FORM 10-Q

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

(Mark One)

[x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31,November 21, 2001

OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________________________________ to _____________________________________________

Commission file number:  1-8308

                                     Luby's, Inc.LUBY'S, INC.
_______________________________________________________________________________
             (Exact name of registrant as specified in its charter)

             Delaware                                           74-1335253
_________________________________________________________________________________________________________________                           _________________
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

                      2211 Northeast Loop 410, P. O. Box 33069
                               San Antonio, Texas                   78265-3069
_______________________________________________________________________________________________________________________________________________________________
                      (Address of principal executive offices)      (Zip Code)

                                 210/654-9000
_______________________________________________________________________________________________________________________________________________________________
                (Registrant's telephone number, including area code)

_______________________________________________________________________________________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

                        Yes  Xx                 No
                            ___                   ___

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

              Common Stock:  22,422,943 shares outstanding as of July 13,December 27,
                             2001, (exclusive of 4,980,124 treasury shares)

                         Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 LUBY'S, INC.
                 CONSOLIDATED STATEMENTS OF INCOME

                                    (UNAUDITED)

                                   Three Months Ended      Nine Months Ended
                                            May 31,            May 31,
                                      2001         2000    2001         2000
                                     _____         ____    ____         ____
                                   (Amounts inOPERATIONS (unaudited)
                        (In thousands except per share data)

                                                         Quarters Ended
                                                   November 21,   November 30,
                                                      2001           2000
                                                   ___________    ___________
                                                    (82 days)      (91 days)

Sales                                               $121,677    $126,281  $347,796   $371,349$ 95,195       $113,900

Costs and expenses:
  Cost of food                                        30,305      32,954    88,649     93,17724,650         29,360
  Payroll and related costs                           41,254      39,255   117,840    115,46534,593         39,210
  Occupancy and other operating expenses              42,512      39,381   123,903    118,06636,384         39,712
  General and administrative expenses                  5,348          6,194
  Provision for asset impairments and store closings     ---         ---    10,199        ---
  General and administrative
    expenses                           6,415       5,244    19,437     16,105
                                     _______     _______   _______    _______
                                     120,486     116,834   360,028    342,813
                                     _______     _______   _______    _______130            755
                                                    ________       ________
                                                     101,105        115,231
                                                    ________       ________
     Income (loss) from operations                    1,191       9,447   (12,232)    28,536(5,910)        (1,331)

Interest expense                                      (3,534)     (1,645)   (8,475)    (3,954)(2,570)        (2,257)
Other income, net                                        703         573     1,479      1,872
                                     _______     _______   _______    _______448            499
                                                    ________       ________
     Income (loss) before income taxes                (1,640)      8,375   (19,228)    26,454

Income tax expense(8,032)        (3,089)

Provision (benefit) (574)      2,540    (6,730)     8,831
                                     _______     _______   _______    _______for income taxes                  (2,687)        (1,081)
                                                    ________       ________
     Net income (loss)                              $ (1,066)(5,345)      $ 5,835  $(12,498)  $ 17,623
                                     _______     _______   _______    _______(2,008)
                                                    ________       ________
Net income (loss) per share - basic and
  assuming dilution                                $(0.05)      $0.26    $(0.56)     $0.79
                                     _______     _______   _______    _______

Cash dividends per share               $0.00       $0.20     $0.00      $0.60
                                     _______     _______   _______    _______

Weighted average$   (0.24)     $   (0.09)
                                                   _________      _________
Average number of shares outstanding                  - basic                 22,423         22,420
                                                   22,422     22,420

Weighted average number of shares
  outstanding - assuming dilution     22,632      22,420    22,475     22,422_________      _________
See accompanying notes.

                            Part I - FINANCIAL INFORMATION (continued)

Item 1.  Financial Statements (continued).


                                LUBY'S, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (UNAUDITED)
                                                      May 31,(In thousands)

                                                   November 21,   August 31,
                                                      2001          2000
                                                      _______2001
ASSETS                                             (unaudited)
                                                   ___________    __________
                                                        (Thousands of dollars)

                                     ASSETS
Current assets:
  Cash and cash equivalents                          $  7,5913,046      $  6794,099
  Short-term investments                               5,935             ---22,968        19,984
  Trade accounts and other receivables                    458             403287           358
  Food and supply inventories                           3,821           3,8533,134         2,701
  Prepaid expenses                                      1,755           4,4812,542         2,765
  Income tax receivable                                 6,949           3,7497,072         4,468
  Deferred income taxes                                 2,207           1,5404,834         4,931
                                                     ________      _________________
    Total current assets                               28,716          14,70543,883        39,306

Property held for sale                                  8,230          13,1561,759         3,047
Investments and other assets                           1,896           4,85812,766         5,929
Property, plant, and equipment - at cost, net         324,186         338,124296,381       305,180
                                                     ________      ________
$363,028        $370,843Total assets                                         $354,789      $353,462
                                                     ________      ________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                   $ 16,80821,805      $ 19,843
  Dividends payable                                        ---           2,24213,696
  Accrued expenses and other liabilities               26,976          24,04033,483        34,585
                                                     ________      ________
    Total current liabilities                          43,784          46,12555,288        48,281

Long-term debt                                        (Note 5)                                123,000         116,000126,746       127,401
Deferred income taxes and other credits                 10,336          10,1622,130         2,271
Reserve for store closings                              604           1,815
Derivative financial instruments (Note 2)                1,191             ---4,441         4,506
                                                     ________      ________
Total liabilities                                     188,605       182,459
                                                     ________      ________
Shareholders' equity:
  Common stock                                          8,769         8,769
  Paid-in capital                                      27,847          27,20234,247        33,882
  Retained earnings                                   254,097         266,596229,370       234,715
  Accumulated other comprehensive income (loss)          (Note 3)                                 (774)            ---(431)         (592)
  Less cost of treasury stock                        (105,826)       (105,826)(105,771)     (105,771)
                                                     ________      ________
    Total shareholders' equity                        184,113         196,741166,184       171,003
                                                     ________      ________
$363,028        $370,843Total liabilities and shareholders' equity           $354,789      $353,462
                                                     ________      ________
See accompanying notes.

                         Part I - FINANCIAL INFORMATION (continued)

Item 1.  Financial Statements (continued).


