Item 1. Business.
Luby's Cafeterias, Inc. (the "Company") operates 221 cafeterias under the name "Luby's" located in suburban shopping areas in Arizona, Arkansas, Florida, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, Tennessee, and Texas. Of the 221 cafeterias operated by the Company, 128 are at locations owned by the Company and 93 are on leased premises.
Luby's Cafeterias, Inc. was originally incorporated in Texas in 1959 and was reincorporated in Delaware on December 31, 1991. The Company's executive offices are at 2211 Northeast Loop 410, P. O. Box 33069, San Antonio, Texas 78265-3069.
Marketing
The Company's product strategy is to provide a wide variety of freshly- prepared foods in an attractive and informal environment. The Company's research has shown that its products appeal to a broad range of value-oriented consumers with particular success among senior citizens, families with children, shoppers, and business people looking for a quick, healthy meal at a reasonable price.
Prior to 1991 the Company relied primarily on customers' word-of-mouth recommendations and community relations activities to promote its business, spending approximately .5% of sales annually on these efforts. In 1991 the Company began developing a new marketing program. Based on favorable results of radio and television advertising tests, the marketing budget increased to approximately two percent of sales for fiscal 1996. The Company intends to continue expending the majority of the marketing budget on television and radio advertising, as well as supporting the increased local marketing activities of the individual cafeterias.
Operations
The Company's operations combine the food quality and atmosphere of a good restaurant with the simplicity and visual food selection of cafeteria service. Food is prepared in small quantities throughout serving hours, and frequent quality checks are made. Each cafeteria offers a broad and varied menu and normally serves 12 to 14 entrees, 12 to 14 vegetable dishes, 22 to 25 salads, and 18 to 20 desserts.
The Company's cafeterias cater primarily to shoppers and office or store personnel for lunch and to families for dinner. The Company's cafeterias are open for lunch and dinner seven days a week. All of the cafeterias sell take-out orders, and most of them have separate food to go entrances. Take- out orders accounted for approximately ten percent of sales in fiscal 1996.
Each cafeteria is operated as a separate unit under the control of a manager who has responsibility for day-to-day operations, including food purchasing, menu planning, and personnel employment and supervision. Each cafeteria manager is compensated on the basis of his or her cafeteria's profits. Management believes that granting broad authority to its cafeteria managers and compensating them on the basis of their performance are significant factors in the profitability of its cafeterias. Of the 221 cafeteria managers employed by the Company, 166 have been with the Company for more than ten years. Generally, an individual is employed for a period of seven to ten years before he or she is considered qualified to become a cafeteria manager.
Each cafeteria cooks or prepares substantially all of the food served, including breads and pastries. The cafeterias prepare food from the same recipes, with minor variations to suit local tastes, although menus are not uniform in all of the Company's cafeterias on any particular day. Menus are prepared to reflect local and seasonal food preferences and to take advantage of any special food purchasing opportunities. Substantially all of the food served by each cafeteria is purchased from local suppliers. None of the cafeterias are dependent upon any one supplier, and the Company believes that alternative sources of supply are readily available.
Quality control teams, each consisting of experienced cooks and a supervisor, help to maintain uniform standards of food preparation. The teams primarily assist in the training of new personnel during the opening of new cafeterias. The teams also visit the cafeterias periodically and work with the regular staffs to check adherence to the Company's recipes, train personnel in new techniques, and evaluate procedures for possible use throughout the Company.
The Company conducts a training program comprised of both on-the-job training and classroom instruction in its training facilities in San Antonio. The training program is approximately three months in duration. Management personnel receive one week of classroom instruction and spend the remaining time on practical training in operating cafeterias. In order to draw management trainees from regional talent pools, the Company has set up satellite training schools in several key cafeterias to make on-the-job training more accessible on a local level.
As of August 31, 1996, the Company had approximately 11,680 employees, consisting of 10,890 nonmanagement cafeteria personnel; 659 cafeteria managers, associate managers, and assistant managers; and 131 executive, administrative, and clerical personnel. Employee relations are considered to be good, and the Company has never had a strike or work stoppage.
Expansion
During the fiscal year ended August 31, 1996, the Company relocated one cafeteria in Port Arthur, Texas, closed one cafeteria in El Paso, Texas, and opened 18 new cafeterias in Surprise, Arizona; Wichita, Kansas; Nashville, Tennessee; and Arlington, Corpus Christi, Dallas, Fort Worth, Houston, Kerrville, McKinney, San Antonio, and Tomball, Texas; for a net increase of 17 units for the fiscal year.
On September 16, 1996, the Company acquired from Triangle FoodService Corporation (formerly Wyatt Cafeterias, Inc.) 20 cafeteria locations, consisting of 12 owned sites and 8 leased locations. On October 2, 1996, the Company opened 15 of those units as "Luby's" cafeterias, located in Hot Springs, Arkansas; Joplin, Missouri; and Abilene, Dallas, Del Rio, Houston, Irving, Jacinto City, Laredo, McAllen, Mesquite, and Rosenberg, Texas. In addition, since August 31, 1996, the Company has relocated a cafeteria in Longview, Texas, and opened two new cafeterias in College Station and San Antonio, Texas.
Ten new cafeterias are under construction in Peoria and Phoenix, Arizona; Little Rock, Arkansas; St. Petersburg, Florida; Albuquerque, New Mexico; Memphis, Tennessee; and Mesquite and San Antonio, Texas. During fiscal 1997, the Company expects to open in excess of 30 new cafeterias, including the reopened units acquired from Triangle FoodService Corporation.
