FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number: 1-8308
LUBY'S CAFETERIAS, INC.
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 74-1335253
__________________________________ ______________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2211 Northeast Loop 410, P. O. Box 33069
San Antonio, Texas 78265-3069
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
210/654-9000
_______________________________________________________________________________
(Registrant's telephone number, including area code)
______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
___ ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock: 25,448,132 shares outstanding as of
May 31, 1994 (exclusive of 1,954,935
treasury shares)<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
LUBY'S CAFETERIAS, INC.
STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
May 31, May 31,
1994 1993 1994 1993
______ ______ ______ ______
(Amounts in thousands except per share data)
<S> <C> <C> <C> <C>
Sales $101,060 $94,791 $288,945 $271,685
Costs and expenses:
Cost of food 25,404 24,315 72,917 68,914
Payroll and related costs 25,986 25,110 77,346 73,718
Occupancy and other operating expenses 29,161 26,732 83,888 77,725
General and administrative expenses 4,179 3,630 11,552 11,847
_______ _______ _______ _______
84,730 79,787 245,703 232,204
_______ _______ _______ _______
Income from operations 16,330 15,004 43,242 39,481
Other income, net 302 403 915 1,101
_______ _______ _______ _______
Income before income taxes and
cumulative effect of change in
accounting for income taxes 16,632 15,407 44,157 40,582
Provision for income taxes (Note 2) 6,246 5,700 16,585 15,015
_______ _______ _______ _______
Income before cumulative effect of
accounting change 10,386 9,707 27,572 25,567
Cumulative effect as of August 31, 1993 of
change in method of accounting for income
taxes (Note 2) --- --- 1,563 ---
_______ _______ _______ _______
Net income $ 10,386 $ 9,707 $ 29,135 $ 25,567
_______ _______ _______ _______
<PAGE>
Earnings per share:
Income before cumulative effect of
accounting change $.40 $.36 $1.05 $.94
Cumulative effect of accounting change --- --- .06 ---
_______ _______ _______ _______
Net income per share $.40 $.36 $1.11 $.94
_______ _______ _______ _______
Cash dividends per share $.15 $.135 $.45 $.405
_______ _______ _______ _______
Average number of shares outstanding 25,652 27,239 26,204 27,182
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
<TABLE>
LUBY'S CAFETERIAS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION> May 31, August 31,
1994 1993
________ __________
(Thousands of dollars)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,038 $ 34,305
Trade accounts and other receivables 618 602
Inventories 3,476 3,426
Prepaid expenses 3,208 2,467
Deferred income taxes 199 3,018
_______ _______
Total current assets 13,539 43,818
Investments and other assets - at cost 14,105 13,495
Property, plant and equipment - at cost, net 250,863 244,786
_______ _______
$278,507 $302,099
_______ _______
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings (Note 3) $ 10,000 $ ---
Accounts payable - trade 8,372 9,688
Dividends payable 3,817 4,084
Accrued expenses and other liabilities 19,393 26,759
Income taxes payable 2,429 2,793
_______ _______
Total current liabilities 44,011 43,324
Deferred income taxes and other credits 19,332 19,827
Shareholders' equity:
Common stock 8,769 8,769
Paid-in capital 26,945 27,037
Retained earnings 222,965 206,214
Less cost of treasury stock (43,515) (3,072)
_______ _______
Total shareholders' equity 215,164 238,948
_______ _______
$278,507 $302,099
_______ _______
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
<TABLE>
LUBY'S CAFETERIAS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Nine Months Ended
May 31,
1994 1993
_______ ________
(Thousands of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $29,135 $25,567
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 11,699 11,545
Cumulative effect of accounting change (1,563) ---
Decrease in accrued expenses and other liabilities (7,366) (926)
Other 674 (1,813)
_______ _______
Net cash provided by operating activities 32,579 34,373
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of land held for future use 270 ---
Purchases of land held for future use (2,646) (455)
Purchases of property, plant and equipment (15,842) (12,203)
_______ _______
Net cash used in investing activities (18,218) (12,658)
_______ _______
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under
employee benefit plans 2,505 1,696
Net proceeds from short-term borrowings 10,000 ---
Principal payments of long-term debt --- (1,847)
Purchases of treasury stock (43,218) ---
Dividends paid (11,915) (11,004)
_______ _______
Net cash used in financing activities (42,628) (11,155)
_______ _______
Net increase (decrease) in cash and cash equivalents (28,267) 10,560
Cash and cash equivalents at beginning of period 34,305 12,294
_______ _______
Cash and cash equivalents at end of period $ 6,038 $22,854
