10-Q

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 February 13, 2013

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: 001-08308

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 No.)
13111 Northwest Freeway, Suite 600 Houston, Texas	77040
(Address of principal executive offices)	(Zip Code)

(713) 329-6800

(Registrant’s telephone number, including area code)

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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of March 18, 2013 there were 28,232,692 shares of the registrant’s common stock outstanding.

Luby’s, Inc.

Form 10-Q

Quarter ended February 13, 2013

Table of Contents

	Page
Part I—Financial Information
Item 1 Financial Statements	3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3 Quantitative and Qualitative Disclosures about Market Risk	32
Item 4 Controls and Procedures	32
Part II—Other Information
Item 1 Legal Proceedings	33
Item 1A Risk Factors	33
Item 6 Exhibits	33
Signatures	34

Additional Information

We file reports with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The public may read and copy any materials we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer, and the SEC maintains an Internet site at http://www.sec.gov that contains the reports, proxy and information statements, and other information that we file electronically. Our website address is http://www.lubys.com. Please note that our website address is provided as an inactive textual reference only. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The information provided on our website is not part of this report, and is therefore not incorporated by reference unless such information is specifically referenced elsewhere in this report.

2

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

Luby’s, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

	February 13, 2013			August 29, 2012
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,897		$	1,223
Trade accounts and other receivables, net		3,722			4,000
Food and supply inventories		4,507			3,562
Prepaid expenses		2,880			3,008
Assets related to discontinued operations		33			42
Deferred income taxes		1,912			1,932
Total current assets		15,951			13,767
Property held for sale		602			602
Assets related to discontinued operations		5,667			4,844
Property and equipment, net		180,190			173,633
Intangible assets, net		28,507			26,679
Goodwill		338			195
Deferred incomes taxes		8,707			9,354
Other assets		3,980			1,943
Total assets	$	243,942		$	231,017
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	16,339		$	14,849
Liabilities related to discontinued operations		368			442
Accrued expenses and other liabilities		18,894			20,646
Total current liabilities		35,601			35,937
Credit facility debt		25,500			13,000
Liabilities related to discontinued operations		302			1,133
Other liabilities		8,983			8,288
Total liabilities		70,386			58,358
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Common stock, $0.32 par value; 100,000,000 shares authorized; Shares issued were 28,732,692 and 28,677,203, respectively; Shares outstanding were 28,232,692 and 28,177,203, respectively		9,194			9,176
Paid-in capital		25,079			24,532
Retained earnings		144,058			143,726
Less cost of treasury stock, 500,000 shares		(4,775	)		(4,775	)
Total shareholders’ equity		173,556			172,659
Total liabilities and shareholders’ equity	$	243,942		$	231,017

The accompanying notes are an integral part of these consolidated financial statements

3

Luby’s, Inc.

Consolidated Statements of Operations (unaudited)

(In thousands except per share data)

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
SALES:
Restaurant sales	$	82,152		$	73,434		$	156,120		$	146,592
Culinary contract services		3,667			4,197			7,508			8,733
Franchise revenue		1,540			1,653			3,062			3,135
Vending revenue		119			131			241			278
TOTAL SALES		87,478			79,415			166,931			158,738
COSTS AND EXPENSES:
Cost of food		23,763			20,758			44,606			41,263
Payroll and related costs		28,817			25,400			54,346			50,487
Other operating expenses		19,593			16,147			37,434			33,660
Opening costs		261			42			467			77
Cost of culinary contract services		3,342			4,137			6,808			8,243
Depreciation and amortization		4,312			4,114			8,430			8,210
General and administrative expenses		7,616			6,737			14,994			13,547
Provision for asset impairments, net		—			—			90			175
Net loss (gain) on disposition of property and equipment		(1,321	)		72			(1,563	)		81
Total costs and expenses		86,383			77,407			165,612			155,743
INCOME FROM OPERATIONS		1,095			2,008			1,319			2,995
Interest income		2			2			4			3
Interest expense		(214	)		(215	)		(389	)		(494	)
Other income, net		207			165			451			351
Income before income taxes and discontinued operations		1,090			1,960			1,385			2,855
Provision for income taxes		487			603			566			928
Income from continuing operations		603			1,357			819			1,927
Loss from discontinued operations, net of income taxes		(400	)		(269	)		(487	)		(636	)
NET INCOME	$	203		$	1,088		$	332		$	1,291
Income per share from continuing operations:
Basic	$	0.02		$	0.05		$	0.03		$	0.07
Assuming dilution		0.02			0.05			0.03			0.07
Loss per share from discontinued operations:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Assuming dilution		(0.01	)		(0.01	)		(0.02	)		(0.02	)
Net income per share:
Basic	$	0.01		$	0.04		$	0.01		$	0.05
Assuming dilution		0.01			0.04			0.01			0.05
Weighted average shares outstanding:
Basic		28,614			28,365			28,500			28,329
Assuming dilution		28,825			28,410			28,698			28,359

The accompanying notes are an integral part of these consolidated financial statements.

4

Luby’s, Inc.

Consolidated Statement of Shareholders’ Equity (unaudited)

(In thousands)

	Common Stock														Total
	Issued				Treasury						Paid-In		Retained		Shareholders’
	Shares		Amount		Shares			Amount			Capital		Earnings		Equity
BALANCE AT AUGUST 29, 2012		28,677	$	9,176		(500	)	$	(4,775	)	$	24,532	$	143,726	$	172,659
Net income		—		—		—			—			—		332		332
Share-based compensation expense		14		4		—			—			24		—		28
Tax benefit from stock options		—		—		—			—			37		—		37
Common stock issued under employee benefit plans		28		9		—			—			120		—		129
Common stock issued under nonemployee benefit plans		14		5		—			—			366		—		371
BALANCE AT FEBRUARY 13, 2013		28,733	$	9,194		(500	)	$	(4,775	)	$	25,079	$	144,058	$	173,556

The accompanying notes are an integral part of these consolidated financial statements.

5

Luby’s, Inc.

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	332		$	1,291
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for asset impairments, net of gains/losses on property sales		(967	)		778
Depreciation and amortization		8,467			8,247
Amortization of debt issuance cost		52			52
Non-cash compensation expense		157			108
Share-based compensation expense		371			297
Tax increase on stock options		37			—
Deferred tax (benefit) expense		(115	)		415
Cash provided by operating activities before changes in operating assets and liabilities		8,334			11,188
Changes in operating assets and liabilities, net of business acquisition:
Decrease in trade accounts and other receivables		385			571
Increase in food and supply inventories		(397	)		(690	)
Decrease (increase) in prepaid expenses and other assets		589			(503	)
Decrease in accounts payable, accrued expenses and other liabilities		(1,344	)		(441	)
Net cash provided by operating activities		7,567			10,125
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets and property held for sale		3,571			1,316
Purchases of property and equipment		(11,435	)		(9,247	)
Acquisition of Cheeseburger in Paradise		(10,706	)		—
Decrease (increase) in note receivable		20			(197	)
Net cash used in investing activities		(18,550	)		(8,128	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Credit facility borrowings		37,100			19,200
Credit facility repayments		(24,600	)		(21,200	)
Proceed from exercise of stock options		157			—
Debt issuance costs		—			(1	)
Net cash provided by (used in) financing activities		12,657			(2,001	)
Net increase (decrease) in cash and cash equivalents		1,674			(4	)
Cash and cash equivalents at beginning of period		1,223			1,252
Cash and cash equivalents at end of period	$	2,897		$	1,248
Cash paid for:
Income taxes	$	—		$	—
Interest		334			423

The accompanying notes are an integral part of these consolidated financial statements.

6

Luby’s, Inc.

Notes to Consolidated Financial Statements (unaudited)

February 13, 2013

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Luby’s, Inc. (the “Company” or “Luby’s”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements that are prepared for the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarterly period ended February 13, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending August 28, 2013.

The consolidated balance sheet dated August 29, 2012, included in this Form 10-Q, has been derived from the audited consolidated financial statements at that date. However, this Form 10-Q does not include all of the information and footnotes required by GAAP for an annual filing of complete financial statements. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 29, 2012.

The results of operations, assets and liabilities for all units included in the cash flow improvement and capital redeployment plan discussed in Note 7 have been reclassified to discontinued operations in the statements of operations and balance sheets for all periods presented.

Note 2. Accounting Periods

The Company’s fiscal year ends on the last Wednesday in August. Accordingly, each fiscal year normally consists of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. Each of the first three quarters of each fiscal year consists of three four-week periods, while the fourth quarter normally consists of four four-week periods. Fiscal years 2012 and 2013 contain 52 weeks. Comparability between quarters may be affected by the varying lengths of the quarters, as well as the seasonality associated with the restaurant business. Seasonality factors affecting a quarter include timing of holidays, weather and school years. Interim results may not be indicative of full year results.

Note 3. Acquisition

Luby’s, Inc., through its newly created subsidiary, Paradise Cheeseburgers, LLC, purchased 100% of the membership units of Paradise Restaurant Group, LLC and affiliated companies which operate Cheeseburger in Paradise brand restaurants (collectively, “Cheeseburger in Paradise”) on December 6, 2012 for $10.7 million in cash.  The Company assumed $1.4 million of Cheeseburger in Paradise obligations, real estate leases and contracts. The Company funded the purchase with cash and borrowings from its credit facility.

The Company believes the acquisition of Cheeseburger in Paradise will produce significant benefits. The acquisition is expected to increase the Company’s market presence and opportunities for growth in sales, earnings and shareholder returns. The acquisition provides a complementary growth vehicle in the casual segment of the restaurant industry. The Company believes these factors support the amount of goodwill recorded as a result of the purchase price paid for the Cheeseburger in Paradise intangible and tangible assets, net of liabilities assumed.

The Company has accounted for the acquisition of Cheeseburger in Paradise using the acquisition method and accordingly the results of operations related to this acquisition have been included in the consolidated results of the Company since the acquisition date. The Company incurred $0.2 million in acquisition costs which were expensed as incurred and classified as general and administrative expenses on the consolidated statements of earnings.

The allocation of the purchase price for the acquisition requires extensive use of accounting estimates and judgments to allocate the purchase price to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The purchase price for the Company’s acquisition of Cheeseburger in Paradise and the assumption of liabilities is based on estimates of fair values at the acquisition date.  The Company’s fair value estimates for the purchase price allocation may change during the allowable period, which is up to one year from the acquisition date to provide sufficient time to devlop fair value estimates.  The fair values that take longer to estimate and are more likely to change include property and equipment, intangible assets and leases.

Such valuations require significant estimates and assumptions. The Company believes the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions.

7

The following table summarizes the estimated fair values of net assets acquired and liabilities assumed, in thousands:

Property and equipment	$	6,220
License agreement and trade name		2,347
Accounts receivable		108
Inventories		548
Cash and cash equivalents		58
Other current assets		329
Liquor licenses and permits		169
Goodwill		143
Favorable leases		2,211
Accrued payables		(570	)
Accrued payroll and benefits		(405	)
Unredeemed gift card liability		(185	)
Personal property and real estate tax liability		(170	)
Other liabilities		(97	)
Net cash paid for acquisition	$	10,706

The license agreement and trade name relates to a perpetual license to use intangible assets including trademarks, service marks and publicity rights related to Cheeseburger in Paradise owned by Jimmy Buffet and affiliated entities. In return, the Company will pay a royalty fee of 2.5% of gross sales less discounts at Cheeseburger in Paradise locations to an entity owned or controlled by Jimmy Buffet. The trade name represents a respected brand with positive customer loyalty; and the Company intends to cultivate and protect the use of the trade name.

The Company will amortize the fair value allocated to the license agreement and trade name over an expected accounting life of 15 years based on the expected use of its assets and the restaurant environment in which it is being used.  The Company recorded $32 thousand of amortization expense for the quarter ended February 13, 2013, which is classified as depreciation and amortization expense in the accompanying consolidated statement of operations.  Because the value of these assets will be amortized using the straight-line method over 15 years, the annual amortization will be $156 thousand in future years.

A portion of the acquired lease portfolio contained favorable leases. Acquired lease terms were compared to current market lease terms to determine if the acquired leases were below or above the current rates tenants would pay for similar leases. The favorable leases assets totaled $2.2 million are recorded in other assets. There were determined to be no unfavorable leases.  The favorable leases are amortized to rent expense on a straight line basis over the lives of the related leases.  The Company recorded $28 thousand of amortization expense for the quarter ended February 13, 2013, which is classified as additional rent expense in the accompanying consolidated statement of operations.

The Company also recorded an intangible asset for goodwill in the amount of $0.1 million. Goodwill is considered to have an indefinite useful life and is not amortized but is tested for impairment at least annually.  The total amount of goodwill recorded is expected to be amortizable and deductible for income tax purposes.

8

The following unaudited pro forma information assumes the Cheeseburger in Paradise acquisition occurred as of the beginning of the fiscal year ended August 29, 2012. The unaudited pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations of the Company or of the results that would have actually been attained had the acquisition taken place at the beginning of the fiscal year ended August 29, 2012.

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(Unaudited)			(Unaudited)
	(In thousands)
Pro forma total sales	$	178,542		$	179,695
Pro forma income from continuing operations		316			1,273
Pro forma net income (loss)		(171	)		637
Pro forma income from continuing operations per share
Basic		0.01			0.04
Diluted		0.01			0.04
Pro forma net income (loss) per share
Basic		(0.01	)		0.02
Diluted		(0.01	)		0.02

Included in the Consolidated Statement of Operations for the two quarters ended February 13, 2013 were actual restaurant sales for Cheeseburger in Paradise $ 7.7 million and loss from operations for Cheeseburger in Paradise only of $0.1 million.

Note 4. Reportable Segments

The Company has three reportable segments: Company-owned restaurants, franchise operations and Culinary Contract Services (“CCS”).

Company-owned restaurants

Company-owned restaurants consists of several brands which are aggregated into one reportable segment because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the nature of the regulatory environment and store level profit margin are similar. The chief operating decision maker analyzes Company-owned restaurants at store level profit which is revenue less cost of food, payroll and related costs and other operating expenses. The primary brands are Luby’s Cafeteria, Fuddruckers and Cheeseburger in Paradise, with a couple of non-core restaurant locations under other brand names (i.e., Koo Koo Roo California Bistro and Bob Luby’s Seafood). All company-owned restaurants are casual dining restaurants. Each restaurant is an operating segment because operating results and cash flow can be determined for each restaurant.

The total number of Company-owned restaurants was 183 at February 13, 2013 and 154 at August 29, 2012.

Culinary Contract Services

CCS branded as Luby’s Culinary Contract Services, consists of a business line servicing healthcare, higher education and corporate dining clients. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service and retail dining. CCS had contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, behavioral hospitals, business and industry clients, and higher education institutions. CCS has the unique ability to deliver quality services that include facility design and procurement as well as nutrition and branded food services to our clients. The costs of culinary contract services on the Consolidated Statements of Operations includes all food, payroll and related costs and other operating expenses related to CCS sales.

The total number of CCS contracts was 18 at February 13, 2013 and August 29, 2012.

9

Franchising

We offer franchises for only the Fuddruckers brand. Franchises are sold in markets where expansion is deemed advantageous to the development of the Fuddruckers concept and system of restaurants. Initial franchise agreements have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area, usually a four-mile radius surrounding the franchised restaurant.

Franchisees bear all direct costs involved in the development, construction and operation of their restaurants. In exchange for a franchise fee, the Company provides franchise assistance in the following areas: site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, assistance by a Fuddruckers “opening team” at the time a franchised restaurant opens, and operations and accounting guidelines set forth in various policies and procedures manuals.

All franchisees are required to operate their restaurants in accordance with Fuddruckers standards and specifications, including controls over menu items, food quality and preparation. The Company requires the successful completion of its training program by a minimum of three managers for each franchised restaurant. In addition, franchised restaurants are evaluated regularly by the Company for compliance with franchise agreements, including standards and specifications through the use of periodic, unannounced, on-site inspections and standards evaluation reports.

The number of franchised restaurants was 119 at February 13, 2013 and 125 at August 29, 2012.

10

The table below shows financial information as required by ASC 280 for segment reporting. ASC 280 requires depreciation and amortization be disclosed for each reportable segment, even if not used by the chief operating decision maker. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, tax refunds receivable, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets, prepaid expenses, intangible assets and goodwill.

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
Sales:
Company-owned restaurants	$	82,271		$	73,565		$	156,361		$	146,870
Culinary contract services		3,667			4,197			7,508			8,733
Franchising		1,540			1,653			3,062			3,135
Total		87,478			79,415			166,931			158,738
Segment level profit:
Company-owned restaurants	$	10,098		$	11,260		$	19,975		$	21,460
Culinary contract services		325			60			700			490
Franchising		1,540			1,653			3,062			3,135
Total		11,963			12,973			23,737			25,085
Depreciation and amortization:
Company-owned restaurants	$	3,853		$	3,679		$	7,382		$	7,328
Culinary contract services		106			108			214			221
Franchising		177			177			354			354
Corporate		176			150			480			(307	)
Total		4,312			4,114			8,430			8,210
Capital expenditures:
Company-owned restaurants	$	6,402		$	4,648		$	11,222		$	9,132
Culinary contract services		40			43			41			76
Franchising		—			—			—			—
Corporate		119			36			172			39
Total	$	6,561		$	4,727		$	11,435		$	9,247
Income before income taxes and discontinues operations:
Segment level profit	$	11,963		$	12,973		$	23,737		$	25,085
Opening costs		(261	)		(42	)		(467	)		(77	)
Depreciation and amortization		(4,312	)		(4,114	)		(8,430	)		(8,210	)
General and administrative expenses		(7,616	)		(6,737	)		(14,994	)		(13,547	)
Provision for asset impairments, net		—			—			(90	)		(175	)
Net gain (loss) on disposition of property and equipment		1,321			(72	)		1,563			(81	)
Interest income		2			2			4			3
Interest expense		(214	)		(215	)		(389	)		(494	)
Other income, net		207			165			451			351
Total	$	1,090		$	1,960		$	1,385		$	2,855

	February 13, 2013		August 29, 2012
Total assets:
Company-owned restaurants	$	195,071	$	182,287
Culinary contract services		3,557		3,774
Franchising		14,701		15,352
Corporate		30,613		29,604
Total	$	243,942	$	231,017

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Note 5. Fair Value Measurements

GAAP establishes a framework for using fair value to measure assets and liabilities, and expands disclosure about fair value measurements. Fair value measurements guidance applies whenever other statements require or permit asset or liabilities to be measured at fair value.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include:

= Level 1: Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

= Level 2: Defined as pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.

= Level 3: Defined as pricing inputs that are unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

Non-recurring fair value measurements related to impaired property and equipment consisted of the following:

			Fair Value Measurement Using
	Two Quarters Ended February 13, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to company-owned restaurant assets	$	20	$	—	$	—	$	20	$	(90	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,634	$	—	$	—	$	1,634	$	(506	)

			Fair Value Measurement Using
	Two Quarters Ended February 15, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to Culinary Contract Services	$	57	$	—	$	—	$	57	$	(175	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,875	$	—	$	—	$	1,875	$	(510	)

Note 6. Income Taxes

No cash payments of estimated federal income taxes were made during the quarter ended February 13, 2013.

Deferred tax assets and liabilities are recorded based on differences between the financial reporting basis and the tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent future taxable income is expected to be sufficient to utilize those assets prior to their expiration.

12

Management believes that adequate provisions for income taxes have been reflected in the financial statements and is not aware of any significant exposure items that have not been reflected in the financial statements. Amounts considered probable of settlement within one year have been included in the accrued expenses and other liabilities in the accompanying consolidated balance sheet.

Note 7. Property and Equipment, Intangible Assets and Goodwill

The cost, net of impairment, and accumulated depreciation of property and equipment at February 13, 2013 and August 29, 2012, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:

	February 13, 2013			August 29, 2012			Estimated Useful Lives (years)
	(In thousands)
Land	$	61,098		$	59,159			—
Restaurant equipment and furnishings		116,590			109,039		1	to	15
Buildings		170,640			167,346		20	to	33
Leasehold and leasehold improvements		34,824			32,913		Lesser of lease term or estimated useful life
Office furniture and equipment		7,276			7,030		3	to	10
Construction in progress		712			3,890			—
		391,140			379,377
Less accumulated depreciation and amortization		(210,950	)		(205,744	)
Property and equipment, net	$	180,190		$	173,633
Intangible assets, net	$	28,507		$	26,679			21
Goodwill	$	338		$	195			—

Intangible assets, net consist of the Fuddruckers trade name and franchise agreements and will be amortized. The Company believes the Fuddruckers’ brand name has an expected accounting life of 21 years from the date of acquisition based on the expected use of its assets and the restaurant environment in which it is being used. The trade name represents a respected brand with customer loyalty and the Company intends to cultivate and protect the use of the trade name. The franchise agreements, after considering renewal periods, have an estimated accounting life of 21 years from the date of acquisition and will be amortized over this period of time. The Company recorded $3.6 million of accumulated amortization expense as of February 13, 2013 and $2.9 million of accumulated amortization expense as of August 29, 2012.

Intangible assets, net also includes the license agreement and trade name related to Cheeseburger in Paradise. These assets have an expected accounting life of 15 years from the date of acquisition December 6, 2012. The Company recorded amortization expense of $32 thousand in the quarter ended February 13, 2013.

The Company recorded an intangible asset for goodwill in the amount of $0.2 million related to the acquisition of substantially all of the assets of Fuddruckers. The Company also recorded an intangible asset for goodwill in the amount of $0.1 million related to the acquisition of the membership units of Paradise Restaurant Group, LLC. Goodwill is considered to have an indefinite useful life and is not amortized. Goodwill was $0.3 million as of February 13, 2013 and $0.2 million as of August 29, 2012 and relates to our Company-owned restaurants reportable segment.

Note 8. Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale

Impairment of Long-Lived Assets and Store Closings

The Company periodically evaluates long-lived assets held for use and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. The Company analyzes historical cash flows of operating locations and compares results of poorer performing locations to more profitable locations. The Company also analyzes lease terms, condition of the assets and related need for capital expenditures or repairs, as well as construction activity and the economic and market conditions in the surrounding area.

