HOUSTON, Feb. 1, 2021 /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 first quarter ended December 16, 2020.
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 estimate
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 of the Company through the end of the
liquidation. Based on the liquidation basis of accounting,
the net assets in liquidation at December
16, 2020 are currently estimated to result in future
liquidating distributions of approximately $3.82 per common share based on the number of
common shares outstanding on that date. The estimated
liquidating distributions per share on a fully diluted basis,
assuming all restricted stock awards vest and all in-the-money
options are exercised, is not materially different than the amount
stated above. 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,
during the period required to complete the plan of liquidation
which is currently projected to be completed by June 30, 2022. 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 including public health
crises, general market conditions, the timing of the sales, the
performance of the underlying assets, resolution of the Company's
PPP loan, settlement of lease terminations, the exercise of
outstanding stock options, the vesting of restricted stock awards
and any changes in the underlying assumptions of projected cash
flows. 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
December 16, 2020 has been estimated
based on undiscounted cash flow projections and assumes a final
liquidation on June 30, 2022 even
though the actual timing of the sale of the Company's operating
businesses and real estate holdings cannot be determined with any
specificity at this time. As such, the final liquidation of
the Company 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.
The Company currently operates 58 Luby's Cafeterias and 24
Fuddruckers, as well as Culinary Contract Services at 26 locations,
while pursuing sales of these businesses as part of its liquidation
plan. Operationally, it is business as usual as we progress through
this plan to find new stewards for these iconic brands.
Comments related to our operations in the context of
COVID-19
The novel coronavirus disease ("COVID-19") pandemic has had a
significant impact on our level of operations, guest behavior,
guest traffic, and the number of locations where we and our
Fuddruckers franchisees operate. As a result, at the onset of the
COVID-19 pandemic in the spring of 2020, we modified our business
operations within our restaurants and significantly reduced
staffing at our corporate support office.
While the development of a vaccine for COVID-19 announced in
December 2020 presents an encouraging
sign, we continue to see rising cases of COVID-19 infection
throughout the U.S. As we execute on our Plan of Liquidation, we
are still operating a number of restaurants as described above.
Uncertainty remains regarding the rate of immunization in the
public and timing of an economic recovery. The COVID-19 pandemic
could continue to materially impact our cash flows and value of net
assets in liquidation, while we execute on our Plan of
Liquidation.
About Luby's
Luby's, Inc. (NYSE: LUB) operates two core restaurant brands:
Luby's Cafeterias and Fuddruckers. Luby's is also the franchisor
for the Fuddruckers restaurant brand. In addition, through its
Luby's Culinary Contract Services business segment, Luby's provides
food service management to 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 regarding sales of
assets, expected proceeds from the sale of assets, expected
proceeds to be distributed to stockholders, 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 effects of public health crises such as the
COVID-19 pandemic; 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 report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form
8-k.
For additional information contact:
Dennard Lascar Investor
Relations
Rick Black / Ken Dennard
LUB@dennardlascar.com
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SOURCE Luby's, Inc.