8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 3, 2020

LUBY’S, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-8308	74-1335253
(Commission File Number)	(I.R.S. Employer Identification No.)
13111 Northwest Freeway, Suite 600 Houston, Texas	77040
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 329-6800

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange at which registered
Common Stock ($0.32 par value per share)	LUB	New York Stock Exchange
Common Stock Purchase Rights	N/A	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Item 2.02. Results of Operations and Financial Condition.

On June 3, 2020, the Company released a press release announcing the results of the second quarter ended March 11, 2020. A copy of that release is attached as Exhibit 99.1. The information and exhibit furnished under Item 2.02 of this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 7.01. Regulation FD Disclosure.

On June 3, 2020, Luby’s, Inc. issued a press release announcing it will pursue a sale of its operations and assets and distribute net proceeds to stockholders. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference into this Item 7.01.

The information provided pursuant to this Item 7.01, including Exhibit 99.2 in Item 9.01, is “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filings.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1	Luby’s Press Release dated June 3, 2020.
Exhibit 99.2	Luby’s Press Release dated June 3, 2020.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 3, 2020	LUBY’S, INC.
	By:	/s/ Christopher J. Pappas
		Christopher J. Pappas
		President and Chief Executive Officer

EX-99.1

	For additional information contact:
FOR IMMEDIATE RELEASE	Dennard-Lascar Investor Relations
	Rick Black / Ken Dennard
	Investor Relations
	713-529-6600

Luby’s Reports Second Quarter Fiscal 2020 Results

HOUSTON, TX - June 3, 2020- Luby’s, Inc. (NYSE: LUB) (“Luby’s”) today announced unaudited financial results for its twelve-week second quarter fiscal 2020 ended March 11, 2020, referred to as “second quarter.” Comparisons in this earnings release are for the second quarter compared to the twelve-week second quarter fiscal 2019.

Same-Store Sales Year-over-Year Comparison:

	Q1 2020	Q2 2020		YTD Q2 2020
Luby's Cafeterias	1.7%	1.3	%	1.5	%
Fuddruckers	0.1%	0.4	%	0.2	%
Combo locations (1)	6.6%	6.8	%	6.7	%
Cheeseburger in Paradise	(1.0)%	9.4	%	3.2	%
Total same-store sales (2)	1.7%	1.6	%	1.7	%

(1)Combo locations consist of a side-by-side Luby’s Cafeteria and Fuddruckers Restaurant at one property location.

(2)Luby’s includes a restaurant’s sales results into the same-store sales calculation in the quarter after that store has been open for six complete consecutive quarters. In the second quarter, there were 72 Luby’s Cafeterias locations, 33 Fuddruckers locations, all six Combo locations, and one Cheeseburger in Paradise location that met the definition of same-stores.

Second Quarter Restaurant Sales:

($ thousands)

Restaurant Brand	Q2 2020		Q2 2019		Change ($)		Change (%)
Luby’s Cafeterias	$	43,302	$	44,266	$	(964)	(2.2)	%
Combo locations	4,653		4,355		298		6.8	%
Luby's cafeteria segment	47,955		48,621		(666)		(1.4)	%
Fuddruckers restaurants segment	11,789		16,156		(4,367)		(27.0)	%
Cheeseburger in Paradise segment	647		592		55		9.3	%
Total Restaurant Sales	$	60,391	$	65,369	$	(4,978)	(7.6)	%

Note: Luby's Cafeterias store count reduced from 76 at Q2 2019 start to 72 at Q2 2020 end; Fuddruckers store count reduced from 51 at Q2 2019

start to 33 at Q2 2020 end; Combo location count at six (12 restaurants) at Q2 2019 start and at Q2 2020 end; Cheeseburger in Paradise store count at one at Q2 2019 and at Q2 2020 end.

