Exhibit 99
Luby's Announces Strong Third Quarter Results;
Company Increases Same-Store Sales 6.5 Percent and Reduces Debt $16.8 Million
HOUSTON--(BUSINESS WIRE)--June 9, 2005--Luby's, Inc. (NYSE:LUB)
today announced financial results for its third quarter of fiscal
2005, which ended on May 4, 2005.
Sales in the third quarter were $77.0 million, an increase of 6.5%
compared to the third quarter of fiscal 2004. All of the Company's
sales during the third quarter were characterized as same-store sales.
Net income in the third quarter increased to $3.7 million, or $0.15
per share fully diluted, compared to $375,000, or $0.02 per share
fully diluted, in the third quarter of fiscal 2004.
Luby's reduced its total debt by $16.8 million in the third
quarter of fiscal 2005 by utilizing cash generated from operations and
proceeds from real estate sales. In April the Company repaid and
terminated its term debt facility. As of May 4, 2005 the balance of
the Company's revolving line of credit was $29.8 million.
"We are pleased with the strong financial results for the third
quarter as we increased same-store sales, grew net income and reduced
debt," said Chris Pappas, President and CEO. "I am proud of the
operational improvements we are making throughout the organization
that are having a positive effect for our customers and on our bottom
line."
Income from continuing operations was $6.1 million, an increase of
128.6% compared to $2.7 million for the third quarter of fiscal 2004.
EBITDA in the third quarter was $9.8 million, an increase of 25.8%
compared to EBITDA of $7.8 million in the third quarter of fiscal
2004.
Operating expenses in the third quarter were $70.4 million, an
increase of 3.8% compared to the same quarter last year. Total prime
costs of food and labor in the third quarter were 51.4% of sales, an
improvement compared to 53.1% of sales in the same quarter last year.
The improvement in food costs came from the Company's ability to
partially offset higher commodity prices for beef, poultry and dairy
by promoting combination meals with favorable cost structures. The
improvement in labor costs was the result of enhanced productivity due
to higher sales and effective labor deployment. Other operating
expenses were $23.2 million in the third quarter of fiscal 2005, an
increase of $1.2 million compared to the same quarter of fiscal 2004.
This increase was driven primarily by higher advertising costs
associated with the Company's television marketing campaign, increased
credit card fees, and higher store management compensation expense due
to increased incentive pay.
"In the third quarter we introduced new menu items that were well
received by our customers and we began airing new television
commercials that focused on our talented chefs, fresh food and 'made
from scratch' recipes," continued Pappas. "The hard work of our
employees and the high quality of the food and service that we deliver
to our customers is providing us with these solid financial results."
Conference Call
The company will host a conference call at 10:00 a.m. Central on
June 9, 2005 to discuss financial results for the quarter. Those
interested in participating may call 866-613-5217 and use the pin code
6720611. A replay of the call will be available approximately two
hours following the call through June 16, 2005. The replay number is
866-453-6660 and the pin code is 200023.
About Luby's
Luby's provides its customers with delicious, home-style food,
value pricing, and outstanding customer service at its 133 restaurants
in Dallas, Houston, San Antonio, the Rio Grande Valley, and other
locations throughout Texas and other states. For more information
about Luby's, visit the Company's Web site at www.lubys.com.
Prior period results have been reclassified to show the
retroactive effect of discontinued operations per the new business
plan. Reclassification facilitates more meaningful comparability to
the Company's current information. As stores are closed in the future
and presented in discontinued operations, quarterly and annual
financial statements, where applicable, will be reclassified for
further comparability.
Consolidated Statements of Operations (unaudited)
-------------------------------------------------
(In thousands except per share data)
Quarter Ended Three Quarters Ended
May 4, May 5, May 4, May 5,
2005 2004 2005 2004
(Restated) (Restated)
------------------------------------------
(84 days) (84 days) (252 days) (252 days)
SALES $77,029 $72,345 $219,093 $207,563
------------------------------------------
COSTS AND EXPENSES:
Cost of food 20,365 19,245 59,309 55,632
Payroll and related costs 19,251 19,143 56,496 56,816
Other operating expenses 23,202 21,959 68,799 64,188
Depreciation and
amortization 3,425 3,707 10,602 11,425
Relocation and voluntary
severance costs 75 - 655 -
General and
administrative expenses 4,455 4,333 13,238 14,045
Provision for (reversal of)
asset impairments
and restaurant closings (367) (569) (396) 456
------------------------------------------
70,406 67,818 208,703 202,562
------------------------------------------
INCOME FROM OPERATIONS 6,623 4,527 10,390 5,001
Interest expense (773) (2,060) (2,435) (6,437)
Other income, net 269 209 459 702
------------------------------------------
Income (loss) from
continuing operations
before income taxes 6,119 2,676 8,414 (734)
Provision (benefit) for
income taxes - - - -
------------------------------------------
Income (loss) from
continuing operations 6,119 2,676 8,414 (734)
Discontinued operations (2,415) (2,301) (3,106) (8,252)
------------------------------------------
NET INCOME (LOSS) $3,704 $375 $5,308 $(8,986)
==========================================
Income (loss) per share -
before discontinued
operations - basic $0.27 $0.12 $0.37 $(0.03)
- assuming
dilution(a) 0.24 0.12 0.34 (0.03)
==========================================
Loss per share - from
discontinued operations
- basic $(0.11) $(0.10) $(0.14) $(0.37)
- assuming
dilution(a) (0.09) (0.10) (0.12) (0.37)
==========================================
Net income (loss) per share
- basic $0.16 $0.02 $0.23 $(0.40)
- assuming
dilution(a) 0.15 0.02 0.22 (0.40)
==========================================
Weighted average shares
outstanding:
- basic 22,632 22,470 22,578 22,470
- assuming
dilution(a) 26,671 22,652 26,635 22,470
(a) In loss periods, earnings per share assuming dilution equals basic
earnings per share since potentially dilutive securities are
antidilutive.