For assets held for use, the Company estimates future cash flows using assumptions based on possible outcomes of the areas analyzed. If the undiscounted future cash flows are less than the carrying value of the location’s assets, the Company records an impairment loss based on an estimate of discounted cash flows. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s subjective judgments. Assumptions and estimates used include operating results, changes in working capital, discount rate, growth rate, anticipated net proceeds from disposition of the property and if applicable, lease terms. The span of time for which future cash flows are estimated is often lengthy, increasing the sensitivity to assumptions made. The time span could be 20 to 25 years for newer properties, but only 5 to 10 years for older properties. Depending on the assumptions and estimates used, the estimated future cash flows projected in the evaluation of long-lived assets can vary within a wide range of outcomes. The Company considers the likelihood of possible outcomes in determining the best estimate of future cash flows. The measurement for such an impairment loss is then based on the fair value of the asset as determined by discounted cash flows.

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The Company recognized the following impairment charges to income from operations:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Provision for asset impairments	$	90		$	175
Net (gain) loss on disposition of property and equipment		(1,563	)		81
	$	(1,473	)	$	256
Effect on EPS:
Basic	$	(0.05	)	$	0.01
Assuming dilution	$	(0.05	)	$	0.01

The impairment charge for the two quarters ended February 13, 2013 is related to an operating Fuddruckers restaurant at a leased location.

The impairment charge for the two quarters ended February 15, 2012 is related to a culinary contract services location.

The net gain for the two quarters ended February 13, 2013 includes the gain on disposal of assets at a Koo Koo Roo leased location and proceeds from the eminent domain disposition of part of a parking lot at a Luby’s location net of asset retirements.

Discontinued Operations

As a result of the first quarter fiscal year 2010 adoption of the Company’s Cash Flow Improvement and Capital Redeployment Plan (“the Plan”), the Company reclassified 23 operating stores and one previously closed location to discontinued operations. The results of operations, assets and liabilities for all units included in the Plan have been reclassified to discontinued operations in the statement of operations and balance sheets for all periods presented. 

The following table sets forth the assets and liabilities for all discontinued operations:

	February 13, 2013		August 29, 2012
	(in thousands)
Prepaid expenses	$	33	$	42
Assets related to discontinued operations—current	$	33	$	42
Property and equipment	$	5,663	$	4,812
Other assets		4		8
Assets related to discontinued operations—non-current	$	5,667	$	4,844
Deferred income taxes	$	297	$	297
Accrued expenses and other liabilities		71		145
Liabilities related to discontinued operations—current	$	368	$	442
Other liabilities	$	84	$	134
Deferred income taxes		218		999
Liabilities related to discontinued operations—non-current	$	302	$	1,133

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As of August 29, 2012, the Company had 7 properties classified as discontinued operations assets. The carrying value of the owned properties was $4.8 million. The carrying values of two ground leases were previously impaired to zero. As of February 13, 2013, the Company had 8 properties classified as discontinued operations assets. The carrying value of the owned properties was $5.7 million. The carrying values of two ground leases were previously impaired to zero.

One property was reclassified as a discontinued operations asset in the quarter ended February 13, 2013.

The Company is actively marketing all of these properties for lease or sale and the Company’s results of discontinued operations will be affected by the disposal of properties related to discontinued operations to the extent proceeds from the sales exceed or are less than net book value.

The following table sets forth the sales and pretax income (losses) reported for discontinued operations:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except discontinued locations)
Sales	$	—		$	—
Pretax income (loss)		(767	)		(901	)
Income tax benefit (expense) on discontinued operations		280			265
Net income (loss) on discontinued operations		(487	)		(636	)
Discontinued locations closed during the period		—			—

The following table summarizes discontinued operations for the first quarters of fiscal years 2013 and 2012:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Impairments	$	(506	)	$	(510	)
Gains (losses)		—			(12	)
Net gains (losses)	$	(506	)		(522	)
Other		19			(114	)
Discontinued operations	$	(487	)	$	(636	)
Effect on EPS from discontinued operations—basic	$	(0.02	)	$	(0.02	)

Within discontinued operations, the Company offsets gains from applicable property disposals against total impairments. The amounts in the table described as “Other” include employment termination and shut-down costs, as well as operating losses through each restaurant’s closing date and carrying costs until the locations are finally disposed of.

The impairment charges included above relate to properties closed and designated for immediate disposal. The assets of these individual operating units have been written down to their net realizable values. In turn, the related properties have either been sold or are being actively marketed for sale. All dispositions are expected to be completed within one to three years. Within discontinued operations, the Company also recorded the related fiscal year-to-date net operating results, employee terminations and carrying costs of the closed units.

Property Held for Sale

The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of properties. If the Company decides to dispose of a property, it will be moved to property held for sale and actively marketed. The Company analyzes market conditions each reporting period and records additional impairments due to declines in market values of like assets. The fair value of the property is determined by observable inputs such as appraisals and prices of comparable properties in active markets for assets like the Company’s. Gains are not recognized until the properties are sold.

15

Property held for sale includes unimproved land, closed restaurant properties and related equipment for locations not classified as discontinued operations. The specific assets are valued at the lower of net depreciable value or net realizable value.

At February 13, 2013 and August 29, 2012, the Company had one owned property recorded at approximately $0.6 million in property held for sale. The Company is actively marketing the location currently classified as property held for sale.

The Company’s results of continuing operations will be affected to the extent proceeds from sales exceed or are less than net book value.

Note 9. Commitments and Contingencies

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements, except for operating leases.

Pending Claims

From time to time, the Company is subject to various private lawsuits, administrative proceedings and claims that arise in the ordinary course of its business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to issues common to the restaurant industry. The Company currently believes that the final disposition of these types of lawsuits, proceedings and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity. It is possible, however, that the Company’s future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, proceedings or claims.

Construction Activity

From time to time, the Company enters into non-cancelable contracts for the construction of its new restaurants. This construction activity exposes the Company to the risks inherent in new construction, including but not limited to rising material prices, labor shortages, delays in getting required permits and inspections, adverse weather conditions, and injuries sustained by workers. The Company had no non-cancelable contracts as of February 13, 2013.

Note 10. Related Parties

Affiliate Services

Christopher J. Pappas, the Company’s Chief Executive Officer, and Harris J. Pappas, director and former Chief Operating Officer of the Company, own two restaurant entities (the “Pappas entities”) that from time to time may provide services to the Company and its subsidiaries, as detailed in the Amended and Restated Master Sales Agreement effective November 16, 2011 among the Company and the Pappas entities.

Under the terms of the Amended and Restated Master Sales Agreement, the Pappas entities may provide specialized (customized) equipment fabrication and basic equipment maintenance, including stainless steel stoves, shelving, rolling carts, and chef tables. The total costs under the Amended and Restated Master Sales Agreement of custom-fabricated and refurbished equipment in the two quarters ended February 13, 2013 and February 15, 2012 were zero and $63,600, respectively. Services provided under this agreement are subject to review and approval by the Finance and Audit Committee of the Company’s Board of Directors.

Operating Leases

In the third quarter of fiscal year 2004, Messrs. Pappas became partners in a limited partnership which purchased a retail strip center in Houston, Texas. Messrs. Pappas collectively own a 50% limited partnership interest and a 50% general partnership interest in the limited partnership. A third party company manages the center. One of the Company’s restaurants has rented and occupied space in that center since July 1969.

On November 22, 2006, the Company executed a new lease agreement in connection with the replacement and relocation of the existing restaurant with a new prototype restaurant in the retail strip center described above. The new restaurant opened in July 2008 and the new lease agreement provides for a primary term of approximately twelve years with two subsequent five-year options. The new lease also gives the landlord an option to buy out the agreement on or after the calendar year 2015 by paying the unamortized cost of the Company’s improvements. The Company is currently obligated to pay rent of $20.00 per square foot ($22.00 per square foot beginning January 2014) plus maintenance, taxes, and insurance during the primary term of the lease. Thereafter, the lease provides for increases in rent at set intervals. The new lease agreement was approved by the Finance and Audit Committee and full Board of Directors. The Company made payments of $144,000 and $133,000 in the two quarters ended February 13, 2013 and February 15, 2012, respectively.

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On November 14, 2012, the Company executed an additional lease agreement in connection with a proposed future restaurant concept in the retail strip center described above. This lease agreement provides for a primary term of approximately eight years with no renewal options. The Company is currently obligated to pay rent of $35.00 per square foot plus maintenance, taxes, and insurance during the primary term of the lease. Thereafter, the lease provides for an increase in rent at a set interval. This lease agreement was approved by the Finance and Audit Committee of the Board of Directors. The Company has not made rental payments on this space in the two quarters ended February 13, 2013. Affiliated rents paid for this restaurant property lease represented 2.2% and 2.3% of total rents for continuing operations for the two quarters ended February 13, 2013 and February 15, 2012, respectively.

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except percentages)
AFFILIATED COSTS INCURRED:
General and administrative expenses – professional and other costs	$	25		$	25
Capital expenditures – custom-fabricated and refurbished equipment and furnishings		—			63
Other operating expenses and opening costs, including property leases		145			108
Total	$	170		$	196
RELATIVE TOTAL COMPANY COSTS:
General and administrative expenses	$	14,994		$	13,547
Capital expenditures		11,435			9,247
Other operating expenses and opening costs		37,901			33,737
Total	$	64,330		$	56,531
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS		0.26	%		0.35	%

Board of Directors

Pursuant to the terms of a Purchase Agreement dated March 9, 2001, entered into by and among the Company, Christopher J. Pappas and Harris J. Pappas, the Company agreed to submit three persons designated by Christopher J. Pappas and Harris J. Pappas as nominees for election at the 2002 Annual Meeting of Shareholders. Messrs. Pappas designated themselves and Frank Markantonis as their nominees for directors, all of whom were subsequently elected. Christopher J. Pappas and Harris J. Pappas are brothers and Frank Markantonis is an attorney whose principal client is Pappas Restaurants, Inc., an entity owned by Harris J. Pappas and Christopher J. Pappas.

Christopher J. Pappas is a member of the Advisory Board of Amegy Bank, National Association, which is a lender and syndication agent under the Company’s 2009 Revolving Credit Facility.

Key Management Personnel

On August 28, 2012, the Company entered into a seventh amendment to the Employment Agreement dated November 9, 2005 and as amended on October 29, 2007, November 19, 2008, November 19, 2009, April 15, 2010, September 2, 2010 and April 20, 2011 between the Company and Christopher J. Pappas to extend the termination date thereof to December 31, 2013. Mr. Pappas continues to devote his primary time and business efforts to the Company while maintaining his role at Pappas Restaurants, Inc.

On January 25, 2013, the Board of Directors of the Company approved the renewal of a consultant agreement with Ernest Pekmezaris, the Company’s former Chief Financial Officer. Under the agreement, Mr. Pekmezaris will continue to furnish to the Company advisory and consulting services related to finance and accounting matters and other related consulting services. The agreement expires on July 31, 2013. Mr. Pekmezaris is also the Treasurer of Pappas Restaurants, Inc. Compensation for the services provided by Mr. Pekmezaris to Pappas Restaurants, Inc. is paid entirely by that entity.

Peter Tropoli, the Company’s Chief Operating Officer, and formerly the Company’s Senior Vice President, Administration, General Counsel and Secretary, is an attorney and stepson of Frank Markantonis, who is a director of the Company.

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Paulette Gerukos, Vice President of Human Resources of the Company, is the sister-in-law of Harris J. Pappas, who is a director of the Company.

Note 11. Share-Based Compensation

We have two active share based stock plans, the Employee Stock Plan and Non-employee Director Stock Plan. Both plans authorize the granting of stock options, restricted stock and other types of awards consistent with the purpose of the plans.

Of the 1.1 million shares approved for issuance under the Nonemployee Director Stock Plan, 0.6 million options, restricted stock units and restricted stock awards were granted, and 0.1 million options were cancelled or expired and added back into the plan. Approximately 0.6 shares remain available for future issuance as of February 13, 2013. Compensation cost for share-based payment arrangements under the Nonemployee Director Stock Plan, recognized in general and administrative expenses for the two quarters ended February 13, 2013 and February 15, 2012 were approximately $57,000 and $155,000, respectively.

Of the 2.6 million shares approved for issuance under the Employee Stock Plan, 4.6 million options and restricted stock units were granted, and 2.9 million options and restricted stock units were cancelled or expired and added back into the plan. Approximately 0.9 million shares remain available for future issuance as of February 13, 2013. Compensation cost for share-based payment arrangements under the Employee Stock Plan, recognized in general and administrative expenses for the two quarters ended February 13, 2013 and February 15, 2012 were approximately $0.3 million and $0.2 million, respectively.

Stock Options

Stock options granted under either the Employee Stock Plan or the Nonemployee Director Stock Plan have exercise prices equal to the market price of the Company’s common stock at the date of the grant.

Option awards under the Nonemployee Director Stock Plan generally vest 100% on the first anniversary of the grant date and expire ten years from the grant date. No options were granted under the Nonemployee Director Stock Plan in the two quarters ended February 13, 2013. However, options to purchase 24,000 shares at option prices from $4.47 to $6.45 per share remain outstanding as of February 13, 2013.

Options granted under the Employee Stock Plan generally vest 25% on the anniversary date of each grant and expire six years from the date of the grant. However, options granted to executive officers under the Employee Stock Plan vest 50% on the first anniversary date of the grant date, 25% on the second anniversary of the grant date and the remaining 25% vest on the third anniversary of the grant date and expire ten years from the grant date. All options granted in fiscal year 2013 were granted under the Employee Stock Plan. Options to purchase 919,585 shares at option prices of $3.44 to $11.10 per share remain outstanding as of February 13, 2013.

A summary of the Company’s stock option activity for the quarter ended February 13, 2013 is presented in the following table:

	Shares Under Fixed Options			Weighted-Average Exercise  Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(In thousands)
Outstanding at August 29, 2012		1,175,224		$	6.31		3.8	$	1,456
Granted		109,335			5.95		—		—
Exercised		(41,489	)		3.78		—		—
Forfeited/Expired		(299,485	)		—		—		—
Outstanding at February 13, 2013		943,585		$	5.24		5.0	$	2,654
Exercisable at February 13, 2013		660,687		$	5.36		4.4	$	1,852

The intrinsic value for stock options is defined as the difference between the current market value, or closing price on February 13, 2013, and the grant price.

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Restricted Stock Units

Grants of restricted stock units consist of the Company’s common stock and generally vest after three years. All restricted stock units are cliff-vested. Restricted stock units are valued at the closing market price of the Company’s common stock at the date of grant.

A summary of the Company’s restricted stock unit activity during the two quarters ended February 15, 2013 is presented in the following table:

	Restricted Stock Units			Weighted Average Fair Value		Weighted-Average Remaining Contractual Term
				(Per share)		(In years)
Unvested at August 29, 2012		163,946		$	4.83		1.8
Granted		274,290			6.17		—
Vested		(14,000	)		3.46		—
Unvested at February 13, 2013		424,236		$	5.74		2.2

At February 13, 2013, there was approximately $1.9 million of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Awards

Under the NonEmployee Director Stock Plan, directors are granted restricted stock in lieu of cash payments, for all or a portion of their compensation as directors. Directors may opt to receive 20% more shares of restricted stock awards by accepting more than the minimum required stock instead of cash. The number of shares granted is valued at the closing market price of the Company’s stock at the date of the grant. Restricted stock awards vest when granted because they are granted in lieu of a cash payment. However, directors are restricted from selling their shares until after the third anniversary of the date of the grant.

Note 12. Earnings Per Share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding and unvested restricted stock for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options determined using the treasury stock method. Stock options excluded from the computation of net income per share for the two quarters ended February 13, 2013 include approximately 75,000 shares with exercise prices exceeding market prices and approximately 33,000 shares whose inclusion would also be antidilutive.

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The components of basic and diluted net income per share are as follows:

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
	(In thousands except per share data)
Numerator:
Income from continuing operations	$	603		$	1,357		$	819		$	1,927
Loss from discontinued operations		(400	)		(269	)		(487	)		(636	)
Net income	$	203		$	1,088		$	332		$	1,291
Denominator:
Denominator for basic earnings per share – weighted-average shares		28,614			28,365			28,500			28,329
Effect of potentially dilutive securities:
Employee and non-employee stock options		211			45			198			30
Denominator for earnings per share assuming dilution		28,825			28,410			28,698			28,359
Income per share from continuing operations:
Basic	$	0.02		$	0.05		$	0.03		$	0.07
Assuming dilution	$	0.02		$	0.05		$	0.03		$	0.07
Loss per share from discontinued operations:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Assuming dilution	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Net income per share:
Basic	$	0.01		$	0.04		$	0.01		$	0.05
Assuming dilution	$	0.01		$	0.04		$	0.01		$	0.05

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and footnotes for the period ended February 13, 2013 included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended August 29, 2012.

The following presents an analysis of the results and financial condition of our continuing operations. Except where indicated otherwise, the results of discontinued operations are excluded from this discussion.

Overview

Luby’s, Inc. is a multi-branded company operating in the restaurant industry and the contract food services industry. Our primary brands include Luby’s Cafeteria, Luby’s Culinary Contract Services, Fuddruckers, and Cheeseburger in Paradise. Also included in our brands are Luby’s, Etc. and Koo Koo Roo Chicken Bistro. We purchased substantially all of the assets of Fuddruckers, Inc., Magic Brands, LLC and certain of their affiliates (collectively, “Fuddruckers”) in July 2010. We purchased all of the Membership Units of Paradise Restaurant Group, LLC and certain of their affiliates (collectively known as, “Cheeseburger in Paradise”) effective December 5, 2012.

As of February 13, 2013, we owned and operated 183 restaurants, of which 93 are traditional cafeterias, 64 are gourmet hamburger restaurants, 23 are casual dining bar and restaurants, two are upscale fast serve chicken restaurants, and one primarily serves seafood. These establishments are located in close proximity to retail centers, business developments and residential areas mostly throughout the United States.

Also as of February 13, 2013, we operated 18 Culinary Contract Service facilities. These facilities are located within healthcare and education settings in Texas and Louisiana. These facilities provide food service options to varied populations including in-hospital-room patient meal service, retail food-court style restaurant dining, and coffee/snack kiosks.

Also as of February 13, 2013, we are a franchisor for a network of 119 franchised Fuddruckers restaurants. The owners of these franchise units pay royalty revenue to us as a franchisor.

Accounting Periods

Our fiscal year ends on the last Wednesday in August. As such, each fiscal year normally consists of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. Each of the first three quarters of each fiscal year consists of three four-week periods, while the fourth quarter normally consists of four four-week periods. Comparability between quarters may be affected by varying lengths of the quarters, as well as the seasonality associated with the restaurant business.

Same-Store Sales

The restaurant business is highly competitive with respect to food quality, concept, location, price, and service, all of which may have an effect on same-store sales. Our same-store sales calculation measures the relative performance of a certain group of restaurants. To qualify for inclusion in this group, a store must have been in operation for 18 consecutive accounting periods. Our Fuddruckers units were included in this measurement beginning with the third fiscal quarter ended May 9, 2012. Stores that close on a permanent basis are removed from the group in the fiscal quarter when operations cease at the restaurant, but remain in the same-store group for previously reported fiscal quarters. Although management believes this approach leads to more effective year-over-year comparisons, neither the time frame nor the exact practice may be similar to those used by other restaurant companies.

RESULTS OF OPERATIONS

For the Second Quarter and Year-to-Date Fiscal Year 2013 versus the Second Quarter and Year-to-Date Fiscal Year 2012

Sales

Total company sales increased approximately $8.1 million, or 10.2%, in the quarter ended February 13, 2013 compared to quarter ended February 15, 2012, consisting primarily of a $8.7 million increase in restaurant sales, offset by a $0.5 million decrease in Culinary Contract Sales and a $0.1 million decrease in franchise revenue. The other component of total sales is vending income.

Total company sales increased approximately $8.2 million, or 5.2%, in the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012, consisting primarily of a $9.5 million increase in restaurant sales, offset by a $1.2 million decrease in Culinary Contract Sales and a $0.1 million decrease in franchise revenue. The other component of total sales is vending income.

The company operates with three reportable operating segments: Company-owned restaurants, franchise operations, and Culinary Contract Services.

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Company-Owned Restaurants

Restaurant Sales

Restaurant sales increased $8.7 million in the quarter ended February 13, 2013, compared to the quarter ended February 15, 2012. The increase in restaurant sales included a $7.7 million increase due to the acquisition of 23 Cheeseburger in Paradise branded stores, a $1.0 million increase in sales from Fuddruckers-branded restaurants and a less than $0.1 million increase in sales at Luby’s Cafeteria-branded restaurants. On a same store-store basis, restaurant sales decreased 0.6%. The decrease in same store sales was due primarily by declines in guest traffic partially offset by increases in the per person average spend. The increase in per person average spend was a result of altering the mix of menu items offered and selected by our customers and by motivating the purchase of additional items on the customer ticket.

Restaurant sales increased $9.5 million in the two quarters ended February 13, 2013, compared to the quarter ended February 15, 2012. The increase in restaurant sales included a $7.7 million increase due to the acquisition of 23 Cheeseburger in Paradise branded stores, a $0.4 million increase in sales at Luby’s Cafeteria-branded restaurants and a $1.4 million increase in sales from Fuddruckers-branded restaurants. On a same store-store basis, restaurant sales decreased 0.2%. The decrease in same store sales was due primarily by declines in guest traffic partially offset by increases in the per person average spend. The increase in per person average spend was a result of altering the mix of menu items offered and selected by our customers and by motivating the purchase of additional items on the customer ticket.

Cost of Food

Food costs increased approximately $3.0 million, or 14.5%, in the quarter ended February 13, 2013, compared to the quarter ended February 15, 2012 due primarily to the addition of 23 Cheeseburger in Paradise branded stores. Removing the impact of Cheeseburger in Paradise and food and beverage rebates, food costs increased $0.7 million for the quarter ended February 13, 2013, compared to the quarter ended February 15, 2012. Food commodity prices for our basket of food commodity purchases were higher by 2.1% for our Luby’s Cafeteria-branded restaurants offset by a decrease in the Fuddruckers-branded restaurants of 1.6%. As a percentage of restaurant sales, food cost increased 0.6% to 28.9% in the quarter ended February 13, 2013, compared to the quarter ended February 15, 2012. Removing the impact of Cheeseburger in Paradise, food costs as a percent of sales were 28.8%.

