Exhibit 99
LUBY'S ANNOUNCES FOURTH QUARTER RESULTS
SAME-STORE SALES GROWTH OF 7.2 PERCENT
HOUSTON, Oct. 18 /PRNewswire-FirstCall/ -- Luby's, Inc. (NYSE: LUB) today
announced unaudited financial results for its fourth quarter and fiscal 2005,
which ended on August 31, 2005. Fiscal year 2005 was a 53 week year for Luby's,
with the extra week occurring in the fourth quarter. The fourth quarter of
fiscal 2005 was a 17 week period compared to a 16 week period in the fourth
quarter of fiscal 2004.
Sales in the fourth quarter of fiscal 2005 were $105.4 million, an increase
of 13.8% compared to the fourth quarter of fiscal 2004. Excluding the additional
week, same-store sales growth for the fourth quarter of fiscal 2005 were 7.2%.
All of the Company's sales during the fourth quarter were characterized as
same-store sales. The Company reported a net loss of $1.9 million, or $0.08 per
share fully diluted, in the fourth quarter of fiscal 2005 compared to net income
of $3.0 million, or $0.13 per share fully diluted, in the fourth quarter of
fiscal 2004. The fourth quarter net loss in fiscal 2005 was primarily attributed
to the one time non-cash charge of $8.0 million to net income in the fourth
quarter. This charge represented the write-off of the unamortized portion of the
discount associated with the conversion feature of the subordinated convertible
notes held by Chris and Harris Pappas, which were converted to common stock in
August 2005.
Luby's reduced its outstanding debt by $16.3 million during the fourth
quarter and decreased its total debt to $13.5 million as of August 31, 2005. The
Company also has a new three year, unsecured revolving credit facility in the
amount of $45 million with the capacity to expand up to $60 million, which
replaced the Company's prior $50 million secured revolving line of credit.
"We are pleased to announce our seventh consecutive quarter and second
consecutive fiscal year of same-store sales growth," said Chris Pappas,
President and CEO. "Financially, we have reduced total debt, restructured our
credit facility, reduced our interest rates and created greater flexibility for
the Company. Operationally we remain committed to enhancing our restaurants,
increasing same store-sales and improving our customers' dining experience."
Income from operations in the 17 week fourth quarter fiscal 2005 was $9.4
million, an increase of 192.9% compared to $3.2 million for the fourth quarter
of fiscal 2004. EBITDA in the 17 week fourth quarter fiscal 2005 was $13.6
million, an increase of 52.3% compared to EBITDA of $9.0 million in the fourth
quarter of fiscal 2004.
Total prime costs of food and labor in the fourth quarter of fiscal 2005
were 61.3% of sales, an improvement compared to 65.5% in the fourth quarter of
fiscal 2004. 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 primarily the result of a reduction in worker compensation
expense and enhanced productivity due to higher sales and effective labor
deployment. Other operating expenses were 18.6% of sales in the fourth quarter
of fiscal 2005 compared to 18.6% of sales in the same quarter of fiscal 2004.
General and Administrative costs were 7.1% of sales in the fourth quarter of
2005 compared to 6.2% of sales in the fourth quarter of fiscal 2004. This
increase was driven by increased professional service costs related to Sarbanes
Oxley and the implementation of new technical systems.
Fiscal year 2005 sales were $322.2 million, an increase of 8.2% compared to
$297.8 million in fiscal 2004. Excluding the additional week in 2005, same-store
sales growth for fiscal 2005 was 6.1%. All of the Company's sales during fiscal
2005 were characterized as same-store sales. Net income in fiscal 2005 was $3.4
million, or $0.15 per share fully diluted, compared to a loss of $6.0 million,
or $0.26 per share fully diluted, in fiscal 2004.
Income from operations in the 53 week fiscal year 2005 was $19.8 million, an
increase of 139.8% compared to $8.2 million in fiscal 2004. EBITDA in the 53
week fiscal year 2005 was $34.8 million, an increase of 31.7% compared to EBITDA
of $26.4 million in fiscal 2004.
"Fiscal 2005 was a year of strong improvement for Luby's financial results
which were a direct result of our employee's hard work over the last four years
implementing efficiencies into the business and improving execution," said Chris
Pappas, President and CEO. "In fiscal 2006 we will continue our focus on
same-store sales growth in our existing units while developing two new stores
that will open in fiscal 2007."
Conference Call
The company will host a conference call at 10:00 a.m. Central on October 18,
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
October 25, 2005. The replay number is (866) 453-6660 and the pin code is
206511. A live audio webcast of the conference call will be available via the
Company's website at http://www.lubys.com/aboutusEvents.asp for all interested
parties to listen online. A replay of the webcast will also be available on the
Company's website soon after the call is concluded.
About Luby's
Luby's provides its customers with delicious, home-style food, value
pricing, and outstanding customer service at its 131 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
website at http://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.
