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 November 30, 1996
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: 23,293,101 shares outstanding as of November 30, 1996
(exclusive of 4,109,966 treasury shares)
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
LUBY'S CAFETERIAS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended
November 30,
1996 1995
____ ____
(Amounts in thousands
except per share data)
Sales $122,287 $108,337
Costs and expenses:
Cost of food 30,389 27,006
Payroll and related costs 36,011 30,304
Occupancy and other operating expenses 36,906 32,172
General and administrative expenses 5,563 4,973
________ ________
108,869 94,455
________ ________
Income from operations 13,418 13,882
Interest expense (653) (528)
Other income, net 301 350
________ ________
Income before income taxes 13,066 13,704
Provision for income taxes 4,900 5,139
________ ________
Net income 8,166 8,565
Retained earnings at beginning of period 267,374 248,973
Cash dividends (4,647) (4,200)
Treasury stock transactions (261) (195)
________ ________
Retained earnings at end of period $270,632 $253,143
________ ________
Net income per share $.35 $.37
________ ________
Cash dividend per share $.20 $.18
________ ________
Average number of shares outstanding 23,614 23,322
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
November 30, August 31,
1996 1996
____ ____
(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents $ 3,977 $ 2,687
Trade accounts and other receivables 565 541
Food and supply inventories 4,133 4,517
Prepaid expenses 2,610 3,195
Deferred income taxes 476 418
________ ________
Total current assets 11,761 11,358
Investments and other assets - at cost 22,000 12,343
Property, plant, and equipment - at cost, net 327,705 311,589
________ ________
$361,466 $335,290
________ ________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 10,431 $ 14,568
Dividends payable 4,659 4,796
Accrued expenses and other liabilities 20,657 24,336
Income taxes payable 6,206 2,754
________ ________
Total current liabilities 41,953 46,454
Long-term debt 84,000 41,000
Deferred income taxes and other credits 22,258 22,163
Shareholders' equity:
Common stock 8,769 8,769
Paid-in capital 26,945 26,945
Retained earnings 270,632 267,374
Less cost of treasury stock (93,091) (77,415)
________ ________
Total shareholders' equity 213,255 225,673
________ ________
$361,466 $335,290
________ ________
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
November 30,
1996 1995
____ ____
(Thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,166 $ 8,565
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,831 4,276
Decrease in accrued expenses
and other liabilities (3,564) (5,797)
Other 1,970 2,923
_______ _______
Net cash provided by operating activities 11,403 9,967
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of land held for future use (10,072) (3,341)
Purchases of property, plant, and equipment (20,947) (7,706)
_______ _______
Net cash used in investing activities (31,019) (11,047)
_______ _______
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock
under stock option plan 950 80
Net proceeds from short-term borrowings --- 3,000
Proceeds from long-term debt 220,000 ---
Reductions of long-term debt (177,000) ---
Purchases of treasury stock (18,260) ---
Dividends paid (4,784) (4,196)
_______ _______
Net cash provided by (used in)
financing activities 20,906 (1,116)
_______ _______
Net increase (decrease) in cash
and cash equivalents 1,290 (2,196)
Cash and cash equivalents at beginning of period 2,687 12,392
_______ _______
Cash and cash equivalents at end of period $ 3,977 $10,196
_______ _______
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 1996
(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.
<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 increased by $1,290,000 from the end of the
preceding fiscal year to November 30, 1996. All capital expenditures
for fiscal 1997 are being funded from cash flows from operations, cash
equivalents, and long-term debt. Capital expenditures for the three
months ended November 30, 1996, were $31,019,000, including approximately
$14 million for the purchase of 20 cafeteria locations from Triangle
FoodService Corporation, formerly Wyatt Cafeterias, Inc. As of November 30,
1996, the Company owned 11 undeveloped land sites and nine land sites on
which cafeterias are under construction.