Food costs increased approximately $3.3 million, or 8.1%, in the two quarters ended February 13, 2013, compared to the two quarters ended February 15, 2012, due primarily to the addition of 23 Cheeseburger in Paradise branded stores. Removing the impact of Cheeseburger in Paradise and food and beverage rebates, food costs were $0.7 million higher for the two quarters ended February 13, 2013, compared to the two quarters ended February 15, 2012.  For the two quarters ended February 13, 2013, food commodity prices for our basket of food commodity purchases were higher due to a 2.1% increase for our Luby’s Cafeteria-branded restaurants offset by a 1.5% decrease for our Fuddruckers-branded restaurants. As a percentage of restaurant sales, food cost increased, 0.4% to 28.6% in the two quarters ended February 13, 2013. Removing the impact of Cheeseburger in Paradise, food costs as a percentage of sales were 28.5% in the two quarters ended February 13, 2013.

Payroll and Related Costs

Payroll and related costs increased approximately $3.4 million in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012. Hourly labor costs increased primarily due to the addition of 23 new Cheeseburger in Paradise branded stores. Restaurant management labor costs increased $0.9 million in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012, primarily due to the addition of the 23 Cheeseburger in Paradise branded stores. As a percentage of restaurant sales, payroll and related costs increased, 0.5%, to 35.1% in the quarter ended February 13, 2013, compared to 34.6% in the quarter ended February 15, 2012, primarily due to the acquisition of Cheeseburger in Paradise branded stores. Excluding Cheeseburger in Paradise, payroll and related costs were 34.6% in the quarter ended February 13, 2013.

Payroll and related costs increased approximately $3.9 million in the two quarters ended February 13, 2013, compared to the two quarters ended February 15, 2012. Hourly labor costs increased primarily due to the addition of 23 new Cheeseburger in Paradise branded stores. Restaurant management labor costs increased $0.9 million in the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012, primarily due to the addition of the Cheeseburger in Paradise branded stores. As a percentage of restaurant sales, payroll and related costs increased, 0.4%, to 34.8% in the two quarters ended February 13, 2013, compared to 34.4% in the two quarters ended February 15, 2012, primarily due to the acquisition of Cheeseburger in Paradise branded stores. Excluding the impact of Cheeseburger in Paradise, payroll and related costs increased 0.1% in the two quarters ended February 13, 2013.

Other Operating Expenses

Other operating expenses primarily include restaurant-related expenses for utilities, repairs and maintenance, advertising, insurance, services, supplies and occupancy costs. Other operating expenses increased by approximately $3.4 million, or 21.4%, in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012, primarily due to (1) $2.4 million increase from the addition of 23 Cheeseburger in Paradise branded stores; (2) an approximate $0.3 million increase in utilities; (3) an approximate $0.4 million increase in restaurant supply and services expense; and (3) an approximate $0.5 million increase in occupancy and insurance, and other costs partially offset by (4) an approximate $0.2 million reduction in repairs and maintenance expenses. As a percentage of restaurant sales, other operating expenses increased 1.8%, to 23.8%, in the quarter ended February 13, 2013 compared to 22.0% in the quarter ended February 15, 2012, due to (1) the cost increases, partially offset by the costs decreases, enumerated above; (2) the typically higher operating costs for the four to eight weeks after opening a new restaurant; and (3) a decline in sales in our same store group of restaurants. Excluding the impact of Cheeseburger in Paradise, other operating expenses costs as a percentage of sales were 23.1%, in the quarter ended February 13, 2013.

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Other operating expenses increased by approximately $3.8 million, or 11.2%, in the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012, primarily due to (1)  $2.4 million increase from the addition of 23 Cheeseburger in Paradise branded stores; (2) an approximate $0.4 million increase in utilities; (3) an approximate $0.8 million increase in restaurant supply and services expense; (4) an approximate $0.3 million increase in marketing expenses; and (5) an approximate $0.2 million increase in insurance and other expenses partially offset by (6) an approximate $0.3 million reduction in repairs and maintenance expenses.

Franchise Operations

We only offer franchises for the Fuddruckers brand. Franchises are sold in markets where expansion is deemed advantageous to the development of the Fuddruckers concept and system of restaurants. Franchise revenue includes (1) royalties paid to us as the franchisor for the Fuddruckers brand; (2) franchise fees paid to us when franchise development agreements are executed and when franchise units are opened for business or transferred to new owners. Franchise revenue decreased $113 thousand in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012. The $113 thousand decrease in franchise revenue includes an $18 thousand decrease in franchise royalties and a $95 thousand decrease in franchise fees.

Franchise revenue decreased $74 thousand for the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012 due to a reduction in franchise fees. At the quarter ended February 15, 2012, there were 122 Fuddruckers franchise units in the system. Over the prior one year period ended February 13, 2013, our franchisees have opened 4 units, including one in Mexico where we are a joint venture partner. Over the prior one year period ended February 13, 2013 there were also five franchise units that closed on a permanent basis and two units that transferred to us as the franchisor to operate as company-operated units. As such, at the quarter ended February 13, 2013, there were 119 Fuddruckers franchise units in the system.

Culinary Contract Services

Culinary Contract Services is a business line servicing healthcare, higher education, and corporate dining clients. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service and retail dining. This business line operated 18 client locations in the quarter ended February 13, 2013 and 19 in the quarter ended February 15, 2012. In fiscal year 2012, we refined our operating model by concentrating on clients able to enter into agreements where all operating costs are reimbursed to us and we generally charge a fixed fee. These agreements typically present lower financial risk to the company.

Culinary Contract Services Revenue

Culinary Contract Services revenue decreased $0.5 million, or 12.6% in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012. The decrease in revenue was primarily due to the reduction in the number of locations where we operate and the sales volume at those locations.

Culinary Contract Services revenue decreased $1.2 million, or 14.0% in the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012.  The decrease in revenue was primarily due to the reduction in the number of locations where we operate and the sales volume at those locations.

Cost of Culinary Contract Services

Cost of Culinary Contract Services includes the food, payroll and related costs, and other direct operating expenses associated with generating culinary contract sales. Cost of Culinary Contract Services decreased approximately $0.8 million, or 19.2%, in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012, due to a commensurate decrease in culinary contract sales volume. We expanded our profit margin in this business segment to 8.9% of culinary contract services revenue in the quarter ended February 13, 2013 from 1.4% on the quarter ended February 15, 2012.

Cost of Culinary Contract Services decreased approximately $1.4 million, or 17.4%, in the two quarters ended February 13, 2013 compared to the two quarters ended February 15, 2012, due to a commensurate decrease in culinary contract sales volume. We expanded our profit margin in this business segment to 9.3% of culinary contract services revenue in the quarter ended February 13, 2013 from 5.6% on the quarter ended February 15, 2012.

Opening Costs

Opening costs include labor, supplies, occupancy, and other costs necessary to support the restaurant through its opening period. Opening costs were approximately $261 thousand in the quarter ended February 13, 2013 compared to approximately $42 thousand in the quarter ended February 15, 2012. The quarter ended February 13, 2013 and the quarter ended February 15, 2012 included carrying costs of locations to be developed for future restaurant openings. The quarter ended February 13, 2013 also included the labor, supplies, and other costs necessary to support the opening of two Fuddruckers restaurants, one of which was previously operated by a franchise owner.

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Opening costs were approximately $467 thousand in the two quarters ended February 13, 2013, compared to approximately $77 thousand in the two quarters ended February 15, 2012.  The two quarters ended February 13, 2013 and the two quarters ended February 15, 2012, included carrying costs of locations to be developed for future restaurant openings. The two quarters ended February 13, 2013, also included the labor, supplies, and other costs necessary to support the opening of one cafeteria and five Fuddruckers restaurants. Three of these restaurants were previously operated by franchise owners.

Depreciation and Amortization

Depreciation and amortization expense increased by approximately $0.2 million, or 4.3%, in the quarter ended February 13, 2013, compared to the quarter ended February 15, 2012, due to the addition of depreciation related to Cheeseburger in Paradise, and new capital expenditures for new construction and remodel activity partially offset by certain assets reaching the end of their depreciable lives.

Depreciation and amortization expense increased by approximately $0.2 million, or 2.2% in the two quarters ended February 13, 2013, compared to the two quarters ended February 15, 2012, due to the addition of depreciation related to Cheeseburger in Paradise, and new capital expenditures for new construction and remodel activity partially offset by certain assets reaching the end of their depreciable lives.

General and Administrative Expenses

General and administrative expenses include corporate salaries and benefits-related costs, including restaurant area leaders, share-based compensation, professional fees, travel and recruiting expenses and other office expenses. General and administrative expenses increased by approximately $0.9 million, or 13.0%, in the quarter ended February 13, 2013 compared to the quarter ended February 15, 2012. The increase was primarily due to the integration costs of $0.4 million and incremental personnel costs of approximately $0.2 million related to the acquisition of Cheeseburger in Paradise.  The remaining increase was related to professional fees, corporate supply costs, and other expenses.  As a percentage of total revenue, general and administrative expenses increased to 8.7% in the quarter ended February 13, 2013, compared to 8.5% in the quarter ended February 15, 2012.

General and administrative expenses increased by approximately $1.4 million, or 10.7%, in the two quarters ended February 13, 2013, compared to the two quarters ended February 15, 2012. The increase was primarily due to (1) integration costs of $0.4 million and incremental personnel costs of approximately $0.2 million related to the acquisition of Cheeseburger in Paradise; (2) professional fees, corporate supply costs, and other expenses; and (3) a non-recurring receipt of $0.3 million settlement in our favor from a class action suit related to credit card interchange fees that was recorded in the quarter ended November 23, 2011.  As a percentage of total revenue, general and administrative expenses increased to 9.0% in the two quarters ended February 13, 2013, compared to 8.5% in the two quarters ended February 15, 2012.

Provision for asset impairments, net

The asset impairment of $90 thousand in the two quarters ended February 13, 2013, reflects the impairment of one leased location where the projected future cash flows through the end of the lease term are now not expected to support the value of the assets at the location.

An impairment charge of $175 thousand for the two quarters ended February 15, 2012, was related to one Culinary Contract Services location.  

Net (Gain) Loss on Disposition of Property and Equipment

The loss or gain on disposition of property and equipment was a gain of approximately $1.3 million in the quarter ended February 13, 2013, and related to the disposition of a portion of our parking lot at one restaurant location offset by normal asset retirement activity in our restaurant units. The loss or gain on disposition of property and equipment was a loss of $72 thousand in the quarter ended February 15, 2012, and related primarily to normal asset retirement activity.

The net gain on dispositions of property and equipment for the two quarters ended February 13, 2013 of approximately $1.6 million primarily related to the disposition of property at one restaurant location and the sale of a portion of our leasehold interest in another restaurant offset by normal asset retirement activity.  The loss of $81 thousand in the two quarters ended February 13, 2013 related primarily to normal asset retirement activity.

Interest Income

Interest income was $2 thousand in the quarter ended February 13, 2013, and in the quarter ended February 15, 2012.

Interest income was $4 thousand in the two quarters ended February 13, 2013, compared to $3 thousand in the two quarters ended February 15, 2012.

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Interest Expense

Interest expense in the quarter ended February 13, 2013 was $0.2 million and $0.4 million in the quarter ended February 15, 2012 due to similar debt balances and interest rates.

Interest expense in the two quarters ended February 13, 2013 decreased approximately $0.1 million compared to the two quarters ended February 15, 2012, due to lower average debt balances.

Other Income, Net

Other income, net consisted primarily of the following components: net rental property income and expenses relating to property for which we are the landlord; prepaid sales tax discounts earned through our participation in state tax prepayment programs; and oil and gas royalty income. Other income, net in the quarter ended February 13, 2013 increased approximately $17 thousand compared to the quarter ended February 15, 2012. The increase was primarily due to higher net rental income on properties that we lease to third parties.

Other income, net in the two quarters ended February 13, 2013 increased approximately $44 thousand compared to the quarter ended February 15, 2012. The increase was primarily due to higher net rental income on properties that we lease to third parties.

Taxes

For the quarter ended February 13, 2013, the income taxes related to continuing operations resulted in a tax provision of $487 thousand compared to a tax provision of $603 thousand for the quarter ended February 15, 2012.

For the two quarters ended February 13, 2013, the income taxes related to continuing operations resulted in a tax provision of $566 thousand compared to a tax provision of $928 thousand for the two quarters ended February 15, 2012. For the two quarters ended February 13, 2013 and the two quarters ended February 15, 2012, there was no change to the valuation allowance related to deferred tax assets.

Discontinued Operations

The loss from discontinued operations was $0.4 million in the quarter ended February 13, 2013 compared to a loss of $0.3 million in the quarter ended February 15, 2012.  The loss from discontinued operations of $0.4 million in the quarter ended February 13, 2013 included (1) $0.1 million in carrying costs associated with assets related to discontinued operations, (2) an asset impairment of $0.5 million and (3) an income tax benefit of $0.2 million. The loss of $0.3 million from discontinued operations in the quarter ended February 15, 2012 included $0.2 million in carrying costs associated with assets related to discontinued operations and an asset impairment of $0.1 million.

The loss from discontinued operations was $0.5 million in the two quarters ended February 13, 2013 compared to a loss of $0.6 million in the two quarters ended February 15, 2012. The loss of $0.5 million for the two quarters ended February 13, 2013 included (1) $0.3 million loss in carrying costs associated with assets that are classified as discontinued operations assets; (2) a $0.5 million impairment charge for assets that are classified as discontinued operations assets; (3) offset by $0.3 million income tax benefit. The loss of $0.6 million in the two quarters ended February 15, 2012 included (1) $0.4 million in carrying costs associated with assets that are classified as discontinued operations assets; (2) a $0.5 million impairment charge for assets that are classified as discontinued operations assets; and (3) $0.3 million income tax benefit related to discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash and Cash Equivalents

General. Our primary sources of short-term and long-term liquidity are cash flows from operations and our revolving credit facility. During the two quarters ended February 13, 2013, cash provided by operating activities was $7.6 million and by financing activities was $12.7 million offset by cash used in investing activities of $18.6 million. Cash and cash equivalents increased $1.7 million in the first two quarters of fiscal year 2013 compared to no increase or decrease in the first two quarters of fiscal year 2012. Cash provided by operating activities was $10.1 million offset by cash used in investing activities of $8.1 million and financing activities of $2.0 million in the first two quarters of fiscal year 2012. We plan to continue the level of capital and repair and maintenance expenditures necessary to keep our restaurants attractive and operating efficiently.

Our cash requirements consist principally of:

• payments to purchase Cheeseburger in Paradise;

• capital expenditures for construction, restaurant renovations, purchase of property for development of our restaurant brands and for use as rental property and upgrades and information technology; and

• working capital primarily for our Company-owned restaurants and CCS agreements.

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As is common in the restaurant industry, we maintain relatively low levels of accounts receivable and inventories and our vendors grant trade credit for purchases such as food and supplies. However, higher levels of accounts receivable are typical for culinary contract services and franchises. We also continually invest in our business through the addition of new units and refurbishment of existing units, which are reflected as long-term assets.

The following table summarizes our cash flows from operating, investing and financing activities:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands)
Total cash provided by (used in):
Operating activities	$	7,567		$	10,125
Investing activities		(18,550	)		(8,128	)
Financing activities		12,657			(2,001	)
Increase (decrease) in cash and cash equivalents	$	1,674		$	(4	)

Operating Activities. Cash flow from operating activities was $7.6 million in the first two quarters of fiscal year 2013, a $2.6 million decrease from the first two quarters of fiscal year 2012. The $2.6 million decrease in cash is due to a $2.9 million decrease in cash from operations before changes in operating assets and liabilities offset by a $0.3 million change in cash generated by changes in operating assets and liabilities for the two quarters ended February 13, 2013 and February 15, 2012.

Cash generated by operating activities before changes in operating assets and liabilities was $8.3 million in the first two quarters of fiscal year 2013, a $2.9 million decrease compared to the first two quarters of fiscal year 2012. The $2.9 million decrease in cash provided by operating activities before changes in operating assets and liabilities was due to less cash generated by segment level profit of $1.5 million for company-owned restaurants and $0.1 million for franchising and $0.4 million increase in cash used for opening costs and $1.1 million increase in cash used in general and administrative activities for legal and professional, payroll and related costs and director fees offset by an increase in cash provided by culinary contract services.

Changes in operating assets and liabilities was a $0.8 million use of cash in the first two quarters of fiscal year 2013, a $0.3 million increase compared to the first two quarters of fiscal year 2012. The $0.3 million increase in the source of cash was due to differences in the change in asset and liability balances during the two quarters ended February 13, 2013 and February 15, 2012.  The favorable differences in the change in prepaid expenses and other assets which includes prepayments for rent, insurance premiums and software maintenance was $1.1 million and $0.3 million for food and supply inventories, offset by unfavorable differences in trade accounts and other receivables of $0.2 million and $0.9 million for accounts payable, accrued expenses and other liabilities.

Investing Activities. We generally reinvest available cash flows from operations to develop new restaurants, enhance existing restaurants and to support culinary contract services. Cash used by investing activities was $18.6 million in the two quarters ended February 13, 2013 and $8.1 million in the two quarters ended February 15, 2012. Capital expenditures were $11.4 million in the two quarters ended February 13, 2013, a $2.2 million increase compared to the two quarters ended February 15, 2012. Proceeds from the disposal of assets was $3.6 million in the first two quarters of fiscal years 2013 and $1.3 million in the first two quarters of fiscal year 2012.

Financing Activities. Cash provided by financing activities was $12.7 million in the two quarters ended February 13, 2013, a $14.7 million increase compared to the two quarters ended February 15, 2012.

Status of Long-Term Investments and Liquidity

At February 13, 2013, we did not hold any long-term investments.

Status of Trade Accounts and Other Receivables, Net

We monitor the aging of our receivables, including Fuddruckers franchising related receivables, and record provisions for uncollectable accounts, as appropriate. Credit terms of accounts receivable associated with our CCS business vary from 30 to 45 days based on contract terms.

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Working Capital

Current assets increased $2.2 million in the first two quarters of fiscal year 2013 compared to an increase of $0.4 million in the first two quarters of fiscal year 2012. In the first two quarters of fiscal year 2013, cash increased $1.7 million and food and supply inventory increased $0.9 million; partially offset by decreases in trade accounts and other receivables of $0.3 million and prepaid expenses of $0.1 million. In the first two quarters of fiscal year 2012, food inventories increased $0.7 million and prepaid expenses increased $0.3 million while trade accounts and other receivable decreased $0.6 million. The change in prepaid expenses and other assets was a $2.0 million source of cash in the first two quarters of fiscal year 2013, an increase of $1.4 million from the first two quarters of fiscal year 2012. The change in trade accounts and other receivables was a $0.3 million source of cash in the first two quarters of fiscal year 2013, a decrease of $0.3 million from the first two quarters of fiscal year 2012. The change in food and supplies inventory was a $0.9 million use of cash in the first two quarters of fiscal year 2013, an increase of $0.3 million from the first two quarters of fiscal year 2012.

Current liabilities decreased $0.3 million in the first two quarters of fiscal year 2013 compared to a $1.6 million decrease in the first two quarters of fiscal year 2012. In the first two quarters of fiscal year 2013, accounts payables increased $1.5 million and accrued expenses and other liabilities decreased $1.7 million. In the first two quarters of fiscal year 2012 accounts payables increased $0.6 million and accrued expenses and other liabilities decreased $2.0 million. The change in accounts payables, accrued expenses and other liabilities was a $1.9 million source of cash in the first two quarters of fiscal year 2013, an increase of $2.3 million from the first two quarters of fiscal year 2012. The $2.3 million difference in the two quarters was primarily due to timing differences in the accrual and payment of salary related costs and taxes other than income taxes.

Capital Expenditures

Capital expenditures consist of purchases of real estate for future restaurant sites, culinary contract services investments, new unit construction, purchases of new and replacement restaurant furniture and equipment, and ongoing remodeling programs. Capital expenditures for the first two quarters of fiscal year 2013 were approximately $11.4 million and related to recurring maintenance of our existing units, improvement of our culinary contract services business and the development of future restaurant sites. We expect to be able to fund all capital expenditures in fiscal year 2013 using proceeds from the sale of assets, cash flows from operations and our available credit. We expect to spend approximately $24.0 million to $29.0 million on capital expenditures in fiscal year 2013.

DEBT

Revolving Credit Facility

In November 2009, we entered into a revolving credit facility with Wells Fargo Bank, National Association, as Administrative Agent, and Amegy Bank, National Association, as Syndication Agent. The following description summarizes the material terms of the revolving credit facility, as subsequently amended as of January 31, 2010, July 26, 2010, September 30, 2010, October 31, 2010, August 25, 2011, October 20, 2011 and February 14, 2013 (the revolving credit facility, together with all amendments thereto, is referred to as the “2009 Credit Facility”). The 2009 Credit Facility is governed by the Credit Agreement dated as of November 9, 2009 (as amended to date, the “Credit Agreement”) among us, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as Administrative Agent, and Amegy Bank, National Association, as Syndication Agent. The maturity date of the 2009 Credit Facility is September 1, 2014.

The aggregate amount of the lenders’ commitments under the 2009 Credit Facility was $50.0 million as of February 13, 2013. The 2009 Credit Facility also provides for the issuance of letters of credit in a maximum aggregate amount of $15.0 million outstanding at any one time. At February 13, 2013, $23.5 million was available under the 2009 Credit Facility.

The 2009 Credit Facility is guaranteed by all of our present or future subsidiaries. In addition, in connection with the expansion of the 2009 Credit Facility that accompanied our acquisition of substantially all of the assets of Fuddruckers in July 2010, Christopher J. Pappas, our President and Chief Executive Officer, and Harris J. Pappas, a member of our Board of Directors, guaranteed the payment of up to $13.0 million of our indebtedness under the 2009 Credit Facility. The maximum amount of this guaranty was reduced to $9.5 million on February 28, 2011, further reduced to $6.0 million on May 31, 2011 and reduced to zero as of August 25, 2011.

