|
74
|
|
|
Total lease income
|
|
$
|
536
|
|
|
|
16 Weeks Ended
|
||
|
|
December 18, 2019
|
||
|
|
(in thousands)
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
$
|
2,850
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease liabilities
|
|
$
|
—
|
|
Fiscal Year Ending:
|
(In thousands)
|
||
August 26, 2020
|
$
|
8,841
|
|
August 25, 2021
|
7,155
|
|
|
August 31, 2022
|
5,643
|
|
|
August 30, 2023
|
4,410
|
|
|
August 28, 2024
|
3,768
|
|
|
Thereafter
|
10,312
|
|
|
Total minimum lease payments
|
$
|
40,129
|
|
|
Quarter Ended
|
||||||
|
December 18, 2019
|
|
December 19, 2018
|
||||
|
(In thousands)
|
||||||
Sales:
|
|
|
|
||||
Luby's cafeterias
|
$
|
67,144
|
|
|
$
|
68,614
|
|
Fuddruckers restaurants(1)
|
15,679
|
|
|
21,633
|
|
||
Cheeseburger in Paradise restaurants
|
845
|
|
|
959
|
|
||
Culinary contract services
|
9,774
|
|
|
9,488
|
|
||
Fuddruckers franchise operations
|
1,707
|
|
|
2,224
|
|
||
Total
|
$
|
95,149
|
|
|
$
|
102,918
|
|
Segment level profit:
|
|
|
|
||||
Luby's cafeterias
|
$
|
7,909
|
|
|
$
|
8,993
|
|
Fuddruckers restaurants
|
(33
|
)
|
|
457
|
|
||
Cheeseburger in Paradise restaurants
|
(67
|
)
|
|
(225
|
)
|
||
Culinary contract services
|
826
|
|
|
681
|
|
||
Fuddruckers franchise operations
|
1,141
|
|
|
1,951
|
|
||
Total
|
$
|
9,776
|
|
|
$
|
11,857
|
|
Depreciation and amortization:
|
|
|
|
||||
Luby's cafeterias
|
$
|
2,451
|
|
|
$
|
3,002
|
|
Fuddruckers restaurants
|
550
|
|
|
1,332
|
|
||
Cheeseburger in Paradise restaurants
|
28
|
|
|
55
|
|
||
Culinary contract services
|
10
|
|
|
22
|
|
||
Fuddruckers franchise operations
|
236
|
|
|
236
|
|
||
Corporate
|
487
|
|
|
256
|
|
||
Total
|
$
|
3,762
|
|
|
$
|
4,903
|
|
Capital expenditures:
|
|
|
|
||||
Luby's cafeterias
|
$
|
586
|
|
|
$
|
956
|
|
Fuddruckers restaurants
|
55
|
|
|
109
|
|
||
Cheeseburger in Paradise restaurants
|
1
|
|
|
—
|
|
||
Culinary contract services
|
—
|
|
|
54
|
|
||
Fuddruckers franchise operations
|
7
|
|
|
—
|
|
||
Corporate
|
44
|
|
|
—
|
|
||
Total
|
693
|
|
|
$
|
1,119
|
|
(1)
|
Includes vending revenue of $110 thousand and $99 thousand for the quarters ended December 18, 2019 and December 19, 2018, respectively.
