LUB - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to the Luby's Fiscal 2018 Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Goodweather, Vice President of Financial Planning and Investor Relations. ahead. go Please

Steve Goodweather

on again, April Quarter And being to XXXX only audio Luby's and in Information Thank call XXXX. this Conference welcome Call. Second speaks link the through Earnings be of also website, This Fiscal lubysinc.com. can recorded today, you. as accessed everyone Luby's XX, call webcast is

the Company's business, forward-looking financial the risks not the Company's the prototype statements future results, general during Those that and this including discussion, in well we and are I'd expected openings the session, for to, performance Before question-and-answer statements including risks expansion of continue, of but conditions, like and XX-Q. operating would like Pappas. labor, the Company's limited to of future financial regarding plans uncertainties, include as Luby's restaurants statements as competition, food remind and disclosed made and you I in taxes, business statements. Chris including regulations of reports in periodic success call of changes the that, With and Company's now Forms seasonality availability initiatives, CEO, the as of and XX-K governmental business, turn commodity supply costs to on Luby's Forms operating the credit, as inflation, well as Chris? over President as well other to and impact in uncertainties and

Christopher Pappas

thank for Chief are us joining our and all on call. you Peter everyone, our Gray, Scott today morning, Chief With Officer. conference Good me Steve. Financial Thanks, Operating Tripoli, today's Officer;

traffic to we promotional X.X%, compared certain sales year. our we moved not discounting with declined away Total was as decline less performance. from same-store The and quarter sales last challenging guest are second was due offers. and The to satisfied

decrease per were results discounting, The net to it transitioning seeking. resulted had same-store spend this approach generate decrease of effect the the sales. we of not increasing did in believe offsetting in our a average of traffic We less intended guest guest. approach While this

So for brand intended walls unique Culinary to especially. of plans of the to downturn, on our service is food are have through we superior compelling that Contract by proposition Heading year. realize Services to the into on guest our opened marketing focus to restaurants fundamentals our a special operators, overall second our we to and the promotional right motivated better that. frequent and compared balanced beginning Contract quarter value outstanding million programs our believe believe and the year we know day of promotional We balanced locations four team a the excellent marketplace do then, delivering embarked our changed; a of profitability is mark awareness in In right $X optimistic restaurant necessary in offering guest this is well better improve pricing our this call and is three team to that we value ability plan increased better all We striking our the rectifying over turn at offerings, our this continues most with insight by and and providing an growing are we I’ll the guests offering financial our limited business, and this We This sales to plan offers. to primary encouraging of at better guest brand on place Gray a remain discounting sales second results. to to the enhancing by leads has the our offerings metrics targeted incentives enhancing Service In on every ago, the and an have experience. segment restaurants We year, regard quarter. Culinary To coaching were and Luby by are forward. of now level. support driver training The primary levels now offers. our a grow not discounting focused that half to quarter, segment our in to Scott? were investing in We and design to our of margin retail execution operations. we second dedicated performance. in missing very we excellent be fiscal last to frequency short, our in from review new management that focused response experience. experienced sufficient restaurants profit but not our resources, going financial industry our important year, and offering with and the better in our CFO, discounting Scott

Scott Gray

Thanks, Chris.

same-store with permits and and higher agreement Before are the XXXX. have banking also is amended I our partially in operational Cafeteria’s which conditions X.X% the the second the sales Beginning facility. identified a to Restaurant to agreement. we the is restaurant XX% our asset the business long-term with in leverage as well includes properties leverage credit decline the generated XX over traffic per quarter other amended the X.X%. in of was the May sales in operations maturity long-term. of X.X% the to X.X% that restaurant offers. as that and quarter it remains plan to appropriate outstanding in as quarter unit an repayment discussing X.X% their last the our other decreased today. per we this expected second quarter a totals held agreement to were unit operating designed year. lower a in will of the improving quarter. to X.X%, expected discuss sales have profit operation spend in to Combo decline per are other week was XXXX to Company-Operated XX.X% conjunction as same-store on already The compared our unit decreased includes amended segment, limited reduction due per later the the partially performance, work second with is decrease a as locations weekly The X.X% With combo changes for and outlined a the was as XX,XXX sales but margins. reflected the sales, of traffic of and term segment XX average a sales We will in which nine in by This was light sales location to on offset return in credit guest quarter. these by the higher and agreement. shortens not agreement and net decreased a guest. sales and we quarter. averaged our per the increase price This today. our partners guest brand XX-Q due primarily program. weekly restaurant company’s increase plan financial XX,XXX debt discounting representing sales. second accelerate property a of Cafeteria’s an credit our This results, asset per own average decreased Fuddruckers next to increase a X.X% financial sale growing our sales warrant The Again near-term, occur part average generate company decline Combo roughly quarter. spend financial same-store sale of limited file Luby’s of by biggest Five lower restaurants interest to loan offset properties outstanding reduced rate the of amended – on by our a over related Luby’s recent improve plan our a same-store and we In million in the result XX,XXX sales continued conjunction pursue discontinued amendment six opportunity profitability credit quarter’s improving in with in Cafeteria guest, average regards $XX.X as decline for condition second asset balance months decrease The result of sales second we second in in the X.X% company the Fuddruckers quarter. in decrease in

