LUBY'S, INC. HOUSTON, Jan. 25, 2017 /PRNewswire/ -- Luby's, Inc. (NYSE: LUB) ("Luby's") today announced unaudited financial results for its sixteen-week first quarter fiscal 2017, which ended on December 21, 2016. Comparisons in this press release for the first quarter fiscal 2017 are referred to as "first quarter."
First Quarter Key Metrics
-- 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."
Same-Store Sales Year-Over-Year Comparison
Quarter Ended Four Quarters
Ended
-----
December 21, December 16, August 31,
2016 2015 2016
---- ---- ----
Q1 Q1 Fiscal
2017(3) 2016(3) 2016(3)
------ ------ ------
(16 weeks vs 16 weeks) (16 weeks vs 16 weeks) (52 weeks vs 52 weeks)
--------------------- --------------------- ---------------------
Luby's Cafeterias (2.2)% 1.2% 1.1%
----------------- ----- --- ---
Fuddruckers
Restaurants (1.6)% 1.3% 0.0%
----- --- ---
Cheeseburger in
Paradise (7.8)% 5.5% 0.8%
----- --- ---
Combo locations (1) (2.3)% (1.3)% (1.4)%
------------------ ----- ----- -----
Total same-store
sales (2) (2.3)% 1.4% 0.7%
---------------- ----- --- ---
(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, December 16, Change Change
2016 2015 (%)
--- ---
(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.
Reconciliation of Loss from continuing operations to Loss from continuing operations,
before special items (1,2):
Q1 FY2017 Q1 FY2016
Item Amount Per Share Amount Per Share
($000s) ($) ($000s) ($)
--- ------
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).
Balance Sheet and Capital Expenditures
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.
Restaurant Counts:
August 31, FY17Q1 FY17Q1 December 21,
2016 2016
Openings 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
Conference Call
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.
About Luby's
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.
For additional information contact:
Dennard-Lascar Associates
Rick Black / Ken Dennard
Investor Relations
713-529-6600
Luby's, Inc.
Consolidated Statements of Operations (unaudited)
(In thousands, except per share data)
------------------------------------
Quarter Ended
December 21, December 16,
2016 2015
---- ----
(16 weeks) (16 weeks)
SALES:
Restaurant
sales $108,082 $113,546
Culinary
contract
services 4,297 4,915
Franchise
revenue 1,871 2,125
Vending
revenue 159 158
--- ---
TOTAL
SALES 114,409 120,744
COSTS AND EXPENSES:
Cost
of
food 30,850 32,434
Payroll
and
related
costs 38,673 39,424
Other
operating
expenses 19,648 18,421
Occupancy
costs 6,475 6,642
Opening
costs 165 397
Cost
of
culinary
contract
services 3,811 4,422
Cost
of
franchise
operations 580 612
Depreciation
and
amortization 6,550 7,014
Selling,
general
and
administrative
expenses 13,759 13,243
Provision
for
asset
impairments 287 -
Net
loss
(gain)
on
disposition
of
property
and
equipment 85 (279)
--- ----
Total
costs
and
expenses 120,883 122,330
------- -------
LOSS
FROM
OPERATIONS (6,474) (1,586)
Interest
income 1 1
Interest
expense (602) (696)
Other
income
(expense),
net 103 (118)
--- ----
Loss
before
income
taxes
and
discontinued
operations (6,972) (2,399)
Benefit
for
income
taxes (1,458) (660)
------ ----
Loss
from
continuing
operations (5,514) (1,739)
Loss
from
discontinued
operations,
net
of
income
taxes (72) (72)
--- ---
NET
LOSS $(5,586) $(1,811)
------- -------
Loss per share from
continuing operations:
Basic $(0.19) $(0.06)
Assuming
dilution $(0.19) $(0.06)
====== ======
Loss per share from
discontinued
operations:
Basic $(0.00) $(0.00)
Assuming
dilution $(0.00) $(0.00)
====== ======
Net loss per share:
Basic $(0.19) $(0.06)
Assuming
dilution $(0.19) $(0.06)
====== ======
Weighted average shares
outstanding:
Basic 29,339 29,133
Assuming
dilution 29,339 29,133
The following table contains information derived from the Company's Consolidated Statements of Operations expressed as a percentage of sales. Percentages may not total due to rounding.