Certain reclassifications of prior period results have been made to conform
to current year presentation. In this regard, store management compensation has
been reclassified from "Other Operating Expenses" to "Payroll and Related
Costs" to provide comparability to financial results reported by our peers in
the industry. These amounts were $11.1 million and $9.7 million for the quarters
ended August 31, 2005 and August 25, 2004 respectively. These amounts were $33.7
million and $30.8 million for the fiscal years ended August 31, 2005 and August
25, 2004 respectively.
Consolidated Statements of Operations (unaudited)
(In thousands except per share data)
Quarter Ended Fiscal Year Ended
---------------------------- ----------------------------
August 31, August 25, August 31, August 25,
2005 2004 2005 2004
(119 days) (112 days) (371 days) (364 days)
------------ ------------ ------------ ------------
SALES $ 105,423 $ 92,646 $ 322,151 $ 297,849
COSTS AND EXPENSES:
Cost of food 27,641 24,941 86,280 79,923
Payroll and related
costs 37,028 35,784 115,481 112,961
Other operating expenses 19,598 17,258 64,796 59,447
Depreciation and
amortization 4,475 4,938 15,054 16,259
Relocation and voluntary
severance costs 14 860 669 860
General and administrative
expenses 7,513 5,703 20,750 19,748
(Reversal of) Provision
for asset impairments
and restaurant closings (236) (44) (632) 413
96,033 89,440 302,398 289,611
INCOME FROM OPERATIONS 9,390 3,206 19,753 8,238
Interest expense (9,201) (1,657) (11,636) (8,094)
Other income, net 116 1,989 574 2,689
Income from continuing
operations before income
taxes 305 3,538 8,691 2,833
Provision for income taxes 117 - 117 -
Income from continuing
operations 188 3,538 8,574 2,833
Discontinued operations (2,048) (529) (5,126) (8,811)
NET (LOSS) INCOME $ (1,860) $ 3,009 $ 3,448 $ (5,978)
Income per share -
before discontinued
operations - basic $ 0.01 $ 0.16 $ 0.38 $ 0.13
- assuming
dilution 0.01 0.15 0.37 0.13
Loss per share - from
discontinued operations
- basic $ (0.09) $ (0.02) $ (0.23) $ (0.39)
- assuming
dilution (0.09) (0.02) (0.22) (0.39)
Net income (loss) per share
- basic $ (0.08) $ 0.13 $ 0.15 $ (0.26)
- assuming
dilution (0.08) 0.13 0.15 (0.26)
Weighted average shares outstanding:
- basic 22,696 22,472 22,608 22,470
- assuming
dilution(a) 23,849 22,993 23,455 22,619
(a) Convertible subordinated notes have been excluded as anti dilutive because
of the income effect of the $8.0 million charge related to their August 31,
2005 conversion. Had these shares been included they would have increased
the quarterly and annual weighted average shares outstanding for the
diluted earnings per share calculation by 3.225 million shares.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
August 31, August 25,
2005 2004
------------ ------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,789 $ 3,311
Short-term investments 1,667 2,284
Trade accounts and other receivables, net 151 101
Food and supply inventories 2,215 2,092
Prepaid expenses 1,639 1,028
Deferred income taxes 865 1,073
Total current assets 9,326 9,889
Property, plant, and equipment, net 186,009 194,042
Property held for sale 9,346 24,594
Other assets 1,533 3,756
Total assets $ 206,214 $ 232,281
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 17,759 $ 15,888
Accrued expenses and other liabilities 16,870 18,006
Total current liabilities 34,629 33,894
Credit facility debt 13,500 28,000
Term debt - 23,470
Convertible subordinated notes, net-related party - 2,091
Other liabilities 8,760 10,215
Deferred income taxes 5,039 5,061
Total liabilities 61,928 102,731
SHAREHOLDERS' EQUITY
Common stock, $.32 par value; authorized 100,000,000 shares, issued
27,610,708 Shares at August 31, 2005 and 27,410,567 shares at August 25,
2004, respectively 8,835 8,771
Paid-in capital 44,526 43,564
Retained earnings 126,529 181,986
Less cost of treasury stock, 1,676,403 shares
at August 31, 2005 and 4,933,063 shares at
August 25, 2004 (35,604) (104,771)
Total shareholders' equity 144,286 129,550
Total liabilities and shareholders' equity $ 206,214 $ 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 Fiscal Year Ended
---------------------------- ----------------------------
August 31, August 25, August 31, August 25,
2005 2004 2005 2004
(119 days) (112 days) (371 days) (364 days)
------------ ------------ ------------ ------------
(In thousands)
Income from operations $ 9,390 $ 3,206 $ 19,753 $ 8,238
Plus excluded items:
Reversal of provision for
asset impairments and
restaurant closings (236) (44) (632) 413
Relocation and voluntary
severance costs 14 860 669 860
Depreciation and
amortization 4,475 4,938 15,054 16,259
Noncash executive
compensation expense - - - 679
EBITDA $ 13,643 $ 8,960 $ 34,844 $ 26,449
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.
SOURCE Luby's, Inc.
-0- 10/18/2005
/CONTACT: Rick Black of Luby's, Inc., +1-713-329-6808 /
/Web site: http://www.lubys.com /
(LUB)