FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to ____________________
Commission file number 333-19283
LUBY'S CAFETERIAS
SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
LUBY'S, INC.
(name of issuer of the securities held pursuant to the plan)
2211 Northeast Loop 410
Post Office Box 33069
San Antonio, Texas 78265-3069
(Address of principal executive office)
REQUIRED INFORMATION
Item 1. Audited Statements of Net Assets Available for Benefits
Audited statements of net assets available for benefits at December 31,
1998 and 1997, prepared in accordance with the financial reporting
requirements of ERISA are filed herewith as an exhibit.
Item 2. Audited Statements of Changes in Net Assets Available for Benefits
Audited statements of changes in net assets available for benefits for the
year ended December 31, 1998, and the ten months ended December 31, 1997,
prepared in accordance with the financial reporting requirements of ERISA
are filed herewith as an exhibit.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the administrator of the plan has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: June 29, 1999.
LUBY'S CAFETERIAS SAVINGS AND
INVESTMENT PLAN
By: Luby's, Inc.
Plan Administrator
LAURA M. BISHOP
By: ___________________________
Laura M. Bishop
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Document
1 Audited financial statements, notes thereto and
supplemental schedules
2 Consent of Ernst & Young LLP
Exhibit 1
Report of Independent Auditors
Plan Administrator
Luby's Cafeterias Savings and Investment Plan
San Antonio, Texas
We have audited the accompanying statements of net assets available for
benefits of the Luby's Cafeterias Savings and Investment Plan as
of December 31, 1998 and 1997, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1998 and the
ten months ended December 31, 1997. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, and the ten months ended
December 31, 1997, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1998, and
reportable transactions for the year then ended, are presented for
purposes of complying with the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, and are not a required part of the basic financial statements.
The supplemental schedules have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ERNST & YOUNG LLP
April 30, 1999
Luby's Cafeterias Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31
1998 1997
____ ____
Assets
Investments, at fair value:
CIGNA Guaranteed Income Fund $ 745,094 $ 302,685
CIGNA Lifetime Funds 1,396,579 600,992
CIGNA Large Co. Stock Index Fund 911,844 334,252
PBHG Growth Fund 1,022,618 549,262
Templeton Foreign Fund 258,208 129,275
Luby's Cafeterias, Inc. Stock 342,136 140,706
Participant loans 76,361 10,633
_________ _________
Total investments 4,752,840 2,067,805
Receivables:
Participant contributions 195 52,814
_________ _________
Net assets available for benefits $4,753,035 $2,120,619
_________ _________
See accompanying notes.
Luby's Cafeterias Savings and Investment Plan
Statements of Changes in Net Assets Available for Benefits
Year Ten Months
Ended Ended
December 31 December 31
1998 1997
____________ _____________
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of
investments $ 241,441 $ 54,026
Interest 32,021 7,164
Dividends 9,933 1,482
_________ _________
283,395 62,672
Contributions:
Participants 2,612,159 2,095,206
_________ _________
Total additions 2,895,554 2,157,878
Deductions from net assets attributed to:
Benefits to participants 244,100 31,754
Administrative expenses 19,038 5,505
_________ _________
Total deductions 263,138 37,259
_________ _________
Net increase 2,632,416 2,120,619
Net assets available for benefits
at beginning of period 2,120,619 ---
_________ _________
Net assets available for benefits at
end of period $4,753,035 $2,120,619
_________ _________
See accompanying notes.
Luby's Cafeterias Savings and Investment Plan
Notes to Financial Statements
December 31, 1998 and 1997
1. Significant Accounting Policies
The accounting records of the Luby's Cafeterias Savings and Investment Plan
(the Plan) are maintained on the accrual basis of accounting.
The Plan's investments are held in common stock of Luby's Cafeterias, Inc. (the
Company),CIGNA Guaranteed Income Fund, CIGNA Lifetime Funds, CIGNA Large
Company Stock Index Fund (formerly CIGNA Stock Market Index Account),
PBHG Growth Fund, and Templeton Foreign Fund, which are stated at fair value
based on quoted market prices on the valuation date. Changes in fair market
value and gains and losses on the sale of investment securities are reflected
in the statement of changes in net assets available for benefits as net
appreciation in fair value of investments.
Certain administrative expenses of the Plan are paid by the Company.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. Description of the Plan
The following is a general description of the Plan. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan, which was effective on March 1, 1997, is a defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code (IRC). Employees
of the Company and Luby's Restaurants Limited Partnership who complete one year
of service, which is defined as 1,000 hours, and have attained age 21 are
eligible to participate in the Plan on the next January 1, April 1, July 1,
or October 1. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Investments
Effective March 1, 1997, the Plan entered into a group annuity contract with
Connecticut General Life Insurance Company (CGLIC). The contract includes a
Guaranteed Income Fund which is invested in CGLIC's general portfolio and is
fully benefit-responsive and, therefore, recorded at contract value. Contract
value equals all contributions and transfers into the account, plus accrued
interest, less payments.
