Luby’s Releases Third Quarter Fiscal 2021 Report
HOUSTON, July 19, 2021 / PRNewswire / – Luby’s, Inc. (NYSE: LUB) (“Luby’s”), which is in the process of monetizing its assets for the benefit of its shareholders, today announced its financial results for the third quarter ended June 2, 2021.
Liquidation accounting basis
Following the approval by Luby’s shareholders of its liquidation plan on November 17, 2020, efficient November 19, 2020In accordance with generally accepted accounting principles (“GAAP”), the company has started to present its financial results on a run-off basis. The liquidation basis of accounting requires, among other things, that management estimate the net sales proceeds on an undiscounted basis, and include in the assets and liabilities of the Company the undiscounted estimate of future income and expenses until the end of the year. of liquidation. Based on the liquidation accounting framework, the net assets in liquidation as of June 2, 2021 are currently estimated to result in future liquidation distributions of approximately $ 4.13 per common share based on the number of common shares outstanding on that date. This amount represents an increase of $ 0.15 per share compared to last quarter estimate mainly due to the actual completion of the completed real estate transactions as well as the achievement of better operating results than previously expected. This estimate of future liquidation distributions includes projections of sales and net operating income receivable and costs and expenses to be incurred, including the costs of disposing of the Company’s assets to complete the liquidation plan. which should currently be completed by June 30th, 2022.
There is inherent uncertainty in these projections and, therefore, these projections could change significantly depending 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. These amounts should not be taken as an indication of the timing or amount of future distributions or of our actual termination.
The current estimate of the net assets in liquidation at June 2, 2021 has been estimated on the basis of undiscounted cash flow projections and assumes final liquidation on June 30, 2022 although the actual timing of the sale of the Company’s operations and real estate cannot be determined with precision at this time. As such, 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 when or the total 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 release.
Recent Company Announcements
- June 21, 2021: Luby’s, Inc. signs agreement to sell Luby’s cafeteria restaurant business to a subsidiary of Calvin Gin as part of the execution of the company’s monetization plan (real estate for sale separately)
The Company has entered into an agreement to sell the catering business Luby’s Cafeteria to a newly formed subsidiary of Calvin Gin. The purchase by the Gin subsidiary (which will be renamed Luby’s Restaurants Corporation after the transaction closes) will include 32 of the existing Luby’s restaurant locations, all in Texas, and the ownership of the Luby’s Cafeteria brand. The acquisition of the Luby’s cafeteria business does not include any real estate owned by Luby’s, nor any of the Company’s Fuddruckers business or the Company’s culinary contract service business. The structure of the transaction will allow Luby’s to sell its real estate related to its cafeteria-restaurant business to third parties and realize shareholder value. It is currently expected, after the transaction closes, that almost all employees at the 32 affected locations will be offered positions by the buyer to stay in these stores, a job that will likely total more than 1,000 associates. It is currently expected that the sale transaction of Luby’s cafeteria operations could provide Luby’s with approximately $ 28.7 million of value (all of which, except a nominal amount, will be derived from the assumption by the buyer of Luby’s debts and the issuance of notes by the buyer to Luby’s). There can be no assurance that the Company will realize or receive the full value of such consideration.
- June 17, 2021: Luby’s, Inc. signs an agreement to sell the Fuddruckers franchise business to a subsidiary of Nicolas perkins as part of the execution of the company’s monetization plan
The purchase by Perkins’ subsidiary, Black Titan Franchise Systems LLC, encompasses the primary ownership of the Fuddruckers brand. The Fuddruckers brand currently has 92 locations operating in United States, including 13 locations operated by affiliates of Mr. Perkins. It is currently anticipated that the sale transaction of the Fuddruckers franchise brand could provide Luby’s, Inc. with approximately $ 18.5 million of value (most of which will come from the buyer’s issuance of a ticket to Luby’s and the assumption of certain liabilities). There can be no assurance that the Company will realize or receive the full value of such consideration.
During fiscal year 2021 to July 19, 2021, we completed the sale of seven properties for total net proceeds of approximately $ 16.9 million. Four of these seven properties were sold in June 2021 for a total net product of approximately $ 9.1 million. The proceeds from the sale of properties have been used primarily to reduce our outstanding debt.
The company currently operates 55 Luby’s cafeterias and nine Fuddruckers, as well as culinary contract services in 27 locations, while continuing to sell these businesses as part of its liquidation plan. Operationally, business continues as usual as we move forward in the transition of these iconic brands to their new owners.
Luby’s, Inc. (NYSE: LUB) previously announced its plan for liquidation and dissolution, which was approved by its shareholders on November 17, 2020. In June 2021, Luby’s, Inc. also previously announced that it has entered into an agreement to sell its two restaurant brands, Luby’s Cafeterias and Fuddruckers. In addition, Luby’s is actively seeking buyers for its Luby’s Culinary Contract Services business line, which provides food service management at sites including healthcare facilities, corporate restaurants, sports arenas, as well as retail. of select Luby’s frozen main dishes in retail grocery stores. Luby’s also owns real estate assets linked to its operations, for which it is also actively seeking buyers.
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 in this press release, other than statements of historical fact, are “forward-looking statements” for the purposes of these provisions, including statements regarding sales of assets, effects of the plan for 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 various 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, proxies, registration statements and other written communications, such as oral statements made from time to time by representatives of Luby’s. The following factors, as well as any other cautionary statements 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 described by Luby in these forward-looking statements: general matters and conditions; the effects of the COVID-19 pandemic; the impact of competition; our operational initiatives; fluctuations in the cost of commodities, including beef, poultry, seafood, dairy products, cheese, and fruits and vegetables; 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 government regulations, including changes in minimum wages; the effects of inflation; the availability of credit; adverse publicity relating to operations, including advertising concerning food quality, disease or other health problems or labor relations; continuous service from key management personnel; 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 relating 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:
Jean Garilli, Interim CEO
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SOURCE Luby’s, Inc.