Luby's Issues Second Quarter Fiscal 2022 Report

Rhea-AI Summary

Luby's, Inc. (NYSE: LUB) announced its financial results for Q2 ended March 9, 2022, under a liquidation basis of accounting. Following shareholder approval for liquidation on November 17, 2020, the estimated future aggregate liquidating distributions remain unchanged at $2.89 per share, declining to $2.39 after a $0.50 distribution paid on March 28, 2022. During Q2, Luby's sold 4 real estate assets for approximately $10.3 million and completed the sale of its Culinary Contract Services business. The company continues to seek buyers for its remaining assets, anticipating final liquidation by June 30, 2022.

Positive

• Sold 4 real estate assets for $10.3 million during Q2 2022.
• Cash liquidating distribution of $0.50 per common share paid on March 28, 2022.

Negative

• Projections of future liquidating distributions come with inherent uncertainty and may not be realized.
• No assurance that distributions will equal or exceed current estimates.

HOUSTON, April 21, 2022 /PRNewswire/ -- Luby's, Inc. (NYSE: LUB) ("Luby's") which is in the process of monetizing its assets for the benefit of its shareholders, announced today its financial results for the second quarter ended March 9, 2022.

Financial Results

Liquidation Basis of Accounting

As a result of Luby's shareholder approval of its plan of liquidation on November 17, 2020, effective November 19, 2020, in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company began reporting its financial results on the liquidation basis of accounting.  The liquidation basis of accounting requires, among other things, that management estimates net sales proceeds on an undiscounted basis, as well as include in the Company's assets and liabilities the undiscounted estimate of future revenues and expenses through the end of the liquidation.  Based on the liquidation basis of accounting, the net assets in liquidation at March 9, 2022 are currently estimated to result in future aggregate liquidating distributions of $2.89 per common share based on the number of common shares outstanding on that date.  This represents no change from our last reported estimate at the end of the first quarter of fiscal 2022.  After giving effect to the $0.50 per common share distribution paid on March 28, 2022, the net assets in liquidation are currently estimated to result in remaining future aggregate liquidating distributions of $2.39 per common share.  This estimate of future liquidating distributions includes projections of sales proceeds and net operating revenues to be received and costs and expenses to be incurred, including costs to dispose of the Company's assets to complete the plan of liquidation, including costs of any transfers to a liquidating entity at that time. 

There is inherent uncertainty with these projections, and accordingly, these projections could change materially based on a number of factors both within and outside of Luby's control. There can be no assurance that these estimated values will be realized.  Such amounts should not be taken as an indication of the timing or the amount of future distributions or our actual dissolution.

The current estimate of net assets in liquidation at March 9, 2022 has been estimated based on undiscounted cash flow projections and assumes a final liquidation of the Company on June 30, 2022, with any remaining assets and liabilities being transferred to a liquidating entity at that time, even though the actual timing of the sale of the Company's remaining operating locations and real estate holdings cannot be determined with any specificity at this time.  As such, the final liquidation of the Company and it's monetization of it's remaining assets while in a liquidating entity is subject to future events and uncertainties.  Liabilities are carried at their contractual amounts due as adjusted for the impact of timing of the planned liquidation.  It is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to our shareholders and no assurance can be given that the distributions will equal or exceed the estimate presented in this release.

Asset Sales

During the second quarter of fiscal year 2022, the Company sold 4 real estate assets for total gross proceeds of approximately $10.3 million. 

Subsequent to the second quarter of fiscal year 2022, the Company sold the Culinary Contract Services business.    

The Company currently owns 18 real estate assets, of which 6 are operating locations and 12 are vacant. The Company currently has 10 Luby's Cafeterias and two Fuddruckers (including 1 combo unit) which are managed by third parties as the Company pursues disposition options for owned properties and leases. 

Distributions

On March 28, 2022, the Company paid a cash liquidating distribution of $15.5 million, or $0.50 per common share, to stockholders of record as of March 21, 2022.

About Luby's

Luby's, Inc. (NYSE: LUB) previously announced its plan of liquidation and dissolution, which was approved by its shareholders on November 17, 2020. Luby's has sold both its restaurant brands, Luby's Cafeterias and Fuddruckers, as well as its Culinary Contract Services business segment.  Luby's is actively seeking buyers for its remaining real estate assets.

Forward Looking Statements

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 regarding sales of assets, effects of the Company's Liquidation and Dissolution Plan (the "Plan"), expected value or proceeds attributable to the sale of assets, and expected proceeds to be distributed to stockholders or the timing thereof. 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 effects of the COVID-19 pandemic; 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 governmental regulations, including changes in minimum wages; the effects of inflation; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; and other risks and uncertainties disclosed in Luby's annual reports on Form 10- K and quarterly reports on Form 10-Q, including information regarding the risks, uncertainties and other factors relating to the Plan, the expected net proceeds from the sale of assets, and expected proceeds to be distributed to stockholders.

For additional information contact:
John Garilli, Interim CEO
LInvestors@lubys.com

 

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SOURCE Luby's, Inc.

FAQ

What are Luby's financial results for Q2 2022?

Luby's reported its Q2 results under a liquidation basis, with future liquidating distributions estimated at $2.89 per share, declining to $2.39 after a distribution.

When did Luby's pay its last cash distribution?

Luby's paid a cash liquidating distribution of $0.50 per common share on March 28, 2022.

What assets has Luby's sold recently?

In Q2 2022, Luby's sold 4 real estate assets for approximately $10.3 million and subsequently sold its Culinary Contract Services business.

What is the timeline for Luby's liquidation?

Luby's anticipates final liquidation of the company by June 30, 2022.

What is Luby's plan for its remaining assets?

Luby's is actively seeking buyers for its remaining real estate assets, which include 6 operating locations and 12 vacant properties.