The average yield on the Guaranteed Income Fund was 5.75% and 5.95% for 1998
and 1997, respectively. The credited interest rate was 5.75% and 5.95% at
December 31, 1998 and 1997, respectively. Because the credited interest rate is
reset periodically at the discretion of CGLIC, the contract value approximates
fair value. Amounts invested in the Guaranteed Income Fund might be subject to
certain restrictions if the contract is terminated or if assets are withdrawn.
The value of the group annuity contract is subject to the stability of CGLIC.
The contract also includes eight pooled separate accounts. CGLIC determines the
fair value of the pooled separate accounts based on quoted market values of the
assets in the separate accounts.
Contributions and Investment Options
Participants may contribute an amount not less than 1% and not exceeding 15%
of their compensation, limited by 401(k) regulations, and may direct
investments of their accounts in either common stock of the Company, CIGNA
Guaranteed Income Fund, CIGNA Lifetime Funds, CIGNA Large Company Stock Index
Fund, PBHG Growth Fund, or Templeton Foreign Fund.
Participant Accounts
Each participant's account is credited with the participant's contributions
and allocations of Plan earnings, and charged with an allocation of any
applicable participant expenses. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
Vesting
Participants are immediately vested in their voluntary contributions plus
actual earnings thereon.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their account balance, reduced by the highest
amount of any loan outstanding within the previous twelve months. Loan
transactions are treated as a transfer from (to) the investment fund to
(from) the loan fund. Loan terms range up to five years for general purpose
loans or up to 30 years for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and bear interest at
a rate commensurate with prevailing rates as determined quarterly by the Plan
administrator. Interest rates on outstanding loans range from 9 to 9.5
percent. Principal and interest are paid ratably through payroll deductions.
Payment of Benefits
Upon retirement, or in the event of death or disability, a participant will
receive a lump-sum payment of his (her) account in the Plan and all amounts
which have been allocated to his (her) Plan account. In the event of
termination of employment with the employer for any other reason, the
participant is entitled to the vested portion of his (her) account in the
Plan and all vested amounts which have been allocated to his (her) Plan
account.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
to terminate the Plan subject to the provisions of ERISA.
3. Benefits Payable to Terminated Participants
At December 31, 1998, there were 157 terminated participants in the Plan
entitled to aggregate vested benefits totaling $188,127 in cash distributions.
The actual distribution of these benefits, in the form of cash, will occur
subsequent to December 31, 1998. At December 31, 1997, there were 124
terminated participants entitled to aggregate vested benefits totaling
$38,217 in cash distributions.
4. Reconciliation of Financial Statements to Form 5500
The Form 5500 is prepared on the modified cash basis of accounting. The
following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
1998 1997
____ ____
Net assets available for benefits per
the financial statements $4,753,035 $2,120,619
Participant contributions receivable (195) (52,814)
_________ _________
Net assets available for benefits per
the Form 5500 $4,752,840 $2,067,805
_________ __________
The following is a reconciliation of contributions received from participants
per the financial statements to the Form 5500 for the year ended December 31,
1998:
Contributions received from participants per the
financial statements $2,612,159
Plus:
Amounts receivable from participants at December 31, 1997 52,814
Less:
Amounts receivable from participants at December 31, 1998 (195)
__________
Contributions received from participants per
the Form 5500 $2,664,778
__________
5. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated February 13, 1998, that the Plan and related trust are designed
in accordance with applicable sections of the IRC. The Plan has been amended
since receiving the determination letter. However, the Plan administrator
and the Plan's tax counsel believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
6. Statement of Changes in Net Assets Available for Benefits Segregated by
Participant-Directed Investment Options
The following represents the changes in net assets available for benefits
segregated by participant-directed investment options for the year ended
December 31, 1998 and the ten months ended December 31, 1997:
<TABLE>
<CAPTION>
Year Ended December 31, 1998
Participant-Directed
________________________________________________________________
CIGNA
Guaranteed
Income CIGNA CIGNA CIGNA CIGNA
Fund Lifetime 20 Lifetime 30 Lifetime 40 Lifetime 50
________________________________________________________________
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation)in
fair value of
investments $ - $ 23,480 $ 45,759 $ 32,993 $ 16,702
Interest 29,476 214 242 238 23
Dividends - - - - -
________________________________________________________________
29,476 23,694 46,001 33,231 16,725
Contributions:
Participants 439,769 149,068 271,149 195,624 112,240
Principal payments
on loans 1,958 2,801 888 830 209
________________________________________________________________
Total additions 471,203 175,563 318,038 229,685 129,174
Deductions from net
assets attributed to:
Benefits to
participants 44,125 15,248 26,397 18,917 9,470
Administrative expenses 3,973 2,252 2,974 1,981 841
Loan withdrawals 20,415 8,623 5,529 6,918 ---
