Luby's Inc. (LUB, Financial) filed Quarterly Report for the period ended 2010-05-05.
Luby's Inc. has a market cap of $112.1 million; its shares were traded at around $4 with and P/S ratio of 0.4. LUB is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Other operating expenses decreased by approximately $4.8 million, or 12.5%, in the three quarters ended May 5, 2010 compared to the three quarters ended May 6, 2009. As a percentage of restaurant sales, these costs decreased 0.2%, to 21.6%, in the three quarters ended May 5, 2010 compared to 21.8% in the three quarters ended May 6, 2009. Other operating expenses decreased primarily due to 1) an approximate $1.7 million reduction in utility expenses; 2) a $1.0 million reduction due to the non-recurrence of Hurricane Ike-related expenses that were recorded in the three quarters ended May 6, 2009; 3) an approximate $1.0 million reduction in supplies and services expenses; and 4) an approximate $0.6 million reduction in repairs and maintenance, marketing and advertising, and occupancy costs. Other operating expenses for the three quarters ended May 5, 2010 were also reduced due to the receipt of insurance proceeds of approximately $0.5 million related to a Hurricane Ike claim settlement for business interruption.
The loss from discontinued operations was $0.5 million in the quarter ended May 5, 2010 compared to a $0.7 million loss in the quarter ended May 6, 2009. The loss from discontinued operations was $1.9 million in the three quarters ended May 5, 2010 compared to a $2.5 million loss in the three quarters ended May 6, 2009. The loss in the three quarters ended May 5, 2010 included a $1.6 million gain related to the sale of closed properties.
Investing Activities. Cash flows provided by investing activities were $7.0 million in the three quarters ended May 5, 2010 compared to $7.6 million in cash used in the three quarters ended May 6, 2009, primarily due to $7.8 million in proceeds received on the sale of four restaurant properties and an easement on one restaurant property and $1.4 million in proceeds from sale of long term investments offset by $2.3 million in purchases of property and equipment. Our capital expenditure program includes, among other things, restaurant remodeling, information technology enhancements and Culinary Contract Service locations. We used $1.5 million for purchases of property and equipment in the three quarters ended May 5, 2010 compared to $8.8 million in the three quarters ended May 6, 2009. We expect to spend approximately $3.0 million to $4.0 million on capital expenditures in fiscal year 2010.
At May 5, 2010, we held $7.1 million, par value ($5.7 million, fair value) in auction rate municipal bonds as investments. These securities are long-term bonds with underlying maturities in years 2022 through 2042 but have historically had short-term features intended for the investors liquidity. Prior to the collapse of the auction rate securities market in February 2008, these bonds were purchased or sold through a Dutch-auction process in short-term intervals of 7, 28 or 35 days, whereby the interest rate on the security is reset. The prevailing market auction failures resulted in the an other-than-temporary impairment net loss of $1.0 million in fiscal year 2009 and $0.4 million in the three quarters ended May 5, 2010. Since our securities estimate of fair market value increased at the quarter ended May 5, 2010, we recorded a $0.6 million unrealized gain. The unrealized gain was recorded in other comprehensive income on the balance sheet.
We had a working capital deficit of $4.0 million as of May 5, 2010, compared to a working capital deficit of $21.1 million as of August 26, 2009. The reduction of the deficit is primarily due to the $6.8 million increase in cash, the reclassification of a $5.7 million net long-term investment in auction rate securities to short-term, a decrease in accounts payable of $2.7 million, a decrease in accrued payroll of $0.8 million, and a decrease in accrued property taxes payable of $1.4 million. We expect to meet our working capital requirements through cash flows from operations, sales of properties and availability under our New Credit Facility.