|
|
Quarter Ended
|
|||||||
|
December 18, 2019
|
|
December 19, 2018
|
|
||||
|
(In thousands)
|
|||||||
Loss before income taxes and discontinued operations:
|
|
|
|
|
||||
Segment level profit
|
$
|
9,776
|
|
|
$
|
11,857
|
|
|
Opening costs
|
(12
|
)
|
|
(33
|
)
|
|
||
Depreciation and amortization
|
(3,762
|
)
|
|
(4,903
|
)
|
|
||
Selling, general and administrative expenses
|
(10,158
|
)
|
|
(10,010
|
)
|
|
||
Other charges
|
(1,238
|
)
|
|
(1,214
|
)
|
|
||
Provision for asset impairments and restaurant closings
|
(1,110
|
)
|
|
(1,227
|
)
|
|
||
Net loss on disposition of property and equipment
|
(30
|
)
|
|
(149
|
)
|
|
||
Interest income
|
23
|
|
|
—
|
|
|
||
Interest expense
|
(1,962
|
)
|
|
(1,713
|
)
|
|
||
Other income, net
|
240
|
|
|
30
|
|
|
||
Total
|
$
|
(8,233
|
)
|
|
$
|
(7,362
|
)
|
|
|
|
|||||||
|
December 18, 2019
|
|
August 28, 2019
|
|
||||
|
(In thousands)
|
|||||||
Total assets:
|
|
|
|
|
||||
Luby's cafeterias
|
$
|
121,680
|
|
|
$
|
107,287
|
|
|
Fuddruckers restaurants (1)
|
39,010
|
|
|
25,725
|
|
|
||
Cheeseburger in Paradise restaurants (2)
|
1,057
|
|
|
829
|
|
|
||
Culinary contract services
|
7,670
|
|
|
6,703
|
|
|
||
Fuddrucker franchise operations (3)
|
9,860
|
|
|
10,034
|
|
|
||
Corporate
|
28,629
|
|
|
$
|
35,422
|
|
|
|
Total
|
$
|
207,906
|
|
|
$
|
186,000
|
|
|
|
Quarter Ended December 18, 2019
|
|
Quarter Ended December 19, 2018
|
||||
|
(In thousands)
|
||||||
Proxy communication related
|
$
|
—
|
|
|
742
|
|
|
Employee severances
|
619
|
|
|
472
|
|
||
Restructuring related
|
619
|
|
|
—
|
|
||
Total Other charges
|
$
|
1,238
|
|
|
$
|
1,214
|
|
•
|
Level 1: Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
•
|
Level 2: Defined as pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.
|
•
|
Level 3: Defined as pricing inputs that are unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
|
|
|
Fair Value
Measurement Using
|
|
|
||||||||||||||
|
December 18, 2019
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Impairments(3)
|
||||||||||
Nonrecurring Fair Value Measurements
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||
Continuing Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Property held for sale(1)
|
$
|
4,661
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,661
|
|
|
$
|
(19
|
)
|
Operating lease right-of-use assets (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(488
|
)
|
|||||
Total Nonrecurring Fair Value Measurements
|
$
|
4,661
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,661
|
|
|
$
|
(507
|
)
|
|
|
|
Fair Value
Measurement Using
|
|
|
||||||||||||||
|
December 19, 2018
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Impairments(3)
|
||||||||||
Nonrecurring Fair Value Measurements
|
|
|
(In thousands)
|
|
|
|
|
||||||||||||
Continuing Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Property held for sale(1)
|
$
|
8,374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,374
|
|
|
$
|
(76
|
)
|
Property and equipment related to company-owned restaurants (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,145
|
)
|
|||||
Total Nonrecurring Fair Value Measurements
|
$
|
8,374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,374
|
|
|
$
|
(1,221
|
)
|
|
December 18,
2019 |
|
August 28,
2019 |
|
Estimated
Useful Lives
(years)
|
||||||||
|
(In thousands)
|
|
|
|
|
|
|
||||||
Land
|
$
|
45,845
|
|
|
$
|
45,845
|
|
|
|
|
—
|
|
|
Restaurant equipment and furnishings
|
67,562
|
|
|
67,015
|
|
|
3
|
|
to
|
|
15
|
||
Buildings
|
127,007
|
|
|
126,957
|
|
|
20
|
|
to
|
|
33
|
||
Leasehold and leasehold improvements
|
22,121
|
|
|
22,098
|
|
|
Lesser of lease term or estimated useful life