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Restaurant Counts:

	August 28, 2019	FY20 YTDQ2 Openings	FY20 YTDQ2 Closings	March 11, 2020
Luby’s Cafeterias(1)	79	—	(1)	78
Fuddruckers Restaurants(1)	44	—	(5)	39
Cheeseburger in Paradise	1	—	—	1
Total	124	—	(6)	118

(1)Includes 6 restaurants that are part of Combo locations

Comments related to COVID-19:

After the end of our fiscal second quarter, the spread of the COVID-19 pandemic has affected the United States economy, our operations and those of third parties on which we rely. Beginning on March 17, 2020, we began suspending on-premise dining at our restaurants and substantially all employees at those locations were placed on furlough. By March 31, 2020 we had suspended on-premise dining at all 118 of our company-owned restaurants and had suspended all operations at 50 of our Luby's Cafeteria's, 36 company-owned Fuddruckers restaurants and our one Cheeseburger in Paradise restaurant. The 28 Luby's Cafeteria's and 3 Fuddruckers restaurants that remained open were providing take-out, drive-through and curbside pickup, or delivery with reduced operating hours and on-site staff. In addition, more than 50 percent of our general and administrative staff were placed on furlough and salaries were temporarily reduced by 50 percent for the remaining general and administrative staff and other salaried employees, including all senior management. Furthermore, our franchise owners suspended operations or moved to limited food-to-go operations at their locations, reducing the number of franchise locations in operation to 37 by early April 2020 from 90 prior to the COVID-19 pandemic.

Beginning in May 2020, we began to gradually reopen the dining rooms with state-mandated limits on guest capacity at the 28 Luby's locations and 3 Fuddruckers locations that had been previously operating with food-to-go service only. We also began to reopen restaurants that were temporarily closed. As of the date of this release, there were 31 Luby's Cafeteria's and 8 Fuddruckers restaurants operating, all of which had their dining rooms open at limited capacity; these restaurants were operating at approximately 75% of their pre-pandemic weekly sales levels. Additionally, there were 59 franchise locations in operation as of the date of this release.

The full extent and duration of the impact of the COVID-19 pandemic on our operations and financial performance is currently unknown, and depends on future developments that are uncertain and unpredictable, including the duration of the spread of the pandemic, its impact of capital and financial markets on a macro-scale and any new information that may emerge concerning the severity of the virus, its spread to other regions, the actions to contain the virus or treat its impact, and consumer attitudes and behaviors, among others.

In response to the changed operating environment from the COVID-19 pandemic, we took the following actions to minimize the financial impact and preserve the prospects for emerging from this unprecedented period.

•We revamped restaurant operations to generate cost efficiencies resulting in higher restaurant operating margins even if sales levels do not return to pre-COVID-19 pandemic levels. As the restaurants adapted to the new operating environment, a lower cost labor model was deployed, food costs declined as menu offerings were concentrated among the historically top selling items, and various restaurant service and supplier costs were reevaluated.

•We began restructuring corporate overhead earlier in calendar 2020 prior to the pandemic, including a transition to a 3rd party provider for certain accounting and payroll function. Significant further

2

restructuring took place in April and May of 2020, as we reviewed all corporate service providers, information technology needs, and personnel requirements to support a reduced level of operations going forward.

•We obtained a $10.0 million "Payroll Protection Program" loan under the Coronavirus Aid, Relief and Economic Security Act which was necessary for funding continuing operations. We believe that a portion of the loan will be eligible for forgiveness; however, that amount cannot currently be calculated.

•We continued efforts to close real estate sales transactions with anticipated aggregate sales proceeds in excess of $20.0 million prior to the end of fiscal 2020. In addition, the Company has identified other real estate properties that may be sold to generate funds for ongoing operations.

About Luby’s

Luby’s, Inc. (NYSE: LUB) operated 118 restaurants nationally as of March 11, 2020: 78 Luby’s Cafeterias, 39 Fuddruckers, one Cheeseburger in Paradise restaurants. Luby's is the franchisor for 90 Fuddruckers franchise locations across the United States (including Puerto Rico), Canada, Mexico, Colombia, and Panama. Luby's Culinary Contract Services provides food service management to 28 sites consisting of healthcare, corporate dining locations, sports stadiums, and sales through retail grocery stores.