                              LUBY'S, INC.
       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                        Nine Months(unaudited)
                             (In thousands)
                                                         Quarters Ended
                                                   May 31,November 21,   November 30,
                                                      2001           2000
                                                   ____          ____
                                                         (Thousands of dollars)___________    ___________
                                                    (82 days)     (91 days)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                  $(12,498)     $ 17,623$(5,345)      $(2,008)
  Adjustments to reconcile net income (loss )(loss) to net
    cash provided by operating activities:
      Depreciation and amortization                    17,320        16,8474,942         5,722
      Amortization of deferred loss on interest
        rate swaps                                       248             -
      Amortization of discount on convertible
        subordinated notes                               111             -
      Provision for asset impairments 10,199           ---and
        store closings                                   130           755
      Gain on disposal of property held for sale         (70)         (329)
      Loss on disposal of property, plant,
        and equipment                                     46            39
      Noncash directors' fees                             68            26
      Noncash compensation expense                       297             -
                                                     _______       _______
        Cash provided by operating activities
          before changes in operating assets
          (1,156)          ---
      Non-cash stock compensation                           558           ---and liabilities                                427         4,205
     Changes in operating assets and liabilities:
        (Increase) decrease in trade accounts and
          other receivables                               71           (18)
        (Increase) decrease in food and supply
          inventories                                   (433)         (282)
        (Increase) decrease in income tax receivable  (2,604)         (635)
        (Increase) decrease in prepaid expenses          223         2,465
        (Increase) decrease in inventory and
          other assets                                   604            14
        Increase (decrease) in accounts payable        8,109        (2,170)
        Increase (decrease) in accrued expenses
          and other liabilities                       (3,214)       (7,975)
                                                       ________      ________(1,102)        3,272
        Increase (decrease) in deferred income
          taxes and other credits                       (131)         (549)
        Increase (decrease) in reserve for
          store closings                                (195)       (1,012)
                                                     _______       _______
        Net cash provided by (used in)
          operating activities                       11,209        26,495$ 4,969       $ 5,290
                                                     _______       _______
CASH FLOWS FROM INVESTING ACTIVITIES:
  (Increase) decrease in short-term investments      $(2,984)      $     -
  Proceeds from disposal of property held for sale       6,935         1,010
  Purchases of land held for future use                     ---        (2,905)790         1,832
  Purchases of property, plant, and equipment, (13,678)      (40,827)
  Purchases of short-term investments                    (5,935)          ---
                                                       ________      ________net    (3,062)       (7,508)
                                                     _______       _______
        Net cash used inprovided by (used in) investing
          activities                                  (12,678)      (42,722)(5,256)       (5,676)
                                                     _______       _______
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under revolving credit agreement         7,000        31,000
  Dividends paid                                         (2,242)      (13,452)
  Proceeds from borrowing(payments on) long-term borrowings      (766)            -
  Proceeds from (payments on) borrowings against
    cash surrender value of officers' life insurance       policies-         3,623
  ---
                                                       ________      ________Dividends paid                                           -        (2,242)
                                                     _______       _______
        Net cash provided by (used in) financing
          activities                                    8,381        17,548(766)        1,381
                                                     _______       _______

Net increase (decrease) in cash and cash equivalents  6,912         1,321(1,053)          995
Cash and cash equivalents at beginning of period       4,099           679
                                                     286
                                                       ________      _______________       _______

Cash and cash equivalents at end of period           $ 7,5913,046       $ 1,6071,674
                                                     _______       _______
See accompanying notes.



Part I - FINANCIAL INFORMATION (continued)

Item 1.  Financial Statements (continued).


                                           LUBY'S, INC.
                       CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited)
                                          (In thousands)