|
||||||
Office furniture and equipment
|
3,302
|
|
|
3,364
|
|
|
3
|
|
to
|
|
10
|
||
|
265,837
|
|
|
265,279
|
|
|
|
|
|
|
|
||
Less accumulated depreciation and amortization
|
(146,635
|
)
|
|
(143,536
|
)
|
|
|
|
|
|
|
||
Property and equipment, net
|
$
|
119,202
|
|
|
$
|
121,743
|
|
|
|
|
|
|
|
Intangible assets, net
|
$
|
16,349
|
|
|
$
|
16,781
|
|
|
15
|
|
to
|
|
21
|
|
December 18, 2019
|
|
August 29, 2018
|
||||||||||||||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Intangible Assets Subject to Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fuddruckers trade name and franchise agreements
|
$
|
29,486
|
|
|
$
|
(13,183
|
)
|
|
$
|
16,303
|
|
|
$
|
29,486
|
|
|
$
|
(12,752
|
)
|
|
$
|
16,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cheeseburger in Paradise trade name and license agreements
|
146
|
|
|
(100
|
)
|
|
46
|
|
|
146
|
|
|
(99
|
)
|
|
47
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets, net
|
$
|
29,632
|
|
|
$
|
(13,283
|
)
|
|
$
|
16,349
|
|
|
$
|
29,632
|
|
|
$
|
(12,851
|
)
|
|
$
|
16,781
|
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
|
(In thousands, except per share data)
|
||||||
Provision for asset impairments and restaurant closings
|
$
|
1,110
|
|
|
$
|
1,227
|
|
Net loss on disposition of property and equipment
|
30
|
|
|
149
|
|
||
|
$
|
1,140
|
|
|
$
|
1,376
|
|
Effect on EPS:
|
|
|
|
||||
Basic
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
Assuming dilution
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
December 18,
2019 |
|
August 28,
2019 |
||||
|
(In thousands)
|
||||||
Property and equipment
|
$
|
1,813
|
|
|
$
|
1,813
|
|
Assets related to discontinued operations—non-current
|
$
|
1,813
|
|
|
$
|
1,813
|
|
Accrued expenses and other liabilities
|
$
|
25
|
|
|
$
|
14
|
|
Liabilities related to discontinued operations—current
|
$
|
25
|
|
|
$
|
14
|
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
|
(In thousands)
|
||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Pretax loss
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
Income tax expense from discontinued operations
|
—
|
|
|
—
|
|
||
Loss from discontinued operations, net of income taxes
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
|
(In thousands, except per share data)
|
||||||
Discontinued operating loss
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
Impairments
|
—
|
|
|
—
|
|
||
Pretax loss
|
(11
|
)
|
|
(6
|
)
|
||
Income tax expense from discontinued operations
|
—
|
|
|
—
|
|
||
Loss from discontinued operations, net of income taxes
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
Effect on EPS from discontinued operations—basic
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
||||||
|
December 18,
2019 |
|
August 28,
2019 |
||||
Long-Term Debt
|
|
|
|
||||
2018 Credit Agreement - Revolver
|
$
|
8,600
|
|
|
$
|
5,300
|
|
2018 Credit Agreement - Term Loan
|
43,399
|
|
|
43,399
|
|
||
Total credit facility debt
|
51,999
|
|
|
48,699
|
|
||
Less:
|
|
|
|
||||
Unamortized debt issue costs
|
(1,696
|
)
|
|
(1,887
|
)
|
||
Unamortized debt discount
|
(1,275
|
)
|
|
(1,373
|
)
|
||
Total credit facility debt, less unamortized debt issuance costs
|
49,028
|
|
|
45,439
|
|
||
Current portion of credit facility debt
|
3,399
|
|
|
—
|
|
||
Credit facility debt, less current portion
|
$
|
45,629
|
|
|
$
|
45,439
|
|
|
Shares
Under
Fixed
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
||||||
|
|
|
(Per share)
|
|
(In years)
|
|
(In thousands)
|
||||||
Outstanding at August 28, 2019
|
1,387,412
|
|
|
$
|
4.06
|
|
|
5.7
|
|
|
$
|
—
|
|
Cancelled / Forfeited
|
(53,165
|
)
|
|