At any time throughout the term of the 2009 Credit Facility, we have the option to elect one of two bases of interest rates. One interest rate option is the greater of (a) the Federal Funds Effective Rate plus 0.50%, or (b) prime, plus, in either case, an applicable spread that ranges from 1.00% to 2.00% per annum. The other interest rate option is the London InterBank Offered Rate plus a spread that ranges from 2.75% to 3.75% per annum. The applicable spread under each option is dependent upon the ratio of our debt to EBITDA at the most recent determination date. We are obligated to pay to the Administrative Agent for the account of each lender a quarterly commitment fee based on the average daily unused amount of the commitment of such lender, ranging from 0.30% to 0.40% per annum depending on our Total Leverage Ratio (as defined in the Credit Agreement) at the most recent determination date.

The proceeds of the 2009 Credit Facility are available for our general corporate purposes and general working capital purposes.

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Borrowings under the 2009 Credit Facility are subject to mandatory repayment with the proceeds of sales of certain of our real property, subject to certain exceptions.

The 2009 Credit Facility is secured by a perfected first priority lien on certain of our real property and all of the material personal property owned by us or any of our subsidiaries, other than certain excluded assets (as defined in the Credit Agreement). At February 13, 2013, the carrying value of the collateral securing the 2009 Credit Facility was $88.3 million.

The Credit Agreement contains the following covenants, among others:

• maintenance of a ratio of (a) EBITDA for the four fiscal quarters ending on the last day of any fiscal quarter to (b) the sum of (x) interest expense (as defined in the Credit Agreement) for such four fiscal-quarter-period plus (y) the outstanding principal balance of the loans as of the last day of such fiscal quarter divided by seven (the “Debt Service Coverage Ratio), of not less than (1) 2.00 to 1.00, beginning with the end of the fourth quarter of fiscal 2011 and ending with the first quarter of fiscal 2012, (2) 2.25 to 1.00 beginning with the end of the second quarter of fiscal 2012 and ending with the first quarter of fiscal 2013, and (3) 2.50 to 1.00 beginning with the end of second quarter of fiscal 2013 and thereafter,

• maintenance of minimum Tangible Net Worth (as defined in the Credit Amendment) of not less than (1) $126.7 million as of the last day of the third fiscal quarter of fiscal 2011 and (2) increasing incrementally thereafter, as of the last day of each subsequent fiscal quarter, by an amount equal to 60% of our consolidated net income (if positive) for the fiscal quarter ending on such date,

• maintenance of minimum net profit of $1.00 (1) for at least one of the first three fiscal quarters of our 2012 fiscal year, (2) for at least one of any two consecutive fiscal quarters beginning with the fourth fiscal quarter of our 2012 fiscal year, and (3) for any period of four consecutive fiscal quarters beginning with the four consecutive fiscal quarters ending with the fourth quarter of our 2011 fiscal year,

• restrictions on incurring indebtedness, including certain guarantees and capital lease obligations,

• restrictions on incurring liens on certain of our property and the property of our subsidiaries,

• restrictions on transactions with affiliates and materially changing our business,

• restrictions on making certain investments, loans, advances and guarantees,

• restrictions on selling assets outside the ordinary course of business,

• prohibitions on entering into sale and leaseback transactions,

• limiting Capital Expenditures (as defined in the Credit Agreement) to $15.0 million for the fiscal year ended August 31, 2011, to $34.9 million for the fiscal year ended August 29, 2012, and for any subsequent fiscal year, the lesser of (a) $38.0 million or (b) the sum of (x) an amount equal to 130% of EBITDA for the immediately preceding fiscal year plus (y) any unused availability for capital expenditures from the immediately preceding fiscal year, and

• restrictions on certain acquisitions of all or a substantial portion of the assets, property and/or equity interests of any person.

We were in compliance with the covenants contained in the Credit Agreement as of February 13, 2013.

The Credit Agreement also includes customary events of default. If a default occurs and is continuing, the lenders’ commitments under the Credit Facility may be immediately terminated and/or we may be required to repay all amounts outstanding under the Credit Facility.

As of February 13, 2013, we had $25.5 million in outstanding loans and $1.0 million committed under letters of credit, which were issued as security for the payment of insurance obligations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Consolidated Financial Statements included in Item 1 of Part 1 of this report were prepared in conformity with U.S. generally accepted accounting principles. Preparation of the financial statements requires us to make judgments, estimates and assumptions that affect the amounts of assets and liabilities in the financial statements and revenues and expenses during the reporting periods. Due to the significant, subjective and complex judgments and estimates used when preparing our consolidated financial statements, management regularly reviews these assumptions and estimates with the Finance and Audit Committee of our Board of Directors. Management believes the following are critical accounting policies used in the preparation of these financial statements.

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Income Taxes

The estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying consolidated balance sheets, as well as operating loss and tax credit carrybacks and carryforwards are recorded. 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. We periodically review the recoverability of tax assets recorded on the balance sheet and provide valuation allowances as management deems necessary.

If the future consequences of differences between financial reporting bases and tax bases of our assets and liabilities result in a net deferred tax asset, management will evaluate the probability of our ability to realize the future benefits of such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The realization of such net deferred tax will generally depend on whether we will have sufficient taxable income of an appropriate character within the carry forward period permitted by the tax law.

Management evaluates both positive and negative evidence, including its forecasts of our future taxable income adjusted by varying probability factors, in making a determination as to whether it is more likely than not that all or some portion of the deferred tax asset will be realized. Based on its analysis, management concluded that a valuation allowance was not necessary.

Management makes judgments regarding the interpretation of tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. We operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions as well as by the Internal Revenue Service. In management’s opinion, adequate provisions for income taxes have been made for all open tax years. The potential outcomes of examinations are regularly assessed in determining the adequacy of the provision for income taxes and income tax liabilities. Management believes that adequate provisions have been made for reasonable and foreseeable outcomes related to uncertain tax matters. The Company is currently being audited by the State of Texas for franchise taxes and the State of Louisiana for income taxes and franchise taxes for report years 2008 through 2011 based on accounting years 2007 through 2010. There are no other audits or reviews at this time.

Impairment of Long-Lived Assets

We periodically evaluate long-lived assets held for use and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable.

We analyze historical cash flows of operating locations and compare results of poorer performing locations to more profitable locations. We also analyze lease terms, condition of the assets and related need for capital expenditures or repairs, construction activity in the surrounding area as well as the economic and market conditions in the surrounding area.

For assets held for use, we estimate future cash flows using assumptions based on possible outcomes of the areas analyzed. If the undiscounted future cash flows are less than the carrying value of our location’s assets, we record an impairment based on an estimate of discounted cash flows. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s subjective judgments. Assumptions and estimates used include operating results, changes in working capital, discount rate, growth rate, anticipated net proceeds from disposition of the property and if applicable, lease terms. The span of time for which future cash flows are estimated is often lengthy, increasing the sensitivity to assumptions made. The time span is longer and could be 20 to 25 years for newer properties, but only 5 to 10 years for older properties. Depending on the assumptions and estimates used, the estimated future cash flows projected in the evaluation of long-lived assets can vary within a wide range of outcomes. We consider the likelihood of possible outcomes in determining the best estimate of future cash flows.

The measurement for such an impairment loss is then based on the fair value of the asset as determined by discounted cash flows. We operated 183 restaurants as of February 13, 2013 and periodically experience unanticipated changes in our assumptions and estimates. Those changes could have a significant impact on discounted cash flow models with a corresponding significant impact on the measurement of an impairment.

We believe we have two locations, with an aggregate net carrying value of assets held for use of $0.3 million, with respect to which it is possible that an impairment charge could be taken over the next 12 months.

We also evaluate the useful lives of our intangible assets, primarily the Fuddruckers trade name and franchise agreements and Cheeseburger in Paradise trade name and license agreement, to determine if they are definite or indefinite-lived. Reaching a determination of useful life requires significant judgments and assumptions regarding the future effects of obsolescence, contract term, demand, competition, other economic factors (such as the stability of the industry, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance expenditures, and the expected lives of other related groups of assets.

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Property Held for Sale

We periodically review long-lived assets against our plans to retain or ultimately dispose of properties. If we decide to dispose of a property, it will be moved to property held for sale and actively marketed. Property held for sale is recorded at amounts not in excess of what management currently expects to receive upon sale, less costs of disposal. We analyze market conditions each reporting period and record additional impairments due to declines in market values of like assets. The fair value of the property is determined by observable inputs such as appraisals and prices of comparable properties in active markets for assets like ours. Gains are not recognized until the properties are sold.

Insurance and Claims

We self-insure a significant portion of risks and associated liabilities under our employee injury, workers’ compensation and general liability programs. We maintain insurance coverage with third party carriers to limit our per-occurrence claim exposure. We have recorded accrued liabilities for self-insurance based upon analysis of historical data and actuarial estimates, and we review these amounts on a quarterly basis to ensure that the liability is appropriate.

The significant assumptions made by the actuary to estimate self-insurance reserves, including incurred but not reported claims, are as follows: (1) historical patterns of loss development will continue in the future as they have in the past (Loss Development Method), (2) historical trend patterns and loss cost levels will continue in the future as they have in the past (Bornhuetter-Ferguson Method), and (3) historical claim counts and exposures are used to calculate historical frequency rates and average claim costs are analyzed to get a projected severity (Frequency and Severity Method). The results of these methods are blended by the actuary to provide the reserves estimates.

Actual workers’ compensation and employee injury claims expense may differ from estimated loss provisions. The ultimate level of claims under the in-house safety program are not known, and declines in incidence of claims as well as claims costs experiences or reductions in reserve requirements under the program may not continue in future periods.

Share-Based Compensation

Share-based compensation is recognized as compensation expense in the income statement utilizing the fair value on the date of the grant. The fair value of restricted stock units is valued at the closing market price of the Company’s common stock at the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Assumptions for volatility, expected option life, risk free interest rate and dividend yield are used in the model.

NEW ACCOUNTING PRONOUNCEMENTS

In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” This pronouncement was issued to simplify how entities test for impairment of indefinite-lived intangible assets. Under this pronouncement, an entity has the option first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. In conclusion of this assessment, if an entity finds that it is not more likely that not than an indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, is an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with ASC Topic 350, “Intangibles – Goodwill and Other.” This pronouncement is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements.

INFLATION

It is generally our policy is to maintain stable menu prices without regard to seasonal variations in food costs. Certain increases in costs of food, wages, supplies, transportation and services may require us to increase our menu prices from time to time. To the extent prevailing market conditions allow, we intend to adjust menu prices to maintain profit margins.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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 Form 10-Q, other than statements of historical facts, are “forward-looking statements” for purposes of these provisions, including any statements regarding:

• future operating results,

• future capital expenditures and expected sources of funds for capital expenditures,

• future debt, including liquidity and the sources and availability of funds related to debt, and expected repayment of debt, as well as our ability to refinance the existing credit facility or enter into a new credit facility on a timely basis,

• expected sources of funds for working capital requirements,

• plans for our new prototype restaurants,

• plans for expansion of our business,

• scheduled openings of new units,

• closing existing units,

• effectiveness of management’s Cash Flow Improvement and Capital Redeployment Plan,

• future sales of assets and the gains or losses that may be recognized as a result of any such sales, and

• continued compliance with the terms of our 2009 Credit Facility.

In some cases, investors can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “may” “should,” “will,” and “would” or similar words. Forward-looking statements are based on certain assumptions and analyses made by management in light of their experience and perception of historical trends, current conditions, expected future developments and other factors we believe are relevant. Although management believes that our assumptions are reasonable based on information currently available, those assumptions are subject to significant risks and uncertainties, many of which are outside of our control. The following factors, as well as the factors set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended August 29, 2012 and any other cautionary language in this Form 10-Q, provide examples of risks, uncertainties, and events that may cause our financial and operational results to differ materially from the expectations described in our forward-looking statements:

• general business and economic conditions,

• the impact of competition,

• our operating initiatives, changes in promotional, couponing and advertising strategies and the success of management’s business plans,

• fluctuations in the costs of commodities, including beef, poultry, seafood, dairy, cheese, oils and produce,

• ability to raise menu prices and customer acceptance of changes in menu items,

• increases in utility costs, including the costs of natural gas and other energy supplies,

• changes in the availability and cost of labor, including the ability to attract qualified managers and team members,

• the seasonality of the business,

• collectability of accounts receivable,

• changes in governmental regulations, including changes in minimum wages and health care benefit regulation,

• the effects of inflation and changes in our customers’ disposable income, spending trends and habits,

• the ability to realize property values,

• the availability and cost of credit,

• the ability to effectively integrate and improve the profitability of the acquired 23 Cheeseburger in Paradise restaurants,

• the effectiveness of our credit card controls and PCI compliance,

• weather conditions in the regions in which our restaurants operate,

• costs relating to legal proceedings,

• impact of adoption of new accounting standards,

• effects of actual or threatened future terrorist attacks in the United States,

• unfavorable publicity relating to operations, including publicity concerning food quality, illness or other health concerns or labor relations, and

• the continued service of key management personnel.

Each forward-looking statement speaks only as of the date of this Form 10-Q, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should be aware that the occurrence of the events described above and elsewhere in this Form 10-Q could have material adverse effect on our business, results of operations, cash flows and financial condition.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in interest rates affecting our variable-rate debt. As of February 13, 2013, the total amount of debt subject to interest rate fluctuations outstanding under our 2009 Credit Facility was $22.5 million. Assuming an average debt balance of $22.5 million, a 1.0% increase in prevailing interest rates would increase our annual interest expense by $0.2 million.

Although we are not currently using interest rate swaps, we have previously used, and may in the future use, these instruments to manage cash flow risk on a portion of our variable-rate debt.

Many ingredients in the products sold in our restaurants are commodities, subject to unpredictable price fluctuations. We attempt to minimize price volatility by negotiating fixed price contracts for the supply of key ingredients and in some cases by passing increased commodity costs through to the customer by adjusting menu prices or menu offerings. Our ingredients are available from multiple suppliers so we are not dependent on a single vendor for our ingredients.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of February 13, 2013. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of February 13, 2013, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended February 13, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II—OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes to our legal proceedings as disclosed in “Legal Proceedings” in Item 3 of Part I of our Annual Report on Form 10-K for the fiscal year ended August 29, 2012.

Item 1A. Risk Factors

There have been no material changes during the quarter ended February 13, 2013 to the Risk Factors discussed in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended August 29, 2012.

If we do not successfully integrate Luby’s and Cheeseburger in Paradise operations, the anticipated benefits of the acquisition of all the Membership Units of Paradise Restaurant Group, LLC and certain of their affiliates may not be fully realized.

On December 5, 2012, we completed the acquisition of all of the membership units of Paradise Restaurant Group, LLC and certain of their affiliates, collectively known as Cheeseburger In Paradise. Although we believe that the integration of Cheeseburger in Paradise into our operations will not present significant difficulties, this integration may not result in the realization of the full benefits of synergies, cost savings and operational efficiencies that we expect or the achievement of these benefits within a reasonable period of time. The diversion of the attention of management to the integration effort and any difficulties encountered in combining our operations could adversely affect our business and results of operations. In addition, we may not have discovered all known and unknown factors regarding the Cheeseburger in Paradise operation that could produce unintended and unexpected consequences for us. Undiscovered factors could result in us incurring financial liabilities, which could be material, and in us not achieving the expected benefits from the acquisition within our desired time frames, if at all.

Item 6. Exhibits

10.1	Luby’s, Inc. Second Amended and Restated Nonemployee Director Stock Plan (Amended and Restated as of January 25, 2013).
10.2	Seventh Amendment to Credit Agreement, dated as of February 14, 2013, among the Company, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent, and Amegy Bank National Association, as syndication agent.
31.1	Rule 13a-14(a)/15d-14(a) certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a)/15d-14(a) certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Section 1350 certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Section 1350 certification of the Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

33

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 thereunto duly authorized.

	LUBY’S, INC. (Registrant)
Date: March 25, 2013	By:	/s/ Christopher J. Pappas
		Christopher J. Pappas
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: March 25, 2013	By:	/s/ K. Scott Gray
		K. Scott Gray
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

34

EXHIBIT INDEX

10.1	Luby’s, Inc. Second Amended and Restated Nonemployee Director Stock Plan (Amended and Restated as of January 25, 2013).
10.2	Seventh Amendment to Credit Agreement, dated as of February 14, 2013, among the Company, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent, and Amegy Bank National Association, as syndication agent.

31.1	Rule 13a-14(a)/15d-14(a) certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a)/15d-14(a) certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Section 1350 certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Section 1350 certification of the Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

35

EX-10.1

Exhibit 10.1

LUBY’S, INC.

SECOND AMENDED AND RESTATED

NONEMPLOYEE DIRECTOR STOCK PLAN

1. Introduction

This Second Amended and Restated Nonemployee Director Stock Plan (the “Restated Director Stock Plan”) of Luby’s, Inc. (the “Company”), upon approval of the Restated Director Stock Plan by the shareholders of the Company at their 2013 annual meeting, shall amend and restate the Amended and Restated Nonemployee Director Stock Plan first approved by the shareholders of the Company on January 20, 2005, and subsequently amended on January 24, 2007 and April 14, 2008 (the “Prior Plan”).

2. Effectiveness

Upon approval of the Restated Director Stock Plan by the shareholders of the Company at their 2013 annual meeting, the Restated Director Stock Plan shall become effective as of the date of such meeting (the “Effective Date”), with participants first being allowed to participate in the Restated Director Stock Plan at the first meeting of the Board of Directors of the Company following said annual meeting. If the Restated Director Stock Plan is not approved by the shareholders at such meeting, it shall not become effective, and the Prior Plan shall continue in force and effect.

3. Purpose

The Purpose of the Restated Director Stock Plan is to promote the interests of the Company and its shareholders by (a) promoting a greater identity of interest between the Nonemployee Directors and the Company’s shareholders and (b) strengthening the Company’s ability to attract and retain the services of experienced and knowledgeable Nonemployee Directors. To accomplish these objectives, the Restated Director Stock Plan authorizes (i) awards of shares of the Company’s common stock par value $.32 per share (“Common Stock”) which have significant restrictions on sale or transfer prior to vesting to Nonemployee Directors, (ii) awards of options to purchase shares of Common Stock to Nonemployee Directors, and (iii) the purchase of shares of Common Stock by Nonemployee Directors out of compensation otherwise payable to such directors, (collectively, the “Awards”) thereby encouraging such directors to acquire an increased proprietary interest in the Company.

4. Administration

The Restated Director Stock Plan shall be administered by the Board of Directors of the Company (the “Board”). The decision of the Board on any questions concerning the interpretation or administration of the Restated Director Stock Plan shall, as between the Company and the Nonemployee Director, be final and conclusive. The Board may consult with counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

5. Participants

Participants shall be the directors of the Company who are not employees of the Company or a subsidiary of the Company or any other business entity in which the Company, directly or indirectly, owns 50% or more of the capital or profit interest (“Nonemployee Directors”).

6. Shares

Subject to the adjustment provisions of Section 10 hereof, the number of shares of Common Stock of the Company which may be issued in connection with Awards available pursuant to the Restated Director Stock Plan shall not exceed 1,100,000 shares. If, however, any Award available under the Restated Director Stock Plan shall expire, terminate, or be canceled without having become vested or been exercised in full, the unused shares shall continue to be available for purposes of the Restated Director Stock Plan. More than one Award may be granted to the same participant.

7. Restricted Stock

Each Nonemployee Director shall be eligible to receive shares of restricted Common Stock, in accordance with the terms of the Restated Director Stock Plan, as follows:

(a) On the first day of each January, April, July and October during the term of the Restated Director Stock Plan, each Nonemployee Director shall be issued shares of Common Stock bearing such restrictions as the Board may determine from time to time (“Restricted Stock”) for services as a director of the Company, in an amount equal to that portion of the annual retainer fee determined by the Board to be payable in Restricted Stock for the quarterly period beginning on such date, as such amount may be changed from time to time at the discretion of the Board (the “Mandatory Retainer Award”).

(b) On the first day of each January, April, July, and October during the term of the Restated Director Stock Plan, each Nonemployee Director shall be issued a number of whole shares of Restricted Stock equal to the ratio of: (i) a portion of the Director Compensation in excess of the Mandatory Retainer Award (the “Elective Retainer Award”) for the quarterly period beginning on such date which the Nonemployee Director has elected pursuant to the provisions of Section 7(f) of the Restated Director Stock Plan to be payable in Restricted Stock (expressed as a dollar amount) to (ii) the Fair Market Value per share of Common Stock on the Stock Award Date (as such terms are defined below). Any fraction of a share shall be disregarded and the remaining amount of the Director Compensation shall be paid in cash.

(c) On the first day of each January, April, July, and October during the term of the Restated Director Stock Plan, each Nonemployee Director who has elected pursuant to the provisions of the Restated Director Stock Plan to receive Restricted Stock in payment of the Elective Retainer Award, shall be granted an additional number of whole shares of Restricted Stock equal to twenty percent (20%) of the number of whole shares of Restricted Stock issued in payment of the Elective Retainer Award for the quarterly period beginning on such date.

(d) Upon the date of election, each newly elected Nonemployee Director (i.e., a Nonemployee Director who has not previously served as a director of the Company) shall be granted the number of shares of Restricted Stock designated by resolution of the Board for such persons from time to time.

(e) The term “Fair Market Value” as used in this Plan means with respect to any date, the average between the highest and lowest sale prices per share of Common Stock on the New York Stock Exchange Composite Transactions Tape on such date, provided that if there shall be no sales of shares of Common Stock reported on such date, the Fair Market Value of a share of Common Stock on such date shall be deemed to be equal to the average between the highest and lowest sale prices per share on such composite tape for the last preceding date on which sales of shares of Common Stock were reported. In the event that Shares are not traded on the New York Stock Exchange as of a given date, the Fair Market Value of a Share as of such date shall be established by the Board acting in good faith. The term “Stock Award Date” means the date on which shares of Restricted Stock are granted to a Nonemployee Director. The term “Director Compensation” means all cash compensation payable to a Nonemployee Director for services as a director of the Company.

(f) Each Nonemployee Director who, prior to the end of any calendar year during the Term of the Restated Director Stock Plan files with the Board or its designee a written election to receive an Elective Retainer Award. An election pursuant to this Section 7.(f) shall be irrevocable.

(g) Upon an award of shares of Restricted Stock to a Nonemployee Director, the stock certificate representing such shares of Common Stock shall be issued and transferred to the Nonemployee Director, whereupon the Nonemployee Director shall become a stockholder of the Company with respect to such shares and shall be entitled to vote the shares; provided, however, subject to the provisions of Section 11, no such shares shall be transferable by the Nonemployee Director for a period of three (3) years from the Stock Award Date.