The Company continually evaluates prospective new cafeteria sites and typically has several sites for new cafeterias under active consideration at any given time. The rate at which new cafeterias are opened is governed by the Company's policy of controlled growth, which takes into account the resources and capabilities of all departments involved, including real estate, construction, equipment, and operations. It has been the Company's experience that new cafeterias generally become profitable within three months after opening.
The costs of opening new cafeterias vary widely, depending on whether the facilities are to be leased or owned, and if owned, on site acquisition and construction costs. The Company estimates that in recent years it has cost $2,300,000 to $2,600,000 to construct, equip, and furnish a new cafeteria in a freestanding building under normal conditions, including land acquisition costs. The approximate cost to finish out, equip, and furnish a new cafeteria in a leased facility has ranged from $1,200,000 to $1,400,000. A new building prototype is now being utilized to reduce the initial investment in a typical new location.
Waterstreet Joint Venture
In January 1996 the Company announced a joint venture agreement with Waterstreet, Inc., a seafood restaurant company operating in Corpus Christi, Fort Worth, and San Antonio, Texas. The Company plans to build three "Water Street Seafood Company" restaurants during fiscal 1997. They will be leased to the joint venture and operated by Waterstreet, Inc. One joint venture restaurant was opened in San Antonio in August 1996.
Service Marks
The Company uses several service marks, including "Luby's" and believes that such marks are of material importance to its business. The Company has federal service mark registrations for several of such marks.
The Company is not the sole user of the name "Luby's" in the cafeteria business. One cafeteria using the name "Luby's" and one cafeteria using the name "Pat Luby's" are being operated in two different cities in Texas by two different owners not affiliated with the Company. The Company's legal counsel is of the opinion that the Company has the paramount right to use the name "Luby's" as a service mark in the cafeteria business in the United States and that such other users can be precluded from expanding their use of the name as a service mark.
Competition and Other Factors
The food service business is highly competitive, and there are numerous restaurants and other food service operations in each of the markets where the Company operates. The quality of the food served, in relation to its price, and public reputation are important factors in food service competition. Neither the Company nor any of its competitors has a significant share of the total market in any area in which the Company competes. The Company believes that its principal competitors are conventional restaurants and other cafeterias.
The Company's facilities and food products are subject to state and local health and sanitation laws. In addition, the Company's operations are subject to federal, state, and local regulations with respect to environmental and safety matters, including regulations concerning air and water pollution and regulations under the Americans with Disabilities Act and the Federal Occupational Safety and Health Act. Such laws and regulations, in the Company's opinion, have not materially affected its operations, although compliance has resulted in some increased costs.
Item 2.
Item 2. Properties.
The Company owns the underlying land and buildings in which 128 of its cafeterias are located. In addition, the Company owns several cafeteria sites being held for future development.
Of the 221 cafeterias operated by the Company, 93 are at locations held under leases, including 51 in regional shopping malls. Most of the leases provide for a combination of fixed-dollar and percentage rentals. Most of the leases require the lessee to pay additional amounts related to property taxes, hazard insurance, and maintenance of common areas.
See Notes 4 and 7 of Notes to Financial Statements for information concerning the Company's lease rental expenses, lease commitments, and construction commitments. Of the 93 cafeteria leases, the current terms of 26 expire from 1997 to 2001, 25 from 2002 to 2006, and 42 thereafter. Seventy-six of the leases can be extended beyond their current terms at the Company's option.
A typical cafeteria seats 250 to 300 guests and contains 9,000 to 10,500 square feet of floor space. A new building prototype is now being utilized for new store openings in the latter part of fiscal 1997 which contains approximately 8,000 square feet and seats 220 guests. Most of the cafeterias are located in modern buildings and all are in good condition. It is the Company's policy to refurbish and modernize cafeterias as necessary to maintain their appearance and utility. The equipment in all cafeterias is well maintained. Several of the Company's cafeteria properties contain excess building space which is rented to tenants unaffiliated with the Company.
The 221 cafeterias operated by the Company are located as follows (locations are in Texas except as otherwise indicated):
Number Number Location of Units Location of Units
Abilene 2 Lubbock 1 Albuquerque, New Mexico 2 Lufkin 1 Amarillo 2 McAllen 3 Arlington 3 McKinney 1 Austin 6 Memphis, Tennessee 3 Bartlesville, Oklahoma 1 Mesa, Arizona 2 Baytown 1 Mesquite 2 Beaumont 1 Midland 1 Bedford 1 Mission, Kansas 1 Bellmead 1 Mission, Texas 1 Bossier City, Louisiana 1 Morristown, Tennessee 1 Broken Arrow, Oklahoma 1 Murfreesboro, Tennessee 1 Brownsville 2 Muskogee, Oklahoma 1 Bryan/College Station 2 Nashville, Tennessee 3 Carrollton 1 New Braunfels 1 Chandler, Arizona 1 North Little Rock, Arkansas 1 Clearwater, Florida 1 Oak Ridge, Tennessee 1 Conroe 1 Odessa 1 Corpus Christi 4 Okalahoma City, Oklahoma 3 Dallas 13 Pasadena 1 Deer Park 1 Pharr 1 Del Rio 1 Phoenix, Arizona 4 Denton 1 Pinellas Park, Florida 1 DeSoto 1 Plano 2 Duncanville 1 Port Arthur 2 El Paso 5 Richardson 1 Fayetteville, Arkansas 1 Rosenberg 1 Fort Smith, Arkansas 1 Round Rock 1 Fort Worth 9 San Angelo 1 Franklin, Tennessee 1 San Antonio 21 Galveston 1 San Marcos 1 Garland 1 Santa Fe, New Mexico 1 Glendale, Arizona 1 Scottsdale, Arizona 1 Grand Prairie 1 Sebring, Florida 1 Grapevine 1 Shawnee, Oklahoma 1 Harlingen 2 Sherman 1 Hattiesburg, Mississippi 1 Shreveport, Louisiana 1 Hot Springs, Arkansas 1 Stafford 1 Houston 31 Sugar Land 1 Humble 1 Surprise, Arizona 1 Independence, Missouri 1 Tampa, Florida 2 Irving/Las Colinas 2 Temple 1 Jacinto City 1 Texarkana 1 Joplin, Missouri 1 The Woodlands 1 Kansas City, Missouri 2 Tomball 1 Kerrville 1 Topeka, Kansas 1 Killeen 1 Tucson, Arizona 2 Kingwood 1 Tulsa, Oklahoma 2 Lake Jackson 1 Tyler 2 Laredo 2 Victoria 1 Las Cruces, New Mexico 1 Waco 1 Leavenworth, Kansas 1 Weslaco 1 Lewisville 1 Wichita, Kansas 2 Little Rock, Arkansas 1 Longview 1
The Company's corporate offices are located in a building owned by the Company containing approximately 40,000 square feet of office space. The Company utilizes the space for its executive offices and related facilities.