Accumu- lated Other Compre- Total Common Stock hensive Share- Issued Treasury Paid-In Retained Income holders' Shares Amount Shares Amount Capital Earnings (loss) Equity _____________________________________________________________________________________________ Balance at August 31, 2001 27,403 $8,769 (4,980) $(105,771) $33,882 $234,715 $(592) $171,003 Other comprehensive income (loss), net of taxes: Reclassification adjustment for loss recognized on termination of interest rate swaps, net of taxes of $87 - - - - - - 161 161 Net income (loss) for the quarter - - - - - (5,345) - (5,345) Common stock issued under benefit plans, net of shares tendered in partial payment and including tax benefits - - - - 68 - - 68 Noncash stock compen- sation expense - - - - 297 - - 297 ________________________________________________________________________ Balance at November 21, 2001 27,403 $8,769 (4,980) $(105,771) $34,247 $229,370 $(431) $166,184 ________________________________________________________________________ See accompanying notes.
LUBY'S, INC. NOTES TO FINANCIAL STATEMENTS May 31,(unaudited) November 21, 2001 (UNAUDITED) Note 1: Basis of Presentation The accompanying unaudited financial statements are presented in accordance with the requirements of Form 10-Q and, consequently, do not include all of the disclosures normally required by accounting principles generally accepted accounting principles.in the United States. All adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods have been made. All such adjustments are of a normal recurring nature. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in Luby's annual report on Form 10-K for the year ended August 31, 2000.2001. The accounting policies used in preparing these consolidated financial statements are the same as those described in Luby's annual report on Form 10-K. Note 2: Accounting-Period Change Beginning with the 2002 fiscal year, the Company changed its accounting intervals from 12 calendar months to 13 four-week periods. To properly accommodate this change, the first period began September 1, 2001, and covered 26 days; subsequent periods cover 28 days. The first, second, third, and fourth quarters of fiscal year 2002 include 82, 84, 84, and 112 days, respectively. Fiscal year 2002 will therefore be 362 days in length compared to 365 days in fiscal year 2001. Fiscal year 2003 and most years going forward will be 364 days in length. Note 3: Derivative Financial Instruments The Company adopted Statement of Financial Accounting Standards No. 133 (FAS(SFAS 133), "Accounting for Derivative Instruments and Hedging Activities," and its amendments, Statements No. 137 and 138, on September 1, 2000. FASSFAS 133 requires that all derivative instruments be recorded on the balance sheet at fair value. ThePursuant to this standard, the Company has designated its interest rate swap agreementsInterest Rate Protection Agreements (Swaps) as cash flow hedge instruments. The swap agreements areSwaps have been used to manage exposure to interest rate movement by effectively changing the variable rate to a fixed rate. The critical terms of the interest rate swap agreementsSwaps and the interest-bearing debt associated with the swap agreements areSwaps were the same; therefore, the Company has assumed that there iswas no ineffectiveness in the hedge relationship. Changes in fair value of the interest rate swap agreements will beSwaps are recognized in other comprehensive income (loss), net of tax effects, until the hedged items are recognized in earnings. The Company has hedged its exposureDue to declining interest rate movement through June 30, 2002. At September 1, 2000, the swap agreements wererates and in a favorable position by approximately $175,000. In accordance with the transition provisions of FAS 133, the net-of-tax cumulative effect of an accounting change adjustment on September 1, 2000, was $114,000 in accumulated other comprehensive income with a deferred income tax liability of $61,000. At May 31, 2001, the fair value of the swap agreements decreased to an unfavorable position; therefore, the derivative financial instruments were adjusted to a liability of $1,191,000. Accumulated other comprehensive income (loss) was adjusted to an accumulated loss of $774,000 and the deferred income tax was adjusted to a $417,000 tax asset. As the swap agreements were deemed to be effective cash flow hedges, there was no income statement impact related to hedge ineffectiveness. In anticipation of additional future unfavorable interest rate changes, the Company unraveledterminated its swap agreementsSwaps on July 2, 2001, for a cash payment of $1,255,000.$1,255,000, including accrued interest of $163,000. In accordance with SFAS 133, the loss of $1,092,000 is being recognized as interest expense over the original term of the Swaps (through June 30, 2002). At November 21, 2001, $431,000, net of taxes of $232,000, remains in accumulated other comprehensive loss. Note 3:4: Comprehensive Income (Loss) The Company's comprehensive income (loss) is comprised of net income (loss) and adjustments to derivative financial instruments. The components of comprehensive income (loss) are as follows: Three MonthsQuarters Ended May 31,November 21, November 30, 2001 2000 ____ _____ (Thousands of dollars)___________ ___________ (82 days) (91 days) (In thousands) Net income (loss) $(1,066) $5,835$(5,345) $(2,008) Other comprehensive income, (loss), net of taxes: Net derivative income (loss), net of taxes of $123 (228) --- Reclassification adjustment for (gains) losses included in net income (loss), net of taxes of $51 95 --- _______ ______ Comprehensive income (loss) $(1,199) $5,835 _______ ______ Nine Months Ended May 31, 2001 2000 ____ _____ (Thousands of dollars) Net income (loss) $(12,498) $17,623 Other comprehensive income (loss), net of taxes: Cumulative effect of a change in accounting for derivative financial instruments upon adoption of FASSFAS 133, net of taxes of $61 - 114 --- Net derivative income (loss), net of taxes of $528 (981) ---$108 - (201) Reclassification adjustment for (gains) lossesgains included in net income (loss), net of taxes of $50 93 --- _________$10 - (20) Reclassification adjustment for loss recognized on termination of interest rate swaps, net of taxes of $87 161 - _______ _______ Comprehensive income (loss) $(13,272) $17,623$(5,184) $(2,115) _______ _______ Note 4:5: Debt At August 31, 2001, the Company had a credit facility balance of $122 million with a syndicate of four banks. Subsequent to fiscal year-end 2001, the terrorist attacks of September 11 and increased recessionary trends resulted in the Company's inability to meet its first quarterly EBITDA covenant for fiscal year 2002. Accordingly, the Company obtained a waiver and amendment to its credit agreement dated December 5, 2001, which waives its noncompliance with first-quarter EBITDA levels, resets remaining fiscal 2002 quarterly EBITDA targets, and limits capital expenditures for the year to $15 million. The Company expects to be in compliance with its revised covenants for the remainder of fiscal year 2002. During the first quarter of fiscal 2002, two payments were made which reduced the balance of the credit facility to $121.2 million. These payments were made in compliance with the amended credit agreement, which requires that the Company pay the facility down in amounts equal to all proceeds received from the sale of real and personal property. The payments were a result of two land sales that occurred during the quarter totaling $766,000. On March 9, 2001, the Company's newly appointed CEO and COO, Christopher J. Pappas and Harris J. Pappas, respectively, made commitments to loan the Company a total of $10 million in exchange for convertible subordinated notes that were funded in the fourth quarter of fiscal 2001. The notes bear interest at LIBOR plus 2%, payable quarterly, and have a stated redemption date of March 1, 2011. Interest through September 1, 2003, may be paid in a combination of cash, common stock, or both at the Company's election, subject to certain restrictions on the amount of stock issued. Notwithstanding any accrued interest that may also be converted to options, the notes are convertible into the Company's common stock at $5.00 per share, or 2,000,000 shares, at the option of the holders at any time after January 2, 2003, and prior to the stated redemption date. The conversion price on the notes was less than the market value of the Company's common stock (as determined by the closing price on the New York Stock Exchange on the date of issue). The intrinsic value of this beneficial conversion feature of $4,680,000 was recorded as a component of paid-in capital and a discount on the notes. The discount is being amortized to interest expense through the redemption date. The Company has amortized $111,000 of this discount during the quarter ended November 21, 2001. The carrying value of the notes at November 21, 2001, net of the unamortized discount, was approximately $5,512,000. Note 6: Impairment of Long-Lived Assets and Store Closings During fiscal year 2001,the current quarter, the Company recorded a pretax charge to operating costs of $10.2 million$130,000 