Quarter Ended
December 21, December 16,
2016 2015
---- ----
(16 weeks) (16 weeks)
Restaurant sales 94.5% 94.0%
Culinary contract services 3.8% 4.1%
Franchise revenue 1.6% 1.8%
Vending revenue 0.1% 0.1%
--- ---
TOTAL SALES 100.0% 100.0%
COSTS AND EXPENSES:
(As a percentage of restaurant
sales)
Cost of food 28.5% 28.6%
Payroll and related costs 35.8% 34.7%
Other operating expenses 18.2% 16.2%
Occupancy costs 6.0% 5.8%
Vending revenue (0.1)% (0.1)%
----- -----
Store level profit 11.7% 14.8%
(As a percentage of total sales)
Marketing and advertising expenses 2.0% 1.5%
General and administrative
expenses 10.0% 9.5%
---- ---
Selling, general and
administrative expenses 12.0% 11.0%
LOSS FROM OPERATIONS (5.7)% (1.3)%
Luby's, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
------------------------------------
December 21, August 31,
2016 2016
---- ----
(Unaudited)
ASSETS
Current Assets:
Cash and
cash
equivalents $1,413 $1,339
Trade
accounts
and
other
receivables,
net 5,665 5,919
Food and
supply
inventories 5,036 4,596
Prepaid
expenses 3,264 3,147
Assets
related
to
discontinued
operations - 1
Deferred
income
taxes 419 540
--- ---
Total
current
assets 15,797 15,542
Property
held for
sale 5,235 5,522
Assets
related
to
discontinued
operations 3,122 3,192
Property
and
equipment,
net 191,957 193,218
Intangible
assets,
net 20,630 21,074
Goodwill 1,605 1,605
Deferred
income
taxes 10,396 8,738
Other
assets 3,506 3,334
----- -----
Total
assets $252,248 $252,225
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts
payable $16,883 $17,539
Liabilities
related
to
discontinued
operations 384 412
Current
portion
of
credit
facility
debt 2,450 -
Accrued
expenses
and
other
liabilities 27,450 23,752
------ ------
Total
current
liabilities 47,167 41,703
Credit
facility
debt,
less
current
portion 36,622 37,000
Liabilities
related
to
discontinued
operations 16 17
Other
liabilities 7,843 7,752
----- -----
Total
liabilities $91,648 $86,472
======= =======
Commitments and
Contingencies
SHAREHOLDERS' EQUITY
Common
stock, 29,461,030 respectively
$0.32 and
par 29,325,754,
value; respectively;
100,000,000 shares
shares outstanding
authorized; were
shares 28,961,030
issued and
were 9,428 9,421
Paid-in
capital 30,774 30,348
Retained
earnings 125,173 130,759
Less cost
of
treasury
stock,
500,000
shares (4,775) (4,775)
------ ------
Total
shareholders'
equity 160,600 165,753
------- -------
Total
liabilities
and
shareholders'
equity $252,248 $252,225
======== ========
Luby's, Inc.