$
|
4.54
|
|
|
—
|
|
|
—
|
|
|
Expired
|
(160,000
|
)
|
|
$
|
3.44
|
|
|
—
|
|
|
—
|
|
|
Outstanding at December 18, 2019
|
1,174,247
|
|
|
$
|
4.12
|
|
|
6.1
|
|
|
$
|
—
|
|
Exercisable at December 18, 2019
|
1,108,153
|
|
|
$
|
4.20
|
|
|
6.0
|
|
|
$
|
—
|
|
|
Restricted
Stock
Units
|
|
Weighted
Average
Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Term
|
||||
|
|
|
(Per share)
|
|
(In years)
|
||||
Unvested at August 28, 2019
|
274,009
|
|
|
$
|
3.40
|
|
|
1.2
|
|
Granted
|
5,236
|
|
|
$
|
1.92
|
|
|
—
|
|
Vested
|
(115,270
|
)
|
|
$
|
4.26
|
|
|
—
|
|
Unvested at December 18, 2019
|
163,975
|
|
|
$
|
2.80
|
|
|
1.1
|
|
|
Quarter Ended
|
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
|
||||
|
(16 weeks)
|
|
(16 weeks)
|
|
||||
|
(In thousands, except per share data)
|
|
||||||
Numerator:
|
|
|
|
|
||||
Loss from continuing operations
|
$
|
(8,327
|
)
|
|
$
|
(7,483
|
)
|
|
Loss from discontinued operations, net of income taxes
|
(11
|
)
|
|
(6
|
)
|
|
||
NET LOSS
|
$
|
(8,338
|
)
|
|
$
|
(7,489
|
)
|
|
Denominator:
|
|
|
|
|
||||
Denominator for basic earnings per share—weighted-average shares
|
30,054
|
|
|
30,059
|
|
|
||
Effect of potentially dilutive securities:
|
|
|
|
|
||||
Employee and non-employee stock options
|
—
|
|
|
—
|
|
|
||
Denominator for earnings per share assuming dilution
|
30,054
|
|
|
30,059
|
|
|
||
|
|
|
|
|
||||
Loss per share from continuing operations:
|
|
|
|
|
||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
Assuming dilution
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
Loss per share from discontinued operations:
|
|
|
|
|
||||
Basic
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
Assuming dilution
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
Net loss per share:
|
|
|
|
|
||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
Assuming dilution
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
|
Quarter Ended
|
||||
|
December 18,
2019 |
|
December 19,
2018 |
||
|
(16 weeks)
|
|
(16 weeks)
|
||
Restaurant sales
|
87.8
|
%
|
|
88.5
|
%
|
Culinary contract services
|
10.3
|
%
|
|
9.2
|
%
|
Franchise revenue
|
1.8
|
%
|
|
2.2
|
%
|
Vending revenue
|
0.1
|
%
|
|
0.1
|
%
|
TOTAL SALES
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
||
STORE COSTS AND EXPENSES:
|
|
|
|
||
(As a percentage of restaurant sales)
|
|
|
|
||
|
|
|
|
||
Cost of food
|
28.7
|
%
|
|
27.5
|
%
|
Payroll and related costs
|
38.5
|
%
|
|
37.9
|
%
|
Other operating expenses
|
17.7
|
%
|
|
18.1
|
%
|
Occupancy costs
|
6.0
|
%
|
|
6.4
|
%
|
Vending revenue
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Store level profit
|
9.3
|
%
|
|
10.1
|
%
|
|
|
|
|
||
COMPANY COSTS AND EXPENSES:
|
|
|
|
||
(As a percentage of total sales)
|
|
|
|
||
|
|
|
|
||
Opening costs
|
0.0
|
%
|
|
0.0
|
%
|
Depreciation and amortization
|
4.0
|
%
|
|
4.8
|
%
|
Selling, general and administrative expenses
|
10.7
|
%
|
|
9.7
|
%
|
Other Charges
|
1.3
|
%
|
|
1.2
|
%
|
Provision for asset impairments and restaurant closings
|
1.2
|
%
|
|
1.2
|
%
|
Net loss on disposition of property and equipment
|
0.0
|
%
|
|
0.1
|
%
|
|
|
|
|
||
Culinary Contract Services Costs
|
|
|
|
||
(As a percentage of Culinary Contract Services sales)
|
|
|
|
||
|
|
|
|
||
Cost of culinary contract services
|
91.5
|
%
|
|
92.8
|
%
|
Culinary segment profit
|
8.5
|
%
|
|
7.2
|
%
|
|
|
|
|
||
Franchise Operations Costs
|
|
|
|
||
(As a percentage of Franchise revenue)
|
|
|
|
||
|
|
|
|
||
Cost of franchise operations
|
33.1
|
%
|
|
12.3
|
%
|
Franchise segment profit
|
66.9
|
%
|
|
87.7
|
%
|
|
|
|
|
||
(As a percentage of total sales)
|
|
|
|
||
Total costs and expenses