The Company maintains public liability insurance and property damage insurance on its properties in amounts which management believes to be adequate.
Item 3.
Item 3. Legal Proceedings.
There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company is a party, or of which any of its property is the subject. There are no material legal proceedings to which any director, officer, or affiliate of the Company, or any associate of any such director or officer, is a party, or has a material interest, adverse to the Company.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the fiscal year ended August 31, 1996, to a vote of security holders of the Company.
Item 4A. Executive Officers of the Registrant.
Certain information is set forth below concerning the executive officers of the Company, each of whom has been elected to serve until the 1997 annual meeting of shareholders and until his successor is duly elected and qualified.
Served as Officer Positions with Company and Name Since Principal Occupation Last Five Years Age ________________________ ________ ____________________________________ ___
Ralph Erben 1978 Chairman of the Board (since Jan. 65 1996), Chief Executive Officer, Chairman of the Executive Committee, and Director; President prior to Jan. 1996.
John E. Curtis, Jr. 1982 President, Chief Operating Officer 49 (since Jan. 1996), Chief Financial Officer, member of the Executive Committee, and Director; Senior Vice President 1988-1995; Treasurer 1990-1995.
William E. Robson 1982 Executive Vice President-Operations 55 and Director (since 1993); Senior Vice President-Operations 1992-1995; Senior Vice President-Operations Development prior to 1992.
Clyde C. Hays III 1985 Senior Vice President-Operations 45 (since Jan. 1996); Vice President- Operations 1993-1995; Area Vice President prior to 1993.
Jimmy W. Woliver 1984 Senior Vice President-Operations 59 (since Jan. 1996); Vice President- Operations prior to 1996.
Ronald E. Riemenschneider 1990 Vice President and Treasurer (since 38 1995); Controller 1990-1995.
James R. Hale 1980 Secretary; Member of law firm of 67 Cauthorn Hale Hornberger Fuller Sheehan & Becker Incorporated since 1992; member of law firm of Cox & Smith Incorporated prior to 1992.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
Stock Prices and Dividends
The Company's common stock is traded on the New York Stock Exchange under the symbol LUB. The following table sets forth, for the last two fiscal years, the high and low sales prices on the New York Stock Exchange from the consolidated transaction reporting system and the per share cash dividends declared on the common stock.
Fiscal Quarters Quarterly Ended High Low Cash Dividend _________________ ______ ______ ______________
November 30, 1994 $24.63 $22.00 $.165 February 28, 1995 23.25 22.00 .165 May 31, 1995 22.88 18.50 .165 August 31, 1995 21.25 19.25 .18 November 30, 1995 22.88 19.88 .18 February 29, 1996 23.00 20.13 .18 May 31, 1996 25.25 20.38 .18 August 31, 1996 25.25 22.50 .20
As of September 13, 1996, there were approximately 4,142 record holders of the Company's common stock.
Item 6.
Item 6. Selected Financial Data.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Liquidity and Capital Resources
During the last three years the Company has funded all capital expenditures from internally-generated funds, cash equivalents, short-term borrowings, and long-term debt. Capital expenditures for fiscal 1996 were $48,529,000, a 30% increase from fiscal 1995. This increase in capital expenditures resulted from the opening of 19 new cafeterias in fiscal 1996, including one relocation, as compared to 12 in fiscal 1995, which also included one relocation. In addition, the Company also purchased eight sites as land held for future use compared to ten land sites purchased during fiscal 1995.
Capital commitments budgeted for fiscal 1997 include the purchase of 20 cafeteria locations from Triangle FoodService Corporation, formerly Wyatt Cafeterias, Inc., for approximately $14 million in cash. On October 2, 1996, 15 of these locations opened as "Luby's." Capital expenditures during fiscal 1997 to repair and refurbish these units will range from $2 million to $3 million. In addition to these locations, plans for fiscal 1997 include the opening of approximately 15 new cafeterias: seven on sites owned by the Company, two on land held under long-term ground leases, and six in regional shopping malls. In addition, two existing units will be relocated: one from a neighborhood shopping center to a regional mall, and one from a leased premise to a freestanding cafeteria on land held under a long-term ground lease. Therefore, a net increase of approximately 30 cafeterias is anticipated in fiscal 1997.
