HOUSTON, July 15, 2019 // PRNewswire // - Luby's, Inc. (NYSE: LUB) ("Luby's") today announced unaudited financial results for its twelve-week third quarter fiscal 2019 referred to as "third quarter." Comparisons in this earnings release are for the third quarter compared to third quarter fiscal 2018.
Third Quarter Key Metrics
Chris Pappas, President and CEO, commented, "Our turn-around plan is two-fold: establishing appropriate cost structures for our business and growing guest traffic and sales. We continue to make progress in efficiently managing restaurant-level costs, resulting in a store level profit improvement, despite the decline in same-store sales in the third quarter. However, we recognize that our turn-around depends on growing guest traffic and sales. While our same-store sales have not yet achieved the improvement we are striving for, we do see a number of positive developments based on our recent efforts and initiatives aimed at growing guest traffic. For instance, at our cafeteria brand, guest traffic has continually trended better throughout the current fiscal year. At both of our core brands, we are providing menu price points that offer compelling everyday value options starting in the $7.00 to $9.00 range, while still including additional premium offerings at higher price points. This value orientation is helping to improve our guest traffic trends and will be central to growing sales.
Our culinary contract services business added seven net new locations compared to last year, which are generating incremental sales and profit. This continues to be a terrific segment of our business with significant growth potential. We continue to pursue new clients for our signature offering. In our Fuddruckers franchise system, we made solid progress on our plans to transition to a primarily franchise model outside our core Houston, Texas market: five locations in the San Antonio market transitioned from company-operated restaurants to franchise-operated locations.
Through the leadership of our chief operating officer, Todd Coutee, the re-alignment of team members into the right positions is substantially complete in restaurant operations. The restaurant leadership team and the entire organization are fully focused on increasing guest traffic by driving restaurant and guest service initiatives to delight our guests. We are putting all the pieces in place so that when we turn the corner and return to sales growth, we are better positioned for future profitability."
2019 Same-Store Sales Year-Over-Year Comparison
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Third Quarter Restaurant Sales:
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Balance Sheet and Capital Expenditures
We ended the third quarter with net debt (total debt less cash) of $32.6 million, a decrease from $35.8 million at the end of fiscal 2018. During the third quarter, our capital expenditures decreased to $1.1 million compared to $3.7 million in the third quarter fiscal 2018. At the end of the third quarter, we had $3.2 million in available cash, $9.6 million in restricted cash, and $110.2 million in total shareholders' equity.
Restaurant Counts:
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Conference Call
Luby's will host a conference call on July 15, 2019 at 10:00 a.m. Central Time to discuss further its third quarter fiscal 2019 results. To access the call live, dial (412) 902-0030 and use the access code 13691758# at least 10 minutes prior to the start time, or listen live over the Internet by visiting the events page in the investor relations section of www.lubysinc.com. For those who cannot listen to the live call, a telephonic replay will be available through July 22, 2019 and may be accessed by calling (201) 612-7415 and using the access code 13691758#. Also, an archive of the webcast will be available after the call for a period of 90 days on the "Investors" section of the Company's website.
Luby's, Inc. (NYSE: LUB) operates 130 restaurants nationally as of June 5, 2019: 80 Luby's Cafeterias, 49 Fuddruckers, one Cheeseburger in Paradise restaurants. Luby's is the franchisor for 107 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Colombia, and Panama. Luby's Culinary Contract Services provides food service management to 32 sites consisting of healthcare, corporate dining locations, sports stadiums, and sales through retail grocery stores.
This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release, other than statements of historical fact, are "forward-looking statements" for purposes of these provisions, including the statements under the caption "Outlook" and any other statements regarding scheduled openings of units, scheduled closures of units, sales of assets, expected proceeds from the sale of assets, expected levels of capital expenditures, effects of food commodity costs, anticipated financial results in future periods and expectations of industry conditions.
Luby's cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements, and other written communications, as well as oral statements made from time to time by representatives of Luby's. The following factors, as well as any other cautionary language included in this press release, provide examples of risks, uncertainties and events that may cause Luby's actual results to differ materially from the expectations Luby's describes in such forward-looking statements: general business and economic conditions; the impact of competition; our operating initiatives; fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese and produce; increases in utility costs, including the costs of natural gas and other energy supplies; changes in the availability and cost of labor; the seasonality of Luby's business; changes in governmental regulations, including changes in minimum wages; the effects of inflation; the availability of credit; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; the continued service of key management personnel; and other risks and uncertainties disclosed in Luby's annual reports on Form 10-K and quarterly reports on Form 10-Q.
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The following table contains information derived from the Company's Consolidated Statements of Operations expressed as a percentage of sales. Percentages may not total due to rounding.
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Store Level Profit
Although store level profit, defined as restaurant sales plus vending revenue, less cost of food, payroll and related costs, other operating expenses, and occupancy costs, is a non-GAAP measure, we believe its presentation is useful because it explicitly shows the results of our most significant reportable segment. The following table reconciles between store level profit, a non-GAAP measure to loss from continuing operations, a GAAP measure:
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Adjusted EBITDA
Adjusted EBITDA is defined as income (loss) from continuing operations before interest, provision (benefit) for income taxes, and depreciation and amortization, and excluding net loss (gain) on disposing of property and equipment, provision for asset impairments and restaurant closings, non-cash compensation expense, franchise taxes, and decrease / (increase) in fair value of derivatives.
Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with GAAP. We believe Adjusted EBITDA provides useful information to management and investors in valuing the Company and evaluating ongoing operating results and trends and in comparing our results to other competitors. Our management uses Adjusted EBITDA in evaluating management's performance when determining incentive compensation.
Adjusted EBITDA, as defined, may not be comparable to other similarly titled measures as computed by other companies. These measures should be considered supplemental and not a substitute or superior to other GAAP performance measures.
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Rick Black / Ken Dennard
Investor Relations
713-529-6600
SOURCE Luby's, Inc.
Luby's, Inc. operates 173 restaurants nationally: 91 Luby's Cafeterias, 73 Fuddruckers, 8 Cheeseburger in Paradise and one Bob Luby's Seafood Grill.