|
|
|
|
||
LOSS FROM OPERATIONS
|
(6.9
|
)%
|
|
(5.5
|
)%
|
Interest income
|
0.0
|
%
|
|
0.0
|
%
|
Interest expense
|
(2.1
|
)%
|
|
(1.7
|
)%
|
Other income, net
|
0.3
|
%
|
|
0.0
|
%
|
Loss before income taxes and discontinued operations
|
(8.7
|
)%
|
|
(7.2
|
)%
|
Provision for income taxes
|
0.1
|
%
|
|
0.1
|
%
|
Loss from continuing operations
|
(8.8
|
)%
|
|
(7.3
|
)%
|
Loss from discontinued operations, net of income taxes
|
0.0
|
%
|
|
0.0
|
%
|
NET LOSS
|
(8.8
|
)%
|
|
(7.3
|
)%
|
|
Quarter Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
|
(In thousands)
|
||||||
Store level profit
|
$
|
7,808
|
|
|
$
|
9,225
|
|
|
|
|
|
||||
Plus:
|
|
|
|
||||
Sales from culinary contract services
|
9,774
|
|
|
9,496
|
|
||
Sales from franchise operations
|
1,707
|
|
|
2,224
|
|
||
|
|
|
|
||||
Less:
|
|
|
|
||||
Opening costs
|
12
|
|
|
33
|
|
||
Cost of culinary contract services
|
8,948
|
|
|
8,815
|
|
||
Cost of franchise operations
|
565
|
|
|
273
|
|
||
Depreciation and amortization
|
3,762
|
|
|
4,903
|
|
||
Selling, general and administrative expenses
|
10,158
|
|
|
10,010
|
|
||
Other charges
|
1,238
|
|
|
1,214
|
|
||
Provision for asset impairments and restaurant closings
|
1,110
|
|
|
1,227
|
|
||
Net loss on disposition of property and equipment
|
30
|
|
|
149
|
|
||
Interest income
|
(23
|
)
|
|
—
|
|
||
Interest expense
|
1,962
|
|
|
1,713
|
|
||
Other income, net
|
(240
|
)
|
|
(30
|
)
|
||
Provision for income taxes
|
94
|
|
|
121
|
|
||
Loss from continuing operations
|
$
|
(8,327
|
)
|
|
$
|
(7,483
|
)
|
|
August 28,
2019 |
|
FY20 Q1
Openings |
|
FY20 Q1
Closings |
|
December 18,
2019 |
||||
Luby’s Cafeterias
|
79
|
|
|
—
|
|
|
(1
|
)
|
|
78
|
|
Fuddruckers Restaurants
|
44
|
|
|
—
|
|
|
(4
|
)
|
|
40
|
|
Cheeseburger in Paradise
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
|
124
|
|
|
—
|
|
|
(5
|
)
|
|
119
|
|
|
Quarter
Ended |
|
Quarter
Ended |
|
|
|||||||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Restaurant sales
|
$
|
83,558
|
|
|
$
|
91,099
|
|
|
$
|
(7,541
|
)
|
|
(8.3
|
)%
|
Culinary contract services
|
9,774
|
|
|
9,496
|
|
|
278
|
|
|
2.9
|
%
|
|||
Franchise revenue
|
1,707
|
|
|
2,224
|
|
|
(517
|
)
|
|
(23.2
|
)%
|
|||
Vending revenue
|
110
|
|
|
99
|
|
|
11
|
|
|
11.1
|
%
|
|||
TOTAL SALES
|
$
|
95,149
|
|
|
$
|
102,918
|
|
|
$
|
(7,769
|
)
|
|
(7.5
|
)%
|
($000s)
|
Quarter
Ended
|
|
Quarter
Ended
|
|
|
|||||||||
Restaurant Brand
|
December 18,
|
|
December 19,
|
|
Increase/(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
$ Amount
|
|
% Change
|
|||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Luby’s Cafeterias
|
$
|
60,785
|
|
|
$
|
62,643
|
|
|
$
|
(1,858
|
)
|
|
(3.0
|
)%
|
Combo locations
|
6,359
|
|
|
5,964
|
|
|
395
|
|
|
6.6
|
%
|
|||
Luby's cafeteria segment
|
67,144
|
|
|
68,607
|
|
|
(1,463
|
)
|
|
(2.1
|
)%
|
|||
Fuddruckers restaurants segment
|
15,569
|
|
|
21,533
|
|
|
(5,964
|
)
|
|
(27.7
|
)%
|
|||
Cheeseburger in Paradise segment
|
845
|
|
|
959
|
|
|
(114
|
)
|
|
(11.9
|
)%
|
|||
Total Restaurant Sales
|
$
|
83,558
|
|
|
$
|
91,099
|
|
|
$
|
(7,541
|
)
|
|
(8.3
|
)%
|
•
|
The approximate $1.9 million sales decrease in sales at stand-alone Luby's Cafeteria restaurants was the result of the closure of six locations (accounting for approximately $2.8 million in reduced sales) partially offset by a 1.7% increase in Luby’s Cafeteria same-store sales in the quarter ended December 18, 2019 compared to the quarter ended December 19, 2018. The 1.7% increase in Luby's Cafeteria same-store sales was the result of a 2.0% increase in guest traffic partially offset by a 0.3% decrease in average spend per guest.