As part of a joint venture agreement with Waterstreet, Inc. signed in January 1996, the Company also plans to build three seafood restaurants during fiscal 1997: two on sites owned by the Company and one on land held under a long-term ground lease. These "Water Street Seafood Company" restaurants will be leased by the joint venture from the Company and operated by Waterstreet, Inc. In addition, as of August 31, 1996, the Company owned 11 undeveloped cafeteria sites, and several land site acquisitions were in varying stages of negotiation. As a result of all the capital commitments discussed above, the Company expects a substantial increase in the total capital expenditures for fiscal 1997. Construction costs for the new cafeterias and seafood restaurants are expected to be funded by cash flow from operations, cash currently held in cash equivalent investments, and long-term debt.
The Company generated cash from operations of $60,354,000 in fiscal 1996. The Company had a balance of $41,000,000 outstanding at August 31, 1996, under a $100,000,000 credit facility with a syndication of four banks. At August 31, 1996, the Company had a working capital deficit of $35,096,000 which compares to the prior year's working capital deficit of $79,316,000. The working capital position improved during fiscal 1996 due primarily to the renegotiation of the short-term facility to long-term debt.
The Board of Directors authorized the purchase in the open market of up to 1,000,000 shares of the Company's outstanding common stock through December 31, 1997. During fiscal 1996 the Company purchased 252,200 shares of its common stock at a cost of $5,997,000, which are being held as treasury stock.
The Company believes that funds generated from operations and short-term or long-term financing from external sources, which can be obtained on terms acceptable to the Company, are adequate for its foreseeable needs.
Results of Operations
Fiscal 1996 Compared to Fiscal 1995
Sales increased $31,104,000, or 7%, due in part to the addition of 18 new cafeterias in fiscal 1996 and 11 cafeterias in fiscal 1995. The average sales volume of cafeterias opened over one year increased slightly to $2,332,000 in fiscal 1996 from $2,321,000 in fiscal 1995 due primarily to higher average tray prices over the prior year. The same-store customer count trend was negative for the first time since 1992. This decline was not wholly unexpected because all but four of the current year openings occurred in existing markets. Accordingly, our market share improved in these areas; however, customer traffic and sales at established cafeterias were negatively impacted. This, combined with increased competition and the lack of full recovery from the peso devaluation in fiscal 1995, resulted in the negative same-store customer count trend.
Cost of food increased $6,397,000, or 6%, due primarily to the increase in sales. Food cost margins improved from the price increase on the Lu Ann Platter, which took effect on December 1, 1995. Payroll and related costs increased $10,381,000, or 9%, due primarily to the increase in sales, higher wages for hourly employees in existing cafeterias, and higher wage costs associated with increased expansion over the prior year. As the expansion rate increases for fiscal 1997 and the new Federal minimum wage increases effective October 1, 1996, the Company anticipates that payroll and related costs will increase as a percentage of sales over fiscal 1996. The Company implemented a 3% to 4% price increase on September 15, 1996, to help offset the pressure on profit margins. Occupancy and other operating expenses increased $8,688,000, or 7%, due primarily to the increase in sales and the opening of 18 new cafeterias. Since all preopening costs are expensed as incurred, the preopening expense amount included in occupancy and other operating expenses for fiscal 1997 will significantly increase due to the higher expansion rate, especially in the first quarter. During fiscal 1997 the Company plans to maintain the budget for advertising expense at 25 of sales. General and administrative expenses increased $1,545,000, or 8%, due primarily to two additional area vice president positions, higher management trainee salaries, and higher moving expenses, all associated with the increased expansion.
Interest expense of $2,130,000 for fiscal 1996 was incurred in conjunction with borrowings under the credit facility and is net of $1,100,000 capitalized on qualifying properties. The increase over fiscal 1995 of $381,000, or 22%, was due to higher average outstanding borrowings.
The provision for income taxes increased $1,411,000, or 6%, due to higher income before income taxes. The Company's effective income tax rate increased slightly from 37.2% in fiscal 1995 to 37.3% in fiscal 1996.
Fiscal 1995 Compared to Fiscal 1994
Sales increased $28,332,000, or 7%, due in part to the addition of 11 new cafeterias in fiscal 1995 and eight cafeterias in fiscal 1994. The average sales volume of cafeterias opened over one year increased to $2,321,000 in fiscal 1995 from $2,287,000 in fiscal 1994. The increase resulted from the implementation of new marketing programs and from higher average tray prices over the prior year.
Cost of food increased $5,388,000, or 5%, due primarily to the increase in sales. Food cost margins improved from the price increase on the Lu Ann Platter, which took effect on December 1, 1994, and an additional price increase on selected individual items effective June 10, 1995. Payroll and related costs increased $9,409,000, or 9%, due primarily to the increase in sales, higher wages for hourly employees in existing cafeterias, and higher wage costs associated with increased expansion over the prior year. Occupancy and other operating expenses increased $10,361,000, or 9%, due primarily to the increase in sales, the opening of 11 new cafeterias, higher advertising expenditures, higher costs for a new uniform program, and higher costs for paper supplies. General and administrative expenses increased $3,342,000, or 22%, due primarily to the higher Company contribution to the profit sharing and retirement plan as determined by the plan's provisions, which increased approximately $3,000,000 over fiscal 1994.
Interest expense for fiscal 1995 was incurred in conjunction with borrowings under the line-of-credit agreement and is net of $895,000 capitalized on qualifying properties.
The provision for income taxes decreased $740,000, or 3%, due in part to lower income before income taxes. The Company's effective income tax rate decreased slightly from 37.5% in fiscal 1994 to 37.2% in fiscal 1995.
Inflation
The Company's policy is to maintain stable menu prices without regard to seasonal variations in food costs. 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. To the extent prevailing market conditions allow, the Company intends to adjust menu prices to maintain profit margins.
Item 8.
Item 8. Financial Statements and Supplementary Data.