Consolidated Statements of Cash Flows (unaudited)
(In thousands)
-------------
Quarter Ended
December 21, December 16,
2016 2015
---- ----
(16 weeks) (16 weeks)
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net
loss $(5,586) $(1,811)
Adjustments to
reconcile net loss
to net cash
provided by
operating
activities:
Net
loss
(gain)
on
disposition
of
property
and
equipment 372 (279)
Depreciation
and
amortization 6,550 7,021
Amortization
of
debt
issuance
cost 67 148
Share-
based
compensation
expense 433 520
Deferred
tax
benefit (1,466) (927)
------ ----
Cash
provided liabilities
by
operating
activities
before
changes
in
operating
assets
and 370 4,672
Changes in operating
assets and
liabilities:
Decrease
in
trade
accounts
and
other
receivables 254 226
Increase
in
food
and
supply
inventories (440) (968)
Decrease
(Increase)
in
prepaid
expenses
and
other
assets (59) 364
Increase
in
accounts
payable,
accrued
expenses
and
other
liabilities 3,116 2,049
----- -----
Net
cash
provided
by
operating
activities 3,241 6,343
----- -----
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Proceeds
from
disposal
of
assets
and
property
held
for
sale 38 1,916
Decrease
in
notes
receivable - 17
Purchases
of
property
and
equipment (4,980) (5,729)
------ ------
Net
cash
used
in
investing
activities (4,942) (3,796)
------ ------
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Credit
facility
borrowings 45,700 27,000
Credit
facility
repayments (78,300) (29,500)
Proceeds
from
term
loan 35,000 -
Debt
issuance
costs (625) (42)
Proceeds
received
on
the
exercise
of
employee
stock
options - 75
--- ---
Net
cash
provided
by
(used
in)
financing
activities 1,775 (2,467)
----- ------
Net
increase
in
cash
and
cash
equivalents 74 80
Cash
and
cash
equivalents
at
beginning
of
period 1,339 1,501
----- -----
Cash
and
cash
equivalents
at
end
of
period $1,413 $1,581
====== ======
Cash paid for:
Income
taxes $ - $ -
Interest 478 520
Although store level profit, defined as restaurant sales plus vending revenue, less cost of food, payroll and related costs, other operating expenses, and occupancy costs is a non-GAAP measure, we believe its presentation is useful because it explicitly shows the results of our most significant reportable segment. The following table reconciles between store level profit, a non-GAAP measure to income (loss) from continuing operations, a GAAP measure:
Quarter Ended
December 21, December 16,
2016 2015
(16 weeks) (16 weeks)
--------- ---------
Store level
profit $12,595 $16,783
Plus:
Sales from
culinary
contract
services 4,297 4,915
Sales from
franchise
operations 1,871 2,125
Less:
Opening costs 165 397
Cost of
culinary
contract
services 3,811 4,422
Cost of
franchise
operations 580 612
Depreciation
and
amortization 6,550 7,014
Selling,
general and
administrative
expenses 13,759 13,243
Provision for
asset
impairments 287 -
Net loss
(gain) on
disposition
of property
and equipment 85 (279)
Interest
income (1) (1)
Interest
expense 602 696
Other income
(expense),
net (103) 118
Provision
(benefit) for
income taxes (1,458) (660)
------ ----
Income (loss)
from
continuing
operations $(5,514) $(1,739)
======= =======
Adjusted EBITDA
Adjusted EBITDA is defined as income (loss) from continuing operations before interest, provision (benefit) for income taxes and depreciation and amortization and excluding net gain (loss) on disposing of property and equipment, provision for asset impairments, non-cash compensation expense, and other income (expense).
Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with GAAP. We believe Adjusted EBITDA provides useful information to management and investors in valuing the Company and evaluating ongoing operating results and trends and in comparing our results to other competitors. Our management uses Adjusted EBITDA in evaluating management's performance when determining incentive compensation.
Adjusted EBITDA, as defined, may not be comparable to other similarly titled measures as computed by other companies. These measures should be considered supplemental and not a substitute or superior to other GAAP performance measures.
($ thousands) Quarter Ended
December 21, December 16,
2016 2015
(16 weeks) (16 weeks)
--------- ---------
Loss from continuing
operations $(5,514) $(1,739)
Depreciation and
amortization 6,550 7,014
Benefit for income taxes (1,458) (660)
Interest expense 602 696
Interest income (1) (1)
Other expense (income),
net (103) 118
Net loss (gain) on
disposition of property
and equipment 85 (279)
Provision for asset
impairments 287 -
Non-cash compensation
expense 577 529
--- ---
Adjusted EBITDA $1,025 $5,678
====== ======
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SOURCE Luby's, Inc.