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Luby's Inc. has a market cap of $112.1 million; its shares were traded at around $4 with and P/S ratio of 0.4. LUB is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Other operating expenses primarily include restaurant-related expenses for utilities, repairs and maintenance, advertising, insurance, services, supplies and occupancy costs. Other operating expenses decreased by approximately $2.1 million, or 16.9%, in the quarter ended May 5, 2010 compared to the quarter ended May 6, 2009. Other operating expenses decreased primarily due to 1) an approximate $0.7 million reduction in marketing and advertising expenses as efforts were focused on store specific limited time offers which generally did not require broad based marketing efforts; 2) an approximate $0.5 million reduction in utility expenses; 3) an approximate $0.3 million reduction in repairs and maintenance expense; 4) an approximate net $0.1 million reduction in supplies, services, and other operating expenses; and 5) the receipt of insurance proceeds of approximately $0.5 million related to a Hurricane Ike claim settlement for business interruption. As a percentage of restaurant sales, other operating expenses decreased 2.6%, to 19.4%, in the quarter ended May 5, 2010 compared to 22.0% in the quarter ended May 6, 2009.Other operating expenses decreased by approximately $4.8 million, or 12.5%, in the three quarters ended May 5, 2010 compared to the three quarters ended May 6, 2009. As a percentage of restaurant sales, these costs decreased 0.2%, to 21.6%, in the three quarters ended May 5, 2010 compared to 21.8% in the three quarters ended May 6, 2009. Other operating expenses decreased primarily due to 1) an approximate $1.7 million reduction in utility expenses; 2) a $1.0 million reduction due to the non-recurrence of Hurricane Ike-related expenses that were recorded in the three quarters ended May 6, 2009; 3) an approximate $1.0 million reduction in supplies and services expenses; and 4) an approximate $0.6 million reduction in repairs and maintenance, marketing and advertising, and occupancy costs. Other operating expenses for the three quarters ended May 5, 2010 were also reduced due to the receipt of insurance proceeds of approximately $0.5 million related to a Hurricane Ike claim settlement for business interruption.
The loss from discontinued operations was $0.5 million in the quarter ended May 5, 2010 compared to a $0.7 million loss in the quarter ended May 6, 2009. The loss from discontinued operations was $1.9 million in the three quarters ended May 5, 2010 compared to a $2.5 million loss in the three quarters ended May 6, 2009. The loss in the three quarters ended May 5, 2010 included a $1.6 million gain related to the sale of closed properties.
Investing Activities. Cash flows provided by investing activities were $7.0 million in the three quarters ended May 5, 2010 compared to $7.6 million in cash used in the three quarters ended May 6, 2009, primarily due to $7.8 million in proceeds received on the sale of four restaurant properties and an easement on one restaurant property and $1.4 million in proceeds from sale of long term investments offset by $2.3 million in purchases of property and equipment. Our capital expenditure program includes, among other things, restaurant remodeling, information technology enhancements and Culinary Contract Service locations. We used $1.5 million for purchases of property and equipment in the three quarters ended May 5, 2010 compared to $8.8 million in the three quarters ended May 6, 2009. We expect to spend approximately $3.0 million to $4.0 million on capital expenditures in fiscal year 2010.
At May 5, 2010, we held $7.1 million, par value ($5.7 million, fair value) in auction rate municipal bonds as investments. These securities are long-term bonds with underlying maturities in years 2022 through 2042 but have historically had short-term features intended for the investors liquidity. Prior to the collapse of the auction rate securities market in February 2008, these bonds were purchased or sold through a Dutch-auction process in short-term intervals of 7, 28 or 35 days, whereby the interest rate on the security is reset. The prevailing market auction failures resulted in the an other-than-temporary impairment net loss of $1.0 million in fiscal year 2009 and $0.4 million in the three quarters ended May 5, 2010. Since our securities estimate of fair market value increased at the quarter ended May 5, 2010, we recorded a $0.6 million unrealized gain. The unrealized gain was recorded in other comprehensive income on the balance sheet.
We had a working capital deficit of $4.0 million as of May 5, 2010, compared to a working capital deficit of $21.1 million as of August 26, 2009. The reduction of the deficit is primarily due to the $6.8 million increase in cash, the reclassification of a $5.7 million net long-term investment in auction rate securities to short-term, a decrease in accounts payable of $2.7 million, a decrease in accrued payroll of $0.8 million, and a decrease in accrued property taxes payable of $1.4 million. We expect to meet our working capital requirements through cash flows from operations, sales of properties and availability under our New Credit Facility.
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