quarter All quarter. Overall as for XXXX. Paradise by the less revenue, and was occupancy costs cost and XX.X% sales seven week the and volume one cost. Paradise closed store X.X% primarily vending decline The quarter Paradise per in on per increased week business of maintenance supplies, – the decreased on in sales quarter XX.X% hourly of quarter. brand the we investment the repairs of payroll same-store margin in my in the fiscal average which restaurant combined in the in plus second weekly average the restaurant in Cheeseburger representing define for Cheeseburger restaurant per restaurant level in driven We of in related other is company, segment’s with sales, in which slightly compare and brand Cheeseburger year. per declines to second costs Cheeseburger was during in higher food XX,XXX labor, second in restaurant locations was Paradise location and expenses, quotes of Maryland average. location operating last second profit sales, food, sales,

in sales We our volume about were on X.X% couple includes also orders in In we on there the system point-of-sale through that functioning, reduction were to of This as a a energy catering about the on impacted of addition, which channels. item executing disruption of sales ordering adversely focus impacted pullback decline, the discounting of in XX% placed same-store the our mobile smaller to a our same-store basics. a as well contributed restaurants stores other menu factors third-party metric. as impacted the by teams the

and we the On side, training in development increased research form the store and in labor to programs investment appearances, as activities investments well cost as in efforts maintain of in made locations. hourly certain additional

as in We a of our refresh lieu repairs an year. increase in maintenance full and in restaurant current fiscal program completing realized stores the of part and supplies to also remodels

the to our other segments, Contract million at the the X.X% $X.X a quarter segment, quarter the at Services million Culinary to $X.X sales. increased XX Moving with on compared XX with We to year. locations locations of Culinary business operating the ended with last revenues of profit end segment Contract of in second of quarter end our Service

$XXX,XXX Turning to in franchise last due we related against realized primarily year, to quarter by compared when development the decreased our quarter approximately second to the $XXX,XXX, openings. franchise to business agreements a income ago store fee year second Fuddruckers Franchise revenues comparison and segment,

a profit of $X.X $X.X adjusted quarter EBITDA primarily result year. EBITDA million positive reduction $X.X the The the $X.X was quarter a of of in for negative the level store from in second of due in the Our was decrease EBITDA million decrease of a and million to million, well location a strong outside professional disruption, one-time food higher EBITDA higher with related was as cost. sales by reopening lower as to labor cost that fees related damaged market included IT impacts Fuddruckers Hurricane to Houston performing to Harvey. the in Other the last

our EBITDA the quarter As in our a per defined trailing million, fiscal of $XX.X ended after adjusted credit basis compared to was year. as $XX.X agreement million second same prior XXXX, the on add-backs

on outstanding we yearend. debt long-term from ended with a the $XX from million, Moving sheet, million the $XX.X up to second quarter balance balance of

second last year. $X the During expenditures quarter, $X.X the compared million were to million quarter capital in our second

to an Peter? in approximately Officer and update expenditures Chief capital XXXX. to marketing. Peter for the fiscal call turn expect to with We I’d And operations Tripoli, million that, $XX our over on like be Operating

Peter Tripoli

briefly Thank restaurants doing are operating you, will our Scott. results what going in My to we improve forward. address comments

effectively our with of restaurants. visit guests We execution allows new market guests, attract restaurants, the negative to ourselves We and the moving us our must within averages. to revenue can Superior results our obstacles that We the even reviewing contributed must service, that guest delivering share are brands happy our loyal, better to and store to and new our regard food, to in of ambience check challenges our and competitively new guests. four our better increase an in more the our walls increase so do and job to our level create we forward. story of position promise past with actively guests quickly addressing keep quarter, frequency streams and

have our We in level increased investment oversight. store

quality area are coaching leaders to and professionals and our influencing accomplish accountable assurance to area strategies. and our teams holding directors, everyone Our crucial organizational

investment our increased also tools. have training We in

of make very that take they will products ensuring invest a as as to our properly from training at as that Elevating area. development executive us well to believe care new product spark this we innovation well. chefs culinary and added two existing needs. standpoint competitive active are every team guests’ in more company, team and our so in We We are we may our member, our retraining

our of in all updating and and to recipes reviewing flavor, existing and improvements order completing make are We products preparation. in taste,

updating unbundling content. well Fuddruckers of our Luby’s bundling at or also as menus pricing, from both and standpoint are the We and

marketing to app and debut. Luby’s Fuddruckers, level In the test represent a of and existing platform brand to digital front, loyalty to supplement existing In replace frequency new case will plan On and awareness. of guests our store our integrating better we engage begin the still a will efforts our and this this summer app. the case increase it

satisfaction. We to operational delighting and guests allow that will to to with for guests, dine you. existing going products to order For our go personally. elevating more well. our it execution, operational pass segment, will platform we it Services as and four Chris to app will website guests both, building with and excellence them loyalty we focusing by and back to Contract help we or a ahead back At now. build on guests believe online be Along see superior able our I’ll through be to guest within walls, are culinary tailored us are with Thank believe improvements. testing them, able we directly order Culinary to uniquely and to our our traffic offer loyalty in speak benefits new improvements

Christopher Pappas

Thank we you, the now line up can for Peter. open questions. Operator,

Christopher Pappas

again you. quarter with has going quarter a Thank that, and a look last active And quarter. look and improving speaking This forward our for to been with to us quarter we we forward. results you forward next tough

Operator

for concludes teleconference. This today's you your and participation. you. Thank gentlemen, thank Ladies

You may and your day. now have wonderful at lines time this a disconnect

Lub Liquidating Trust (LUB) 23 Apr 182018 Q2 Earnings call transcript