8. Options

(a) The Board shall select the Nonemployee Directors who are to be granted Options under the Restated Director Stock Plan and, subject to the provisions of the Restated Director Stock Plan, shall determine the terms, conditions, and limitations applicable to each Option. No Nonemployee Director may receive, under the Restated Director Stock Plan, Options for more than 7,500 shares in any 12-month period.

(b) The option price shall be 100% of the Fair Market Value of the shares at the time of the granting of the Option. Such Fair Market Value shall be determined by the Board pursuant to the provisions of Section 7.(e) hereof.

(c) (i) An Option shall terminate upon the expiration of ten years from the date the Option is granted or one year from the date the optionee ceases to be a director of the Company, whichever first occurs (the “Expiration Date”). In no event shall an Option be exercised after the Expiration Date.

(ii) To the extent that an Option is exercisable, it may be exercised by the optionee or the legal representative of the optionee or the legal representative of the optionee’s estate. Except as provided in subsection (c)(iii) below, an Option may not be exercised prior to the expiration of one year from the date the Option is granted. Once an Option becomes exercisable, it may thereafter be exercised, wholly or in part, at any time prior to its Expiration Date.

(iii) Upon the occurrence of any of the following events prior to the Expiration Date of an Option, the Option shall become immediately and fully exercisable:

A. death of the optionee;

B. resignation or removal of the optionee as a director of the Company by reason of a physical or mental impairment which prevents the optionee from performing the duties of his or her directorship for a period of six months or more;

C. resignation of the optionee as a director of the Company after having served at least two full terms as a director; or

D. expiration of the optionee’s term of office as a director of the Company, without being reelected to the Board, after having served at least two full terms as a director.

No Option shall be assignable or transferable other than by will or the laws of descent and distribution. During an optionee’s lifetime, only the optionee or his or her guardian or legal representative may exercise an option.

(d) Payment for shares purchased upon exercise of an Option shall be made in full at the time of exercise of the Option. No loan shall be made or guaranteed by the Company for the purpose of financing the purchase of any optioned shares. Payment of the option price shall be made in cash, or by delivering Common Stock of the Company having a Fair Market Value (determined as provided in Section 7.(e)) at least equal to the option price, or a combination of Common Stock and cash. Payment in shares of Common Stock shall be made by delivering to the Company certificates, duly endorsed for transfer, representing shares of Common Stock having an aggregate Fair Market Value on the date of exercise equal to that portion of the option price which is to be paid in Common Stock. Whenever payment of the option price would require delivery of a fractional share, the optionee shall deliver the next lower whole number of shares of Common Stock and a cash payment shall be made by the optionee for the balance of the option price.

(e) Options granted under the Restated Director Stock Plan do not meet the requirements of Section 422 of the Internal Revenue Code and are commonly referred to as “nonqualified stock options.”

9. Listing and Registration

The Company, in its discretion, may postpone the issuance and delivery of shares issuable in connection with an Award, until completion of such stock exchange listing, or registration, or other qualification of such shares under any federal or state law, rule, or regulation, as the Company may consider appropriate. The Company may require any person entitled to shares issuable in connection with an Award to make such representations and to furnish such information as the Company may consider appropriate in connection with the issuance of the shares in compliance with applicable law.

10. Adjustment Provisions

(a) If the Company shall at any time change the number of issued shares of Common Stock without new consideration to the Company (such as by stock dividend, stock split, recapitalization, reorganization, exchange of shares, liquidation, combination or other change in corporate structure affecting the Common Stock) or make a distribution of cash or property which has a substantial impact on the value of issued shares of Common Stock, the total number of shares of Common Stock reserved for issuance under the Restated Director Stock Plan shall be appropriately adjusted and the number of shares of Common Stock covered by each outstanding Option and the purchase price per share of Common Stock under each outstanding Option shall be adjusted so that the aggregate consideration payable to the Company and the value of each such Option shall not be changed.

(b) Notwithstanding any other provision of the Restated Director Stock Plan, and without affecting the number of shares of Common Stock reserved or available hereunder, the Board shall authorize the issuance, continuation or assumption of outstanding Options or provide for other equitable adjustments after changes in the shares of Common Stock resulting from any merger, consolidation, sale of assets, acquisition of property or stock, recapitalization, reorganization or similar occurrence in which the Company is the continuing or surviving Company, upon such terms and conditions as it may deem necessary to preserve the rights of Optionees and holders of shares of Common Stock that are subject to any restrictions under the Restated Director Stock Plan.

(c) In the case of any sale of assets, merger, consolidation or combination of the Company with or into another Company other than a transaction in which the Company is the continuing or surviving Company and which does not result in the outstanding Common Stock being converted into or exchanged for different securities, cash or other property, or any combination thereof (an “Acquisition”), any Optionee who holds an outstanding Option shall have the right (subject to the provisions of the Restated Director Stock Plan and any limitation applicable to the Option) thereafter and during the term of the Option, to receive upon exercise thereof the Acquisition Consideration (as defined below) receivable upon the Acquisition by a holder of the number of shares of Common Stock which would have been obtained upon exercise of the Option or portion thereof, as the case may be, immediately prior to the Acquisition. The term “Acquisition Consideration” shall mean the kind and amount of shares of the surviving or new Company, cash, securities, evidence of indebtedness, other property or any combination thereof receivable in respect of one share of Common Stock upon consummation of an Acquisition.

11. Change of Control

(a) Upon the occurrence of a “Change of Control”, as defined below, any and all outstanding Options shall become immediately vested and exercisable and any and all stock certificates representing shares awarded to a Nonemployee Director pursuant to the provisions of Section 7 hereof, shall be transferred to such Nonemployee Director.

(b) A “Change of Control” shall occur when:

(i) A “Person” (which term, when used in this Section 11, shall have the meaning it has when it is used in Section 13(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), but shall not include the Company, any underwriter temporarily holding securities pursuant to an offering of such securities, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any Company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Voting Stock (as defined below) of the Company) is or becomes, without the prior consent of a majority of the Continuing Directors (as defined below), the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of Voting Stock (as defined below) representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities; or

(ii) The stockholders of the Company approve and the Company consummates a reorganization, merger or consolidation of the Company or the Company sells, or otherwise disposes of, all or substantially all of the Company’s property and assets, or the Company liquidates or dissolves (other than a reorganization, merger, consolidation or sale which would result in all or substantially all of the beneficial owners of the Voting Stock of the Company outstanding immediately prior thereto continuing to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the resulting entity), more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such entity resulting from the transaction (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s property or assets, directly or indirectly) outstanding immediately after such transaction in substantially the same proportions relative to each other as their ownership immediately prior to such transaction); or

(iii) The individuals who are Continuing Directors of the Company (as defined below) cease for any reason to constitute at least a majority of the Board of the Company.

(iv) For purposes of this Section 11, (i) the term “Continuing Director” means (A) any member of the Board who is a member of the Board immediately after the issuance of any class of securities of the Company that are required to be registered under Section 12 of the Exchange Act, and the term “Voting Stock” means all capital stock of the Company which by its terms may be voted on all matters submitted to shareholders of the Company

12. Provisions for Taxes

It shall be a condition to the Company’s obligation to issue or reissue shares of Common Stock in connection with an Award that the participant pay, or make provision satisfactory to the Company for payment of, any federal or state income or other taxes which the Company is obligated to withhold or collect with respect to the issuance or reissuance of such shares.

13. Term of Plan

The Restated Director Stock Plan shall become effective on the Effective Date and shall terminate on the tenth (10th) anniversary of the Effective Date, unless sooner terminated by the Board pursuant to Section 15. After any such termination, no Awards may be made under the Restated Director Stock Plan, but any such termination shall not affect Awards then outstanding or the authority of the Board to continue to administer the Restated Director Stock Plan.

14. Restrictions on Exercise

Any provision of the Restated Director Stock Plan to the contrary notwithstanding, (i) no Option granted pursuant to the Restated Director Stock Plan shall be exercisable at any time, in whole or in part, prior to the shares of Common Stock subject to the Option being authorized for listing on the New York Stock Exchange and (ii) no Option granted pursuant to the Restated Director Stock Plan shall be exercisable at any time, nor shall any shares of Restricted Stock issuable pursuant to the Restated Director Stock Plan be issued, if issuance and delivery of the shares of Common Stock subject to the Award would be in violation of any applicable laws or governmental regulations.

15. Amendment and Termination

Subject to the limitation that the provisions of the Restated Director Stock Plan shall not be amended more than once every six months other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, applicable securities laws and applicable stock exchange regulations, or the rules thereunder, the Board may at any time amend, suspend or discontinue the Restated Director Stock Plan or alter or amend any or all Awards under the Restated Director Stock Plan to the extent permitted by law. However, no such action by the Board may, without approval of the shareholders of the Company, alter the provisions of the Restated Director Stock Plan so as to:

(a) increase the maximum number of shares of Common Stock that may be issued in connection with Awards granted under the Restated Director Stock Plan except pursuant to Section 10;

(b) change the class of individuals eligible to receive Awards under the Restated Director Stock Plan; or

(c) effect any other amendment to the Restated Director Stock Plan for which approval of the Company’s shareholders is required by Rule 16b-3 under the Exchange Act, or as a condition to the listing of shares on the NYSE.

16. Unfunded Plan

The Restated Director Stock Plan shall be unfunded. Neither the Company nor the Board shall be required to segregate any assets in connection with Awards issued pursuant to the Restated Director Stock Plan. Any liability of the Company to any Nonemployee Director with respect to an Award shall be based solely upon contractual obligations created by the Restated Director Stock Plan and any Award agreement. No such obligation shall be deemed to be secured by any pledge or any encumbrance on any property of the Company.

17. Governing Law

This Plan shall be governed by, construed, and enforced in accordance with the internal laws of the State of Delaware, and, where applicable, the laws of the United States.

EX-10.2

Exhibit 10.2

SEVENTH AMENDMENT TO CREDIT AGREEMENT

THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of February 14, 2013  by and among LUBY’S, INC., a Delaware corporation (the “Company”); each of the Lenders which is or may from time to time become a party to the Credit Agreement (as defined below) (individually, a “Lender” and, collectively, the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, acting as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

RECITALS

A.           The Company, the Lenders and the Administrative Agent executed and delivered that certain Credit Agreement dated as of November 9, 2009, as amended by instruments dated as of January 31, 2010, July 26, 2010, September 30, 2010, October 31, 2010, August 25, 2011 and October 20, 2011.  Said Credit Agreement, as amended, supplemented and restated, is herein called the “Credit Agreement”.  Any capitalized term used in this Amendment and not otherwise defined shall have the meaning ascribed to it in the Credit Agreement.

B.           The Company, the Lenders and the Administrative Agent desire to amend the Credit Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties herein set forth, and further good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, the Lenders and the Administrative Agent do hereby agree as follows:

SECTION 1. Amendment to Credit Agreement.  Section 6.13 of the Credit Agreement is hereby amended to read in its entirety as follows:

SECTION 6.13  Capital Expenditures.  The Borrower will not, and will not permit any other Loan Party to, make a Capital Expenditure if, after giving effect to such Capital Expenditure, (a) any Event of Default is then existing or would arise as a result of the applicable Capital Expenditure or (b) aggregate Capital Expenditures for the Borrower’s 2011 fiscal year would exceed $15,000,000 or aggregate Capital Expenditures for any subsequent fiscal year of the Borrower would exceed the lesser of (i) $38,000,000 or (ii) the sum of (x) an amount equal to one hundred thirty percent (130%) of EBITDA for immediately preceding fiscal year of the Borrower plus (y) any unused availability for Capital Expenditures from the immediately preceding fiscal year (but not from any earlier fiscal year).  Acquisitions permitted under the terms and provisions of Section 6.14 hereof shall not be treated as Capital Expenditures for purposes of this Section.

SECTION 2. Ratification.  Except as expressly amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect.  None of the rights, title and interests existing and to exist under the Credit Agreement are hereby released, diminished or impaired, and the Company hereby reaffirms all covenants, representations and warranties in the Credit Agreement.

SECTION 3. Expenses.  The Company shall pay to the Administrative Agent all reasonable fees and expenses of its legal counsel incurred in connection with the execution of this Amendment.

SECTION 4. Certifications.  The Company hereby certifies that (a) no material adverse change in the assets, liabilities, financial condition, business or affairs of the Company has occurred and (b) no Default or Event of Default has occurred and is continuing or will occur as a result of this Amendment.

34

SECTION 5. Miscellaneous.  This Amendment (a) shall be binding upon and inure to the benefit of the Company, the Lenders and the Administrative Agent and their respective successors, assigns, receivers and trustees; (b) may be modified or amended only by a writing signed by the required parties; (c) shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America; (d) may be executed in several counterparts by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original agreement, and all such separate counterparts shall constitute but one and the same agreement and (e) together with the other Loan Documents, embodies the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements, consents and understandings relating to such subject matter.  The headings herein shall be accorded no significance in interpreting this Amendment.

NOTICE PURSUANT TO TEX. BUS. & COMM. CODE §26.02

THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Pages Follow]

35

IN WITNESS WHEREOF, the Company, the Lenders and the Administrative Agent have caused this Amendment to be signed by their respective duly authorized officers, effective as of the date first above written.

LUBY’S, INC.,
a Delaware corporation
By:	/s/ Christopher J. Pappas
	Christopher J. Pappas,
	President and Chief Executive Officer

The undersigned Subsidiaries of the Borrower hereby join in this Amendment to evidence their consent to execution by Borrower of this Amendment, to confirm that each Loan Document now or previously executed by the undersigned applies and shall continue to apply to this Amendment, and to acknowledge that without such consent and confirmation, Lenders would not execute this Amendment.

LUBY’S HOLDINGS, INC.,
a Delaware corporation
LUBY’S LIMITED PARTNER, INC.,
a Delaware corporation,
LUBCO, INC.,
a Delaware corporation,
LUBY’S MANAGEMENT, INC.,
a Delaware corporation
LUBY’S BEVCO, INC.,
a Texas corporation
LUBY’S FUDDRUCKERS RESTAURANTS, LLC, a Texas limited liability company
FUDDRUCKERS TULSA, LLC,
a Texas limited liability company
R. WES, INC.,
a Texas corporation
FUDDRUCKERS OF ANNAPOLIS, LLC,
a Maryland limited liability company
FUDDRUCKERS OF HOWARD COUNTY,
LLC, a Maryland limited liability company
By:	/s/ Christopher J. Pappas
	Christopher J. Pappas,
	President and Chief Executive Officer

PARADISE CHEESEBURGERS, LLC,
a Texas limited liability company
PARADISE RESTAURANT GROUP, LLC,
a Delaware limited liability company
CHEESEBURGER OF NEWARK, LLC,
a Delaware limited liability company
CHEESEBURGER OF FORT MEYERS, LLC,
a Florida limited liability company
CHEESEBURGER OF SANDESTIN, LLC,
a Florida limited liability company
CHEESEBURGER OF DOWNERS GROVE, LLC,
an Illinois limited liability company
CHEESEBURGER OF ALGONQUIN, LLC,
an Illinois limited liability company
CHEESEBURGER OF EVANSVILLE, LLC,
an Indiana liability company
CHEESEBURGER OF FISHERS, LLC,
an Indiana limited liability company
CHEESEBURGER OF SOUTHPORT, LLC,
an Indiana limited liability company
CHEESEBURGER OF TERRE HAUTE, LLC,
an Indiana limited liability company
CHEESEBURGER OF KANSAS CITY, LLC,
a Kansas limited liability company
CHEESEBURGER OF PASADENA, LLC,
a Maryland limited liability company
CHEESEBURGER OF CALIFORNIA, LLC,
a Maryland limited liability company
CHEESEBURGER IN PARADISE OF ANNE ARUNDEL COUNTY, INC.,
a Maryland corporation
CHEESEBURGER IN PARADISE OF ST. MARY’S COUNTY, LLC,
a Maryland limited liability company
CHEESEBURGER OF STERLING HEIGHTS, LLC,
a Michigan limited liability company
HIGH TIDES OF OMAHA, LLC,
a Nebraska limited liability company
CHEESEBURGER OF SEACAUCUS, LLC,
a New Jersey limited liability company
CHEESEBURGER OF WALLKILL, LLC,
a New York limited liability company
CHEESEBURGER OF HILLIARD, LLC,
a Ohio limited liability company
CHEESEBURGER OF MYRTLE BEACH, LLC,
a South Carolina limited liability company
CHEESEBURGER OF FREDERICKSBURG, LLC,
a Virginia limited liability company
CHEESEBURGER OF NEWPORT NEWS, LLC,
a Virginia limited liability company
CHEESEBURGER OF VIRGINIA BEACH, LLC,
a Virginia limited liability company
CHEESEBURGER OF WOODBRIDGE, LLC,
a Virginia limited liability company
CHEESEBURGER OF MIDDLETON, LLC,
a Wisconsin limited liability company
By:	/s/ Peter Tropoli
	Peter Tropoli, President

WELLS FARGO BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent
By:	/s/ Missy Collura
Name:	Missy Collura
Title:	Vice President

AMEGY BANK, NATIONAL ASSOCIATION
By:	/s/ Kelly Nash
Name:	Kelly Nash
Title:	Assistant Vice President

EX-31.1

Exhibit 31.1

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Christopher J. Pappas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Luby’s, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 25, 2013
	By:	/s/ Christopher J. Pappas
		Christopher J. Pappas
		President and Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has been provided to Luby’s, Inc. and will be retained by Luby’s, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, K. Scott Gray, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Luby’s, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 25, 2013
	By:	/s/ K. Scott Gray
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 302 of the Sarbanes-Oxley Act of 2002 has been provided to Luby’s, Inc. and will be retained by Luby’s, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Luby’s, Inc. (the “Registrant”) on Form 10-Q for the fiscal quarter ended February 13, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher J. Pappas, President and Chief Executive Officer of the Registrant, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: March 25, 2013	By:	/s/ Christopher J. Pappas
		Christopher J. Pappas
		President and Chief Executive Officer (Principal Executive Officer)

This certification is made solely for purposes of 18 U.S.C. Section 1350, and not for any other purpose.

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Luby’s, Inc. (the “Registrant”) on Form 10-Q for the fiscal quarter ended February 13, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, K. Scott Gray, Senior Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: March 25, 2013	By:	/s/ K. Scott Gray
		K. Scott Gray
		Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

This certification is made solely for purposes of 18 U.S.C. Section 1350, and not for any other purpose.

XML

Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Detail) - sales and pretax income (losses) reported for discontinued operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Pretax income (loss)			$ (767)	$ (901)
Income tax benefit (expense) on discontinued operations			280	265
Net income (loss) on discontinued operations	(400)	(269)	(487)	(636)
Discontinue Operations (Member)
Net income (loss) on discontinued operations			$ (487)	$ (636)

XML

Note 12 - Earnings Per Share (Detail)	6 Months Ended
	Feb. 13, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	33,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	75,000

XML

Note 5 - Fair Value Measurements (Detail) - Non-recurring fair value measurements related to impaired property and equipment (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Continuing Operations
Level	$ 1,321	$ (72)	$ 1,563	$ (81)
Company-Owned Asset (Member) | Fair Value, Inputs, Level 3 [Member]
Continuing Operations
Level			20
Company-Owned Asset (Member)
Continuing Operations
Balance	20		20
Total Impairment			(90)
Corporate Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Continuing Operations
Level			1,634	1,875
Corporate Assets [Member]
Continuing Operations
Balance	1,634	1,875	1,634	1,875
Total Impairment			(506)	(510)
Culinary Contract Services [Member] | Fair Value, Inputs, Level 3 [Member]
Continuing Operations
Level				57
Culinary Contract Services [Member]
Continuing Operations
Balance		57		57
Total Impairment				$ (175)

XML

Note 11 - Share-Based Compensation (Tables)

3 Months Ended

Feb. 13, 2013

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Shares Under Fixed Options			Weighted-Average Exercise  Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(In thousands)
Outstanding at August 29, 2012		1,175,224		$	6.31		3.8	$	1,456
Granted		109,335			5.95		—		—
Exercised		(41,489	)		3.78		—		—
Forfeited/Expired		(299,485	)		—		—		—
Outstanding at February 13, 2013		943,585		$	5.24		5.0	$	2,654
Exercisable at February 13, 2013		660,687		$	5.36		4.4	$	1,852

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

	Restricted Stock Units			Weighted Average Fair Value		Weighted-Average Remaining Contractual Term
				(Per share)		(In years)
Unvested at August 29, 2012		163,946		$	4.83		1.8
Granted		274,290			6.17		—
Vested		(14,000	)		3.46		—
Unvested at February 13, 2013		424,236		$	5.74		2.2

XML

Note 10 - Related Parties (Detail) - Affiliated rents paid for this restaurant property lease (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
AFFILIATED COSTS INCURRED:
General and Administrative Expenses	$ 7,616	$ 6,737	$ 14,994	$ 13,547
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS	0.26%	0.35%	0.26%	0.35%
Affiliated Cost Incurred [Member]
AFFILIATED COSTS INCURRED:
General and Administrative Expenses			25	25
Capital Expenditures				63
Other Operating Expenses and opening costs			145	108
Total			170	196
Relative Company Cost [Member]
AFFILIATED COSTS INCURRED:
General and Administrative Expenses			14,994	13,547
Capital Expenditures			11,435	9,247
Other Operating Expenses and opening costs			37,901	33,737
Total			$ 64,330	$ 56,531

XML

Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Detail) - The Company recognized the following impairment charges to income from operations: (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Provision for asset impairments			$ 90	$ 175
Net (gain) loss on disposition of property and equipment	(1,321)	72	(1,563)	81
			(1,473)	256
Effect on EPS:
Basic (in Dollars per share)	$ 0.01	$ 0.04	$ 0.01	$ 0.05
Assuming dilution (in Dollars per share)			$ (0.05)	$ 0.01
Net Gain (Loss) on Disposition of Property and Equipment [Member]
Effect on EPS:
Basic (in Dollars per share)			$ (0.05)	$ 0.01
Net Gain (Loss) on Disposition of Property and Equipment [Member]
Net (gain) loss on disposition of property and equipment			$ (1,563)	$ 81

XML

Note 12 - Earnings Per Share (Detail) - The components of basic and diluted net income per share are as follows: (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Numerator:
Income from continuing operations (in Dollars)	$ 603	$ 1,357	$ 819	$ 1,927
Loss from discontinued operations (in Dollars)	(400)	(269)	(487)	(636)
Net income (in Dollars)	203	1,088	332	1,291
Denominator:
Denominator for basic earnings per share – weighted-average shares (in Shares)	28,614	28,365	28,500	28,329
Effect of potentially dilutive securities:
Employee and non-employee stock options (in Shares)	211	45	198	30
Denominator for earnings per share assuming dilution (in Shares)	28,825	28,410	28,698	28,359
Income per share from continuing operations:
Basic	$ 0.02	$ 0.05	$ 0.03	$ 0.07
Assuming dilution	$ 0.02	$ 0.05	$ 0.03	$ 0.07
Loss per share from discontinued operations:
Basic	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Assuming dilution	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Net income per share:
Basic	$ 0.01	$ 0.04	$ 0.01	$ 0.05
Assuming dilution	$ 0.01	$ 0.04	$ 0.01	$ 0.05
Discontinue Operations (Member)
Numerator:
Loss from discontinued operations (in Dollars)			$ (487)	$ (636)
Loss per share from discontinued operations:
Basic	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Assuming dilution	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)

XML

Note 3 - Acquisition

3 Months Ended

Feb. 13, 2013

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Note 3. Acquisition

Luby’s, Inc., through its newly created subsidiary, Paradise Cheeseburgers, LLC, purchased 100% of the membership units of Paradise Restaurant Group, LLC and affiliated companies which operate Cheeseburger in Paradise brand restaurants (collectively, “Cheeseburger in Paradise”) on December 6, 2012 for $10.7 million in cash.  The Company assumed $1.4 million of Cheeseburger in Paradise obligations, real estate leases and contracts. The Company funded the purchase with cash and borrowings from its credit facility.

