Luby : 01/25/2017 Luby's Reports First Quarter Fiscal 2017 Results

For additional information contact:

FOR IMMEDIATE RELEASE Dennard-Lascar Associates Rick Black / Ken Dennard Investor Relations

713-529-6600

• Opened four Fuddruckers franchise locations: two domestic and two international

• Capital expenditures decreased $0.7 million in the first quarter compared to the first quarter fiscal 2016

• Same-store sales decreased 2.3%

Chris Pappas, President and CEO, commented, "We continue to execute our operational plans and initiatives to drive guest satisfaction. While we are not satisfied with our first quarter results, and despite the continued challenges that are pressuring sales throughout the restaurant industry, we remain optimistic in our ability to demonstrate improvement over the long term. Most importantly, our entire team remains focused on providing an enhanced guest experience at each of our brands to change the trajectory of our business and drive shareholder value."

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

2. Luby's includes a restaurant's sales results into the same-store sales calculation in the quarter after that store has been open for six complete consecutive quarters. In the first quarter, there were 86 Luby's Cafeterias, 58 Fuddruckers Restaurants, 5 Combo locations, and 8 Cheeseburger in Paradise locations that met the definition of same-stores.

3. Q1 2017, Q1 2016, and fiscal 2016 same-store sales reflect the change in restaurant sales for the locations included in the same-store grouping for each of the comparable periods.

   First Quarter Restaurant Sales:

   ($ thousands)

   Quarter Ended
   Restaurant Brand	December 21, 2016	December 16, 2015	Change	Change (%)
   (16 weeks)	(16 weeks)	(16 weeks vs 16 weeks)
   Luby's Cafeterias	$ 68,339	$ 70,905	$ (2,566)	(3.6 )%
   Fuddruckers	28,748	30,880	(2,132)	(6.9 )%
   Combo locations	6,626	7,020	(394)	(5.6 )%
   Cheeseburger in Paradise	4,369	4,741	(372)	(7.8 )%
   Total Restaurant Sales	$ 108,082	$ 113,546	$ (5,464)	(4.8)%

   • Restaurant sales in the first quarter decreased to $108.1 million, a decrease of 4.8% versus the first quarter fiscal 2016.

     • Luby's Cafeterias sales decreased $2.6 million versus the first quarter fiscal 2016, due to the closure of two locations and a 2.2% decrease in Luby's same-store sales. The 2.2% decrease was the result of a 1.4% decrease in guest traffic and a 0.8% decrease in average spend per guest.

     • Fuddruckers sales at company-owned restaurants decreased $2.1 million versus the first quarter fiscal 2016, due to six restaurant closings (five on a permanent basis and one on a temporary basis for remodeling) and a 1.6% decrease in same-store sales, offset by the opening of three Fuddruckers locations. The 1.6% decrease in same-store sales was the result of a 2.7% decrease in guest traffic offset by a 1.1% increase in average spend per guest.

     • Combo location sales decreased $0.4 million and represented 6.1% of total restaurant sales in the first quarter. Our sixth Combo location opened in the third quarter fiscal 2015 with a high volume of sales which was sustained through the first quarter fiscal 2016, creating a challenging comparison for first quarter fiscal 2017. The $0.4 million decrease in Combo location sales was due to that comparison and a 2.3% same-store sales decrease at the other five Combo locations.

     • Cheeseburger in Paradise sales decreased $0.4 million, or 7.8%, compared to a significant prior year same-store sales increase of 5.5%.

   • Store level profit, defined as restaurant sales plus vending revenue less cost of food, payroll and related costs, other operating expenses, and occupancy costs, was $12.6 million, or 11.7% of restaurant sales, in the first quarter compared to $16.8 million, or 14.8% of restaurant sales, during the first quarter fiscal 2016. Lower sales volumes coupled with higher other operating expenses and higher average hourly wage rates as well as the fixed cost component of payroll and related costs (mainly management labor) led to this decrease in store level profitability. Store level profit is a non-GAAP measure, and reconciliation to income from continuing operations is presented after the financial statements.

   • Culinary Contract Services revenues decreased to $4.3 million with 23 operating locations during the first quarter compared to $4.9 million with 28 operating locations during the first quarter fiscal 2016. Culinary Contract Services profit was 11.3% of Culinary Contract Services sales in the first quarter compared to 10.0% in the first quarter fiscal 2016.