_______ _______
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
<TABLE>
LUBY'S CAFETERIAS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Nine Months Ended May 31, 1994 and 1993
(UNAUDITED)
<CAPTION>
Total
Common Stock Paid-in Retained Shareholders'
Issued Treasury Capital Earnings Equity
______ ________ _______ ________ ____________
(Thousands of dollars)
<S> <C> <C> <C> <C> <C>
Balance at August 31, 1992 $8,769 $(4,252) $26,945 $185,789 $217,251
Net income for the period --- --- --- 25,567 25,567
Common stock issued under
employee benefit plans, net
of shares tendered in partial
payment --- 1,576 121 (2) 1,695
Cash dividends --- --- --- (11,017) (11,017)
_______ _______ _______ _______ _______
Balance at May 31, 1993 $8,769 $(2,676) $27,066 $200,337 $233,496
_______ _______ _______ _______ _______
Balance at August 31, 1993 $8,769 $(3,072) $27,037 $206,214 $238,948
Net income for the period --- --- --- 29,135 29,135
Common stock issued under
employee benefit plans, net
of shares tendered in partial
payment --- 3,333 (92) (736) 2,505
Cash dividends --- --- --- (11,648) (11,648)
Purchases of treasury stock --- (43,776) --- --- (43,776)
_______ _______ _______ _______ _______
Balance at May 31, 1994 $8,769 $(43,515) $26,945 $222,965 $215,164
_______ _______ _______ _______ _______
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 1994
(UNAUDITED)
Note 1: All adjustments which are, in the opinion of management, necessary
to a fair statement of the results for the interim periods have been
made. All such adjustments are of a normal recurring nature. The
results for the interim period are not necessarily indicative of the
results to be expected for the full year.
Note 2: Effective September 1, 1993, the Company adopted FASB Statement
No. 109,"Accounting for Income Taxes." Under Statement 109, the
liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities ("temporary differences") and are measured using the
enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Prior to the adoption of
Statement 109, income tax expense was determined using the deferred
method. Deferred tax expense was based on items of income and
expense that were reported in different years in the financial
statements and tax returns and were measured at the tax rate in
effect in the year the difference originated.
As permitted by Statement 109, the Company has elected not to
restate the financial statements of any prior years. The effect
of the change on pretax income from continuing operations for the
nine month periods ended May 31, 1994 and 1993, was not material;
however, the cumulative effect of the change increased net income
by $1,563,000, or $.06 per share.
The tax effect of temporary differences results in deferred
income tax assets and liabilities as follows:
May 31, 1994
Assets Liabilities
______ ___________
(Thousands of dollars)
Workers' compensation insurance $ 199 $ -
Amortization of capitalized interest - 552
Depreciation and amortization - 16,995
Deferred compensation 968 -
Other - 209
______ _______
$1,167 $17,756
______ _______
The above amounts aggregate to a current deferred tax asset of
$199,000 and to a noncurrent deferred tax liability of
$16,788,000 at May 31, 1994.
Note 3: During May 1994, the Company borrowed $10,000,000 under a
$30,000,000 line of credit agreement which expires in January
1995. The current borrowings bear interest at 4.81% and mature
on June 16, 1994.<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
_______________________________
Cash and cash equivalents decreased by $28,267,000 from the end of the preceding
fiscal year to May 31, 1994. All capital expenditures for fiscal 1994 are being
funded from cash flows from operations, cash equivalents and short-term
borrowings. Capital expenditures for the nine months ended May 31, 1994, were
$18,488,000. As of May 31, 1994, the Company owned 18 undeveloped land sites
and two land sites on which cafeterias are under construction. During the nine
months ended May 31, 1994, the Company purchased 1,936,800 shares of its common
stock at a cost of $43,776,000, which are being held as treasury stock. To
complete this purchase and fund capital expenditures, the Company required
external financing and borrowed funds under a $30,000,000 line of credit
agreement. At May 31, 1994, the amount outstanding under this line of credit
was $10,000,000.
Results of Operations
_____________________
Quarter ended May 31, 1994 compared to the quarter ended May 31, 1993.
______________________________________________________________________
Sales increased $6,269,000, or 6.6%, due to the addition of five new cafeterias
in fiscal 1994 and six in fiscal 1993, and due to an increase in average sales
volume at cafeterias opened over one year. Cost of food increased $1,089,000,
or 4.5%, due primarily to the increase in sales. The percentage increase is
lower than the percentage increase in sales since food costs for the quarter
ended May 31, 1993, included higher costs for poultry, red meats and produce.