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 the statements under the caption “Outlook” and any other statements regarding scheduled openings of units, scheduled closures of units, sales of assets, expected proceeds from the sale of assets, expected levels of capital expenditures, effects of food commodity costs, anticipated financial results in future periods and expectations of industry conditions.

Luby’s cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements, and other written communications, as well as oral statements made from time to time by representatives of Luby’s. The following factors, as well as any other cautionary language 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 Luby’s describes in such forward-looking statements: general business and economic conditions; the impact of competition; our operating initiatives; fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese and produce; 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 governmental regulations, including changes in minimum wages; the effects of inflation; the availability of credit; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; the continued service of 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.

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Luby’s, Inc.

Consolidated Statements of Operations (unaudited)

(In thousands, except per share data)

	Quarter Ended				Two Quarters Ended
	March 11, 2020		March 13, 2019		March 11, 2020		March 13, 2019
	(12 weeks)		(12 weeks)		(28 weeks)		(28 weeks)
SALES:
Restaurant sales	$	60,391	$	65,369	$	143,949	$	156,468
Culinary contract services	6,998		7,543		16,772		17,039
Franchise revenue	1,158		1,421		2,865		3,644
Vending revenue	14		90		124		190
TOTAL SALES	68,561		74,423		163,710		177,341
COSTS AND EXPENSES:
Cost of food	17,399		18,145		41,341		43,226
Payroll and related costs	23,782		24,730		55,915		59,244
Other operating expenses	10,065		11,412		24,860		27,914
Occupancy costs	3,783		4,166		8,773		10,041
Opening costs	2		11		14		44
Cost of culinary contract services	6,400		6,717		15,348		15,532
Cost of franchise operations	409		247		974		519
Depreciation and amortization	2,677		3,222		6,440		8,126
Selling, general and administrative expenses	6,816		7,753		16,974		17,763
Other Charges	1,509		1,263		2,748		2,477
Provision for asset impairments and restaurant closings	661		1,195		1,770		2,422
Net gain on disposition of property and equipment	(2,527)		(12,651)		(2,498)		(12,501)
Total costs and expenses	70,976		66,210		172,659		174,807
INCOME (LOSS) FROM OPERATIONS	(2,415)		8,213		(8,949)		2,534
Interest income	5		19		28		19
Interest expense	(1,473)		(1,554)		(3,435)		(3,269)
Other income, net	148		55		388		86
Income (loss) before income taxes and discontinued operations	(3,735)		6,733		(11,968)		(630)
Provision for income taxes	62		93		156		213
Income (loss) from continuing operations	(3,797)		6,640		(12,124)		(843)
Loss from discontinued operations, net of income taxes	(6)		(8)		(17)		(13)
NET INCOME (LOSS)	$	(3,803)	$	6,632	$	(12,141)	$	(856)
Income (loss) per share from continuing operations:
Basic	$	(0.13)	$	0.22	$	(0.40)	$	(0.03)
Assuming dilution	$	(0.13)	$	0.22	$	(0.40)	$	(0.03)
Loss per share from discontinued operations:
Basic	$	0.00	$	0.00	$	0.00	$	0.00
Assuming dilution	$	0.00	$	0.00	$	0.00	$	0.00
Net income (loss) per share:
Basic	$	(0.13)	$	0.22	$	(0.40)	$	(0.03)
Assuming dilution	$	(0.13)	$	0.22	$	(0.40)	$	(0.03)
Weighted average shares outstanding:
Basic	30,215		29,769		30,123		29,671
Assuming dilution	30,215		29,799		30,123		29,671

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The following table contains information derived from the Company’s Consolidated Statements of Operations expressed as a percentage of sales. Percentages may not total due to rounding.