________________________________________________________________
Total deductions 68,513 26,123 34,900 27,816 10,311
Net interfund transfers 39,719 12,251 (1,722) 6,708 (6,613)
________________________________________________________________
Net increase (decrease) 442,409 161,691 281,416 208,577 112,250
Net assets available
for benefits at
beginning of year 302,685 113,974 223,260 154,001 81,679
________________________________________________________________
Net assets available
for benefits at end
of year $745,094 $275,665 $504,676 $362,578 $193,929
________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
___________________________________________________________________________
CIGNA
Large Luby's
Company Temple- Cafe-
CIGNA Stock PBHG ton terias, Parti-
Life- Index Growth Foreign Inc. cipant
time 60 Fund Fund Fund Stock Loans Other Total
___________________________________________________________________________
<C> <C> <C> <C> <C> <C> <C> <C>
$ 4,963 $147,866 $ 18,336 $(14,918) $(33,740) $ - $ - $ 241,441
27 738 713 235 115 - - 32,021
- - - - 9,933 - - 9,933
____________________________________________________________________________
4,990 148,604 19,049 (14,683) (23,692) - - 283,395
34,865 436,992 620,079 172,693 232,299 - (52,619) 2,612,159
226 5,641 4,457 1,770 1,095 (19,875) - -
____________________________________________________________________________
40,081 591,237 643,585 159,780 209,702 (19,875) (52,619) 2,895,554
3,555 40,822 57,197 9,307 17,088 1,974 - 244,100
420 2,840 1,900 251 1,606 - - 19,038
826 19,226 17,965 4,817 3,258 (87,577) - -
____________________________________________________________________________
4,801 62,888 77,062 14,375 21,952 (85,603) - 263,138
(3,627) 49,243 (93,167) (16,472) 13,680 - - -
____________________________________________________________________________
31,653 577,592 473,356 128,933 201,430 65,728 (52,619) 2,632,416
28,078 334,252 549,262 129,275 140,706 10,633 52,814 2,120,619
____________________________________________________________________________
$59,731 $911,844 $1,022,618 $258,208 $342,136 $76,361 $ 195 $4,753,035
____________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Ten Months Ended
December 31, 1997
Participant-Directed
________________________________________________________________
CIGNA
Guaranteed
Income CIGNA CIGNA CIGNA CIGNA
Fund Lifetime 20 Lifetime 30 Lifetime 40 Lifetime 50
________________________________________________________________
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation)in
fair value of
investments $ - $ 4,920 $ 10,956 $ 6,922 $ 3,558
Interest 7,030 81 - - -
Dividends - - - - -
________________________________________________________________
7,030 5,001 10,956 6,922 3,558
Contributions:
Participants 303,045 112,029 215,149 149,158 80,748
Principal payments
on loans - 949 - - -
_______________________________________________________________
Total additions 310,075 117,979 226,105 156,080 84,306
Deductions from net
assets attributed to:
Benefits to
participants 7,466 1,489 3,192 867 698
Administrative expenses 981 943 928 391 162
Loan withdrawals 269 3,318 666 117 117
_______________________________________________________________
Total deductions 8,716 5,750 4,786 1,375 977
Net interfund transfers 1,326 1,745 1,941 (704) (1,650)
_______________________________________________________________
Net assets available
for benefits $302,685 $113,974 $223,260 $154,001 $ 81,679
_______________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
___________________________________________________________________________
CIGNA Luby's
Stock Temple- Cafete-
CIGNA Market PBHG ton rias, Parti-
Life- Index Growth Foreign Inc. cipant
time 60 Account Fund Fund Stock Loans Other Total
___________________________________________________________________________
<C> <C> <C> <C> <C> <C> <C> <C>
$ 1,162 $ 28,424 $ 17,732 $ (3,240) $(16,408) $ - $ - $ 54,026
- 19 25 6 3 - - 7,164
- - - - 1,482 - - 1,482
___________________________________________________________________________
1,162 28,443 17,757 (3,234) (14,923) - - 62,672
27,209 303,987 554,181 135,970 160,916 - 52,814 2,095,206
- 217 277 64 36 (1,543) - -
___________________________________________________________________________
28,371 332,647 572,215 132,800 146,029 (1,543) 52,814 2,157,878
134 2,579 9,478 2,698 3,153 - - 31,754
42 557 693 170 638 - - 5,505
117 2,958 2,763 1,409 442 (12,176) - -
___________________________________________________________________________
293 6,094 12,934 4,277 4,233 (12,176) - 37,259
- 7,699 (10,019) 752 (1,090) - - -
___________________________________________________________________________
$28,078 $334,252 $549,262 $129,275 $140,706 $10,633 $52,814 $2,120,619
___________________________________________________________________________
</TABLE>
Luby's Cafeterias Savings and Investment Plan
Notes to Financial Statements (continued
December 31, 1998 and 1997
7. Year 2000 (Unaudited)
During 1998 the Company, in the ordinary course of business, decided to migrate
its information technology from internally developed systems to commercially
available products, for a variety of business reasons, which are Year 2000
compliant. The system migration included all systems that have a direct impact
on the Plan. The Company has also established formal communications with its
third-party service providers to determine that they have developed plans to
address their own Year 2000 issues which relate to the Plan. All third-party
service providers have indicated that they will be Year 2000 compliant by late
1999. The Company does not believe a contingency plan is required and does not
intend to create one as it believes the likelihood is remote that the third-
party service providers have not fully addressed the Year 2000 issue or that it
would have a material impact on the Plan.