Payroll and related costs increased $876,000, or 3.5%, due primarily to the
increase in sales. As a percentage of sales, payroll and related costs declined
due to lower workers' compensation costs from continued favorable trends in
claims experience and due to increased average sales volume at cafeterias opened
over one year. Occupancy and other operating expenses increased $2,429,000, or
9.1%, due primarily to the increase in sales, higher advertising expenditures,
and higher managers' salaries, which are based on the profitability of the
cafeterias. General and administrative expenses increased $549,000, or 15.1%,
due primarily to higher costs under employee benefit plans which are based on
the earnings growth of the Company.
The provision for income taxes increased $546,000, or 9.6%, due primarily to the
increase in operating income. The effective income tax rate increased from 37%
to 37.6% due primarily to the increase in federal income tax rates effective
January 1, 1993.
<PAGE>
Nine months ended May 31, 1994 compared to the nine months ended May 31, 1993.
______________________________________________________________________________
Sales increased $17,260,000, or 6.4%, due primarily to the addition of five new
cafeterias in fiscal 1994 and six in fiscal 1993, and due to an increase in
average sales volume at cafeterias opened over one year. Cost of food increased
$4,003,000, or 5.8%, due primarily to the increase in sales. Payroll and
related costs increased $3,628,000, or 4.9%, due primarily to the increase in
sales, and were partially offset by lower costs of workers' compensation
insurance. Occupancy and other operating expenses increased $6,163,000, or
7.9%, due primarily to the increase in sales, higher advertising expenditures
and higher managers' salaries, which are based on the profitability of the
cafeterias. General and administrative expenses decreased $295,000, or 2.5%,
due primarily to the lower Company contribution to the profit sharing and
retirement plan as determined by the plan's provisions. In addition, the
nine months ended May 31, 1993, included costs for the settlement of
litigation. These declines in general and administrative expenses were
partially offset by higher costs under employee benefit plans which are based
on the earnings growth of the Company.
The provision for income taxes increased $1,570,000, or 10.5%, due primarily to
the increase in operating income. The effective income tax rate increased from
37% to 37.6% due primarily to the increase in federal income tax rates effective
January 1, 1993.
<PAGE>
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
________
2 Agreement and Plan of Merger dated November 1, 1991, between Luby's
Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc.,
a Delaware corporation (filed as Exhibit 2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended November 30,
1991, and incorporated herein by reference).
4(a) Form of certificate representing shares of common stock of Luby's
Cafeterias, Inc. (filed as Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended November 30, 1991, and
incorporated herein by reference).
4(b) Description of Common Stock Purchase Rights of Luby's Cafeterias,
Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991,
File No. 1-8308, and incorporated herein by reference).
4(c) Amendment No. 1 dated December 19, 1991, to Rights Agreement dated
April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended November 30, 1991, and
incorporated herein by reference).
4(d) Promissory Note (Loan Agreement) dated January 31, 1994, in favor
of NationsBank of Texas, N.A., in the maximum amount of $30,000,000
(filed as Exhibit 4(d) to the Company's Quarterly Report on Form
10-Q for the quarter ended February 28, 1994, and incorporated
herein by reference).
10(a) Form of Deferred Compensation Agreement entered into between Luby's
Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to
the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1981, and incorporated herein by reference).
10(b) Annual Incentive Plan for Area Vice Presidents of Luby's
Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d)
to the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1983, and incorporated herein by reference).
10(c) Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19,
1983 (filed as Exhibit 10(e) to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1983, and incorporated
herein by reference).
10(d) Employee Stock Option Plan of Luby's Cafeterias, Inc. approved by
the shareholders on January 12, 1984 (filed as Exhibit 10(e) to the
Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1984, and incorporated herein by reference).
10(e) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the
shareholders on January 12, 1984 (filed as Exhibit 10(f) to the
Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1984, and incorporated herein by reference).
10(f) Employment Contract dated January 8, 1988, between Luby's
Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to
the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1988, and incorporated herein by reference).
10(g) Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed
as Exhibit 10(i) to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1989, and incorporated herein by
reference).
11 Statement re computation of per share earnings.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which this
report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LUBY'S CAFETERIAS, INC.
(Registrant)
By: Ralph Erben
_________________________
Ralph Erben
President
Chief Executive Officer
By: John E. Curtis, Jr.
_________________________
John E. Curtis, Jr.
Senior Vice President
Chief Financial Officer
Dated: July 12, 1994
<PAGE>
EXHIBIT INDEX
Number Document
______ ________
2 Agreement and Plan of Merger dated November 1, 1991, between
Luby's Cafeterias, Inc., a Texas corporation, and Luby's
Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1991, and incorporated herein by reference).
4(a) Form of certificate representing shares of common stock of Luby's
Cafeterias, Inc. (filed as Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the quarter ended November 30, 1991, and
incorporated herein by reference).
4(b) Description of Common Stock Purchase Rights of Luby's Cafeterias,
Inc. in Form 8-A (filed April 17, 1991, effective April 26, 1991,
File No. 1-8308, and incorporated herein by reference).