related to employee termination costs for 11 of asset impairment charges in17 restaurants that met the Company's criteria for closure last fiscal year. During the first fiscal quarter of 2002, the employees of those 11 units received notification and each unit was subsequently closed. In accordance with StatementCompany guidelines, management periodically reviews the financial performance of Financial Accounting Standards No. 121 (FAS 121), "Accountingeach store for the Impairmentindicators of Long-Lived Assets toimpairment or indicators that closure would be Disposed of." $9.4 millionappropriate. Where indicators are present, such as three full fiscal years of the charge related to the impairment of 13 restaurant properties. These properties have experienced specificnegative cash flows or other unfavorable market conditions, that have contributed to their impairment. Thethe carrying values of the assets wereare written down to the estimated future discounted cash flows or fully written off in the case of negative future cash flows.flows anticipated in the future. Estimated future cash flows wereare based on aupon regression analysis of averages foranalyses generated from similar restaurants, discounted at the Company's weighted average cost of capital. Three of the 13 properties were designated for closure and were closed April 30, 2001. The remaining $755,000 of impairment charge was recorded in accordance with FAS 121 for assets related to surplus properties held for sale, which were written down to the lower of their historical costs or estimated net realizable values. In lateDuring fiscal 2000 the Company reviewed its restaurants from a capital strategy standpoint to determine whether the closing of certain units could positively impact sales and profitability at nearby locations while also providing capital funds from the sale of these properties to invest in other more profitable capital projects, such as food-to-go drive-thru expansions. As a result of this review and continual evaluation of possible impairments,2001, the Company recorded a pretax charge of $14.5$30.4 million during the fourth quarteras a result of fiscal 2000its reviews for store closings, associated closing costs, asset impairment chargesimpairments in accordance with FASSFAS 121 and other unusual charges.assessments of closure costs. The principal components of the 2000fiscal 2001 charge were as follows: - $7.7$11.6 million for the closing of 15 restaurants that had not met the Company's return on invested capital and sales growth requirements. Fourteen of the 15 unitsunderperforming restaurants; nine were closed by the first quarter of fiscal year 2002. (As explained below, two other restaurants were closed that will be remodeled and reopened as of February 2001, and the remaining store is planned for closure prior to August 31, 2001. Thenew concepts.) This charge included the cost to write down the properties and equipment to net realizable value and estimated costs for the settlement of lease obligations, legal and professional fees, severance costs, and other exit costs. Employee severance costs were not accrued as of August 31, 2001, but were paid out and expensed in the first quarter of fiscal 2002. - $3.2$17.0 million for asset impairmentsimpairment of six restaurant properties which13 restaurants that the Company continues to operate. The carrying values ofIn accordance with SFAS 121, the assetsproperties were written down to the estimated future discounted cash flows or fully written off in the case of negative future cash flows. Estimated future cash flows were based on a regression analysis of averages for similar restaurants, discounted at the Company's weighted average cost of capital. - $1.3$0.8 million primarily for the write-downimpairment of computer-related equipment and software.one property operated under a joint venture with Waterstreet, Inc. The write-down included the abandonment of a payroll-related software package and several point-of-sale (POS) systems. The POS systems were replaced with new touch-screen systems to provide better information and customer service, especially in the food-to-go expansions. As these items were abandoned, the remaining book value of these assets was written off. - $1.2 million additional write-down on surplus properties held for sale. These properties were written down to the lower of their historical carrying costs or estimated net realizable values. - $1.1 million related to other unusual charges. The primary component of this charge was the write-off of the remaining asset balance related tojoint venture, L&W Seafood, Inc., a joint venture originally established betweenwas terminated in 1999. This property was written down to its estimated net realizable value and was sold in fiscal year 2001. - $1.0 million associated with the write-off of assets for two locations that will be remodeled and reopened before the end of fiscal year 2002. The Company closed these units by October 31, 2001. Property that cannot be salvaged, transferred, or effectively reused has been written off. The comparative quarterly results of operations for the 15 restaurants designated for closure at August 31, 2001, were as follows: Quarters Ended November 21, November 30, 2001 2000 ___________ ___________ (82 days) (91 days) (In thousands) Sales $2,848 $4,851 Operating loss (1,317) (950) At November 21, 2001, the Company and Waterstreet, Inc. Prior to August 31, 2000, all restaurant employees of the Company were notified of the possibility of their termination due to future restaurant closures. As of May 31, 2001, approximately 300 employees have been terminated, and approximately 30 additional employees will be terminated when the remaining restaurant is closed during the coming year. The severance cost for these employees was accrued and included in the store closing charge noted above. During 1998 the Company recordedhad a similar pretax charge of $36.9 million as a result of the adoption of its strategic plan, which included the disposition, relocation, and write-down of several restaurants that had not met management's financial return expectations. The principal components of the 1998 charge were (1) $14.7 million for the closing of 14 underperforming restaurants; (2) $10.7 million for the closing and relocation of 16 restaurants to optimize their market potential; (3) $11.4 million for asset impairments of 13 restaurants which the Company continues to operate; and (4) $0.1 million additional write- down on surplus properties held for sale. At May 31, 2001, the balance in the reserve for store closings was $604,000. All material cash outlays related to the 1998 pretax charge have been made as of November 2000. It$4.4 million. Excluding lease termination settlements, it is anticipated that all material cash outlays required for the 2000 pretax chargestore closings planned as of August 31, 2001, will be made prior to August 31, 2001.2002. The following table presentsis a summary for the quarter of the types and amounts recognized as accrued expenses together with cash payments made against such accruals throughunder the period ended May 31, 2001: _____________________________________________________fiscal year 2001 plan: Reserve Balance ______________________________________________________ Lease Legal And Lease Profes- Workand Other Settlement sional forceProfessional Workforce Exit Total Costs Fees Severance Costs Reserve _____________________________________________________ (Thousands_______________________________________________________ (In thousands) As of dollars) Reserve balance at August 31, 19982001 $4,206 $ 4,537- $ 985 $ 260 $ 390 $ 6,172 Additions/transfer/- $300 $4,506 Additions (reductions) (224) 150 56 (257) (275)- - 130 - 130 Cash payments (406) (135) (244) (45) (830) _______ _______ _______ _______ _______ Reserve balance at(56) - (130) (9) (195) ______ ____ ____ ____ ______ As of November 21, 2001 $4,150 $ - $ - $291 $4,441 ______ ____ ____ ____ ______ All material cash outlays associated with prior closure plans were completed by August 31, 1999 3,907 1,000 72 88 5,067 Additions/transfers/ (reductions) 675 350 375 300 1,700 Cash payments (3,817) (975) (72) (88) (4,952) _______ _______ _______ _______ _______ Reserve balance at August 31, 2000 765 375 375 300 1,815 Additions/transfers/ (reductions) 450 (200) (55) (195) --- Cash payments (715) --- (306) (190) (1,211) _______ _______ _______ _______ _______ Reserve balance at May 31, 2001 $ 500 $ 175 $ 14 $ (85) $ 604 _______ _______ _______ _______ _______2001. Note 5. Debt The Company has a $125 million credit facility with a syndication of four banks. As of May 31, 2001, the balance outstanding under the line-of-credit agreement was $123 million. A portion of the remaining balance on the line of credit, $1.1 million, has been committed to fund obligations under letters of credit. The credit facility was amended effective June 29, 2001, to include only one financial covenant relative to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and an extension of the agreement term to April 30, 2003. Additional term extensions are also available if certain conditions are met. There is no ability to borrow additional funds under the credit facility. Per the new amendment, scheduled principal payments will be required and annual limits have been set for capital expenditures. In addition to the scheduled principal payments, the Company made a $1 million principal payment on July 6, 2001, which reduced the principal balance owed to $122 million. As part of the amended credit facility, the Company will pay interest at prime, plus an applicable margin as defined in the amendment, on all debt outstanding. Based upon the new covenant, the Company is no longer in default. Note 6:7: Related Parties A Directordirector of the Company is also the Chief Operating Officera director of an investment firm that provides investment services for the Company's profit sharing and retirement trust plan (the Plan). During the nine monthsquarter ended May 31,November 21, 2001, the Plan paid the investment firm approximately $50,000 for its services.