During the three months ended November 30, 1996, the Company purchased
747,800 shares of its common stock at a cost of $17,102,000, which are
being held as treasury stock. To complete the treasury stock purchases
and fund capital expenditures, the Company required external financing
and borrowed funds under a $100,000,000 line-of-credit agreement. As of
November 30, 1996, the amount outstanding under this line of credit was
$84,000,000. The Company believes that additional financing from external
sources can be obtained on terms acceptable to the Company in the event
such financing is required.
Results of Operations
Quarter ended November 30, 1996 compared to the quarter ended November 30,
1995.
Sales increased $13,950,000, or 12.9%, due to the addition of 17 new
cafeterias in fiscal 1997 and 18 in fiscal 1996.
Cost of food increased $3,383,000, or 12.5%, due primarily to the increase
in sales. Payroll and related costs increased $5,707,000, or 18.8%, due
primarily to the increase in sales, the higher Federal minimum wage effective
October 1, 1996, and higher wage costs associated with the significant
increase in expansion over the prior year. Labor costs are typically higher
in new units due to the significant amount of training during the early
months. Occupancy and other operating expenses increased $4,734,000, or
14.7%, due primarily to the increase in sales and the opening of 17 new
cafeterias. All preopening and other start-up costs are expensed as incurred,
including costs for the initial shipments of china, silverware, and glassware.
The total impact of opening the 15 former Wyatt's locations caused net income
for the quarter to be lower by $.045 per share. General and administrative
expenses increased $590,000, or 11.9%, due primarily to higher legal and
professional fees, higher management trainee salaries, and higher moving
expenses, all associated with the increased expansion.
Interest expense for the quarter ended November 30, 1996, increased $125,000
over the first quarter of fiscal 1996 due to higher borrowings under the
line-of-credit agreement.
The provision for income taxes decreased $239,000, or 4.7%, due primarily
to the decrease in pretax income. The effective income tax rate was 37.5%
for both periods.
General increases in costs of food, wages, supplies, and services make
it necessary for the Company to increase its menu prices from time to
time. As a result of the new Federal minimum wage, the Company implemented
a 3% to 4% price increase on September 15, 1996, to help offset the pressure
on profit margins.
<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).
3(a) Certificate of Incorporation of Luby's Cafeterias, Inc.,
a Delaware corporation, as in effect February 28, 1994
(filed as Exhibit 3(a) to the Company's Quarterly Report
on Form 10-Q for the quarter ended February 28, 1994, and
incorporated herein by reference).
3(b) Bylaws of Luby's Cafeterias, Inc., as currently in effect
(filed as Exhibit 3(c) to the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 1996, and
incorporated herein by reference).
4(a) 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(b) 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(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1995, and incorporated herein by reference).
4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 31,
1995, and incorporated herein by reference).
4(e) Credit Agreement dated February 27, 1996, among Luby's
Cafeterias, Inc., Certain Lenders, and NationsBank of Texas,
N.A. (filed as Exhibit 4(e) to the Company's Quarterly
Report on Form 10-Q for the quarter ended February 29,
1996, 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) 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(e) 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(f) Management Incentive Stock Plan of 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).
10(g) Nonemployee Director Deferred Compensation Plan of Luby's
Cafeterias, Inc. adopted October 27, 1994 (filed as
Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q
for the quarter ended November 30, 1994, and incorporated
herein by reference).
10(h) Nonemployee Director Stock Option Plan of Luby's Cafeterias,
Inc. approved by the shareholders on January 13, 1995 (filed
as Exhibit 10(h) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1995, and
incorporated herein by reference).
10(i) Employment Contract dated January 12, 1996, between Luby's
Cafeterias, Inc. and John B. Lahourcade (filed as
Exhibit 10(i) to the Company's Quarterly Report on Form 10-Q
for the quarter ended February 29, 1996, and incorporated
herein by reference).
10(j) Luby's Cafeterias, Inc. Supplemental Executive Retirement
Plan dated May 30, 1996 (filed as Exhibit 10(j) to the
Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1996, and incorporated herein by
reference).
