HOUSTON, Jan. 31, 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 first quarter ended December 15, 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 December
15, 2021 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. After giving effect
to the $2.00 per share liquidating
distribution paid on November 1,
2021, this represents an $0.11
per share decrease in the estimate of future liquidating
distributions from our last reported estimate owing primarily to a
net decrease in estimated future operating results primarily driven
by changes in the estimated holding periods of our remaining
assets. 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 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
December 15, 2021 has been estimated
based on undiscounted cash flow projections and assumes a final
liquidation 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 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 the first quarter of fiscal year 2022, the Company closed
on the sale of the Luby's Cafeteria brand and the operations at 35
locations for aggregate consideration of approximately $28.4 million which included the assumption of
certain liabilities by the buyer and the issuance of promissory
notes, preferred stock and common stock warrants to the Company
which are carried at their expected liquidation value. We
also closed on the sale of 32 real estate properties for total
gross proceeds of approximately $103.9
million.
Subsequent to the first quarter of fiscal year 2022 the Company
sold 1 additional real estate asset for total gross proceeds of
approximately $1.8 million.
The Company currently owns 21 real estate assets, of which 8 are
operating locations and 13 are vacant. The Company currently has 11
Luby's Cafeterias and four 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 23
locations, while pursuing a sale of this business as part of its
liquidation plan.
Debt Repayment
During the first quarter of fiscal year 2022, the Company fully
repaid the remaining $17.0 million on
its credit facility debt and the credit facility has been
terminated.
Distributions
On November 1, 2021, the Company
paid a cash liquidating distribution of $62.2 million, or $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;
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.