$15,000. The recently hired Chief Executive OfficerCEO and Chief Operating OfficerCOO of the Company own a restaurant company whichthat provides services to Luby's.the Company. The services include general business consulting, basic equipment maintenance, specialized equipment fabrication, warehousing support, and warehousing support.a ground lease. The total cost of these services for the nine monthsquarter ended May 31,November 21, 2001, has been estimated at $100,000. All costs to date were incurred in the third quarter after the chief officers were hired.was $367,700. The Chief Executive OfficerCEO and the Chief Operating Officer have personally committed to loaningCOO loaned the Company a total of $10 million beforein the endform of the fiscal yearconvertible subordinated notes to support the Company's future dailyoperating cash needs. The Company received an installment toward this commitmententire balance was outstanding as of $3 million on July 2, 2001, and the remainder on July 5,November 21, 2001. The recently hired Chief Financial OfficerCFO and the Senior Vice President of AdministrationPresident-Administration provide financial and legal services to the restaurant company owned by the Chief Executive OfficerCEO and the Chief Operating OfficerCOO of the Company. CompensationCompany; compensation for the services provided by the Chief Financial OfficerCFO and the Senior Vice President of AdministrationPresident-Administration to the separate restaurant company are funded by that organization. Part I - FINANCIAL INFORMATION (continued) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.Operations Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and footnotes for the quarter ended November 21, 2001, and the audited financial statements filed on Form 10-K for the fiscal year ended August 31, 2001. Results of Operations Quarter ended November 21, 2001, compared to the quarter ended November 30, 2000 Sales decreased $18,705,000, or 16.4%, in the first quarter of fiscal 2002 compared to the first quarter of fiscal 2001. Nine fewer days in the current quarter accounted for approximately $12 million of the total sales decline. Revenues were also lower due to the closure of 30 stores since September 2000. Excluding the effect of fewer days and stores this quarter, same-store sales declined $2.6 million, or 2.7%, which was primarily pressured by recent recessionary trends. Cost of food decreased $4,710,000, or 16.0%, due primarily to the decline in sales. As a percentage of sales, food costs were slightly higher due to the emphasis on increased food quality. Payroll and related costs decreased $4,617,000, or 11.8%, due primarily to store closures and nine fewer days in the quarter. Wages as a percentage of sales increased; the Company was unable to quickly lower labor cost in response to the decrease in sales. Management initiatives to better and more promptly optimize labor are currently in development. Occupancy and other operating expenses decreased $3,328,000, or 8.4%, due primarily to store closures, but increased as a percentage of sales due to higher utility rates and higher expenditures related to improving the general condition of the restaurants. General and administrative expenses decreased $846,000, or 13.7%, due primarily to lower officer salaries and decreased legal and professional fees. The provision for asset impairments and store closings decreased $625,000, or 82.8%, primarily due to a write-down in the first quarter of fiscal year 2001. The property that was subsequently sold had been operated under L&W Seafood, Inc., a joint venture with Waterstreet that was terminated in 1999. The lower expense in the first quarter of fiscal year 2002 relates to employee termination costs for 11 of 17 restaurants that met the Company's criteria for closure in the previous fiscal year. Interest expense increased $313,000, or 13.9%, due primarily to noncash interest amortization and higher levels of debt, offset by lower interest rates and nine fewer days of interest expense in the quarter. Other income decreased $51,000, or 10.2%, due to lower gains on the sale of properties compared to the same quarter of the prior fiscal year. The income tax benefit increased $1,606,000, or 148.5%, due primarily to a greater loss incurred in the current quarter in comparison with the same quarter of the prior fiscal year. This benefit was partially offset by a lower effective tax rate of 33.5% in the current year compared to 35% in the prior year primarily due to permanent differences in non-deductible interest expense. Liquidity and Capital Resources _______________________________ Cash and cash equivalents increaseddecreased by $6,912,000$1,053,000 from the end of the preceding fiscal year to May 31,November 21, 2001. Capital expenditures for the first quarter ended November 21, 2001, were $3,062,000. All capital expenditures for fiscal 20012002 are being funded from cash flows from operations and cash equivalents, and long-term debt. Capital expenditures for the nine months ended May 31, 2001, were $13,678,000.equivalents. As of May 31, 2001,the quarter-end, the Company owned 18seven properties held for sale, including eightfive undeveloped land sites. The Company also has two18 properties held for future use. To fundCapital expenditures for fiscal 2002 are expected to approximate $15 million. The Company will focus on improving the appearance, functionality, and sales at existing restaurants. These efforts will include changing several locations to other dining concepts, where feasible. As a start, the Company plans to remodel two currently closed units. One will reopen as a new seafood restaurant. The new dining theme for the other restaurant is still under development. The Company typically carries current liabilities in excess of current assets because a substantial portion of cash generated from operating activities is reinvested in capital expenditures. At November 21, 2001, the Company had a working capital deficit of $11,405,000, in comparison to a working capital deficit of $8,975,000 at August 31, 2001. The higher deficit was primarily attributable to an increase in accounts payable of $8,109,000, due to changes in the timing of operational cutoffs and Thanksgiving holiday purchases under the Company's new 13-period fiscal year. Partially offsetting the rise in accounts payable was the improvement in cash and cash equivalents and short-term investments provided by operating activities to a combined total of $26,014,000 at the end of the first quarter of fiscal year 2002, from $24,083,000 at the end of the previous fiscal year. As of September 1, 2001, the Company had a balance of $122 million outstanding under its credit facility. Due to the events of September 11 and the resulting impact on the economy, the Company was unable to meet its first quarter fiscal 2002 EBITDA covenant requirement for its credit facility. Accordingly, the Company obtained a waiver and amendment to its credit facility dated December 5, 2001, which waives its noncompliance with EBITDA levels, resets remaining fiscal 2002 quarterly EBITDA targets, and limits capital expenditures to $15 million. During the Company required external financing and borrowed funds under a $125quarter, two payments totaling $766,000 were made to the credit facility, which brought the balance to $121.2 million line-of-credit agreement. Asas of May 31, 2001, the amount outstanding under this line of credit is $123 million. A portion of the remaining amount under the line of credit, $1.1 million, is committed to fund obligations under letters of credit.November 21, 2001. There is no ability to borrow additional funds under the credit facility. In prior fiscal years, the Company had Interest Rate SwapProtection Agreements _____________________________ The Company has two(Swaps) that effectively fixed the interest rate swap agreements (swaps) that fix the rate on a portion of the floating-rateits floating- rate debt outstanding under its revolving line of credit. The swaps fix interest at a rate of 6.50% in the notional amounts of $30 million and $15 million and both terminate as of June 30, 2002. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment to interest expense related to the debt. The related amount payable to or receivable from counterparties is included in other liabilities or assets. The fair values of these agreements are estimated by obtaining quoted market prices. The swap agreements were in an unfavorable market value position of approximately $1,191,000 as of May 31, 2001. The Company unraveledterminated its swap agreementsSwaps effective July 2, 2001, due to declining interest rates. The Company currently has a total of $131.2 million in variable-rate debt: $121.2 million under its credit facility at prime plus an applicable margin as required by the amended credit facility and $10 million in subordinated convertible notes loaned to the Company by its CEO and COO at LIBOR plus 2%. See Financial Statement Notes 3 and 5 for a cash payment of $1,255,000, in anticipation of additional future unfavorable interest rate changes.further discussion. Trends and Uncertainties _________________________ FASThe events of September 11 increased concerns over national security, fueled the development of recessionary trends, and cast uncertainty on the general economic outlook of the country. The long-term impact of these trends and uncertainties on the Company is difficult to predict and will ultimately depend on their severity, duration, and resulting effect on consumer spending. SFAS 121 requires the Company to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company considers a history of operating losses or negative cash flows and unfavorable changes in market conditions to be its main indicators of potential impairment. Assets are generally evaluated for impairment at the restaurant level. If a restaurant does not meet its financial investment objectives or continues to incur negative cash flows or operating losses, an impairment or restaurant closing charge may be recognized in future periods. The U.S. Congress is currently considering an increase in the federal minimum wage as part of an economic stimulus package. The restaurant industry is intensely competitive, and the Company may not be able to transfer all of the resulting increases in operating costs to its customers in the form of price increases. Reserve for Store Closings __________________________No additional restaurants were impaired during the first quarter of fiscal 2002. Of the 1317 restaurants impaireddesignated for closure as of August 31, 2001, 11 were closed in the first nine monthsquarter of 2001, three were designated for closure and were closed April 30, 2001. The reserve for store closings was not increased for the effect of these three restaurants as most employees transferred to nearby locations and the properties are either owned or the related leases have expired. During the nine months ended May 31, 2001, the Company had cash outlays related to the reserve, which originally resulted from write-downs taken in fiscal year 2000 and fiscal year 1998. The write-downs were the result of the Company's continuing efforts to redeploy both capital and human resources to improve the Company's financial performance and strengthen the organization. See further discussion of the 2000 and 1998 pretax write-downs in Note 4 of the Notes to Consolidated Financial Statements for the period ended May 31, 2001. All material cash outlays related to the 1998 pretax charge were made as of November 30, 2000. It is anticipated that all material cash outlays required for the 2000 pretax charge will be made prior to2002. At August 31, 2001. At May 31, 2001, the balance in the reserve for store closings was $604,000, which relates$4.5 million. During the quarter, the Company paid $56,000 in lease settlement costs and $9,000 in other exit costs. The Company also charged to the 2000 pretax charge. The following table presents a summaryreserve, and subsequently paid before the end of the types and amounts recognized as accrued expenses together with cash payments made against such accruals forquarter, $130,000 in employee termination costs. After the nine months ended May 31, 2001: _____________________________________________________ Legal And Lease Profes- Work Other Settlement sional force Exit Total Costs Fees Severance Costs Reserve _____________________________________________________ (Thousands of dollars) Reserve balance at August 31, 2000 $ 765 $ 375 $ 375 $ 300 $ 1,815 Additions/transfers/ (reductions) 450 (200) (55) (195) --- Cash payments (715) --- (306) (190) (1,211) _______ _______ _______ _______ _______ Reserve balance at February 28, 2001 $ 500 $ 175 $ 14 $ (85) $ 604 _______ _______ _______ _______ _______ Results of Operations _____________________ Quarter ended May 31, 2001, compared to the quarter ended May 31, 2000 Sales decreased $4,604,000, or 3.6%, due to the closing of three restaurants in fiscal year 2000 and 17 restaurants in fiscal year 2001; this decrease was partially offset by the opening of 11 new restaurants during fiscal year 2000 and one restaurant in fiscal year 2001. Same-store sales declined 0.4% during the quarter at restaurants opened over 18 months. Additionally, in April 2001, the Company effected a 50 cent price increase on its signature Lu Ann Plate. The bundled offerings of the Luby's Platter and the "Big2Do" were in turn discontinued. Cost of food decreased $2,649,000, or 8.0%, due primarily to the decline in sales. As a percentage of sales, food costs were lower due to the move from deeply discounted bundled offerings. Payroll and related costs increased $1,999,000, or 5.1%, due to higher hourly labor costs and higher workers' compensation costs. Occupancy and other operating expenses increased $3,131,000, or 8.0%, due primarily to increased utility costs due to higher rates, higher property taxes related to new stores and remodels, higher expenditures related to improving the general condition of the restaurants, and increased management compensation. In addition, advertising expense was higher due to the timing of expenditures. General and administrative expenses increased $1,171,000, or 22.3%, due primarily to higher officer salaries due to non-cash compensation related to new management stock options and increased legal and professional fees related to the debt restructuring. These increases were partially offset by lower manager trainee salaries due to fewer trainees and lower travel-related costs. Interest expense increased $1,889,000, or 114.8%, due to higher borrowings under the line-of-credit agreement and higher interest rates. Other income increased $130,000 due to higher gains on the sale of properties. The income tax benefit increased $3,114,000, or 122.6%, due primarily to lower income before income taxes. This was also raised by an increasechanges in the effective income tax rate from 30.3%reserve noted here, the balance decreased to 35.0%. In the prior year, the Company settled several tax items favorably which contributed to a lower effective tax rate. Nine months ended May 31, 2001, compared to the nine months ended May 31, 2000 ______________________________________________________________________________ Sales decreased $23,553,000, or 6.3%, due to the closing$4.4 million as of three restaurants in fiscal 2000 and 17 restaurants in fiscal year 2001; this decrease was partially offset by the opening of 11 new restaurants during fiscal 2000 and one restaurant in fiscal yearNovember 21, 2001. Excluding a leap day in fiscal year 2000, same store sales declined 4.5% during the nine-month period at restaurants opened over 18 months. Additionally, in April 2001, the Company effected a 50 cent price increase on its signature Lu Ann Plate. The bundled offerings of the Luby's Plate and the "Big2Do" were in turn discontinued. Cost of food decreased $4,528,000, or 4.9%, due primarily to the decline in sales. As a percentage of sales, food costs were lower due to the move from deeply discounted bundled offerings. Payroll and related costs increased $2,375,000, or 2.1%, primarily due to higher hourly labor costs and higher workers' compensations costs. Occupancy and other operating expenses increased $5,837,000, or 4.9%, due primarily to increased utility costs due to higher rates and higher expenditures related to improving the general condition of the restaurants. The provision for asset impairments of $10,199,000 during the current year relates the pretax charge to operating costs which resulted from asset impairment charges in accordance with the Statement of Financial Accounting Standards No. 121 (FAS121), "Accounting for the Impairment of Long Lived Assets to be Disposed of." See Note 4. General and administrative expenses increased $3,332,000, or 20.7%, due primarily to higher officers' salaries related to incentive options6 for new executive management, as well as a separation agreement negotiated with Luby's former President and CEO, increased consulting services, and higher legal and professional fees related to the proxy and debt restructuring. These increases were offset by lower profit sharing expense. Interest expense increased $4,521,000, or 114.3%, from the first nine months of fiscal 2000 due to higher borrowings under the line-of-credit agreement and higher interest rates. Other income decreased $393,000 due primarily to property tax late payment penalties and other miscellaneous costs. These