|
•
|
The approximate $6.0 million sales decrease at stand-alone Fuddruckers restaurants was the result of 13 restaurant closings and seven restaurant transfers to a franchise owner's operations (accounting for approximately $6.0 million of this sales decline combined) partially offset by a 0.1% increase in same-store sales in the quarter ended December 18, 2019 compared to the quarter ended December 19, 2018. The 0.1% increase in same-store sales was the result of a 2.7% increase in guest traffic, partially offset by a 2.5% decrease in average spend per guest.
|
•
|
The approximate $0.4 million increase in sales from Combo locations reflects a 6.6% increase in sales at the six locations that operated throughout the quarter ended December 18, 2019 and the quarter ended December 19, 2018.
|
•
|
The approximate $0.1 million decrease in Cheeseburger in Paradise restaurants sales in the quarter ended December 18, 2019 compared to the quarter ended December 19, 2018 was the result of one store closure and a 1.0% decrease at the remaining location.
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18, 2019
|
|
December 19, 2018
|
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Cost of food:
|
|
|
|
|
|
|
|
|||||||
Luby's cafeteria segment
|
$
|
19,396
|
|
|
$
|
19,257
|
|
|
$
|
139
|
|
|
0.7
|
%
|
Fuddruckers restaurants segment
|
4,284
|
|
|
5,553
|
|
|
(1,269
|
)
|
|
(22.9
|
)%
|
|||
Cheeseburger in Paradise segment
|
262
|
|
|
273
|
|
|
(11
|
)
|
|
(4.0
|
)%
|
|||
Total Restaurants
|
$
|
23,942
|
|
|
$
|
25,083
|
|
|
$
|
(1,141
|
)
|
|
(4.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
As a percentage of restaurant sales
|
|
|
|
|
|
|
|
|||||||
Luby's cafeteria segment
|
28.9
|
%
|
|
28.1
|
%
|
|
|
|
0.8
|
%
|
||||
Fuddruckers restaurants segment
|
27.5
|
%
|
|
25.8
|
%
|
|
|
|
1.7
|
%
|
||||
Cheeseburger in Paradise segment
|
31.0
|
%
|
|
28.5
|
%
|
|
|
|
2.5
|
%
|
||||
Total Restaurants
|
28.7
|
%
|
|
27.5
|
%
|
|
|
|
1.2
|
%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18, 2019
|
|
December 19, 2018
|
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Payroll and related Costs:
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
$
|
25,538
|
|
|
$
|
25,622
|
|
|
$
|
(84
|
)
|
|
(0.3
|
)%
|
Fuddruckers Restaurants Segment
|
6,254
|
|
|
8,453
|
|
|
(2,199
|
)
|
|
(26.0
|
)%
|
|||
Cheeseburger in Paradise Segment
|
342
|
|
|
438
|
|
|
(96
|
)
|
|
(21.9
|
)%
|
|||
Total Restaurants
|
$
|
32,134
|
|
|
$
|
34,513
|
|
|
$
|
(2,379
|
)
|
|
(6.9
|
)%
|
|
|
|
|
|
|
|
|
|||||||
As a percentage of restaurant sales
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
38.0
|
%
|
|
37.3
|
%
|
|
|
|
0.7
|
%
|
||||
Fuddruckers Restaurants Segment:
|
40.2
|
%
|
|
39.3
|
%
|
|
|
|
0.9
|
%
|
||||
Cheeseburger in Paradise Segment
|
40.5
|
%
|
|
45.7
|
%
|
|
|
|
(5.2
|
)%
|
||||
Total Restaurants
|
38.5
|
%
|
|
37.9
|
%
|
|
|
|
0.6
|
%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18, 2019
|
|
December 19, 2018
|
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Other operating expenses:
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
$
|
11,554
|
|
|
$
|
11,794
|
|
|
$
|
(240
|
)
|
|
(2.0
|
)%
|
Fuddruckers Restaurants Segment
|
3,038
|
|
|
4,329
|
|
|
(1,291
|
)
|
|
(29.8
|
)%
|
|||
Cheeseburger in Paradise Segment
|
202
|
|
|
379
|
|
|
(177
|
)
|
|
(46.7
|
)%
|
|||
Total Restaurants
|
$
|
14,794
|
|
|
$
|
16,502
|
|
|
$
|
(1,708
|
)
|
|
(10.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
As a percentage of restaurant sales
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
17.2
|
%
|
|
17.2
|
%
|
|
|
|
0.0
|
%
|
||||
Fuddruckers Restaurants Segment:
|
19.5
|
%
|
|
20.1
|
%
|
|
|
|
(0.6
|
)%
|
||||
Cheeseburger in Paradise Segment
|
23.9
|
%
|
|
39.5
|
%
|
|
|
|
(15.6
|
)%
|
||||
Total Restaurants