	Quarter Ended				Two Quarters Ended
	March 11, 2020		March 13, 2019		March 11, 2020		March 13, 2019
	(12 weeks)		(12 weeks)		(28 weeks)		(28 weeks)
Restaurant sales	88.1	%	87.8	%	87.9	%	88.2	%
Culinary contract services	10.2	%	10.1	%	10.2	%	9.6	%
Franchise revenue	1.7	%	1.9	%	1.8	%	2.1	%
Vending revenue	0.0	%	0.1	%	0.1	%	0.1	%
TOTAL SALES	100.0	%	100.0	%	100.0	%	100.0	%
COSTS AND EXPENSES:
(As a percentage of restaurant sales)
Cost of food	28.8	%	27.8	%	28.7	%	27.6	%
Payroll and related costs	39.4	%	37.8	%	38.8	%	37.9	%
Other operating expenses	16.7	%	17.5	%	17.3	%	17.8	%
Occupancy costs	6.3	%	6.4	%	6.1	%	6.4	%
Vending revenue	0.0	%	(0.1)	%	(0.1)	%	(0.1)	%
Store level profit	8.9	%	10.7	%	9.2	%	10.4	%
(As a percentage of total sales)
General and administrative expenses	7.8	%	9.4	%	8.5	%	9.0	%
Marketing and advertising expenses	2.1	%	1.0	%	1.9	%	1.0	%
Selling, general and administrative expenses	9.9	%	10.4	%	10.4	%	10.0	%

5

Luby’s, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

	March 11, 2020		August 28, 2019
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	7,080	$	3,640
Restricted cash and cash equivalents	8,704		9,116
Trade accounts and other receivables, net	8,413		8,852
Food and supply inventories	2,392		3,432
Prepaid expenses	1,970		2,355
Total current assets	28,559		27,395
Property held for sale	13,770		16,488
Assets related to discontinued operations	1,813		1,813
Property and equipment, net	117,430		121,743
Intangible assets, net	16,025		16,781
Goodwill	514		514
Operating lease right-of-use assets	24,296		—
Other assets	890		1,266
Total assets	$	203,297	$	186,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	7,945	$	8,465
Liabilities related to discontinued operations	5		14
Current portion of credit facility debt	2,567		—
Operating lease liabilities-current	5,916		—
Accrued expenses and other liabilities	24,015		24,475
Total current liabilities	40,448		32,954
Credit facility debt, less current portion	48,268		45,439
Operating lease liabilities-noncurrent	23,047		—
Other liabilities	922		6,577
Total liabilities	$	112,685	$	84,970
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Common stock, 0.32 par value; 100,000,000 shares authorized; shares issued were 30,751,629 and 30,478,972; and shares outstanding were 30,251,629 and 29,978,972 at March 11, 2020 and August 28, 2019, respectively	9,841		9,753
Paid-in capital	35,478		34,870
Retained earnings	50,068		61,182
Less cost of treasury stock, 500,000 shares	(4,775)		(4,775)
Total shareholders’ equity	90,612		101,030
Total liabilities and shareholders’ equity	$	203,297	$	186,000

6

Luby’s, Inc.

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

	Quarter Ended
	March 11, 2020			March 13, 2019
	(28 weeks)			(28 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(12,141)		$	(856)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for asset impairments and net (gains) losses on property sales	(727)			(10,079)
Depreciation and amortization	6,440		8.126	8,126
Amortization of debt issuance cost	577			811
Share-based compensation expense	732			823
Cash used in operating activities before changes in operating assets and liabilities	(5,119)			(1,175)
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts and other receivables	509			(414)
Increase in food and supply inventories	(94)			(45)
Decrease in prepaid expenses and other assets	197			1,115
Decrease in operating lease assets	2,407			—
Decrease in operating lease liabilities	(3,541)			—
Decrease in accounts payable, accrued expenses and other liabilities	(263)			(7,110)
Net cash used in operating activities	(5,904)			(7,629)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets and property held for sale	5,453			20,444
Purchases of property and equipment	(1,490)			(1,781)
Net cash provided by investing activities	3,963			18,663
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolver borrowings	3,300			34,500
Revolver repayments	—			(54,500)
Proceeds from term loan	2,500			58,400
Term loan repayments	(831)			(35,169)
Debt issuance costs	—			(3,236)
Taxes paid on equity withheld	—			(12)
Net cash provided by (used in) financing activities	4,969			(17)
Net increase in cash and cash equivalents and restricted cash	3,028			11,017
Cash and cash equivalents and restricted cash at beginning of period	12,756			3,722
Cash and cash equivalents and restricted cash at end of period	$	15,784		$	14,739
Cash paid for:
Income taxes, net of (refunds)	$	7		$	51
Interest	2,647			1,951