The Company believes the acquisition of Cheeseburger in Paradise will produce significant benefits. The acquisition is expected to increase the Company’s market presence and opportunities for growth in sales, earnings and shareholder returns. The acquisition provides a complementary growth vehicle in the casual segment of the restaurant industry. The Company believes these factors support the amount of goodwill recorded as a result of the purchase price paid for the Cheeseburger in Paradise intangible and tangible assets, net of liabilities assumed.

The Company has accounted for the acquisition of Cheeseburger in Paradise using the acquisition method and accordingly the results of operations related to this acquisition have been included in the consolidated results of the Company since the acquisition date. The Company incurred $0.2 million in acquisition costs which were expensed as incurred and classified as general and administrative expenses on the consolidated statements of earnings.

The allocation of the purchase price for the acquisition requires extensive use of accounting estimates and judgments to allocate the purchase price to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The purchase price for the Company’s acquisition of Cheeseburger in Paradise and the assumption of liabilities is based on estimates of fair values at the acquisition date.  The Company’s fair value estimates for the purchase price allocation may change during the allowable period, which is up to one year from the acquisition date to provide sufficient time to devlop fair value estimates.  The fair values that take longer to estimate and are more likely to change include property and equipment, intangible assets and leases.

Such valuations require significant estimates and assumptions. The Company believes the fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions.

The following table summarizes the estimated fair values of net assets acquired and liabilities assumed, in thousands:

Property and equipment	$	6,220
License agreement and trade name		2,347
Accounts receivable		108
Inventories		548
Cash and cash equivalents		58
Other current assets		329
Liquor licenses and permits		169
Goodwill		143
Favorable leases		2,211
Accrued payables		(570	)
Accrued payroll and benefits		(405	)
Unredeemed gift card liability		(185	)
Personal property and real estate tax liability		(170	)
Other liabilities		(97	)
Net cash paid for acquisition	$	10,706

The license agreement and trade name relates to a perpetual license to use intangible assets including trademarks, service marks and publicity rights related to Cheeseburger in Paradise owned by Jimmy Buffet and affiliated entities. In return, the Company will pay a royalty fee of 2.5% of gross sales less discounts at Cheeseburger in Paradise locations to an entity owned or controlled by Jimmy Buffet. The trade name represents a respected brand with positive customer loyalty; and the Company intends to cultivate and protect the use of the trade name.

The Company will amortize the fair value allocated to the license agreement and trade name over an expected accounting life of 15 years based on the expected use of its assets and the restaurant environment in which it is being used.  The Company recorded $32 thousand of amortization expense for the quarter ended February 13, 2013, which is classified as depreciation and amortization expense in the accompanying consolidated statement of operations.  Because the value of these assets will be amortized using the straight-line method over 15 years, the annual amortization will be $156 thousand in future years.

A portion of the acquired lease portfolio contained favorable leases. Acquired lease terms were compared to current market lease terms to determine if the acquired leases were below or above the current rates tenants would pay for similar leases. The favorable leases assets totaled $2.2 million are recorded in other assets. There were determined to be no unfavorable leases.  The favorable leases are amortized to rent expense on a straight line basis over the lives of the related leases.  The Company recorded $28 thousand of amortization expense for the quarter ended February 13, 2013, which is classified as additional rent expense in the accompanying consolidated statement of operations.

The Company also recorded an intangible asset for goodwill in the amount of $0.1 million. Goodwill is considered to have an indefinite useful life and is not amortized but is tested for impairment at least annually.  The total amount of goodwill recorded is expected to be amortizable and deductible for income tax purposes.

The following unaudited pro forma information assumes the Cheeseburger in Paradise acquisition occurred as of the beginning of the fiscal year ended August 29, 2012. The unaudited pro forma data is presented for informational purposes only and does not purport to be indicative of the results of future operations of the Company or of the results that would have actually been attained had the acquisition taken place at the beginning of the fiscal year ended August 29, 2012.

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(Unaudited)			(Unaudited)
	(In thousands)
Pro forma total sales	$	178,542		$	179,695
Pro forma income from continuing operations		316			1,273
Pro forma net income (loss)		(171	)		637
Pro forma income from continuing operations per share
Basic		0.01			0.04
Diluted		0.01			0.04
Pro forma net income (loss) per share
Basic		(0.01	)		0.02
Diluted		(0.01	)		0.02

Included in the Consolidated Statement of Operations for the two quarters ended February 13, 2013 were actual restaurant sales for Cheeseburger in Paradise $ 7.7 million and loss from operations for Cheeseburger in Paradise only of $0.1 million.

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Note 11 - Share-Based Compensation (Detail) (USD $)	3 Months Ended
	Feb. 13, 2013	Feb. 15, 2012
Number of Stock Plans	2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	0.6
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Granted During Period	2
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options (in Dollars)	$ 1,900,000
Non Employee Directors Stock Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)	$ 4.47
Non Employee Directors Stock Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)	$ 6.45
Non Employee Directors Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	100,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	0.6
Allocated Share-based Compensation Expense (in Dollars)	57,000	155,000
Percentage Of Vesting In First Anniversary	100.00%
Share Based Compensation Arrangement By Share Based Payment Award Award Expiration Period	ten
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	24,000
Restricted Stock And Unit Awards Granted To Named Executive Officers Percentage	20.00%
Employee Stock Plan [Member] | Minimum [Member]
Company Common Stock At Purchase Price Per Share (in Dollars per share)	$ 3.44
Employee Stock Plan [Member] | Maximum [Member]
Company Common Stock At Purchase Price Per Share (in Dollars per share)	$ 11.10
Employee Stock Plan [Member] | Third Anniversary [Member]
Share Based Compensation Arrangement By Share Based Payment Award Award Expiration Period	ten
Employee Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	900,000
Allocated Share-based Compensation Expense (in Dollars)	$ 300,000	$ 200,000
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Granted During Period	2,900,000
Percentage Of Vesting In First Anniversary	50.00%
Share Based Compensation Arrangement By Share Based Payment Award Award Expiration Period	six
Percentage Of Vesting Benefit Plan	25.00%
Percentage Of Vesting In Second Anniversary	25.00%
Percentage Of Vesting In Third Anniversary	25.00%
Option To Purchase Common Stock Shares	919,585

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Note 3 - Acquisition (Detail) - The following unaudited pro forma information assumes the Cheese Burger acquisition occurred as of t (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012
Pro forma total sales (in Dollars)	$ 178,542	$ 179,695
Pro forma income from continuing operations (in Dollars)	316	1,273
Pro forma net income (loss) (in Dollars)	$ (171)	$ 637
Pro forma income from continuing operations per share
Basic	$ 0.01	$ 0.04
Diluted	$ 0.01	$ 0.04
Pro forma net income (loss) per share
Basic	$ (0.01)	$ 0.02
Diluted	$ (0.01)	$ 0.02

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Note 3 - Acquisition (Detail) - Estimated fair values of net assets acquired and liabilities assumed (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Feb. 13, 2013
Net cash paid for acquisition	$ 10,706
Accrued Payables Assumed (Member)
Fair Value of Liabilities Assumed	(570)
Accrued Payroll and Benefits (Member)
Fair Value of Liabilities Assumed	(405)
Unredeemed Gift Card Liability (Member)
Fair Value of Liabilities Assumed	(185)
Personal Property and Real Estate Tax Liability (Member)
Fair Value of Liabilities Assumed	(170)
Other Liabilities Assumed (Member)
Fair Value of Liabilities Assumed	(97)
Property and Equipment (Member)
Fair Value of Assets Acquired	6,220
License Agreement and Trade Name (Member)
Fair Value of Assets Acquired	2,347
Accounts Receivable [Member]
Fair Value of Assets Acquired	108
Inventory Acquired (Member)
Fair Value of Assets Acquired	548
Cash and Cash Equivalents [Member]
Fair Value of Assets Acquired	58
Other Current Assets Acquired (Member)
Fair Value of Assets Acquired	329
Liquor Licenses and Permits (Member)
Fair Value of Assets Acquired	169
Goodwill Acquired (Member)
Fair Value of Assets Acquired	143
Favorable Leases (Member)
Fair Value of Assets Acquired	$ 2,211

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Note 11 - Share-Based Compensation (Detail) - Company’s stock option activity for the quarter: (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Feb. 13, 2013
Granted	109,335
Granted (in Dollars per share)	$ 5.95
Exercised	(41,489)
Exercised (in Dollars per share)	$ 3.78
Forfeited/Expired	(299,485)
Exercisable at February 13, 2013	660,687
Exercisable at February 13, 2013 (in Dollars per share)	$ 5.36
Exercisable at February 13, 2013	4 years 146 days
Exercisable at February 13, 2013 (in Dollars)	$ 1,852
Beginning of Period [Member]
Outstanding at August 29, 2012	1,175,224
Outstanding at August 29, 2012 (in Dollars per share)	$ 6.31
Outstanding at August 29, 2012	3 years 292 days
Outstanding at August 29, 2012 (in Dollars)	1,456
Outstanding at February 13, 2013	3 years 292 days
End of Period [Member]
Outstanding at August 29, 2012	5 years
Outstanding at February 13, 2013	943,585
Outstanding at February 13, 2013 (in Dollars per share)	$ 5.24
Outstanding at February 13, 2013	5 years
Outstanding at February 13, 2013 (in Dollars)	$ 2,654

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Note 4 - Reportable Segments (Detail)	3 Months Ended
	Feb. 13, 2013	Aug. 29, 2012	Aug. 31, 2012
Number of Reportable Segments	3
Company Owned Restaurants [Member]
Number of Reportable Segments	1
Number of Operating Segments	183	154
Culinary Contract Services [Member]
Number of Operating Segments	18
Franchise [Member]
Number of Operating Segments	119	125
Franchise Term			20 years

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Note 4 - Reportable Segments (Detail) - Financial information as required by ASC 280 for segment reporting: (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Sales	$ 82,152	$ 73,434	$ 156,120	$ 146,592
Segment Level Profit	87,478	79,415	166,931	158,738
Income Before Income Taxes and Discontinued Operations	1,090	1,960	1,385	2,855
Company Owned Restaurants [Member]
Sales	82,271	73,565	156,361	146,870
Segment Level Profit	10,098	11,260	19,975	21,460
Depreciation and Amortization	3,853	3,679	7,382	7,328
Capital Expenditures	6,402	4,648	11,222	9,132
Culinary Contract Services [Member]
Sales	3,667	4,197	7,508	8,733
Segment Level Profit	325	60	700	490
Depreciation and Amortization	106	108	214	221
Capital Expenditures	40	43	41	76
Franchise [Member]
Sales	1,540	1,653	3,062	3,135
Segment Level Profit	1,540	1,653	3,062	3,135
Depreciation and Amortization	177	177	354	354
Segment Sales Total [Member]
Sales	87,478	79,415	166,931	158,738
Segment Level Profit Total [Member]
Segment Level Profit	11,963	12,973	23,737	25,085
Corporate [Member]
Depreciation and Amortization	176	150	480	(307)
Capital Expenditures	119	36	172	39
Depreciation and Amortization Total [Member]
Depreciation and Amortization	4,312	4,114	8,430	8,210
Capital Expenditures Total [Member]
Capital Expenditures	6,561	4,727	11,435	9,247
Segment Level Profit Total [Member]
Income Before Income Taxes and Discontinued Operations	11,963	12,973	23,737	25,085
Opening Costs [Member]
Income Before Income Taxes and Discontinued Operations	(261)	(42)	(467)	(77)
Depreciation and Amortization Total [Member]
Income Before Income Taxes and Discontinued Operations	(4,312)	(4,114)	(8,430)	(8,210)
General and Administrative [Member]
Income Before Income Taxes and Discontinued Operations	(7,616)	(6,737)	(14,994)	(13,547)
Provision For Asset Impairments, Net [Member]
Income Before Income Taxes and Discontinued Operations			(90)	(175)
Net Gain (Loss) on Disposition of Property and Equipment [Member]
Income Before Income Taxes and Discontinued Operations	1,321	(72)	1,563	(81)
Interest Income [Member]
Income Before Income Taxes and Discontinued Operations	2	2	4	3
Interest Expense [Member]
Income Before Income Taxes and Discontinued Operations	(214)	(215)	(389)	(494)
Other Income [Member]
Income Before Income Taxes and Discontinued Operations	207	165	451	351
Income before income taxes and discontinued operations Total [Member]
Income Before Income Taxes and Discontinued Operations	$ 1,090	$ 1,960	$ 1,385	$ 2,855

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Note 2 - Accounting Periods

3 Months Ended

Nov. 21, 2012

Accounting Periods Disclosure [Text Block]

Note 2. Accounting Periods

The Company’s fiscal year ends on the last Wednesday in August. Accordingly, each fiscal year normally consists of 13 four-week periods, or accounting periods, accounting for 364 days in the aggregate. Each of the first three quarters of each fiscal year consists of three four-week periods, while the fourth quarter normally consists of four four-week periods. Fiscal years 2012 and 2013 contain 52 weeks. Comparability between quarters may be affected by the varying lengths of the quarters, as well as the seasonality associated with the restaurant business. Seasonality factors affecting a quarter include timing of holidays, weather and school years. Interim results may not be indicative of full year results.

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Note 4 - Reportable Segments (Detail) - Components of Total Assets (USD $) In Thousands, unless otherwise specified	Feb. 13, 2013	Aug. 29, 2012
Total assets:
Assets	$ 243,942	$ 231,017
Company Owned Restaurants [Member]
Total assets:
Assets	195,071	182,287
Culinary Contract Services [Member]
Total assets:
Assets	3,557	3,774
Franchise [Member]
Total assets:
Assets	14,701	15,352
Corporate Assets [Member]
Total assets:
Assets	$ 30,613	$ 29,604

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Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Detail) - Discontinued operations for the first quarters of fiscal years 2013 and 2012 (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
Impairments			$ (506)	$ (510)
Gains (losses)				(12)
Net gains (losses)			(506)	(522)
Other			19	(114)
Discontinued operations	(400)	(269)	(487)	(636)
Effect on EPS from discontinued operations—basic (in Dollars per share)			$ (0.02)	$ (0.02)
Two Quarters Ended (Member)
Discontinued operations			$ (487)	$ (636)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Feb. 13, 2013	Aug. 29, 2012
Current Assets:
Cash and cash equivalents	$ 2,897	$ 1,223
Trade accounts and other receivables, net	3,722	4,000
Food and supply inventories	4,507	3,562
Prepaid expenses	2,880	3,008
Assets related to discontinued operations	33	42
Deferred income taxes	1,912	1,932
Total current assets	15,951	13,767
Property held for sale	602	602
Assets related to discontinued operations	5,667	4,844
Property and equipment, net	180,190	173,633
Intangible assets, net	28,507	26,679
Goodwill	338	195
Deferred incomes taxes	8,707	9,354
Other assets	3,980	1,943
Total assets	243,942	231,017
Current Liabilities:
Accounts payable	16,339	14,849
Liabilities related to discontinued operations	368	442
Accrued expenses and other liabilities	18,894	20,646
Total current liabilities	35,601	35,937
Credit facility debt	25,500	13,000
Liabilities related to discontinued operations	302	1,133
Other liabilities	8,983	8,288
Total liabilities	70,386	58,358
SHAREHOLDERS’ EQUITY
Common stock, $0.32 par value; 100,000,000 shares authorized; Shares issued were 28,732,692 and 28,677,203, respectively; Shares outstanding were 28,232,692 and 28,177,203, respectively	9,194	9,176
Paid-in capital	25,079	24,532
Retained earnings	144,058	143,726
Less cost of treasury stock, 500,000 shares	(4,775)	(4,775)
Total shareholders’ equity	173,556	172,659
Total liabilities and shareholders’ equity	$ 243,942	$ 231,017

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Note 11 - Share-Based Compensation (Detail) - Company’s restricted stock unit activity during the first quarter: (USD $)	0 Months Ended
	Feb. 13, 2013	Aug. 29, 2012
Restricted Stock Units	424,236	163,946
Weighted Average Fair Value (in Dollars per share)	$ 5.74	$ 4.83
Weighted-Average Remaining Contractual Term	2 years 73 days	1 year 292 days
Granted		274,290
Granted (in Dollars per share)		$ 6.17
Vested		(14,000)
Vested (in Dollars per share)		$ 3.46

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Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 203	$ 1,291
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for asset impairments, net of gains/losses on property sales	(967)	778
Depreciation and amortization	8,467	8,247
Amortization of debt issuance cost	52	52
Non-cash compensation expense	157	108
Share-based compensation expense	371	297
Tax increase on stock options	37
Deferred tax (benefit) expense	(115)	415
Cash provided by operating activities before changes in operating assets and liabilities	8,334	11,188
Decrease in trade accounts and other receivables	385	571
Increase in food and supply inventories	(397)	(690)
Decrease (increase) in prepaid expenses and other assets	589	(503)
Decrease in accounts payable, accrued expenses and other liabilities	(1,344)	(441)
Net cash provided by operating activities	7,567	10,125
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of assets and property held for sale	3,571	1,316
Purchases of property and equipment	(11,435)	(9,247)
Acquisition of Cheeseburger in Paradise	(10,706)
Decrease (increase) in note receivable	20	(197)
Net cash used in investing activities	(18,550)	(8,128)
CASH FLOWS FROM FINANCING ACTIVITIES:
Credit facility borrowings	37,100	19,200
Credit facility repayments	(24,600)	(21,200)
Proceed from exercise of stock options	157
Debt issuance costs		(1)
Net cash provided by (used in) financing activities	12,657	(2,001)
Net increase (decrease) in cash and cash equivalents	1,674	(4)
Cash and cash equivalents at beginning of period	1,223	1,252
Cash and cash equivalents at end of period	2,897	1,248
Cash paid for:
Interest	334	423
Two Quarters Ended (Member)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 332	$ 1,291

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Note 7 - Property and Equipment, Intangible Assets and Goodwill (Detail) - Summary of property and equipment: (USD $) In Thousands, unless otherwise specified					3 Months Ended				3 Months Ended						3 Months Ended
	Feb. 13, 2013	Aug. 29, 2012	Feb. 13, 2013 Land [Member]	Aug. 29, 2012 Land [Member]	Feb. 13, 2013 Restaurant Equipment and Furnishings [Member] Minimum [Member]	Feb. 13, 2013 Restaurant Equipment and Furnishings [Member] Maximum [Member]	Feb. 13, 2013 Restaurant Equipment and Furnishings [Member]	Aug. 29, 2012 Restaurant Equipment and Furnishings [Member]	Feb. 13, 2013 Building [Member] Minimum [Member]	Feb. 13, 2013 Building [Member] Maximum [Member]	Feb. 13, 2013 Building [Member]	Aug. 29, 2012 Building [Member]	Feb. 13, 2013 Leaseholds and Leasehold Improvements [Member]	Aug. 29, 2012 Leaseholds and Leasehold Improvements [Member]	Feb. 13, 2013 Furniture and Fixtures [Member] Minimum [Member]	Feb. 13, 2013 Furniture and Fixtures [Member] Maximum [Member]	Feb. 13, 2013 Furniture and Fixtures [Member]	Aug. 29, 2012 Furniture and Fixtures [Member]	Feb. 13, 2013 Construction in Progress [Member]	Aug. 29, 2012 Construction in Progress [Member]	Feb. 13, 2013 Relating to Property, Plant and Equipment (Member)	Aug. 29, 2012 Relating to Property, Plant and Equipment (Member)
Balance	$ 391,140	$ 379,377	$ 61,098	$ 59,159			$ 116,590	$ 109,039			$ 170,640	$ 167,346	$ 34,824	$ 32,913			$ 7,276	$ 7,030	$ 712	$ 3,890
Estimated useful lives					1 year	15 years			20 years	33 years					3 years	10 years
Less accumulated depreciation and amortization	(210,950)	(205,744)
Property and equipment, net	180,190	173,633
Intangible assets, net	28,507	26,679
Goodwill	$ 338	$ 195																			$ 338	$ 195

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Note 7 - Property and Equipment, Intangible Assets and Goodwill (Tables)

3 Months Ended

Feb. 13, 2013

Property Equipment Intangible Assets And Goodwill Disclosure Table Text Block

	February 13, 2013			August 29, 2012			Estimated Useful Lives (years)
	(In thousands)
Land	$	61,098		$	59,159			—
Restaurant equipment and furnishings		116,590			109,039		1	to	15
Buildings		170,640			167,346		20	to	33
Leasehold and leasehold improvements		34,824			32,913		Lesser of lease term or estimated useful life
Office furniture and equipment		7,276			7,030		3	to	10
Construction in progress		712			3,890			—
		391,140			379,377
Less accumulated depreciation and amortization		(210,950	)		(205,744	)
Property and equipment, net	$	180,190		$	173,633
Intangible assets, net	$	28,507		$	26,679			21
Goodwill	$	338		$	195			—

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Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Detail) (USD $)	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Aug. 29, 2012	Aug. 29, 2012	Feb. 13, 2013	Feb. 13, 2012	Feb. 13, 2013
Carrying Value Of Asset Held For Sale	$ 4,800,000		$ 5.7
Number Of Locations Leased			2		2
Number Of Locations				2
Disposal Group Including Discontinued Operation Assets Of Disposal Group Number	7		8
Lease Impairment	2	0	0
Number Of Properties Held For Sale			1		1
Assets Held-for-sale, Property, Plant and Equipment	602,000	602,000	602,000		602,000
Ground Leases (Member)
Lease Impairment			2
Continuing Operations [Member]
Disposal Group Including Discontinued Operation Assets Of Disposal Group Number				23
Discontinued Properties [Member]
Disposal Group Including Discontinued Operation Assets Of Disposal Group Number				1
Previously Impaired (Member)
Disposal Group Including Discontinued Operation Assets Of Disposal Group Number			1
Newer Properties [Member] | Minimum [Member]
Carrying Value Of Asset Held For Sale			20
Newer Properties [Member] | Maximum [Member]
Carrying Value Of Asset Held For Sale			25
Older Properties [Member] | Minimum [Member]
Carrying Value Of Asset Held For Sale			5
Older Properties [Member] | Maximum [Member]
Carrying Value Of Asset Held For Sale			10
Minimum [Member]
Property Plant And Equipment Including Asset Held For Sale			1		1
Maximum [Member]
Property Plant And Equipment Including Asset Held For Sale			$ 3		$ 3

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Note 10 - Related Parties (Tables)

3 Months Ended

Feb. 13, 2013

Schedule of Related Party Transactions [Table Text Block]

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except percentages)
AFFILIATED COSTS INCURRED:
General and administrative expenses – professional and other costs	$	25		$	25
Capital expenditures – custom-fabricated and refurbished equipment and furnishings		—			63
Other operating expenses and opening costs, including property leases		145			108
Total	$	170		$	196
RELATIVE TOTAL COMPANY COSTS:
General and administrative expenses	$	14,994		$	13,547
Capital expenditures		11,435			9,247
Other operating expenses and opening costs		37,901			33,737
Total	$	64,330		$	56,531
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS		0.26	%		0.35	%

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Note 1 - Basis of Presentation

3 Months Ended

Feb. 13, 2013

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Luby’s, Inc. (the “Company” or “Luby’s”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements that are prepared for the Company’s Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarterly period ended February 13, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending August 28, 2013.