LUBY'S CAFETERIAS, INC. FINANCIAL STATEMENTS
Years Ended August 31, 1996, 1995, and 1994 with Report of Independent Auditors
Report of Independent Auditors
The Board of Directors and Shareholders Luby's Cafeterias, Inc.
We have audited the accompanying balance sheets of Luby's Cafeterias, Inc. at August 31, 1996 and 1995, and the related statements of income, shareholders' equity, and cash flows for each of the three years in the period ended August 31, 1996. These financial statements are the responsibility of the Company'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 financial position of Luby's Cafeterias, Inc. at August 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 1996, in conformity with generally accepted accounting principles.
As discussed in Note 6 to the financial statements, in 1994 the Company changed its method of accounting for income taxes.
ERNST & YOUNG LLP San Antonio, Texas October 1, 1996
Luby's Cafeterias, Inc. Balance Sheets
August 31 1996 1995 ________ _______ (Thousands of Dollars)
Assets Current assets: Cash and cash equivalents $ 2,687 $ 12,392 Trade accounts and other receivables 541 311 Food and supply inventories 4,517 4,034 Prepaid expenses 3,195 2,849 Deferred income taxes 418 629 ________ ________ Total current assets 11,358 20,215
Investments and other assets - at cost: Land held for future use 8,040 9,820 Other assets 4,303 3,188 ________ ________ Total investments and other assets 12,343 13,008
Property, plant, and equipment - at cost, less accumulated depreciation and amortization 311,589 279,157 ________ ________ Total assets $335,290 $312,380 ________ ________
Liabilities and Shareholders' Equity Current liabilities: Short-term borrowings $ - $ 57,000 Accounts payable - trade 14,568 10,969 Dividends payable 4,796 4,196 Accrued expenses and other liabilities 24,336 24,895 Income taxes payable 2,754 2,471 ________ ________ Total current liabilities 46,454 99,531
Deferred income taxes and other credits 22,163 20,145
Commitments - -
Shareholders' equity: Common stock, $.32 par value; authorized 100,000,000 shares, issued 27,403,067 shares 8,769 8,769 Paid-in capital 26,945 26,945 Retained earnings 267,374 248,973 Less cost of treasury stock, 3,425,525 shares in 1996 and 4,089,935 shares in 1995 (77,415) (91,983) ________ ________ Total shareholders' equity 225,673 192,704 ________ ________
Total liabilities and shareholders' equity $335,290 $312,380 ________ ________
See accompanying notes. Luby's Cafeterias, Inc. Statements of Income
Years Ended August 31 1996 1995 1994 ________ ________ ________ (Thousands of dollars except per share data)
Sales $450,128 $419,024 $390,692
Costs and expenses: Cost of food 110,008 103,611 98,223 Payroll and related costs 124,333 113,952 104,543 Occupancy and other operating expenses 132,595 123,907 113,546 General and administrative expenses 20,217 18,672 15,330 ________ ________ ________ 387,153 360,142 331,642 ________ ________ ________ Income from operations 62,975 58,882 59,050
Interest expense (2,130) (1,749) -
Other income, net 1,697 1,805 1,385 ________ ________ ________
Income before income taxes and cumulative effect of change in method of accounting for income taxes 62,542 58,938 60,435
Provision for income taxes: Current 20,940 21,750 18,909 Deferred 2,394 173 3,754 ________ ________ ________ 23,334 21,923 22,663 ________ ________ ________ Income before cumulative effect of change in method of accounting for income taxes 39,208 37,015 37,772
Cumulative effect of change in method of accounting for income taxes - - 1,563 ________ ________ ________ Net income $ 39,208 $ 37,015 $ 39,335 ________ ________ ________ Earnings per share: Income before cumulative effect of change in method of accounting for income taxes $ 1.66 $ 1.55 $ 1.45
Cumulative effect of change in method of accounting for income taxes - - .06 ________ ________ ________ Net income per share $ 1.66 $ 1.55 $ 1.51 ________ ________ ________
See accompanying notes.
Luby's Cafeterias, Inc. Statements of Cash Flows
Years Ended August 31 1996 1995 1994 ________ ________ ________ (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 39,208 $ 37,015 $ 39,335 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,693 16,417 15,700 Cumulative effect of change in method of accounting - - (1,563) (Gain) loss on disposal of land held for future use - (106) 69 (Gain) loss on disposal of property, plant, and equipment 31 (313) 23 ________ ________ ________ Cash provided by operating activities before changes in operating assets and liabilities 56,932 53,013 53,564
Changes in operating assets and liabilities: (Increase) decrease in trade accounts and other receivables (230) (36) 327 Increase in food and supply inventories (483) (183) (425) Increase in prepaid expenses (346) (9) (373) Increase in other assets (1,115) (353) (460) Increase (decrease) in accounts payable - trade 2,441 1,368 (87) Increase (decrease) in accrued expenses and other liabilities (337) 3,082 (4,832) Increase (decrease) in income taxes payable 1,263 (479) 157 Increase (decrease) in deferred income taxes and other credits 2,229 (5) 4,275 _______ ________ ________ Net cash provided by operating activities 60,354 56,398 52,146
CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of land held for future use - 495 955 Proceeds from disposal of property, plant, and equipment 153 474 182 Purchases of land held for future use (5,776) (7,531) (3,470) Purchases of property, plant, and equipment (42,753) (29,715) (26,252) _______ ________ ________ Net cash used in investing activities (48,376) (36,277) (28,585)
CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common under stock option plans 16,145 3,196 2,524 Net proceeds (payments) of short-term borrowings (57,000) 40,000 17,000 Proceeds from long-term debt 268,000 - - Reductions of long-term debt (227,000) - - Purchases of treasury stock (4,839) (45,916) (50,750) Dividends paid (16,989) (15,918) (15,731) _______ _______ _______ Net cash used in financing activities (21,683) (18,638) (46,957) _______ _______ _______ Net increase (decrease) in cash and cash equivalents (9,705) 1,483 (23,396)
Cash and cash equivalents at beginning of year 12,392 10,909 34,305 ________ ________ ________ Cash and cash equivalents at end of year $ 2,687 $ 12,392 $ 10,909