10(k) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated
July 18, 1996 (filed as Exhibit 10(k) to the Company's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1996, 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
Chairman of the Board and
Chief Executive Officer
By: JOHN E. CURTIS, JR.
_____________________________
John E. Curtis, Jr.
President, Chief Operating Officer,
and Chief Financial Officer
Dated: January 10, 1997
<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).
3(a) Certificate of Incorporation of Luby's Cafeterias, Inc.,
a Delaware corporation, as in effect February 28, 1994 (filed as
Exhibit 3(a) to the Company's Quarterly Report on Form 10-Q for
the quarter ended February 28, 1994, and incorporated herein by
reference).
3(b) Bylaws of Luby's Cafeterias, Inc., as currently in effect
(filed as Exhibit 3(c) to the Company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1996, and incorporated herein
by reference).
4(a) 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(b) 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(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated
April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended February 28, 1995, and
incorporated herein by reference).
4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated
April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 31, 1995, and
incorporated herein by reference).
4(e) Credit Agreement dated February 27, 1996, among Luby's Cafeterias,
Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as
Exhibit 4(e) to the Company's Quarterly Report on Form 10-Q for
the quarter ended February 29, 1996, 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) 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(e) 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(f) 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).
10(g) Nonemployee Director Deferred Compensation Plan of Luby's
Cafeterias, Inc. adopted October 27, 1994 filed as Exhibit 10(g)
to the Company's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1994, and incorporated herein by reference).
10(h) Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc.
approved by the shareholders on January 13, 1995 (filed as
Exhibit 10(h) to the Company's Quarterly Report on Form 10-Q
for the quarter ended February 28, 1995, and incorporated
herein by reference).
10(i) Employment Contract dated January 12, 1996, between Luby's
Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i)
to the Company's Quarterly Report on Form 10-Q for the quarter
ended February 29, 1996, and incorporated herein by reference).
10(j) Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan
dated May 30, 1996 (filed as Exhibit 10(j) to the Company's Annual
Report on Form 10-K for the fiscal year ended August 31, 1996, and
incorporated herein by reference).
10(k) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18,
1996 (filed as Exhibit 10(k) to the Company's Annual Report on
Form 10-K for the fiscal year ended August 31, 1996, 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 months ended November 30, 1996 and 1995.
Three months ended November 30, 1996
23,892,819 x shares outstanding for 30 days 716,784,570
23,666,720 x shares outstanding for 31 days 733,668,320
23,281,927 x shares outstanding for 30 days 698,457,810
_____________
2,148,910,700
Divided by number of days in the period 91
_____________
23,614,403
Three months ended November 30, 1995:
23,313,132 x shares outstanding for 21 days 489,575,772
23,315,089 x shares outstanding for 21 days 489,616,869
23,320,721 x shares outstanding for 18 days 419,772,978
23,331,311 x shares outstanding for 8 days 186,650,488
23,334,503 x shares outstanding for 23 days 536,693,569
_____________
2,122,309,676
Divided by number of days in the period 91
_____________
23,322,084
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 3,977
<SECURITIES> 0
<RECEIVABLES> 565
<ALLOWANCES> 0
<INVENTORY> 4,133
<CURRENT-ASSETS> 11,761
<PP&E> 478,526
<DEPRECIATION> 150,821
<TOTAL-ASSETS> 361,466
<CURRENT-LIABILITIES> 41,953
<BONDS> 0
0
0
<COMMON> 8,769
<OTHER-SE> 204,486<F1>
<TOTAL-LIABILITY-AND-EQUITY> 361,466
<SALES> 122,287
<TOTAL-REVENUES> 122,287
<CGS> 66,400
<TOTAL-COSTS> 66,400
<OTHER-EXPENSES> 36,906
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 653
<INCOME-PRETAX> 13,066
<INCOME-TAX> 4,900
<INCOME-CONTINUING> 8,166
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,166
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
<FN>
<F1>Other stockholders' equity amount is less cost of treasury stock of $93,091.
</FN>
</TABLE>