4(c) Amendment No. 1 dated December 19, 1991, to Rights Agreement dated
April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly
Report on Form 10-Q for the quarter ended November 30, 1991, and
incorporated herein by reference).
4(d) Promissory Note (Loan Agreement) dated January 31, 1994, in favor
of NationsBank of Texas, N.A., in the maximum amount of
$30,000,000 (filed as Exhibit 4(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended February 28, 1994, and
incorporated herein by reference).
10(a) Form of Deferred Compensation Agreement entered into between
Luby's Cafeterias, Inc. and various officers (filed as Exhibit
10(b) to the Company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1981, and incorporated herein by reference).
10(b) Annual Incentive Plan for Area Vice Presidents of Luby's
Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d)
to the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1983, and incorporated herein by reference).
10(c) Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted
October 19, 1983 (filed as Exhibit 10(e) to the Company's Annual
Report on Form 10-K for the fiscal year ended August 31, 1983, and
incorporated herein by reference).
10(d) Employee Stock Option Plan of Luby's Cafeterias, Inc. approved by
the shareholders on January 12, 1984 (filed as Exhibit 10(e) to
the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1984, and incorporated herein by reference).
10(e) Performance Unit Plan of Luby's Cafeterias, Inc. approved by the
shareholders on January 12, 1984 (filed as Exhibit 10(f) to the
Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1984, and incorporated herein by reference).
10(f) Employment Contract dated January 8, 1988, between Luby's
Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to
the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1988, and incorporated herein by reference).
10(g) Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed
as Exhibit 10(i) to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1989, and incorporated herein by
reference).
11 Statement re computation of per share earnings.
Exhibit 11
COMPUTATION OF PER SHARE EARNINGS
The following is a computation of the weighted average number of shares
outstanding which is used in the computation of per share earnings for Luby's
Cafeterias, Inc. for the three and nine months ended May 31, 1994 and 1993.
Three months ended May 31, 1994:
25,813,627 x shares outstanding for 17 days 438,831,659
25,768,465 x shares outstanding for 14 days 360,758,510
25,679,895 x shares outstanding for 19 days 487,918,005
25,588,896 x shares outstanding for 14 days 358,244,544
25,543,726 x shares outstanding for 16 days 408,699,616
25,462,707 x shares outstanding for 12 days 305,552,484
_____________
2,360,004,818
92
_____________
25,652,226
Nine months ended May 31, 1994:
27,227,108 x shares outstanding for 1 day 27,227,108
27,214,570 x shares outstanding for 15 days 408,218,550
27,145,448 x shares outstanding for 14 days 380,036,272
27,022,276 x shares outstanding for 12 days 324,267,312
26,820,618 x shares outstanding for 19 days 509,591,742
26,420,208 x shares outstanding for 11 days 290,622,288
26,388,690 x shares outstanding for 21 days 554,162,490
26,389,190 x shares outstanding for 10 days 263,891,900
26,314,582 x shares outstanding for 19 days 499,977,058
26,077,694 x shares outstanding for 16 days 417,243,104
26,066,151 x shares outstanding for 15 days 390,992,265
26,054,664 x shares outstanding for 14 days 364,765,296
25,907,814 x shares outstanding for 14 days 362,709,396
25,813,627 x shares outstanding for 17 days 438,831,659
25,768,465 x shares outstanding for 14 days 360,758,510
25,679,895 x shares outstanding for 19 days 487,918,005
25,588,896 x shares outstanding for 14 days 358,244,544
25,543,726 x shares outstanding for 16 days 408,699,616
25,462,707 x shares outstanding for 12 days 305,552,484
_____________
7,153,709,599
273
_____________
26,204,064
<PAGE>
Three months ended May 31, 1993:
27,238,292 x shares outstanding for 30 days 817,148,760
27,238,969 x shares outstanding for 62 days 1,688,816,078
_____________
2,505,964,838
92
_____________
27,238,748
Nine months ended May 31, 1993:
27,133,567 x shares outstanding for 28 days 759,739,876
27,133,663 x shares outstanding for 23 days 624,074,249
27,134,265 x shares outstanding for 43 days 1,166,773,395
27,134,512 x shares outstanding for 14 days 379,883,168
27,141,134 x shares outstanding for 17 days 461,399,278
27,149,905 x shares outstanding for 25 days 678,747,625
27,179,067 x shares outstanding for 4 days 108,716,268
27,227,626 x shares outstanding for 15 days 408,414,390
27,238,292 x shares outstanding for 42 days 1,144,008,264
27,238,969 x shares outstanding for 62 days 1,688,816,078
_____________
7,420,572,591
273
_____________
27,181,584
