HOUSTON, Nov. 19, 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 fiscal year ended August 25,
2021.
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 August 25,
2021 are currently estimated to result in total aggregate
liquidating distributions of $5.00
per common share based on the number of common shares outstanding
on that date. On November 1, 2021,
the Company paid a cash liquidating distribution of $2.00 per common share, reducing the estimate of
future liquidating distributions to $3.00 per common share as of the date of this
release. This updated estimate of future liquidating distributions
represents an increase of $0.87 per
share compared to last quarter's estimate owing primarily to actual
realization from completed real estate transactions as well as
achieving better operating results than previously
forecasted. 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 which is currently projected to be substantially
completed by June 30, 2022, including
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
August 25, 2021 has been estimated
based on undiscounted cash flow projections and assumes a final
liquidation on June 30, 2022
(including transfers to a liquidating entity) even though the
actual timing of the sale of the Company's remaining 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.
Asset Sales
During fiscal year 2021, the Company closed on the sale of the
Fuddruckers franchise brand. Subsequent to fiscal year end,
the Company closed on the sale of the Luby's Cafeteria brand and 35
restaurants.
During fiscal year 2021, the Company closed on the sale of 11
real estate assets for total gross proceeds of approximately
$32.1 million. Subsequent to
fiscal year end the Company sold an additional 30 real estate
assets for total gross proceeds of approximately $101.0 million. Proceeds from property
sales have been used primarily to fully repay the Company's
outstanding debt balance and to make a cash liquidating
distribution to its shareholders.
The Company currently owns 24 real estate assets, of which 12
are operating locations and 12 are vacant. The Company currently
has 14 Luby's Cafeterias and six Fuddruckers (including 2 combo
units) which are managed by third parties as the Company pursues
disposition options for owned properties and leases. In
addition, the Company currently operates Culinary Services at 25
locations, while pursuing a sale of this business as part of its
liquidation plan.
Distributions
On November 1, 2021, the Company
paid a cash liquidating distribution of $2.00 per common share to stockholders of record
as of October 25, 2021.
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.
Luby's is actively seeking buyers for its Luby's Culinary Contract
Services business segment, its packaged foods business segment and
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; 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, 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.