HOUSTON, Sept. 10, 2019 /PRNewswire/ -- Luby's, Inc.
(NYSE: LUB) today announced the formation of a new Board
Special Committee and provided an update on several on-going
initiatives, strategic operational plans and measures to right-size
its corporate overhead.
The Company's Board of Directors has formed a new Board Special
Committee comprised of independent directors with the purpose of
establishing a strategic review process to identify, examine, and
consider a range of strategic alternatives available to the Company
with the objective of maximizing shareholder value. This new
Special Committee has been formed consisting of Gerald Bodzy, Twila
Day, Joe McKinney,
Gasper Mir, John Morlock, and Randolph Read. The Special Committee will be
Co-Chaired by Messrs. Bodzy and Read.
"The steps we are taking represent our commitment to maximizing
value to our shareholders over the long term," said Gerald Bodzy, Chairman of the Board.
Chris Pappas, President and Chief
Executive Officer, stated, "The formation of this Special Committee
has the support of the entire Board of Directors and management,
and we look forward to the results of their work."
The Board of Directors has not made a decision to enter into any
transaction at this time, and there are no assurances that the
consideration of strategic alternatives will result in any
transaction. Luby's does not intend to comment on or disclose
developments regarding the process unless it deems further
disclosure appropriate or required.
"As we begin our fiscal year 2020, we are laser-focused on
improving the operational and financial performance of the Company
and are confident in our team's ability to continue to make
significant progress on our turn-around plans. Our efforts
are well underway to grow guest traffic and sales, as well as to
establish an appropriate cost structure across the business. We
have already reduced our general and administrative expense by over
10% as we right-size the overhead needed to support our business
operations, with additional plans to further reduce our cost
structure in 2020," said Pappas.
The Company continues to pursue its initiative to transition
certain company-owned Fuddruckers restaurants to franchises. This
month, two Fuddruckers locations in Austin were transitioned to one of our
franchise operators that has also signed a new development
agreement to open additional restaurants in the future. Since
April 2019, the Company has
transitioned a total of seven Fuddruckers restaurants to this new
franchise operator. Luby's will continue to work on additional
transition opportunities in markets outside of its home market of
Houston, Texas.
Pappas, commented further, "During our fiscal year 2019, which
ended August 29, 2019, we launched
several initiatives to improve restaurant sales, reduce expenses
and improve the financial performance of the Company.
"Earlier in fiscal year 2019, Luby's entered into a new
five-year credit agreement to improve our financial liquidity and
to aid our efforts to decrease costs and improve sales results. We
continue to work diligently to lower our overall cost structure by
reducing corporate and overhead expenses.
"We have also been very active in making significant
enhancements to our leadership team during fiscal year 2019 with
the appointment of Todd Coutee as
Chief Operating Officer earlier in the year and most recently
through the hiring of a new Vice President of Marketing and a new
Vice President of Information Technology. These critical senior
management leaders are highly qualified and extremely talented
industry veterans. At the Board level, we replaced three
departing directors during fiscal year 2019 with three new
independent directors adding significant public board and
restaurant industry experience. We are also pleased that
Gerald Bodzy, an independent
director, assumed the role of Independent Chairman last month,"
said Pappas.
"In regard to our asset divestitures program that began in
fiscal 2018, we have sold property generating $35.9 million in proceeds. In addition, over the
last two fiscal years, we have closed 39 underperforming
restaurants (10 Luby's cafeterias, 22 Fuddruckers, and seven
Cheeseburger in Paradise restaurants)."
The Company plans to release its fourth quarter and fiscal 2019
financial results on Monday, November 11,
2019, before the market opens.
About Luby's
Luby's, Inc. (NYSE: LUB) operated 121 restaurants nationally as
of September 10: 78 Luby's
Cafeterias, 42 Fuddruckers, and one Cheeseburger in Paradise
restaurant. Luby's is the franchisor for 103 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.
Forward-Looking Statements
The statements in this press release that are not historical
facts may be forward-looking statements. These forward-looking
statements involve substantial risks and uncertainties. Actual
results or events could differ materially from the plans,
intentions, and expectations disclosed in such forward-looking
statements. The words "anticipates," "believes," "expects,"
"estimates," "projects," "plans," "intends," "may," "will,"
"would," and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. The Company may
not actually identify any viable strategic alternatives, execute
any strategic alternative, or achieve the plans, intentions, or
expectations (including enhancing shareholder value) disclosed in
these forward-looking statements, and you should not place undue
reliance on these forward-looking statements. Factors that
might cause such differences include general business and market
conditions, the Company's business strategy and leverage, the
Company's ability to identify and implement any viable strategic
alternatives, and other factors included in Luby's reports
filed with the Securities and Exchange Commission ("SEC"),
particularly in the "Risk Factors" sections of Luby's latest Annual
Report on Form 10-K and Form 10-KA for year ended August 29, 2018, filed with the SEC on
November 16, 2018, as such Risk
Factors may be updated from time to time in subsequent reports.
Luby's does not assume any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
For additional information contact:
Dennard Lascar Investor
Relations
713-529-6600
Rick Black / Ken Dennard
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SOURCE Luby's, Inc.