|
17.7
|
%
|
|
18.1
|
%
|
|
|
|
(0.4
|
)%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18, 2019
|
|
December 19, 2018
|
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Occupancy costs:
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
$
|
2,746
|
|
|
$
|
2,940
|
|
|
$
|
(194
|
)
|
|
(6.6
|
)%
|
Fuddruckers Restaurants Segment
|
2,137
|
|
|
2,841
|
|
|
(704
|
)
|
|
(24.8
|
)%
|
|||
Cheeseburger in Paradise Segment
|
107
|
|
|
94
|
|
|
13
|
|
|
13.8
|
%
|
|||
Total Restaurants
|
$
|
4,990
|
|
|
$
|
5,875
|
|
|
$
|
(885
|
)
|
|
(15.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
As a percentage of restaurant sales
|
|
|
|
|
|
|
|
|||||||
Luby's Cafeteria Segment
|
4.1
|
%
|
|
4.3
|
%
|
|
|
|
(0.2
|
)%
|
||||
Fuddruckers Restaurants Segment:
|
13.7
|
%
|
|
13.2
|
%
|
|
|
|
0.5
|
%
|
||||
Cheeseburger in Paradise Segment
|
12.7
|
%
|
|
9.8
|
%
|
|
|
|
2.9
|
%
|
||||
Total Restaurants
|
6.0
|
%
|
|
6.4
|
%
|
|
|
|
(0.4
|
)%
|
•
|
We recognize as revenue the amounts due to us from franchisees for pooled advertising expenditures.
|
•
|
We recognize initial and renewal franchise fees evenly over the term of franchise area development agreements and we recognize revenue when a franchise agreement is terminated early.
|
•
|
Additionally, we record an expense and liability in an amount equal to the unspent funds paid to us from franchisees for pooled advertising expenditures that will be incurred in a future period.
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Franchise revenue
|
$
|
1,707
|
|
|
$
|
2,224
|
|
|
$
|
(517
|
)
|
|
(23.2
|
)%
|
Cost of franchise operations
|
565
|
|
|
273
|
|
|
292
|
|
|
107.0
|
%
|
|||
Franchise profit
|
$
|
1,142
|
|
|
$
|
1,951
|
|
|
$
|
(809
|
)
|
|
(41.5
|
)%
|
Franchise profit as a percentage of franchise revenue
|
66.9
|
%
|
|
87.7
|
%
|
|
|
|
(20.8
|
)%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Culinary contract services sales
|
$
|
9,774
|
|
|
$
|
9,496
|
|
|
$
|
278
|
|
|
2.9
|
%
|
Cost of culinary contract services
|
8,948
|
|
|
8,815
|
|
|
133
|
|
|
1.5
|
%
|
|||
Culinary contract services profit
|
$
|
826
|
|
|
$
|
681
|
|
|
$
|
145
|
|
|
21.3
|
%
|
Culinary contract services profit as a percentage of Culinary contract services sales
|
8.5
|
%
|
|
7.2
|
%
|
|
|
|
1.3
|
%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
Depreciation and amortization
|
$
|
3,762
|
|
|
$
|
4,903
|
|
|
$
|
(1,141
|
)
|
|
(23.3
|
)%
|
As a percentage of total sales
|
4.0
|
%
|
|
4.8
|
%
|
|
|
|
(0.8
|
)%
|
|
Quarter Ended
|
|
Quarter Ended
|
|
|
|||||||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
|
Increase/
(Decrease) |
|||||||||
|
(16 weeks)
|
|
(16 weeks)
|
|
(16 weeks vs 16 weeks)
|
|||||||||
General and administrative expenses
|
$
|
8,497
|
|
|
$
|
9,085
|
|
|
$
|
(588
|
)
|
|
(6.5
|
)%
|
Marketing and advertising expenses
|
1,661
|
|
|
925
|
|
|
736
|
|
|
79.6
|
%
|
|||
Selling, general and administrative expenses
|
$
|
10,158
|
|
|
$
|
10,010
|
|
|
$
|
148
|
|
|
1.5
|
%
|
As a percentage of total sales
|
10.7
|
%
|
|
9.7
|
%
|
|
|
|
1.0
|
%
|
|
Quarter Ended
|
|
Quarter Ended
|
||||
($000s)
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
Proxy communication related
|
$
|
—
|
|
|
$
|
742
|
|
Employee severances
|
619
|
|
|
472
|
|
||
Restructuring related
|
619
|
|
|
—
|
|
||
Total Other Charges
|
$
|
1,238
|
|
|
$
|
1,214
|
|
|
Quarters Ended
|
||||||
|
December 18,
2019 |
|
December 19,
2018 |
||||
|
(16 weeks)
|
|
(16 weeks)
|
||||
|
(In thousands)
|
||||||
Total cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(2,131
|
)
|
|
$
|
1,257
|
|
Investing activities
|
(545
|
)
|
|
(948
|
)
|
||
Financing activities
|
3,300
|
|
|
15,737
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
$
|
624
|
|
|
$
|
16,046
|
|
|
|
||||||
|
December 18,