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Store Level Profit

Although store level profit, defined as restaurant sales plus vending revenue, less cost of food, payroll and related costs, other operating expenses, and occupancy costs, is a non-GAAP measure, we believe its presentation is useful because it explicitly shows the results of our most significant reportable segments.   The following table reconciles between store level profit, a non-GAAP measure to loss from continuing operations, a GAAP measure:

($ thousands)	Quarter Ended				Two Quarters Ended
	March 11, 2020		March 13, 2019		March 11, 2020		March 13, 2019
	(12 weeks)		(12 weeks)		(28 weeks)		(28 weeks)
Store level profit	$	5,376	$	7,006	$	13,184	$	16,233
Plus:
Sales from culinary contract services	6,998		7,543		16,772		17,039
Sales from franchise operations	1,158		1,421		2,865		3,644
Less:
Opening costs	2		11		14		44
Cost of culinary contract services	6,400		6,717		15,348		15,532
Cost of franchise operations	409		247		974		519
Depreciation and amortization	2,677		3,222		6,440		8,126
Selling, general and administrative expenses	6,816		7,753		16,974		17,763
Other Charges	1,509		1,263		2,748		2,477
Provision for asset impairments and restaurant closings	661		1,195		1,770		2,422
Net gain on disposition of property and equipment	(2,527)		(12,651)		(2,498)		(12,501)
Interest income	(5)		(19)		(28)		(19)
Interest expense	1,473		1,554		3,435		3,269
Other income, net	(148)		(55)		(388)		(86)
Provision for income taxes	62		93		156		213
Income (loss) from continuing operations	$	(3,797)	$	6,640	$	(12,124)	$	(843)

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Adjusted EBITDA

Adjusted EBITDA is defined as income (loss) from continuing operations before interest, provision (benefit) for income taxes, and depreciation and amortization, and excluding net loss (gain) on disposing of property and equipment, provision for asset impairments and restaurant closings, other charges, non-cash compensation expense, franchise taxes, and decrease / (increase) in fair value of derivatives.

Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by, or presented in accordance with GAAP. We believe Adjusted EBITDA provides useful information to management and investors in valuing the Company and evaluating ongoing operating results and trends and in comparing our results to other competitors. Our management uses Adjusted EBITDA in evaluating management's performance when determining incentive compensation.

Adjusted EBITDA, as defined, may not be comparable to other similarly titled measures as computed by other companies. These measures should be considered supplemental and not a substitute or superior to other GAAP performance measures.

($ thousands)	Quarter Ended				Two Quarters Ended
	March 11, 2020		March 13, 2019		March 11, 2020		March 13, 2019
	(12 weeks)		(12 weeks)		(28 weeks)		(28 weeks)
Income (loss) from continuing operations	$	(3,797)	$	6,640	(12,124)		(843)
Depreciation and amortization	2,677		3,222		6,440		8,126
Provision for income taxes	62		93		$	156	$	213
Interest expense	1,473		1,554		3,435		3,269
Interest income	(5)		(19)		(28)		(19)
Other Charges	1,509		1,263		2,748		2,477
Net loss on disposition of property and equipment	(2,527)		(12,651)		(2,498)		(12,501)
Provision for asset impairments and restaurant closings	661		1,195		1,770		2,422
Non-cash compensation expense	366		398		732		823
Franchise Taxes	42		42		98		108
Increase in fair value of derivative	—		—		—		88
Adjusted EBITDA	$	461	$	1,737	$	729	$	4,163

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EX-99.2

	For additional information contact:
FOR IMMEDIATE RELEASE	Dennard Lascar Investor Relations
	Rick Black / Ken Dennard
	LUB@dennardlascar.com

LUBY’S ANNOUNCES IT WILL PURSUE SALE OF ITS OPERATIONS AND ASSETS AND DISTRIBUTE NET PROCEEDS TO STOCKHOLDERS

Company Provides Update to its Strategic Review Process

HOUSTON, TX - June 3, 2020 – Luby’s, Inc. (NYSE: LUB) today announced it will immediately pursue the sale of its operating divisions and assets, including its real estate assets, and distribute the net proceeds to stockholders after payment of debt and other obligations. During the sale process, certain of the Company’s restaurants will remain open to continue serving our guests.