________ ________ ________ See accompanying notes.
Luby's Cafeterias, Inc. Notes to Financial Statements August 31, 1996, 1994, and 1994
1. Significant Accounting Policies
Nature of Operations
Luby's Cafeterias, Inc. (the Company), based in San Antonio, Texas, owns and operates cafeterias in the southern United States. As of August 31, 1996, the Company operated a total of 204 units. The Company locates its cafeterias convenient to shopping and business developments as well as to residential areas. Accordingly, the cafeterias cater primarily to shoppers, store and office personnel at lunchtime, and to families at dinner.
Inventories
The food and supply inventories are stated at the lower of cost (first-in, first-out) or market.
Depreciation and Amortization
The Company depreciates the cost of plant and equipment over their estimated useful lives using both straight-line and accelerated methods. Leasehold improvements are amortized over the related lease lives, which are in some cases shorter than the estimated useful lives of the improvements.
Long-Lived Assets
In March 1995, the Financial Accounting Standards Board (FASB) issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement No. 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company will adopt Statement 121 in the first quarter of 1997 and, based on current circumstances, does not believe the effect of adoption will be material.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents.
Preopening Expenses
New store preopening costs are expensed as incurred.
Advertising Expenses
Advertising costs are expensed as incurred.
Income Taxes
Deferred income taxes are computed using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities (temporary differences) and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Stock Options
Proceeds from the sale of common stock issued under the stock option plans and related tax benefits which accrue to the Company are accounted for as capital transactions, and no charges or credits are made to income in connection with the plans.
Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates.
2. Property, Plant, and Equipment
The cost and accumulated depreciation of property, plant, and equipment at August 31, 1996 and 1995, together with the related estimated useful lives used in computing depreciation and amortization, are reflected below:
Estimated 1996 1995 Useful Lives ________ ________ _______________ (Thousands of dollars)
Land $ 74,699 $ 66,405 - Cafeteria equipment and furnishings 117,227 106,540 3 to 10 years Buildings 209,404 181,389 20 to 40 years Leasehold and leasehold improvements 46,403 43,752 Term of leases Office furniture and equipment 2,536 2,271 5 to 10 years Transportation equipment 688 674 5 years Construction in progress 7,506 9,225 - ________ ________
458,463 410,256
Less accumulated depreciation and amortization 146,874 131,099 ________ ________
$311,589 $279,157 ________ ________
Total interest expense incurred for 1996, 1995, and 1994 was $3,230,000, $2,644,000, and $288,000, respectively, which approximated the amount paid in each year. The amounts capitalized on qualifying properties in 1996, 1995, and 1994 were $1,100,000, $895,000, and $288,000, respectively.
3. Debt
As of August 31, 1995, $57,000,000 in short-term borrowings was outstanding under a $100 million line-of-credit which expired in December 1995. The weighted average interest rate for short-term borrowings based on the number of days outstanding was 6.4% for 1995.
During 1996 the Company entered into a new $100 million credit facility with a syndication of four banks. As part of this credit facility, the Company has a revolving credit agreement which allows borrowings for varying periods through February 27, 2001, at the lower of the prime rate or other rate options available at the time of borrowing. The credit facility includes a maximum commitment for letters of credit of $20 million. The Company pays a facility fee of .1% on the total commitment. The credit facility contains business covenants which, among other things, impose certain financial restrictions on the Company relating primarily to leverage and net worth. As of August 31, 1996, the balance outstanding under the revolving credit agreement was $41 million at an interest rate of 5.7%.
At August 31, 1996, letters of credit of approximately $4,244,000 have been issued as security for the payment of insurance obligations classified as accrued expenses on the balance sheet.
4. Leases
The Company conducts a major part of its operations from facilities which are leased under noncancelable lease agreements. Most of the leases are for periods of ten to 25 years and provide for contingent rentals based on sales in excess of a base amount. Approximately 80% of the leases contain renewal options ranging from five to 30 years.
Annual future minimum lease payments under noncancelable operating leases as of August 31, 1996, are as follows: (Thousands of dollars) Years ending August 31: 1997 $ 6,386 1998 6,570 1999 6,623 2000 6,470 2001 6,231 Thereafter 52,516 _______ Total minimum lease payments $84,796 _______
Total rent expense for operating leases for the years ended August 31, 1996, 1995, and 1994 was as follows:
1996 1995 1994 ________ ________ ________ (Thousands of dollars)
Minimum rentals $ 5,807 $ 5,477 $ 5,141 Contingent rentals 1,126 1,229 1,436 ________ ________ ________
$ 6,933 $ 6,706 $ 6,577 ________ ________ ________
5. Employee Benefit Plans and Agreements
Incentive Compensation
The Company has various incentive compensation plans covering officers and other key employees that are based upon the achievement of specified earnings goals and performance factors. Awards under the plans are payable in cash and/or in shares of common stock. Charges to expense for current and future distributions under the plans amounted to $400,000, $431,000, and $1,481,000 in 1996, 1995, and 1994, respectively. During the years ended August 31, 1996, 1995, and 1994, 10,590, 4,820, and -0- shares of common stock were issued under the plans out of treasury stock, respectively.