The consolidated balance sheet dated August 29, 2012, included in this Form 10-Q, has been derived from the audited consolidated financial statements at that date. However, this Form 10-Q does not include all of the information and footnotes required by GAAP for an annual filing of complete financial statements. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 29, 2012.

The results of operations, assets and liabilities for all units included in the cash flow improvement and capital redeployment plan discussed in Note 7 have been reclassified to discontinued operations in the statements of operations and balance sheets for all periods presented.

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Consolidated Balance Sheets (Parentheticals) (USD $)	Feb. 13, 2013	Aug. 29, 2012
Common stock, par value (in Dollars per share)	$ 0.32	$ 0.32
Common stock, shares authorized	100,000,000	100,000,000
Common stock, Shares issued	28,677,203	28,677,203
Common stock, Shares outstanding	28,177,203	28,177,203
treasury stock, shares	500,000	500,000

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Note 11 - Share-Based Compensation

3 Months Ended

Feb. 13, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 11. Share-Based Compensation

We have two active share based stock plans, the Employee Stock Plan and Non-employee Director Stock Plan. Both plans authorize the granting of stock options, restricted stock and other types of awards consistent with the purpose of the plans.

Of the 1.1 million shares approved for issuance under the Nonemployee Director Stock Plan, 0.6 million options, restricted stock units and restricted stock awards were granted, and 0.1 million options were cancelled or expired and added back into the plan. Approximately 0.6 shares remain available for future issuance as of February 13, 2013. Compensation cost for share-based payment arrangements under the Nonemployee Director Stock Plan, recognized in general and administrative expenses for the two quarters ended February 13, 2013 and February 15, 2012 were approximately $57,000 and $155,000, respectively.

Of the 2.6 million shares approved for issuance under the Employee Stock Plan, 4.6 million options and restricted stock units were granted, and 2.9 million options and restricted stock units were cancelled or expired and added back into the plan. Approximately 0.9 million shares remain available for future issuance as of February 13, 2013. Compensation cost for share-based payment arrangements under the Employee Stock Plan, recognized in general and administrative expenses for the two quarters ended February 13, 2013 and February 15, 2012 were approximately $0.3 million and $0.2 million, respectively.

Stock Options

Stock options granted under either the Employee Stock Plan or the Nonemployee Director Stock Plan have exercise prices equal to the market price of the Company’s common stock at the date of the grant.

Option awards under the Nonemployee Director Stock Plan generally vest 100% on the first anniversary of the grant date and expire ten years from the grant date. No options were granted under the Nonemployee Director Stock Plan in the two quarters ended February 13, 2013. However, options to purchase 24,000 shares at option prices from $4.47 to $6.45 per share remain outstanding as of February 13, 2013.

Options granted under the Employee Stock Plan generally vest 25% on the anniversary date of each grant and expire six years from the date of the grant. However, options granted to executive officers under the Employee Stock Plan vest 50% on the first anniversary date of the grant date, 25% on the second anniversary of the grant date and the remaining 25% vest on the third anniversary of the grant date and expire ten years from the grant date. All options granted in fiscal year 2013 were granted under the Employee Stock Plan. Options to purchase 919,585 shares at option prices of $3.44 to $11.10 per share remain outstanding as of February 13, 2013.

A summary of the Company’s stock option activity for the quarter ended February 13, 2013 is presented in the following table:

	Shares Under Fixed Options			Weighted-Average Exercise  Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(In thousands)
Outstanding at August 29, 2012		1,175,224		$	6.31		3.8	$	1,456
Granted		109,335			5.95		—		—
Exercised		(41,489	)		3.78		—		—
Forfeited/Expired		(299,485	)		—		—		—
Outstanding at February 13, 2013		943,585		$	5.24		5.0	$	2,654
Exercisable at February 13, 2013		660,687		$	5.36		4.4	$	1,852

The intrinsic value for stock options is defined as the difference between the current market value, or closing price on February 13, 2013, and the grant price.

Restricted Stock Units

Grants of restricted stock units consist of the Company’s common stock and generally vest after three years. All restricted stock units are cliff-vested. Restricted stock units are valued at the closing market price of the Company’s common stock at the date of grant.

A summary of the Company’s restricted stock unit activity during the two quarters ended February 15, 2013 is presented in the following table:

	Restricted Stock Units			Weighted Average Fair Value		Weighted-Average Remaining Contractual Term
				(Per share)		(In years)
Unvested at August 29, 2012		163,946		$	4.83		1.8
Granted		274,290			6.17		—
Vested		(14,000	)		3.46		—
Unvested at February 13, 2013		424,236		$	5.74		2.2

At February 13, 2013, there was approximately $1.9 million of total unrecognized compensation cost related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Awards

Under the NonEmployee Director Stock Plan, directors are granted restricted stock in lieu of cash payments, for all or a portion of their compensation as directors. Directors may opt to receive 20% more shares of restricted stock awards by accepting more than the minimum required stock instead of cash. The number of shares granted is valued at the closing market price of the Company’s stock at the date of the grant. Restricted stock awards vest when granted because they are granted in lieu of a cash payment. However, directors are restricted from selling their shares until after the third anniversary of the date of the grant.

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Document And Entity Information	6 Months Ended
	Feb. 13, 2013	Mar. 18, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LUBYS INC
Document Type	10-Q
Current Fiscal Year End Date	--08-29
Entity Common Stock, Shares Outstanding		28,232,692
Amendment Flag	false
Entity Central Index Key	0000016099
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Feb. 13, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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Note 12 - Earnings Per Share

3 Months Ended

Feb. 13, 2013

Earnings Per Share [Text Block]

Note 12. Earnings Per Share

Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding and unvested restricted stock for the reporting period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income per share, the basic weighted average number of shares is increased by the dilutive effect of stock options determined using the treasury stock method. Stock options excluded from the computation of net income per share for the two quarters ended February 13, 2013 include approximately 75,000 shares with exercise prices exceeding market prices and approximately 33,000 shares whose inclusion would also be antidilutive.

The components of basic and diluted net income per share are as follows:

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
	(In thousands except per share data)
Numerator:
Income from continuing operations	$	603		$	1,357		$	819		$	1,927
Loss from discontinued operations		(400	)		(269	)		(487	)		(636	)
Net income	$	203		$	1,088		$	332		$	1,291
Denominator:
Denominator for basic earnings per share – weighted-average shares		28,614			28,365			28,500			28,329
Effect of potentially dilutive securities:
Employee and non-employee stock options		211			45			198			30
Denominator for earnings per share assuming dilution		28,825			28,410			28,698			28,359
Income per share from continuing operations:
Basic	$	0.02		$	0.05		$	0.03		$	0.07
Assuming dilution	$	0.02		$	0.05		$	0.03		$	0.07
Loss per share from discontinued operations:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Assuming dilution	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Net income per share:
Basic	$	0.01		$	0.04		$	0.01		$	0.05
Assuming dilution	$	0.01		$	0.04		$	0.01		$	0.05

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Consolidated Statements of Operations (unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012
SALES:
Restaurant sales	$ 82,152	$ 73,434	$ 156,120	$ 146,592
Culinary contract services	3,667	4,197	7,508	8,733
Franchise revenue	1,540	1,653	3,062	3,135
Vending revenue	119	131	241	278
TOTAL SALES	87,478	79,415	166,931	158,738
COSTS AND EXPENSES:
Cost of food	23,763	20,758	44,606	41,263
Payroll and related costs	28,817	25,400	54,346	50,487
Other operating expenses	19,593	16,147	37,434	33,660
Opening costs	261	42	467	77
Cost of culinary contract services	3,342	4,137	6,808	8,243
Depreciation and amortization	4,312	4,114	8,430	8,210
General and administrative expenses	7,616	6,737	14,994	13,547
Provision for asset impairments, net			90	175
Net loss (gain) on disposition of property and equipment	(1,321)	72	(1,563)	81
Total costs and expenses	86,383	77,407	165,612	155,743
INCOME FROM OPERATIONS	1,095	2,008	1,319	2,995
Interest income	2	2	4	3
Interest expense	(214)	(215)	(389)	(494)
Other income, net	207	165	451	351
Income before income taxes and discontinued operations	1,090	1,960	1,385	2,855
Provision for income taxes	487	603	566	928
Income from continuing operations	603	1,357	819	1,927
Loss from discontinued operations, net of income taxes	(400)	(269)	(487)	(636)
NET INCOME	$ 203	$ 1,088	$ 332	$ 1,291
Income per share from continuing operations:
Basic (in Dollars per share)	$ 0.02	$ 0.05	$ 0.03	$ 0.07
Assuming dilution (in Dollars per share)	$ 0.02	$ 0.05	$ 0.03	$ 0.07
Loss per share from discontinued operations:
Basic (in Dollars per share)	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Assuming dilution (in Dollars per share)	$ (0.01)	$ (0.01)	$ (0.02)	$ (0.02)
Net income per share:
Basic (in Dollars per share)	$ 0.01	$ 0.04	$ 0.01	$ 0.05
Assuming dilution (in Dollars per share)	$ 0.01	$ 0.04	$ 0.01	$ 0.05
Weighted average shares outstanding:
Basic (in Shares)	28,614	28,365	28,500	28,329
Assuming dilution (in Shares)	28,825	28,410	28,698	28,359

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Note 6 - Income Taxes

3 Months Ended

Feb. 13, 2013

Income Tax Disclosure [Text Block]

Note 6. Income Taxes

No cash payments of estimated federal income taxes were made during the quarter ended February 13, 2013.

Deferred tax assets and liabilities are recorded based on differences between the financial reporting basis and the tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent future taxable income is expected to be sufficient to utilize those assets prior to their expiration.

Management believes that adequate provisions for income taxes have been reflected in the financial statements and is not aware of any significant exposure items that have not been reflected in the financial statements. Amounts considered probable of settlement within one year have been included in the accrued expenses and other liabilities in the accompanying consolidated balance sheet.

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Note 5 - Fair Value Measurements

3 Months Ended

Feb. 13, 2013

Fair Value Disclosures [Text Block]

Note 5. Fair Value Measurements

GAAP establishes a framework for using fair value to measure assets and liabilities, and expands disclosure about fair value measurements. Fair value measurements guidance applies whenever other statements require or permit asset or liabilities to be measured at fair value.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include:

= Level 1: Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

= Level 2: Defined as pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.

= Level 3: Defined as pricing inputs that are unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

Non-recurring fair value measurements related to impaired property and equipment consisted of the following:

			Fair Value Measurement Using
	Two Quarters Ended February 13, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to company-owned restaurant assets	$	20	$	—	$	—	$	20	$	(90	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,634	$	—	$	—	$	1,634	$	(506	)

			Fair Value Measurement Using
	Two Quarters Ended February 15, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to Culinary Contract Services	$	57	$	—	$	—	$	57	$	(175	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,875	$	—	$	—	$	1,875	$	(510	)

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Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Tables)

3 Months Ended

Feb. 13, 2013

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Provision for asset impairments	$	90		$	175
Net (gain) loss on disposition of property and equipment		(1,563	)		81
	$	(1,473	)	$	256
Effect on EPS:
Basic	$	(0.05	)	$	0.01
Assuming dilution	$	(0.05	)	$	0.01

	February 13, 2013		August 29, 2012
	(in thousands)
Prepaid expenses	$	33	$	42
Assets related to discontinued operations—current	$	33	$	42
Property and equipment	$	5,663	$	4,812
Other assets		4		8
Assets related to discontinued operations—non-current	$	5,667	$	4,844
Deferred income taxes	$	297	$	297
Accrued expenses and other liabilities		71		145
Liabilities related to discontinued operations—current	$	368	$	442
Other liabilities	$	84	$	134
Deferred income taxes		218		999
Liabilities related to discontinued operations—non-current	$	302	$	1,133

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except discontinued locations)
Sales	$	—		$	—
Pretax income (loss)		(767	)		(901	)
Income tax benefit (expense) on discontinued operations		280			265
Net income (loss) on discontinued operations		(487	)		(636	)
Discontinued locations closed during the period		—			—

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Impairments	$	(506	)	$	(510	)
Gains (losses)		—			(12	)
Net gains (losses)	$	(506	)		(522	)
Other		19			(114	)
Discontinued operations	$	(487	)	$	(636	)
Effect on EPS from discontinued operations—basic	$	(0.02	)	$	(0.02	)

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Note 3 - Acquisition (Tables)

3 Months Ended

Feb. 13, 2013

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Property and equipment	$	6,220
License agreement and trade name		2,347
Accounts receivable		108
Inventories		548
Cash and cash equivalents		58
Other current assets		329
Liquor licenses and permits		169
Goodwill		143
Favorable leases		2,211
Accrued payables		(570	)
Accrued payroll and benefits		(405	)
Unredeemed gift card liability		(185	)
Personal property and real estate tax liability		(170	)
Other liabilities		(97	)
Net cash paid for acquisition	$	10,706

Business Acquisition, Pro Forma Information [Table Text Block]

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(Unaudited)			(Unaudited)
	(In thousands)
Pro forma total sales	$	178,542		$	179,695
Pro forma income from continuing operations		316			1,273
Pro forma net income (loss)		(171	)		637
Pro forma income from continuing operations per share
Basic		0.01			0.04
Diluted		0.01			0.04
Pro forma net income (loss) per share
Basic		(0.01	)		0.02
Diluted		(0.01	)		0.02

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Note 9 - Commitments and Contingencies

3 Months Ended

Feb. 13, 2013

Commitments and Contingencies Disclosure [Text Block]

Note 9. Commitments and Contingencies

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements, except for operating leases.

Pending Claims

From time to time, the Company is subject to various private lawsuits, administrative proceedings and claims that arise in the ordinary course of its business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to issues common to the restaurant industry. The Company currently believes that the final disposition of these types of lawsuits, proceedings and claims will not have a material adverse effect on the Company’s financial position, results of operations or liquidity. It is possible, however, that the Company’s future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, proceedings or claims.

Construction Activity

From time to time, the Company enters into non-cancelable contracts for the construction of its new restaurants. This construction activity exposes the Company to the risks inherent in new construction, including but not limited to rising material prices, labor shortages, delays in getting required permits and inspections, adverse weather conditions, and injuries sustained by workers. The Company had no non-cancelable contracts as of February 13, 2013.

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Note 7 - Property and Equipment, Intangible Assets and Goodwill

3 Months Ended

Feb. 13, 2013

Property Equipment Intangible Assets And Goodwill Disclosure [Text Block]

Note 7. Property and Equipment, Intangible Assets and Goodwill

The cost, net of impairment, and accumulated depreciation of property and equipment at February 13, 2013 and August 29, 2012, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:

	February 13, 2013			August 29, 2012			Estimated Useful Lives (years)
	(In thousands)
Land	$	61,098		$	59,159			—
Restaurant equipment and furnishings		116,590			109,039		1	to	15
Buildings		170,640			167,346		20	to	33
Leasehold and leasehold improvements		34,824			32,913		Lesser of lease term or estimated useful life
Office furniture and equipment		7,276			7,030		3	to	10
Construction in progress		712			3,890			—
		391,140			379,377
Less accumulated depreciation and amortization		(210,950	)		(205,744	)
Property and equipment, net	$	180,190		$	173,633
Intangible assets, net	$	28,507		$	26,679			21
Goodwill	$	338		$	195			—

Intangible assets, net consist of the Fuddruckers trade name and franchise agreements and will be amortized. The Company believes the Fuddruckers’ brand name has an expected accounting life of 21 years from the date of acquisition based on the expected use of its assets and the restaurant environment in which it is being used. The trade name represents a respected brand with customer loyalty and the Company intends to cultivate and protect the use of the trade name. The franchise agreements, after considering renewal periods, have an estimated accounting life of 21 years from the date of acquisition and will be amortized over this period of time. The Company recorded $3.6 million of accumulated amortization expense as of February 13, 2013 and $2.9 million of accumulated amortization expense as of August 29, 2012.

Intangible assets, net also includes the license agreement and trade name related to Cheeseburger in Paradise. These assets have an expected accounting life of 15 years from the date of acquisition December 6, 2012. The Company recorded amortization expense of $32 thousand in the quarter ended February 13, 2013.

The Company recorded an intangible asset for goodwill in the amount of $0.2 million related to the acquisition of substantially all of the assets of Fuddruckers. The Company also recorded an intangible asset for goodwill in the amount of $0.1 million related to the acquisition of the membership units of Paradise Restaurant Group, LLC. Goodwill is considered to have an indefinite useful life and is not amortized. Goodwill was $0.3 million as of February 13, 2013 and $0.2 million as of August 29, 2012 and relates to our Company-owned restaurants reportable segment.

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Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale

3 Months Ended

Feb. 13, 2013

Impairment Of Long Lived Assets Discontinued Operations And Property Held For Sale Disclosure [Text Block]

Note 8. Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale

Impairment of Long-Lived Assets and Store Closings

The Company periodically evaluates long-lived assets held for use and held for sale whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. The Company analyzes historical cash flows of operating locations and compares results of poorer performing locations to more profitable locations. The Company also analyzes lease terms, condition of the assets and related need for capital expenditures or repairs, as well as construction activity and the economic and market conditions in the surrounding area.

For assets held for use, the Company estimates future cash flows using assumptions based on possible outcomes of the areas analyzed. If the undiscounted future cash flows are less than the carrying value of the location’s assets, the Company records an impairment loss based on an estimate of discounted cash flows. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management’s subjective judgments. Assumptions and estimates used include operating results, changes in working capital, discount rate, growth rate, anticipated net proceeds from disposition of the property and if applicable, lease terms. The span of time for which future cash flows are estimated is often lengthy, increasing the sensitivity to assumptions made. The time span could be 20 to 25 years for newer properties, but only 5 to 10 years for older properties. Depending on the assumptions and estimates used, the estimated future cash flows projected in the evaluation of long-lived assets can vary within a wide range of outcomes. The Company considers the likelihood of possible outcomes in determining the best estimate of future cash flows. The measurement for such an impairment loss is then based on the fair value of the asset as determined by discounted cash flows.

The Company recognized the following impairment charges to income from operations:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Provision for asset impairments	$	90		$	175
Net (gain) loss on disposition of property and equipment		(1,563	)		81
	$	(1,473	)	$	256
Effect on EPS:
Basic	$	(0.05	)	$	0.01
Assuming dilution	$	(0.05	)	$	0.01

The impairment charge for the two quarters ended February 13, 2013 is related to an operating Fuddruckers restaurant at a leased location.

The impairment charge for the two quarters ended February 15, 2012 is related to a culinary contract services location.

The net gain for the two quarters ended February 13, 2013 includes the gain on disposal of assets at a Koo Koo Roo leased location and proceeds from the eminent domain disposition of part of a parking lot at a Luby’s location net of asset retirements.

Discontinued Operations

As a result of the first quarter fiscal year 2010 adoption of the Company’s Cash Flow Improvement and Capital Redeployment Plan (“the Plan”), the Company reclassified 23 operating stores and one previously closed location to discontinued operations. The results of operations, assets and liabilities for all units included in the Plan have been reclassified to discontinued operations in the statement of operations and balance sheets for all periods presented. 