SUPPLEMENTAL SCHEDULES
Luby's Cafeterias Savings and Investment Plan
Item 27a - Schedule of Assets Held for Investment Purposes
EIN: 74-1335253 Plan No.: 003
December 31, 1998
Description of
Investment, Including
Identity of Issue, Maturity Date, Rate of
Borrower, Lessor, Interest, Collateral, Current
or Similar Party Par or Maturity Date Cost Value
_________________ ______________________ _________ _________
*CIGNA Guaranteed
Income Fund Fixed income account $745,094 $745,094
*CIGNA Lifetime 20 Pooled separate account 244,188 275,665
*CIGNA Lifetime 30 Pooled separate account 442,968 504,676
*CIGNA Lifetime 40 Pooled separate account 316,818 362,578
*CIGNA Lifetime 50 Pooled separate account 170,182 193,929
*CIGNA Lifetime 60 Pooled separate account 52,725 59,731
*CIGNA Large Company
Stock Index Fund Pooled separate account 737,046 911,844
PBHG Growth Fund Pooled separate account 965,728 1,022,618
Templeton Foreign
Fund Pooled separate account 271,451 258,208
*Luby's Cafeterias,
Inc. Stock Common stock
21,545 shares 381,129 342,136
*Participant loans Interest accrued at prime
rate plus 1%, varying
maturity dates, 9.00%-
9.50% charged during 1998 - 76,361
*Denotes party-in-interest
<TABLE>
<CAPTION>
Luby's Cafeterias Savings and Investment Plan
Item 27d - Schedule of Reportable Transactions
EIN: 74-1335253 Plan No.: 003
Year Ended December 31, 1998
Description of
Asset (Including
Identity Interest Rate and Current Value
of Party Maturity in Case Purchase Selling Cost of of Asset on Net Gain
Involved* of a Loan) Price Price Asset Transaction Date or <Loss>
______________________________________________________________________________________________________________________
Category (iii) - Series of Securities Transactions
<S> <C> <C> <C> <C> <C> <C>
CIGNA Guaranteed Income Fund $495,172 $ - $495,172 $495,172 $ -
CIGNA Guaranteed Income Fund - 81,906 81,906 81,906 -
CIGNA Lifetime 20 Fund 168,303 - 168,303 168,303 -
CIGNA Lifetime 20 Fund - 34,520 33,790 34,520 730
CIGNA Lifetime 30 Fund 280,885 - 280,885 280,885 -
CIGNA Lifetime 30 Fund - 53,434 50,452 53,434 2,982
CIGNA Lifetime 40 Fund 199,760 - 199,760 199,760 -
CIGNA Lifetime 40 Fund - 32,118 30,155 32,118 1,963
CIGNA Lifetime 50 Fund 109,867 - 109,867 109,867 -
CIGNA Lifetime 50 Fund - 19,139 18,030 19,139 1,109
CIGNA Large Co. Stock Index Fund 512,841 - 512,841 512,841 -
CIGNA Large Co. Stock Index Fund - 92,314 82,476 92,314 9,838
PBHG Growth Fund 622,283 - 622,283 622,283 -
PBHG Growth Fund - 178,139 190,233 178,139 (12,094)
Templeton Foreign Fund 181,972 - 181,972 181,972 -
Templeton Foreign Fund - 41,457 43,190 41,457 (1,733)
Luby's Cafeterias, Inc. Stock 252,705 - 252,705 252,705 -
Luby's Cafeterias, Inc. Stock - 26,161 29,102 26,161 (2,941)
There were no Category (i), (ii), or (iv) transactions
during the year ended December 31, 1998.
*All transactions on market
</TABLE>
Exhibit 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-19283) pertaining to the Employees' Savings and Investment
Plan of Luby's, Inc. of our report dated April 30, 1999, with respect to the
financial statements and schedules of the Luby's Cafeterias Savings and
Investment Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1998.
ERNST & YOUNG LLP
San Antonio, Texas
June 28, 1999