2019 |
|
August 28,
2019 |
||||
Long-Term Debt
|
|
|
|
||||
2018 Credit Agreement - Revolver
|
$
|
8,600
|
|
|
$
|
5,300
|
|
2018 Credit Agreement - Term Loan
|
43,399
|
|
|
43,399
|
|
||
Total credit facility debt
|
51,999
|
|
|
48,699
|
|
||
Less:
|
|
|
|
||||
Unamortized debt issue costs
|
(1,695
|
)
|
|
(1,887
|
)
|
||
Unamortized debt discount
|
(1,275
|
)
|
|
(1,373
|
)
|
||
Total credit facility debt, less unamortized debt issuance costs
|
49,029
|
|
|
45,439
|
|
||
Current portion of credit facility debt
|
3,399
|
|
|
—
|
|
||
Credit facility debt, less current portion
|
$
|
45,630
|
|
|
$
|
45,439
|
|
•
|
future operating results,
|
•
|
future capital expenditures and expected sources of funds for capital expenditures,
|
•
|
future debt, including liquidity and the sources and availability of funds related to debt, and expected repayment of debt,
|
•
|
expected sources of funds for working capital requirements,
|
•
|
plans for expansion and revisions to our business,
|
•
|
closing existing units,
|
•
|
effectiveness of management's disposal plans,
|
•
|
future sales of assets and the gains or losses that may be recognized as a result of any such sales, and
|
•
|
continued compliance with the terms of our 2018 Credit Agreement.
|
•
|
our ability to pursue strategic alternatives
|
•
|
general business and economic conditions,
|
•
|
the impact of competition,
|
•
|
decisions made in the allocation of capital resources,
|
•
|
our operating initiatives, changes in promotional, couponing and advertising strategies and the success of management’s business plans,
|
•
|
fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese, oils and produce,
|
•
|
ability to raise menu prices and customer acceptance of changes in menu items,
|
•
|
increases in utility costs, including the costs of natural gas and other energy supplies,
|
•
|
changes in the availability and cost of labor, including the ability to attract qualified managers and team members,
|
•
|
the seasonality of the business,
|
•
|
collectability of accounts receivable,
|
•
|
changes in governmental regulations, including changes in minimum wages and health care benefit regulation,
|
•
|
the effects of inflation and changes in our customers’ disposable income, spending trends and habits,
|
•
|
the ability to realize property values,
|
•
|
the availability and cost of credit,
|
•
|
the effectiveness of our credit card controls and Payment Card Industry ("PCI") compliance,
|
•
|
weather conditions in the regions in which our restaurants operate,
|
•
|
costs relating to legal proceedings,
|
•
|
impact of adoption of new accounting standards,
|
•
|
effects of actual or threatened future terrorist attacks in the United States,
|
•
|
unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations, and
|
•
|
the continued service of key management personnel.
|
|
|
LUBY’S, INC.
(Registrant)
|
|
|
|
|
|
Date:
|
2/3/2020
|
By:
|
/s/ Christopher J. Pappas
|
|
|
|
Christopher J. Pappas
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
2/3/2020
|
By:
|
/s/ K. Scott Gray
|
|
|
|
K. Scott Gray
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
BORROWER:
|
LUBY’S, INC.,
|
AGENT AND LENDER:
|
MSD PCOF PARTNERS VI, LLC,
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 3, 2020
|
By:
|
/s/ Christopher J. Pappas
|
|
|
Christopher J. Pappas
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 3, 2020
|
By:
|
/s/ K/ Scott Gray
|
|
|
K. Scott Gray
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Date: February 3, 2020
|
By:
|
/s/ Christopher J. Pappas
|
|
|
Christopher J. Pappas
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: February 3, 2020
|
By:
|
/s/ K. Scott Gray
|
|
|
K. Scott Gray
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Executive Officer)
|