Luby’s Issues First Quarter Fiscal 2022 Report

HOUSTON, Jan. 31, 2022 /PRNewswire/ — Luby’s, Inc. (NYSE: LUB) (“Luby’s”), which is monetizing its assets for the benefit of its shareholders, today announced its financial results for the first quarter ended December 15, 2021.

Financial results

Accounting liquidation basis

Following Luby’s shareholders’ approval of its liquidation plan on November 17, 2020, effective November 19, 2020, in accordance with generally accepted accounting principles (“GAAP”), the Company has begun reporting its financial results on the basis of liquidation of . The liquidation method of accounting requires, among other things, that management estimate the net sales proceeds on an undiscounted basis, and include in the Company’s assets and liabilities the undiscounted estimate of future income and expenses until the end of liquidation. On a liquidation accounting basis, the net assets in liquidation as of December 15, 2021 are currently expected to give rise to future aggregate liquidation distributions of $2.89 per common share based on the number of common shares outstanding at that time. dated. Taking into account the liquidation distribution of $2.00 per share paid on November 1, 2021, this represents a decrease of $0.11 per share in the estimate of future liquidation distributions compared to our last published estimate, mainly in net decrease in estimated future operating results primarily due to changes in the estimated holding periods of our remaining assets. This estimate of future liquidation distributions includes projections of sales proceeds and net operating income to be received and costs and expenses to be incurred, including the costs of disposing of the Company’s assets to complete the liquidation plan, including including any transfer to an entity in liquidation at that time. time.

There is inherent uncertainty in these projections and, accordingly, these projections could change significantly depending on a number of factors both within and beyond Luby’s control. There can be no assurance that these estimated values ​​will be realized. These amounts should not be taken as an indication of the timing or amount of future distributions or our actual dissolution.

The current estimate of net assets in liquidation as of December 15, 2021 has been estimated based on undiscounted cash flow projections and assumes final liquidation on June 30, 2022, with all remaining assets and liabilities being transferred to an entity in liquidation at that time, although the actual timing of the sale of the Company’s remaining operations and real estate assets cannot be determined with precision at this time. Thus, the final liquidation of the Company is subject to future events and uncertainties. Liabilities are recognized at their contractual amounts due adjusted for the impact of the timing of the planned liquidation. It is not possible to predict with certainty the timing or the aggregate amount that may ultimately be distributed to our shareholders and no assurance can be given that distributions will equal or exceed the estimate presented in this press release.

Asset sales

During the first quarter of fiscal 2022, the Company completed the sale of the Luby’s Cafeteria brand and 35-location business for aggregate consideration of approximately $28.4 million, which included the assumption of certain liabilities by the purchaser and the issuance of promissory notes, preferred shares and common stock purchase warrants to the Company which are recorded at their expected liquidation value. We also completed the sale of 32 real estate properties for total gross proceeds of approximately $103.9 million.

Subsequent to the first quarter of fiscal 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 sites and 13 are vacant. The company currently has 11 Luby’s cafeterias and four Fuddruckers (including 2 combined units) which are managed by third parties as the company pursues disposal options for owned properties and leases. Additionally, the Company currently operates culinary services in 23 locations, while pursuing the sale of this business as part of its liquidation plan.

Debt repayment

During the first quarter of fiscal 2022, the Company fully repaid the remaining $17.0 million of its credit facility indebtedness and the credit facility was terminated.

Distributions

On November 1, 2021, the Company paid a cash liquidation distribution of $62.2 million, or $2.00 per common share, to shareholders of record as of October 25, 2021.

About Luby

Luby’s, Inc. (NYSE: LUB) previously announced its liquidation and dissolution plan, which was approved by its shareholders on November 17, 2020. Luby’s sold its two restaurant brands, Luby’s Cafeterias and Fuddruckers. Luby’s is actively seeking buyers for its Luby’s Culinary Contract Services business segment, its packaged food 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 statements regarding asset sales, effects of the plan of liquidation and dissolution of the Company (the “Plan”), the expected value or proceeds attributable to the sale of assets, and the expected proceeds to be distributed to shareholders or the timing thereof. Luby’s cautions readers that a variety of factors could cause its actual financial and operating results to differ materially from those indicated by forward-looking statements made from time to time in press releases, reports, proxy statements, recording and other written communications, as well as oral statements made from time to time by representatives of Luby’s. The following factors, together with any other cautionary statements included in this press release, provide examples of risks, uncertainties and events that could cause Luby’s actual results to differ materially from the expectations Luby describes in these statements. prospective: general activities and economic conditions; the effects of the COVID-19 pandemic; the impact of competition; our operational initiatives; fluctuations in commodity costs, including beef, poultry, seafood, dairy, cheese and produce; increases in utility costs, including the costs of natural gas and other energy sources; changes in labor availability and cost; the seasonality of Luby’s business; changes in government regulations, including changes in minimum wages; the effects of inflation; the availability of credit; adverse advertising relating to operations, including advertising regarding food quality, illness or other health issues, 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 risks, uncertainties and other factors related to the plan, the expected net proceeds from the sale of assets, and the expected proceeds will be distributed to shareholders.

For more information, contact: John Garilli, Interim [email protected]

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SOURCE Luby’s, Inc.

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