The decision by the Company’s Board of Directors follows a comprehensive review of the Company’s operations and assets led by a Special Committee of the Board of Directors comprised of independent directors including Gerald Bodzy, Twila Day, Joe McKinney, Gasper Mir, John Morlock, and Randolph Read; Messrs. Bodzy and Read Co-Chaired the Committee. The Special Committee, with the assistance of financial and legal advisors, reviewed a range of strategic alternatives available to the Company with the objective of maximizing stockholder value. The Special Committee recommended this course of action to the full Board of Directors which then approved the Special Committee’s recommendations.

After a careful and thorough review of the Company’s operations (including the impact of COVID-19) and the Company’s strategic options, the Board concluded a monetization process will likely unlock more value more quickly and with greater certainty for the benefit of all Luby’s stockholders than the other alternatives considered by the Special Committee. A number of stockholders have expressed their support for seeking alternatives to continuing operating the Company’s restaurants in their current form in the present environment and this monetization program will seek to accomplish that task in the most efficient manner.

Luby’s will explore a variety of potential transactions, including selling the Company’s operating divisions: Luby’s Cafeteria, Fuddruckers, and Culinary Contract Services, as well as its real estate, or selling the Company in its entirety. Net proceeds obtained from any such transactions, after satisfying the Company’s debt and other obligations, will ultimately be distributed to

Luby’s stockholders. The process will be conducted in a disciplined, expeditious and cost-effective manner which seeks to maximize returns to stockholders. The Company has not established a definitive timeframe for completing this process which most likely will lead to the adoption by the Board of Directors of a formal plan of sale and proceeds distribution followed by an orderly wind down of any remaining operations. Such a plan of sale and proceeds distribution, if adopted by the Board, would require stockholder approval. There can be no assurance such a plan of sale and proceeds distribution will be adopted by the Board or approved by stockholders.

If the Company receives an offer which would result in a sale of the Company in its entirety which, in the view of the Board of Directors, will provide superior value to stockholders in comparison to the value of estimated distributions to stockholders under the contemplated sale of assets scenario, taking into account factors that could affect valuation, including timing and certainty of closing, credit market risks, proposed terms and other factors, the Company will have the ability to pursue such a transaction.

Christopher J. Pappas, Chief Executive Officer and President of Luby’s, said, “We believe that proceeding with this sale process followed by distributions contemplated under a proceeds distribution plan will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the Company should a compelling offer that delivers superior value be made. This path also provides for the potential to place the restaurant operations with well-capitalized owners moving forward.”

The Company on behalf of the Special Committee has retained Duff & Phelps Securities, LLC to assist it with the sale of Luby’s Cafeteria and Culinary Contract Services and has retained Brookwood Associates LLC to assist it with the sale of Fuddruckers.

The Company noted there can be no assurance one or more sale transactions will result from this process. 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 the statements regarding sales of assets or the Company and the use of proceeds received from such sales.

Forward Looking Statements

Luby’s cautions readers that various factors could cause its actual financial and operational results to differ materially from those indicated by forward-looking statements made from time-to-time in news releases, reports, proxy statements, registration statements, and other written communications, as well as oral statements made from time to time by representatives of Luby’s. The following factors, as well as any other cautionary language 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 Luby’s describes in such forward-looking statements: general business and economic conditions; the effects of the COVID-19 pandemic; the possible inability of the Company to sell itself, its operations or assets on terms deemed to be favorable to the Company or its stockholders; if presented, whether the Company’s stockholders will approve the

sale and proceeds distribution plan described above; the impact of competition; our operating initiatives; fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese and produce; 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 governmental regulations, including changes in minimum wages; the effects of inflation; the availability of credit; unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations; the continued service of 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 and Current Reports on Form 8-K.