   • Franchise revenue decreased $254 thousand, or 12.0%, in the first quarter compared to first quarter fiscal 2016. The decrease included (1) a $151 thousand decrease in franchise royalties due in part to the closure of franchise locations, lower international royalty income, and same-store sales declines at franchise locations and (2) an approximate $103 thousand decrease in non-royalty related fee income due to fewer openings in the first quarter compared to the first quarter fiscal 2016. In the first quarter, franchisees opened two U.S. locations (in Pennsylvania and South Carolina) and two international locations (in Panama and the Dominican Republic). Four locations also closed during the first quarter.

   • Income from continuing operations was a loss of $5.5 million, or a loss of $0.19 per diluted share, compared to a loss of $1.7 million, or a loss of $0.06 per diluted share, in the first quarter fiscal 2016. Excluding special items, loss from continuing operations was $5.3 million, or a loss of $0.18 per diluted share, in the first quarter compared to a loss of $1.9 million, or a loss of $0.07 per diluted share, in the first quarter fiscal 2016.

Item

Loss from continuing operations $ (5,514) $ (0.19) $ (1,739) $ (0.06)

Less: Net loss (gain) on disposition of property and equipment, and

provision for asset impairments 246 0.01 (184) (0.01)

Loss from continuing operations, before special items $ (5,268) $ (0.18) $ (1,923) $ (0.07)

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

2. Per share amounts are per diluted share after tax (adjustments assume an effective 34% tax rate).

We ended the first quarter with a debt balance outstanding of $39.4 million, up from $37.0 million at the end of fiscal 2016. During the first quarter, our capital expenditures were $5.0 million, compared to $5.7 million in the first quarter fiscal 2016. At the end of the first quarter, we had $1.4 million in cash and $160.6 million in total shareholders' equity.

FY17Q1

Openings

FY17Q1

Closings

Luby's Cafeterias(1) 91 - - 91

Fuddruckers Restaurants(1) 75 - (2) 73

Cheeseburger in Paradise 8 - - 8

Other restaurants(2) 1 - - 1

Total 175 - (2) 173

1. Includes 6 restaurants that are part of Combo locations

2. Other restaurants include one Bob Luby's Seafood Grill

Luby's will host a conference call on January 26, 2017 at 10:00 a.m. Central Time to discuss further its first quarter fiscal 2017 results. To access the call live, dial (412) 902-0030 and use the access code 13652944

# at least 10 minutes prior to the start time, or listen live over the Internet by visiting the events page in the investor relations section of www.lubysinc.com. For those who cannot listen to the live call, a telephonic replay will be available through February 2, 2017 and may be accessed by calling (201) 612-7415 and using the access code 13652944#. Also, an archive of the webcast will be available after the call for a period of 90 days on the "Investors" section of the Company's website.

Luby's, Inc. (NYSE: LUB) operates 173 restaurants nationally: 91 Luby's Cafeterias, 73 Fuddruckers, 8 Cheeseburger in Paradise and one Bob Luby's Seafood Grill. Luby's is the franchisor for 114 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Italy, the Dominican Republic, Panama, and Colombia. Additionally, a licensee operates 34 restaurants with the exclusive right to use the Fuddruckers proprietary marks, trade dress, and system in certain countries in the Middle East. The Company does not receive revenue or royalties from these Middle East restaurants. Luby's Culinary Contract Services provides food service management to 23 sites consisting of healthcare and corporate dining locations.

This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical fact, are "forward-looking statements" for purposes of these provisions, including the statements under the caption "Outlook" and any other statements regarding scheduled openings of units, scheduled closures of units, sales of assets, expected proceeds from the sale of assets, expected levels of capital expenditures, effects of food commodity costs, anticipated financial results in future periods and expectations of industry conditions.

Luby's cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements, and other written communications, as well as oral statements made from time to time by representatives of Luby's. The following factors, as well as any other cautionary language included in this press release, provide examples of risks, uncertainties and events that may cause Luby's actual results to differ materially from the expectations Luby's describes in such forward-looking statements: general business and economic conditions; the impact of competition; our operating initiatives; fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese and produce; increases in utility costs, including the costs of natural gas and other energy supplies; changes in the availability and cost of labor; the seasonality of Luby's business; changes in governmental regulations, including changes in minimum wages; the effects of inflation; the availability of credit; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; the continued service of key management personnel; and other risks and uncertainties disclosed in Luby's annual reports on Form 10-K and quarterly reports on Form 10-Q.