Consolidated Balance Sheets
---------------------------
(In thousands, except share and per share amounts)
May 4, August 25,
2005 2004
(Restated)
-----------------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $5,995 $3,311
Short-term investments 2,284 2,284
Trade accounts and other receivables, net 252 101
Food and supply inventories 2,037 2,092
Prepaid expenses 1,189 1,028
Deferred income taxes 256 1,073
-----------------------
Total current assets 12,013 9,889
Property, plant, and equipment, net 187,786 194,042
Property held for sale 11,267 24,594
Investments and other assets 1,797 3,756
-----------------------
Total assets $212,863 $232,281
=======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $15,129 $15,888
Accrued expenses and other liabilities 16,438 18,006
-----------------------
Total current liabilities 31,567 33,894
Credit facility debt 29,800 28,000
Term debt - 23,470
Convertible subordinated notes, net-related
party 1,964 2,091
Other liabilities 9,107 9,715
Deferred income taxes 4,368 5,061
Reserve for restaurant closings 500 500
-----------------------
Total liabilities 77,306 102,731
-----------------------
SHAREHOLDERS' EQUITY
Common stock, $.32 par value; authorized
100,000,000 shares, issued 27,539,067 shares
at May 4, 2005 and 27,410,567 shares at August
25, 2004, respectively 8,812 8,771
Paid-in capital 43,567 43,564
Retained earnings 187,294 181,986
Less cost of treasury stock, 4,902,209 shares
at May 4, 2005 and 4,933,063 shares at August
25, 2004 (104,116) (104,771)
-----------------------
Total shareholders' equity 135,557 129,550
-----------------------
Total liabilities and shareholders' equity $212,863 $232,281
=======================
The Company's operating performance is evaluated using several
measures. One of those measures, EBITDA, is a non-GAAP financial
measure that is derived from the Company's Income (Loss) From
Operations, which is a GAAP measurement. EBITDA has historically been
used by the Company's lenders to measure compliance with certain
financial debt covenants and the Company believes that EBITDA provides
a meaningful measure of liquidity, providing additional information
regarding the Company's cash earnings from ongoing operations and the
Company's ability to service its long-term debt and other fixed
obligations. The Company's senior debt agreements define EBITDA as the
consolidated income (loss) from operations set forth in the Company's
consolidated statements of operations before depreciation,
amortization, other noncash expenses, interest expense, taxes, noncash
income and extraordinary gains or losses, and other nonrecurring items
of income or expense as approved by the required lenders.
The following table reconciles the Company's non-GAAP financial
measure, EBITDA, with Income (Loss) from Operations, prepared in
accordance with GAAP.
Quarter Ended Three Quarters Ended
-------------------------------------------
May 4, May 5, May 4, May 5,
2005 2004 2005 2004
(Restated) (Restated)
-------------------------------------------
(84 days) (84 days) (168 days) (168 days)
(In thousands)
Income from operations $6,623 $4,527 $10,390 $5,001
Plus excluded items:
Reversal of provision
for asset impairments
and restaurant closings (367) (569) (396) 456
Relocation and voluntary
severance costs 75 - 655 -
Depreciation and
amortization 3,425 3,707 10,602 11,425
Noncash executive
compensation expense - 91 - 679
-------------------------------------------
EBITDA $9,756 $7,756 $21,251 $17,561
===========================================
While the Company and many in the financial community consider
EBITDA to be an important measure of operating performance, it should
be considered in addition to, but not as a substitute for or superior
to, other measures of financial performance prepared in accordance
with U.S. generally accepted accounting principles, such as operating
income, net income and cash flow from operating activities. In
addition, the Company's definition of EBITDA is not necessarily
comparable to similarly titled measures reported by other companies.
The company wishes to caution 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 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 and Form 10-Q.
CONTACT: Luby's, Inc., Houston
Rick Black, 713-329-6808