decreases were offset by higher gains on property sales. The income tax benefit increased $15,561,000, or 176.2%, due primarily to lower income before income taxes. This was also raised by a slight increase in the effective income tax rate from 33.4% to 35.0%. In the prior year, the Company settled several items favorably which contributed to a lower effective tax ratefurther discussion. Forward-Looking Statements The Company wishes to caution readers that various factors could cause the actual results of the Company 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 (including the preceding sections of this Management's Discussion and Analysis), as well as oral statements made from time to time by representatives of the Company. Except for historical information, matters discussed in such oral and written communications are forward-looking statements that involve risks and uncertainties, including but not limited to general business conditions, the impact of competition, the success of operating initiatives, changes in the cost and supply of food and labor, the seasonality of the Company's business, taxes, inflation, governmental regulations, and the availability of credit, as well as other risks and uncertainties disclosed in periodic reports on Form 10-K. Item 3. Quantitative10-K and Qualitative Disclosure about Market Risk Excluding the interest rate swap agreements (swaps) in the combined notional amount of $45 million, the Company borrowed under its revolving credit agreement at prime or other rate options available at the time of borrowing. The other rate options were increased or decreased according to the Company's performance in comparison to existing bank covenants. As of May 31, 2001, the total amount of debt subject to interest rate fluctuations was $78 million under its revolving credit agreement. A 1% change in interest rates would result in an increase or decrease in interest expense of $780,000 per year.Form 10-Q. Part II - OTHER INFORMATION (continued) Item 6.4. Exhibits and Reports on Form 8-K. (a)8-K A. Exhibits 3(a) - Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference). 3(b) - Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 4(a) - Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1 8308,1-8308, and incorporated herein by reference). 4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the Company's QuarterlQuarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) - Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) - Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) - Amendment No. 4 dated March 8, 2001, to Rights Agreement dated April 16, 1991 (filed as Exhibit 99.1 to the Company's Report on Form 8 A12B/8-A12B/A on March 22, 2001, and incorporated herein by reference). 4(f) - Credit Agreement dated February 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(e) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 4(g) - First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(h) - ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) - ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(j) - Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(k) - Third Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Certain Lenders, and Bank of America, N.A. (filed as Exhibit 4(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). 4(l) - Fourth Amendment to Credit Agreement dated October 27, 2000,July 9, 2001, among Luby's, Inc., Bank of America, N.A., and other creditors of its bank group.group (filed as Exhibit 4(l) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(m) - Deed of Trust, Assignment, Security Agreement, and Financing Statement dated July 2001, executed as part of the Fourth Amendment to Credit Agreement (filed as Exhibit 4(m) to the Credit Agreement.Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(n) - Subordination and Intercreditor Agreement dated June 29, 2001, between Harris J. Pappas and Christopher J. Pappas, Bank of America, N.A. (asAgreement [as the bank group agent)agent], and Luby's, Inc. (filed as Exhibit 4(n) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(o) - Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $1,500,000.00$1,500,000 (filed as Exhibit 4(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(p) - Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $1,500,000.00.$1,500,000 (filed as Exhibit 4(p) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(q) - Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $3,500,000.00.$3,500,000 (filed as Exhibit 4(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(r) - Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $3,500,000.00.$3,500,000 (filed as Exhibit 4(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(s) - Fifth Amendment to Credit Agreement dated December 5, 2001, among Luby's, Inc., Bank of America, and other creditors of its bank group (filed as Exhibit 4(s) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(a) - Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference).* 10(b) - Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(c) - Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference).* 10(d) - Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(e) - Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference).* 10(f) - Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(g) - Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(h) - Amended and Restated Nonemployee Director Stock Option Plan of Luby's, Inc. approved by the shareholders of Luby's, Inc. on January 14, 2000 (filed as Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2000, and incorporated herein by reference).* 10(i) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996 (filed as Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference).* 10(j) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(k) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(l) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999 (filed as Exhibit 10(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference.)* 10(m) - Severance Agreement between Luby's, Inc. and Barry J.C. Parker dated December 19, 2000 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 2000, and incorporated herein by reference).reference.)* 10(n) - Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(o) - Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference).* 10(p) - Form of Change in Control Agreement entered into between Luby's, Inc., and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference).* 10(q) - Luby's, Inc. Deferred Compensation Plan effective June 1, 1999 (filed as Exhibit 10(cc) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference).* 10(r) - Registration Rights Agreement dated March 9, 2001, by and among Luby's, Inc., Christopher J. Pappas, and Harris J. Pappas (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herebyherein by reference). 10(s) - Purchase Agreement dated March 9, 2001, by and among Luby's, Inc., Harris J. Pappas, and Christopher J. Pappas (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference). 10(t) - Employment Agreement dated March 9, 2001, between Luby's, Inc. and Christopher J. Pappas (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(u) - Employment Agreement dated March 9, 2001, between Luby's, Inc. and Harris J. Pappas (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(v) - Luby's, Inc. Incentive Bonus Plan for Fiscal 2001 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference).* 10(w) - Luby's, Inc. Stock Option granted to Christopher J. Pappas on March 9, 2001.2001 (filed as Exhibit 10(w) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference).* 10(x) - Luby's, Inc. Stock Option granted to Harris J. Pappas on March 9, 2001 (filed as Exhibit 10(x) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference).* 10(y) - Affiliate Services Agreement dated August 31, 2001, by and among Luby's, Inc., Christopher J. Pappas, Harris J. Pappas, Pappas Restaurants, L. P., and Pappas Restaurants, Inc. (filed as Exhibit 10(y) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(z) - Ground Lease dated March 25, 1994, by and between Luby's Cafeterias, Inc. and PHCG Investments, as amended by Lease Amendment dated July 6, 1994 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(aa)- Lease Agreement dated June 1, 2001, by and between Luby's, Inc. and Pappas Restaurants, Inc. (filed as Exhibit 10(aa) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(bb)- Final Severance Agreement and Release between Luby's, Inc. and Alan M. Davis dated July 20, 2001 (filed as Exhibit 10(bb) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). While in search for new executive management, the Company entered into an employment agreement with Mr. Davis in January 2001. The value of that one-year contract was a year's salary upon termination. After new management was secured, the Company finalized the exhibited agreement that provides for the payment of monthly consulting fees to Mr. Davis until July 2002, but releases the Company from all prior employment commitments.* 10(cc)- Consultant Agreement between Luby's Restaurants Limited Partnership and Alan M. Davis dated July 20, 2001 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference).* 11 - Statement re computation of per share earnings. 99(a) - Corporate Governance Guidelines of Luby's, Cafeterias, Inc., as amended July 20, 200026, 2001 (filed as Exhibit 99(a) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000,2001, and incorporated herein by reference). *Denotes management contract or compensatory plan or arrangement. (b)B. Reports on Form 8-K The Company filed a reportNo reports on Form 8-K dated March 15, 2001, relating tohave been filed during the employment of Harris J. and Christopher J. Pappas, the agreement of Messrs. Pappas to purchase $10 million in subordinated convertible notes, the election of Messrs. Pappas to the Board of Directors of the Company, and an amendment to the Company's shareholder right plan.quarter for which this report is filed. 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 thereunto duly authorized. LUBY'S, INC. (Registrant) By: /s/CHRISTOPHER/s/Christopher J. PAPPAS ________________________________Pappas ________________________ Christopher J. Pappas President and Chief Executive Officer By: /s/ERNEST PEKMEZARIS :________________________________/s/Ernest Pekmezaris ________________________ Ernest Pekmezaris Senior Vice President and Chief Financial Officer Dated: July 16, 2001January 3, 2002 EXHIBIT INDEX Number Document Page 3(a) - Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference). 3(b) - Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference). 4(a) - Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1 8308,1-8308, and incorporated herein by reference). 4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) - Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) - Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) - Amendment No. 4 dated March 8, 2001, to Rights Agreement dated April 16, 1991 (filed as Exhibit 99.1 to the Company's Report on Form 8- A12B/8-A12B/A on March 22, 2001, and incorporated herein by reference). 4(f) - Credit Agreement dated February 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(e) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 4(g) - First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(h) - ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) - ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(j) - Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(k) - Third Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Certain Lenders, and Bank of America, N.A. (filed as Exhibit 4(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). 4(l) - Fourth Amendment to Credit Agreement dated October 27, 2000,July 9, 2001, among Luby's, Inc., Bank of America, N.A., and other creditors of its bank group.group (filed as Exhibit 4(l) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(m) - Deed of Trust, Assignment, Security Agreement, and Financing Statement dated July 2001, executed as part of the Fourth Amendment to Credit Agreement (filed as Exhibit 4(m) to the Credit Agreement.Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(n) - Subordination and Intercreditor Agreement dated June 29, 2001, between Harris J. Pappas and Christopher J. Pappas, Bank of America, N.A. (asAgreement [as the bank group agent)agent], and Luby's, Inc. (filed as Exhibit 4(n) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(o) - Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $1,500,000.00.$1,500,000 (filed as Exhibit 4(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(p) - Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $1,500,000.00.$1,500,000 (filed as Exhibit 4(p) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(q) - Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $3,500,000.00.$3,500,000 (filed as Exhibit 4(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(r) - Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $3,500,000.00.$3,500,000 (filed as Exhibit 4(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference). 4(s) - Fifth Amendment to Credit Agreement dated December 5, 2001, among Luby's, Inc., Bank of America, and other creditors of its bank group (filed as Exhibit 4(s) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(a) - Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference).* 10(b) - Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(c) - Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference).* 10(d) - Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(e) - Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference).* 10(f) - Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(g) - Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(h) - Amended and Restated Nonemployee Director Stock Option Plan of Luby's, Inc. approved by the shareholders of Luby's, Inc. on January 14, 2000 (filed as Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2000, and incorporated herein by reference).* 10(i) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996 (filed as Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference).* 10(j) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(k) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(l) - Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999 (filed as Exhibit 10(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference.)* 10(m) - Severance Agreement between Luby's, Inc. and Barry J.C. Parker dated December 19, 2000 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 2000, and incorporated herein by reference).reference.)* 10(n) - Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(o) - Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference).* 10(p) - Form of Change in Control Agreement entered into between Luby's, Inc., and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference).* 10(q) - Luby's, Inc. Deferred Compensation Plan effective June 1, 1999 (filed as Exhibit 10(cc) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference).* 10(r) - Registration Rights Agreement dated March 9, 2001, by and among Luby's, Inc., Christopher J. Pappas, and Harris J. Pappas (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herebyherein by reference). 10(s) - Purchase Agreement dated March 9, 2001, by and among Luby's, Inc., Harris J. Pappas, and Christopher J. Pappas (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference). 10(t) - Employment Agreement dated March 9, 2001, between Luby's, Inc. and Christopher J. Pappas (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(u) - Employment Agreement dated March 9, 2001, between Luby's, Inc. and Harris J. Pappas (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(v) - Luby's, Inc. Incentive Bonus Plan for Fiscal 2001 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference).* 10(w) - Luby's, Inc. Stock Option granted to Christopher J. Pappas on March 9, 2001.2001 (filed as Exhibit 10(w) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference).* 10(x) - Luby's, Inc. Stock Option granted to Harris J. Pappas on March 9, 2001 (filed as Exhibit 10(x) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2001, and incorporated herein by reference).* 10(y) - Affiliate Services Agreement dated August 31, 2001, by and among Luby's, Inc., Christopher J. Pappas, Harris J. Pappas, Pappas Restaurants, L. P., and Pappas Restaurants, Inc. (filed as Exhibit 10(y) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(z) - Ground Lease dated March 25, 1994, by and between Luby's Cafeterias, Inc. and PHCG Investments, as amended by Lease Amendment dated July 6, 1994 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(aa)- Lease Agreement dated June 1, 2001, by and between Luby's, Inc. and Pappas Restaurants, Inc. (filed as Exhibit 10(aa) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). 10(bb)- Final Severance Agreement and Release between Luby's, Inc. and Alan M. Davis dated July 20, 2001 (filed as Exhibit 10(bb) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference). While in search for new executive management, the Company entered into an employment agreement with Mr. Davis in January 2001. The value of that one-year contract was a year's salary upon termination. After new management was secured, the Company finalized the exhibited agreement that provides for the payment of monthly consulting fees to Mr. Davis until July 2002, but releases the Company from all prior employment commitments.* 10(cc)- Consultant Agreement between Luby's Restaurants Limited Partnership and Alan M. Davis dated July 20, 2001 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2001, and incorporated herein by reference).* 11 - Statement re computation of per share earnings. 99(a) - Corporate Governance Guidelines of Luby's, Cafeterias, Inc., as amended July 20, 200026, 2001 (filed as Exhibit 99(a) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000,2001, and incorporated herein by reference). *Denotes management contract or compensatory plan or arrangement. (b) Reports on Form 8-K The Company filed a report on Form 8-K dated March 15, 2001, relating to the employment of Harris J. and Christopher J. Pappas, the agreement of Messrs. Pappas to purchase $10 million in subordinated convertible notes, the election of Messrs. Pappas to the Board of Directors of the Company, and an amendment to the Company's shareholder right plan.