Stock Option Plans
The Company had an Employee Stock Option Plan for executive and other key salaried employees. Under the terms of the stock option plan, nonqualified options and incentive stock options totaling 225,000 shares of the Company's common stock could be granted at prices not less than 100% of fair market value at date of grant. Options were exercisable for such periods as the Compensation Committee determined, but not for more than ten years from date of grant. All options outstanding under this plan either expired or were exercised as of August 31, 1995.
In 1990 the Company adopted a new Management Incentive Stock Plan to replace the Employee Stock Option Plan and to provide for market-based incentive awards, including stock options, stock appreciation rights, restricted stock, and performance share awards. Under the terms of the Management Incentive Stock Plan, nonqualified options and incentive stock options totaling 2,700,000 shares of the Company's common stock are reserved for grants to the officer group, certain administrative personnel, and cafeteria management personnel. Stock options may be granted at prices not less than 100% of fair market value at date of grant. Options granted to the participants of the plan are exercisable over staggered periods and expire, depending upon the type of grant, in five to seven years. The plan provides for various vesting methods, depending upon the category of personnel.
Following is a summary of activity in the stock option plans for the three years ended August 31, 1996, 1995, and 1994:
Deferred Compensation
Deferred compensation agreements exist for several key management employees, all of whom are current or former officers. Under the agreements, the Company is obligated to provide for each such employee or his beneficiaries, during a period of ten years after the employee's death, disability, or retirement, annual benefits ranging from $15,500 to $43,400. The estimated present value of future benefits to be paid is being accrued over the period from the effective date of the agreements until the expected retirement dates of the participants. The net expense incurred for this plan for the years ended August 31, 1996, 1995, and 1994 amounted to $239,000, $79,000, and $78,000, respectively.
The Company also has a Supplemental Executive Retirement Plan (SERP) for key executives and officers. The SERP is a "target" benefit plan, with the annual lifetime benefit based upon a percentage of average salary during the final five years of service at age 65, offset by several sources of income including benefits payable under deferred compensation agreements, if applicable, the profit sharing plan, and Social Security. SERP benefits will be paid from the Company's assets. The net expense incurred for this plan for the year ended August 31, 1996, was $80,000, and the unfunded accumulated benefit obligation as of August 31, 1996, was approximately $250,000.
Profit Sharing
The Company has a profit sharing plan and retirement trust covering substantially all employees who have attained the age of 21 years and have completed one year of continuous service. The plan is administered by a corporate trustee, is a "qualified plan" under Section 401(a) of the Internal Revenue Code, and provides for the payment of the employee's vested portion of the plan upon retirement, termination, disability, or death. The plan is funded by contributions of a portion of the net earnings of the Company. The plan provides that for each fiscal year in which the Company's net income (before income taxes and before any contribution to the plan) meets certain minimum standards, the Company is obligated to contribute to the plan, at a minimum, an amount equal to a defined percentage of the participants' compensation. In no event will the required contribution exceed 10% of the Company's income before income taxes and before any contribution to the plan. The Company's annual contribution to the plan amounted to $5,100,000, $4,888,000, and $1,886,000, for 1996, 1995, and 1994, respectively.
6. Income Taxes
The Company adopted FASB Statement No. 109, "Accounting for Income Taxes," in 1994. The effect of the change on pretax income from continuing operations for the year ended August 31, 1994, was not material; however, the cumulative effect of the change increased net income in fiscal 1994 by $1,563,000, or $.06 per share.
The tax effect of temporary differences results in deferred income tax assets and liabilities as of August 31 as follows:
1996 1995 ________ ___________ (Thousands of dollars)
Deferred tax liabilities: Amortization of capitalized interest $ 494 $ 522 Depreciation and amortization 19,085 17,566 Deferred compensation (779) (766) Other 1,083 378 _______ _______ Total deferred tax liabilities 19,883 17,700 Deferred tax asset: Workers' compensation insurance 418 629 _______ _______ Net deferred tax liabilities $19,465 $17,071 _______ _______
The reconciliation of the provision for income taxes to the expected income tax expense (computed using the statutory tax rate) is as follows:
1996 1995 1994 Amount % Amount % Amount % _______ ____ _______ ____ _______ ____ (Thousands of dollars and as a percent of pretax income)
Normally expected income tax expense $21,890 35.0% $20,628 35.0% $21,152 35.0%
State income taxes 1,488 2.4 1,616 2.7 1,625 2.7
Jobs tax credits (1) - (151) (.2) (260) (.4)
Other differences (43) (.1) (170) (.3) 146 .2 _______ ____ _______ ____ ______ ____
$23,334 37.3% $21,923 37.2% $22,663 37.5% _______ ____ _______ ____ ______ ____
Cash payments for income taxes for 1996, 1995, and 1994 were $19,677,000, $22,229,000, and $18,752,000, respectively.
7. Commitments
At August 31, 1996, the Company had seven cafeterias under construction. The aggregate unexpended costs under the construction contracts were approximately $5,469,000.
The Company has unconditionally guaranteed a $2,000,000 loan under a line of credit for an unrelated limited partnership in exchange for advertising rights and a participation in future profits of the venture.
8. Common Stock
In 1991 the Board of Directors adopted a Shareholder Rights Plan and declared a dividend of one common stock purchase right for each outstanding share of common stock. The rights are not initially exercisable. The rights may become exercisable under circumstances described in the Plan if any person or group (an Acquiring Person) becomes the beneficial owner of 15% or more of the common stock. Once the rights become exercisable, each right will be exercisable to purchase, for $27.50 (the Purchase Price), one-half of one share of common stock, par value $.32 per share, of the Company. If any person becomes the beneficial owner of 15% or more of the common stock, each right will entitle the holder, other than the Acquiring Person, to purchase for the Purchase Price a number of shares of the Company's common stock having a market value of four times the Purchase Price.
