LUBYS INC - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 20, 2002, or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From _____ to _____

Commission file number 1-8308

Luby's, Inc.
(Exact name of registrant as specified in its charter)

Delaware		74-1335253

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

2211 Northeast Loop 410
San Antonio, Texas 78217

(Address of principal executive offices, including zip code)

(210) 654-9000	www.lubys.com

(Registrant's telephone number, including area code, and Website)



(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No

As of January 3, 2003, there were 22,448,574 shares of the registrant's Common Stock outstanding, which does not include 4,954,493 treasury shares.

Luby's, Inc.
Form 10-Q
Quarter ended November 20, 2002
Table of Contents

Part I - Financial Information		Page


Item 1	Financial Statements	3

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4	Controls and Procedures	23

Part II - Other Information		Page


Item 1	Legal Proceedings	24

Item 6	Exhibits and Reports on Form 8-K	24

Signatures		29

Section 302 Certifications		30

Section 906 Certifications		32

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Luby's, Inc.
Consolidated Balance Sheets
(In thousands)

November 20,

August 28,

2002

2002

(unaudited)

Assets

Current Assets:

Cash

199

1,584

Short-term investments (see Note 3)

21,587

24,122

Trade accounts and other receivables

299

185

Food and supply inventories

2,963

2,197

Prepaid expenses

1,533

1,667

Income tax receivable

7,245

7,245

Deferred income taxes (see Note 4)

2,726

2,726

Total current assets

36,552

39,726

Property held for sale

6,005

8,144

Investments and other assets

4,579

4,642

Property, plant, and equipment -- at cost, net (see Note 5)

288,498

289,967

Total assets

335,634

342,479

Liabilities and shareholders' equity

Current Liabilities:

Accounts payable

20,242

19,077

Accrued expenses and other liabilities

21,385

21,735

Current portion of debt (see Note 6)

113,507

118,448

Total current liabilities

155,134

159,260

Convertible subordinated notes, net -- related party (see Note 6)

5,994

5,883

Accrued claims and insurance

5,142

5,142

Deferred income taxes and other credits (see Note 4)

5,432

5,460

Reserve for restaurant closings (see Note 7)

3,058

3,114

Commitments and contingencies (see Note 8)

Total liabilities

174,760

178,859

Shareholders' equity

Common stock, $.32 par value; authorized 100,000,000 shares, issued
27,403,067 shares in fiscal 2003 and 2002

8,769

8,769

Paid-in capital

37,058

37,335

Deferred compensation

(1,687

)

(1,989

)

Retained earnings

221,961

225,062

Less cost of treasury shares, 4,954,493 and 4,970,024, in fiscal 2003 and 2002,
respectively

(105,227

)

(105,557

)

Total shareholders' equity

160,874

163,620

Total liabilities and shareholders' equity

335,634

342,479

See accompanying notes.

Luby's, Inc.
Consolidated Statements of Operations (unaudited)
(In thousands)

		Quarter Ended

			November 20,			November 21,
			2002			2001

			(84 days)			(82 days)

Sales	$			88,229		$	95,195
Costs and expenses:
Cost of food				25,019			24,650
Payroll and related costs				27,675			34,593
Occupancy and other operating expenses				34,370			36,384
General and administrative expenses				5,367			5,348
Provision for asset impairments and restaurant closings (see Note 7)				(163	)		130

				92,268			101,105

Income (loss) from operations				(4,039	)		(5,910	)
Interest expense				(2,004	)		(2,570	)
Other income, net				2,942			448

Income (loss) before income taxes				(3,101	)		(8,032	)
Provision (benefit) for income taxes (see Note 4)				--			(2,687	)

Net income (loss)	$			(3,101	)	$	(5,345	)



Net income (loss) per share -- basic and assuming dilution	$			(0.14	)	$	(.24	)



See accompanying notes.

Luby's, Inc.
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

		Quarter Ended

		November 20,				November 21,
		2002				2001

		(84 days)				(82 days)
Cash flows from operating activities:
Net income (loss)	$		(3,101	)	$		(5,345	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			5,011				4,942
Amortization of deferred loss on interest rate swaps			--				248
Amortization of discount on convertible subordinated notes			111				111
Provision for asset impairments and restaurant closings			(163	)			130
Gain on disposal of property held for sale			(2,735	)			(70	)
Loss on disposal of property, plant, and equipment			141				46
Noncash directors' fees			53				68
Noncash executive compensation expense			302				297

Cash provided by operating activities before changes in operating assets and liabilities			(381	)			427
Changes in operating assets and liabilities:
(Increase) decrease in trade accounts and other receivables			(114	)			71
(Increase) decrease in food and supply inventories			(766	)			(433	)
(Increase) decrease in income tax receivable			--				(2,604	)
(Increase) decrease in prepaid expenses			134				223
(Increase) decrease in other assets			63				604
Increase (decrease) in accounts payable			1,165				8,109
Increase (decrease) in accrued claims and insurance, accrued expenses, and other liabilities			(350	)			(1,102	)
Increase (decrease) in deferred income taxes and other credits			(28	)			(131	)
Increase (decrease) in reserve for restaurant closings			(56	)			(195	)

Net cash provided by (used in) operating activities	$		(333	)	$		4,969

Luby's, Inc.
Consolidated Statements of Cash Flows (unaudited)
(In thousands)

		Quarter Ended

		November 20,				November 21,
		2002				2001

		(84 days)				(82 days)
Cash flows from investing activities:
(Increase) decrease in short-term investments	$		2,535		$		(2,984	)
Proceeds from disposal of property held for sale			4,991				790
Purchases of property, plant, and equipment			(3,637	)			(3,062	)

Net cash provided by (used in) investing activities			3,889				(5,256	)


Cash flows from financing activities:
Issuance (repayment) of debt			(4,941	)			(766	)

Net cash provided by (used in) financing activities			(4,941	)			(766	)


Net increase (decrease) in cash			(1,385	)			(1,053	)
Cash at beginning of period			1,584				4,099

Cash at end of period	$		199		$		3,046



See accompanying notes.

Luby's, Inc.
Consolidated Statements of Shareholders' Equity (unaudited)
(In thousands)


		Common Stock																								Total

		Issued					Treasury							Paid-In			Deferred					Retained					Shareholders'

		Shares		Amount			Shares			Amount				Capital			Compensation					Earnings					Equity


Balance at August 28, 2002	27,403		$		8,769	(4,970		)	$		(105,557	)	$		37,335			$	(1,989	)	$		225,062		$			163,620
Net income (loss) for the quarter																							(3,101	)				(3,101	)
Deferred Compensation/Options																			302									302
Common stock issued under benefit plans, net of shares tendered in partial payment and including tax benefits						16					330				(277	)												53

Balance at November 20, 2002	27,403		$		8,769	(4,954		)	$		(105,227	)	$		37,058			$	(1,687	)	$		221,961		$