The Board of Directors authorized the purchase in the open market of up to 1,000,000 shares of the Company's outstanding common stock through December 31, 1997. During 1996 the Company purchased 252,200 shares of its common stock at a cost of $5,997,000, which are being held as treasury stock.
9. Per Share Information
The weighted average number of shares used in the net income per share computation was 23,688,813 for 1996, 23,908,087 for 1995, and 25,981,840 for 1994.
10. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at August 31 consisted of:
1996 1995 _______ _______ (Thousands of dollars)
Salaries and bonuses $ 6,185 $ 7,542 Rent 777 841 Taxes, other than income 5,742 4,886 Profit sharing plan 5,057 4,888 Insurance 6,273 6,417 Other 302 321 _______ _______ $24,336 $24,895 _______ _______
11. Quarterly Financial Information (Unaudited)
The following is a summary of quarterly unaudited financial information for 1996 and 1995: Three Months Ended November 30, February 29, May 31, August 31, 1995 1996 1996 1996 ________ ________ ________ _________ (Thousands of dollars except per share data)
Sales $108,337 $108,835 $117,132 $115,824 Gross profit 51,027 52,634 57,140 54,986 Net income 8,565 9,322 10,964 10,357 Net income per share .37 .40 .46 .43
Three Months Ended November 30, February 28, May 31, August 31, 1994 1995 1995 1995 ________ ________ ________ _________ (Thousands of dollars except per share data)
Sales $101,446 $100,570 $106,899 $110,109 Gross profit 48,361 48,446 51,523 53,131 Net income 8,683 8,582 9,907 9,843 Net income per share .35 .36 .42 .42
12. Subsequent Event
On September 16, 1996, the Company purchased the assets of 20 cafeteria locations from Triangle FoodService Corporation, formerly Wyatt Cafeterias, Inc., for approximately $14 million in cash.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable. PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
There is incorporated in this Item 10 by reference that portion of the Company's definitive proxy statement for the 1997 annual meeting of shareholders appearing therein under the captions "Election of Directors" and "Information Concerning Directors and Executive Officers." See also the information in Item 4A of Part I of this Report.
Item 11.
Item 11. Executive Compensation.
There is incorporated in this Item 11 by reference that portion of the Company's definitive proxy statement for the 1997 annual meeting of shareholders appearing therein under the caption "Executive Compensation."
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
There is incorporated in this Item 12 by reference that portion of the Company's definitive proxy statement for the 1997 annual meeting of shareholders appearing therein under the captions "Principal Shareholders" and "Management Shareholders."
Item 13.
Item 13. Certain Relationships and Related Transactions.
There is incorporated in this Item 13 by reference that portion of the Company's definitive proxy statement for the 1997 annual meeting of shareholders appearing therein under the caption "Certain Relationships and Related Transactions."
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Documents.
1. Financial Statements
The following financial statements are filed as part of this Report:
Balance sheets at August 31, 1996 and 1995
Statements of income for each of the three years in the period ended August 31, 1996
Statements of shareholders' equity for each of the three years in the period ended August 31, 1996
Statements of cash flows for each of the three years in the period ended August 31, 1996
Notes to financial statements
Report of independent auditors
2. Financial Statement Schedules
All schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the financial statements and notes thereto.
3. Exhibits
The following exhibits are filed as a part of this Report:
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) - Amendment to Bylaws of Luby's Cafeterias, Inc. adopted July 12, 1996.
3(c) - Bylaws of Luby's Cafeterias, Inc. as currently in effect.
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.
10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996.
11 - Statement re computation of per share earnings.
21 - Subsidiaries of Luby's Cafeterias, Inc.
99(a) - Consent of Ernst & Young LLP.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the last quarter of the period covered by this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: November 26, 1996 LUBY'S CAFETERIAS, INC. (Registrant)
By: JOHN E. CURTIS, JR. ___________________________ John E. Curtis, Jr., President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature and Date Name and Title
RALPH ERBEN Ralph Erben, Chairman _______________________________ of the Board, Chief Executive November 26, 1996 Officer, and Director
JOHN E. CURTIS, JR. John E. Curtis, Jr., President, _______________________________ Chief Operating Officer, Chief November 26, 1996 Financial Officer, and Director
WILLIAM E. ROBSON William E. Robson, Executive Vice ________________________________ President-Operations, and Director November 26, 1996
RONALD E. RIEMENSCHNEIDER Ronald E. Riemenschneider, Vice ________________________________ President, Treasurer, and November 26, 1996 Principal Accounting Officer
LAURO F. CAVAZOS Lauro F. Cavazos, Director ________________________________ November 26, 1996
DAVID B. DAVISS David B. Daviss, Director ________________________________ November 26, 1996
ROGER R. HEMMINGHAUS Roger R. Hemminghaus, Director ________________________________ November 26, 1996
JOHN B. LAHOURCADE John B. Lahourcade, Director ________________________________ November 26, 1996
WALTER J. SALMON Walter J. Salmon, Director ________________________________ November 26, 1996
GEORGE H. WENGLEIN George H. Wenglein, Director ________________________________ November 26, 1996
JOANNE WINIK Joanne Winik, Director ________________________________ November 26, 1996
EXHIBIT INDEX
Exhibit Page
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) - Amendment to Bylaws of Luby's Cafeterias, Inc. adopted July 12, 1996.
3(c) - Bylaws of Luby's Cafeterias, Inc. as currently in effect.
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.
10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996.
11 - Statement re computation of per share earnings.
21 - Subsidiaries of Luby's Cafeterias, Inc.
99(a) - Consent of Ernst & Young LLP.