The following table sets forth the assets and liabilities for all discontinued operations:

	February 13, 2013		August 29, 2012
	(in thousands)
Prepaid expenses	$	33	$	42
Assets related to discontinued operations—current	$	33	$	42
Property and equipment	$	5,663	$	4,812
Other assets		4		8
Assets related to discontinued operations—non-current	$	5,667	$	4,844
Deferred income taxes	$	297	$	297
Accrued expenses and other liabilities		71		145
Liabilities related to discontinued operations—current	$	368	$	442
Other liabilities	$	84	$	134
Deferred income taxes		218		999
Liabilities related to discontinued operations—non-current	$	302	$	1,133

As of August 29, 2012, the Company had 7 properties classified as discontinued operations assets. The carrying value of the owned properties was $4.8 million. The carrying values of two ground leases were previously impaired to zero. As of February 13, 2013, the Company had 8 properties classified as discontinued operations assets. The carrying value of the owned properties was $5.7 million. The carrying values of two ground leases were previously impaired to zero.

One property was reclassified as a discontinued operations asset in the quarter ended February 13, 2013.

The Company is actively marketing all of these properties for lease or sale and the Company’s results of discontinued operations will be affected by the disposal of properties related to discontinued operations to the extent proceeds from the sales exceed or are less than net book value.

The following table sets forth the sales and pretax income (losses) reported for discontinued operations:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except discontinued locations)
Sales	$	—		$	—
Pretax income (loss)		(767	)		(901	)
Income tax benefit (expense) on discontinued operations		280			265
Net income (loss) on discontinued operations		(487	)		(636	)
Discontinued locations closed during the period		—			—

The following table summarizes discontinued operations for the first quarters of fiscal years 2013 and 2012:

	Two Quarters ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except per share data)
Impairments	$	(506	)	$	(510	)
Gains (losses)		—			(12	)
Net gains (losses)	$	(506	)		(522	)
Other		19			(114	)
Discontinued operations	$	(487	)	$	(636	)
Effect on EPS from discontinued operations—basic	$	(0.02	)	$	(0.02	)

Within discontinued operations, the Company offsets gains from applicable property disposals against total impairments. The amounts in the table described as “Other” include employment termination and shut-down costs, as well as operating losses through each restaurant’s closing date and carrying costs until the locations are finally disposed of.

The impairment charges included above relate to properties closed and designated for immediate disposal. The assets of these individual operating units have been written down to their net realizable values. In turn, the related properties have either been sold or are being actively marketed for sale. All dispositions are expected to be completed within one to three years. Within discontinued operations, the Company also recorded the related fiscal year-to-date net operating results, employee terminations and carrying costs of the closed units.

Property Held for Sale

The Company periodically reviews long-lived assets against its plans to retain or ultimately dispose of properties. If the Company decides to dispose of a property, it will be moved to property held for sale and actively marketed. The Company analyzes market conditions each reporting period and records additional impairments due to declines in market values of like assets. The fair value of the property is determined by observable inputs such as appraisals and prices of comparable properties in active markets for assets like the Company’s. Gains are not recognized until the properties are sold.

Property held for sale includes unimproved land, closed restaurant properties and related equipment for locations not classified as discontinued operations. The specific assets are valued at the lower of net depreciable value or net realizable value.

At February 13, 2013 and August 29, 2012, the Company had one owned property recorded at approximately $0.6 million in property held for sale. The Company is actively marketing the location currently classified as property held for sale.

The Company’s results of continuing operations will be affected to the extent proceeds from sales exceed or are less than net book value.

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Note 10 - Related Parties

3 Months Ended

Feb. 13, 2013

Related Party Transactions Disclosure [Text Block]

Note 10. Related Parties

Affiliate Services

Christopher J. Pappas, the Company’s Chief Executive Officer, and Harris J. Pappas, director and former Chief Operating Officer of the Company, own two restaurant entities (the “Pappas entities”) that from time to time may provide services to the Company and its subsidiaries, as detailed in the Amended and Restated Master Sales Agreement effective November 16, 2011 among the Company and the Pappas entities.

Under the terms of the Amended and Restated Master Sales Agreement, the Pappas entities may provide specialized (customized) equipment fabrication and basic equipment maintenance, including stainless steel stoves, shelving, rolling carts, and chef tables. The total costs under the Amended and Restated Master Sales Agreement of custom-fabricated and refurbished equipment in the two quarters ended February 13, 2013 and February 15, 2012 were zero and $63,600, respectively. Services provided under this agreement are subject to review and approval by the Finance and Audit Committee of the Company’s Board of Directors.

Operating Leases

In the third quarter of fiscal year 2004, Messrs. Pappas became partners in a limited partnership which purchased a retail strip center in Houston, Texas. Messrs. Pappas collectively own a 50% limited partnership interest and a 50% general partnership interest in the limited partnership. A third party company manages the center. One of the Company’s restaurants has rented and occupied space in that center since July 1969.

On November 22, 2006, the Company executed a new lease agreement in connection with the replacement and relocation of the existing restaurant with a new prototype restaurant in the retail strip center described above. The new restaurant opened in July 2008 and the new lease agreement provides for a primary term of approximately twelve years with two subsequent five-year options. The new lease also gives the landlord an option to buy out the agreement on or after the calendar year 2015 by paying the unamortized cost of the Company’s improvements. The Company is currently obligated to pay rent of $20.00 per square foot ($22.00 per square foot beginning January 2014) plus maintenance, taxes, and insurance during the primary term of the lease. Thereafter, the lease provides for increases in rent at set intervals. The new lease agreement was approved by the Finance and Audit Committee and full Board of Directors. The Company made payments of $144,000 and $133,000 in the two quarters ended February 13, 2013 and February 15, 2012, respectively.

On November 14, 2012, the Company executed an additional lease agreement in connection with a proposed future restaurant concept in the retail strip center described above. This lease agreement provides for a primary term of approximately eight years with no renewal options. The Company is currently obligated to pay rent of $35.00 per square foot plus maintenance, taxes, and insurance during the primary term of the lease. Thereafter, the lease provides for an increase in rent at a set interval. This lease agreement was approved by the Finance and Audit Committee of the Board of Directors. The Company has not made rental payments on this space in the two quarters ended February 13, 2013. Affiliated rents paid for this restaurant property lease represented 2.2% and 2.3% of total rents for continuing operations for the two quarters ended February 13, 2013 and February 15, 2012, respectively.

	Two Quarters Ended
	February 13, 2013			February 15, 2012
	(24 weeks)			(24 weeks)
	(In thousands, except percentages)
AFFILIATED COSTS INCURRED:
General and administrative expenses – professional and other costs	$	25		$	25
Capital expenditures – custom-fabricated and refurbished equipment and furnishings		—			63
Other operating expenses and opening costs, including property leases		145			108
Total	$	170		$	196
RELATIVE TOTAL COMPANY COSTS:
General and administrative expenses	$	14,994		$	13,547
Capital expenditures		11,435			9,247
Other operating expenses and opening costs		37,901			33,737
Total	$	64,330		$	56,531
AFFILIATED COSTS INCURRED AS A PERCENTAGE OF RELATIVE TOTAL COMPANY COSTS		0.26	%		0.35	%

Board of Directors

Pursuant to the terms of a Purchase Agreement dated March 9, 2001, entered into by and among the Company, Christopher J. Pappas and Harris J. Pappas, the Company agreed to submit three persons designated by Christopher J. Pappas and Harris J. Pappas as nominees for election at the 2002 Annual Meeting of Shareholders. Messrs. Pappas designated themselves and Frank Markantonis as their nominees for directors, all of whom were subsequently elected. Christopher J. Pappas and Harris J. Pappas are brothers and Frank Markantonis is an attorney whose principal client is Pappas Restaurants, Inc., an entity owned by Harris J. Pappas and Christopher J. Pappas.

Christopher J. Pappas is a member of the Advisory Board of Amegy Bank, National Association, which is a lender and syndication agent under the Company’s 2009 Revolving Credit Facility.

Key Management Personnel

On August 28, 2012, the Company entered into a seventh amendment to the Employment Agreement dated November 9, 2005 and as amended on October 29, 2007, November 19, 2008, November 19, 2009, April 15, 2010, September 2, 2010 and April 20, 2011 between the Company and Christopher J. Pappas to extend the termination date thereof to December 31, 2013. Mr. Pappas continues to devote his primary time and business efforts to the Company while maintaining his role at Pappas Restaurants, Inc.

On January 25, 2013, the Board of Directors of the Company approved the renewal of a consultant agreement with Ernest Pekmezaris, the Company’s former Chief Financial Officer. Under the agreement, Mr. Pekmezaris will continue to furnish to the Company advisory and consulting services related to finance and accounting matters and other related consulting services. The agreement expires on July 31, 2013. Mr. Pekmezaris is also the Treasurer of Pappas Restaurants, Inc. Compensation for the services provided by Mr. Pekmezaris to Pappas Restaurants, Inc. is paid entirely by that entity.

Peter Tropoli, the Company’s Chief Operating Officer, and formerly the Company’s Senior Vice President, Administration, General Counsel and Secretary, is an attorney and stepson of Frank Markantonis, who is a director of the Company.

Paulette Gerukos, Vice President of Human Resources of the Company, is the sister-in-law of Harris J. Pappas, who is a director of the Company.

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Note 7 - Property and Equipment, Intangible Assets and Goodwill (Detail) (USD $)	3 Months Ended		0 Months Ended			3 Months Ended
	Feb. 13, 2013	Aug. 29, 2012	Dec. 06, 2012 Cheeseburger in Paradise [Member]	Feb. 13, 2013 Fuddruckers (Member)	Feb. 13, 2013 Paradise Restaurants Group, LLC [Member]	Feb. 13, 2013 Trade Names [Member]	Feb. 13, 2013 Franchise [Member]
Finite-Lived Intangible Asset, Useful Life	15 years		15 years			21 years	21 years
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets	$ 3,600,000
Finite-Lived Intangible Assets, Accumulated Amortization	32,000	2,900,000
Business Acquisition, Purchase Price Allocation, Goodwill Amount				200,000	100,000
Goodwill	$ 338,000	$ 195,000

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Note 5 - Fair Value Measurements (Tables)

6 Months Ended

Feb. 13, 2013

Fair Value Measurements, Nonrecurring [Table Text Block]

			Fair Value Measurement Using
	Two Quarters Ended February 13, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to company-owned restaurant assets	$	20	$	—	$	—	$	20	$	(90	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,634	$	—	$	—	$	1,634	$	(506	)

			Fair Value Measurement Using
	Two Quarters Ended February 15, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments
			(In thousands)
Continuing Operations
Property and equipment related to Culinary Contract Services	$	57	$	—	$	—	$	57	$	(175	)
Discontinued Operations
Property and equipment related to corporate assets	$	1,875	$	—	$	—	$	1,875	$	(510	)

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Note 12 - Earnings Per Share (Tables)

3 Months Ended

Feb. 13, 2013

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
	(In thousands except per share data)
Numerator:
Income from continuing operations	$	603		$	1,357		$	819		$	1,927
Loss from discontinued operations		(400	)		(269	)		(487	)		(636	)
Net income	$	203		$	1,088		$	332		$	1,291
Denominator:
Denominator for basic earnings per share – weighted-average shares		28,614			28,365			28,500			28,329
Effect of potentially dilutive securities:
Employee and non-employee stock options		211			45			198			30
Denominator for earnings per share assuming dilution		28,825			28,410			28,698			28,359
Income per share from continuing operations:
Basic	$	0.02		$	0.05		$	0.03		$	0.07
Assuming dilution	$	0.02		$	0.05		$	0.03		$	0.07
Loss per share from discontinued operations:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Assuming dilution	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)
Net income per share:
Basic	$	0.01		$	0.04		$	0.01		$	0.05
Assuming dilution	$	0.01		$	0.04		$	0.01		$	0.05

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Note 10 - Related Parties (Detail) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended			1 Months Ended	3 Months Ended
	Nov. 14, 2012	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012	Nov. 16, 2011	Nov. 22, 2006 New Lease Agreement Leases [Member]	Feb. 13, 2013 New Lease Agreement [Member]	Feb. 15, 2012 New Lease Agreement [Member]	Feb. 13, 2013 2014 New Lease Agreement [Member]	Feb. 13, 2013 Limitied Partnership - Ownership percentage (Member)	Feb. 13, 2013 Affiliated Cost Incurred [Member]
Number of Related Party Entities					2
Total Capital Expenditures		$ 63,600	$ 0.022	$ 0.023							$ 0
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest										50.00%
Option To Extend Lease Years						2
Optional Lease Term						5 years
Lease Annual Rent Payments Per Square Foot (in Dollars per Item)	35.00						20.00		22.00
Lease Annual Rent Payments							$ 144,000	$ 133,000
Lease Term	8 years

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Consolidated Statement of Shareholders’ Equity (unaudited) (USD $) In Thousands, except Share data	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
BALANCE AT AUGUST 29, 2012 at Aug. 31, 2012	$ 9,176	$ (4,775)	$ 24,532	$ 143,726	$ 172,659
BALANCE AT AUGUST 29, 2012 (in Shares) at Aug. 31, 2012	28,677	(500)
Net income				332	332
Share-based compensation expense	4		24		28
Share-based compensation expense	14
Tax benefit from stock options			37		37
Common stock issued under employee benefit plans	9		120		129
Common stock issued under employee benefit plans (in Shares)	28
Common stock issued under nonemployee benefit plans	5		366		371
Common stock issued under nonemployee benefit plans (in Shares)	14
BALANCE AT FEBRUARY 13, 2013 at Feb. 13, 2013	$ 9,194	$ (4,775)	$ 25,079	$ 144,058	$ 173,556
BALANCE AT FEBRUARY 13, 2013 (in Shares) at Feb. 13, 2013	28,733	(500)

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Note 4 - Reportable Segments

3 Months Ended

Feb. 13, 2013

Segment Reporting Disclosure [Text Block]

Note 4. Reportable Segments

The Company has three reportable segments: Company-owned restaurants, franchise operations and Culinary Contract Services (“CCS”).

Company-owned restaurants

Company-owned restaurants consists of several brands which are aggregated into one reportable segment because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the nature of the regulatory environment and store level profit margin are similar. The chief operating decision maker analyzes Company-owned restaurants at store level profit which is revenue less cost of food, payroll and related costs and other operating expenses. The primary brands are Luby’s Cafeteria, Fuddruckers and Cheeseburger in Paradise, with a couple of non-core restaurant locations under other brand names (i.e., Koo Koo Roo California Bistro and Bob Luby’s Seafood). All company-owned restaurants are casual dining restaurants. Each restaurant is an operating segment because operating results and cash flow can be determined for each restaurant.

The total number of Company-owned restaurants was 183 at February 13, 2013 and 154 at August 29, 2012.

Culinary Contract Services

CCS branded as Luby’s Culinary Contract Services, consists of a business line servicing healthcare, higher education and corporate dining clients. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service and retail dining. CCS had contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, behavioral hospitals, business and industry clients, and higher education institutions. CCS has the unique ability to deliver quality services that include facility design and procurement as well as nutrition and branded food services to our clients. The costs of culinary contract services on the Consolidated Statements of Operations includes all food, payroll and related costs and other operating expenses related to CCS sales.

The total number of CCS contracts was 18 at February 13, 2013 and August 29, 2012.

Franchising

We offer franchises for only the Fuddruckers brand. Franchises are sold in markets where expansion is deemed advantageous to the development of the Fuddruckers concept and system of restaurants. Initial franchise agreements have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area, usually a four-mile radius surrounding the franchised restaurant.

Franchisees bear all direct costs involved in the development, construction and operation of their restaurants. In exchange for a franchise fee, the Company provides franchise assistance in the following areas: site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, assistance by a Fuddruckers “opening team” at the time a franchised restaurant opens, and operations and accounting guidelines set forth in various policies and procedures manuals.

All franchisees are required to operate their restaurants in accordance with Fuddruckers standards and specifications, including controls over menu items, food quality and preparation. The Company requires the successful completion of its training program by a minimum of three managers for each franchised restaurant. In addition, franchised restaurants are evaluated regularly by the Company for compliance with franchise agreements, including standards and specifications through the use of periodic, unannounced, on-site inspections and standards evaluation reports.

The number of franchised restaurants was 119 at February 13, 2013 and 125 at August 29, 2012.

The table below shows financial information as required by ASC 280 for segment reporting. ASC 280 requires depreciation and amortization be disclosed for each reportable segment, even if not used by the chief operating decision maker. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, tax refunds receivable, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets, prepaid expenses, intangible assets and goodwill.

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
Sales:
Company-owned restaurants	$	82,271		$	73,565		$	156,361		$	146,870
Culinary contract services		3,667			4,197			7,508			8,733
Franchising		1,540			1,653			3,062			3,135
Total		87,478			79,415			166,931			158,738
Segment level profit:
Company-owned restaurants	$	10,098		$	11,260		$	19,975		$	21,460
Culinary contract services		325			60			700			490
Franchising		1,540			1,653			3,062			3,135
Total		11,963			12,973			23,737			25,085
Depreciation and amortization:
Company-owned restaurants	$	3,853		$	3,679		$	7,382		$	7,328
Culinary contract services		106			108			214			221
Franchising		177			177			354			354
Corporate		176			150			480			(307	)
Total		4,312			4,114			8,430			8,210
Capital expenditures:
Company-owned restaurants	$	6,402		$	4,648		$	11,222		$	9,132
Culinary contract services		40			43			41			76
Franchising		—			—			—			—
Corporate		119			36			172			39
Total	$	6,561		$	4,727		$	11,435		$	9,247
Income before income taxes and discontinues operations:
Segment level profit	$	11,963		$	12,973		$	23,737		$	25,085
Opening costs		(261	)		(42	)		(467	)		(77	)
Depreciation and amortization		(4,312	)		(4,114	)		(8,430	)		(8,210	)
General and administrative expenses		(7,616	)		(6,737	)		(14,994	)		(13,547	)
Provision for asset impairments, net		—			—			(90	)		(175	)
Net gain (loss) on disposition of property and equipment		1,321			(72	)		1,563			(81	)
Interest income		2			2			4			3
Interest expense		(214	)		(215	)		(389	)		(494	)
Other income, net		207			165			451			351
Total	$	1,090		$	1,960		$	1,385		$	2,855

	February 13, 2013		August 29, 2012
Total assets:
Company-owned restaurants	$	195,071	$	182,287
Culinary contract services		3,557		3,774
Franchising		14,701		15,352
Corporate		30,613		29,604
Total	$	243,942	$	231,017

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Note 3 - Acquisition (Detail) (USD $)	3 Months Ended		6 Months Ended			0 Months Ended		1 Months Ended	3 Months Ended		0 Months Ended
	Feb. 13, 2013	Feb. 15, 2012	Feb. 13, 2013	Feb. 15, 2012	Aug. 29, 2012	Dec. 06, 2012 Paradise Restaurant Group, LLC (Member)	Dec. 06, 2012 Cheeseburger in Paradise [Member]	Dec. 31, 2012 Cheeseburger in Paradise [Member]	Feb. 13, 2013 Cheeseburger in Paradise [Member]	Feb. 13, 2013 Acquired Lease portfolio (Member)	Dec. 06, 2012 allowable period for adjustments to Fair Value (Member)
Percent of Membership Units						100.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price							$ 10,700,000
Business Acquisition, Purchase Price Allocation, Liabilities Assumed							1,400,000
General and Administrative Expense	7,616,000	6,737,000	14,994,000	13,547,000			200,000
Number of Years											one
Royalty Fee, Percent								2.50%
Finite-Lived Intangible Asset, Useful Life	15 years
Segment Reporting Depreciation And Amortization	156,000								32,000
Other Assets	3,980,000		3,980,000		1,943,000					2,200,000
Additional Rent Expense	28,000		28,000
Goodwill	338,000		338,000		195,000					100,000
Sales Revenue, Services, Net	87,478,000	79,415,000	166,931,000	158,738,000					7,700,000
Interest Income, Operating	$ 2,000	$ 2,000	$ 4,000	$ 3,000					$ 100,000

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Note 8 - Impairment of Long-Lived Assets, Discontinued Operations and Property Held for Sale (Detail) - Assets and liabilities for all discontinued operations: (USD $) In Thousands, unless otherwise specified	Feb. 13, 2013	Aug. 29, 2012
Prepaid expenses	$ 33	$ 42
Assets related to discontinued operations—current	33	42
Property and equipment	5,663	4,812
Other assets	4	8
Assets related to discontinued operations—non-current	5,667	4,844
Deferred income taxes	297	297
Accrued expenses and other liabilities	71	145
Liabilities related to discontinued operations—current	368	442
Other liabilities	84	134
Deferred income taxes	218	999
Liabilities related to discontinued operations—non-current	$ 302	$ 1,133

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Note 4 - Reportable Segments (Tables)

3 Months Ended

Feb. 13, 2013

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Quarter Ended						Two Quarters Ended
	February 13, 2013			February 15, 2012			February 13, 2013			February 15, 2012
	(12 weeks)			(12 weeks)			(24 weeks)			(24 weeks)
Sales:
Company-owned restaurants	$	82,271		$	73,565		$	156,361		$	146,870
Culinary contract services		3,667			4,197			7,508			8,733
Franchising		1,540			1,653			3,062			3,135
Total		87,478			79,415			166,931			158,738
Segment level profit:
Company-owned restaurants	$	10,098		$	11,260		$	19,975		$	21,460
Culinary contract services		325			60			700			490
Franchising		1,540			1,653			3,062			3,135
Total		11,963			12,973			23,737			25,085
Depreciation and amortization:
Company-owned restaurants	$	3,853		$	3,679		$	7,382		$	7,328
Culinary contract services		106			108			214			221
Franchising		177			177			354			354
Corporate		176			150			480			(307	)
Total		4,312			4,114			8,430			8,210
Capital expenditures:
Company-owned restaurants	$	6,402		$	4,648		$	11,222		$	9,132
Culinary contract services		40			43			41			76
Franchising		—			—			—			—
Corporate		119			36			172			39
Total	$	6,561		$	4,727		$	11,435		$	9,247
Income before income taxes and discontinues operations:
Segment level profit	$	11,963		$	12,973		$	23,737		$	25,085
Opening costs		(261	)		(42	)		(467	)		(77	)
Depreciation and amortization		(4,312	)		(4,114	)		(8,430	)		(8,210	)
General and administrative expenses		(7,616	)		(6,737	)		(14,994	)		(13,547	)
Provision for asset impairments, net		—			—			(90	)		(175	)
Net gain (loss) on disposition of property and equipment		1,321			(72	)		1,563			(81	)
Interest income		2			2			4			3
Interest expense		(214	)		(215	)		(389	)		(494	)
Other income, net		207			165			451			351
Total	$	1,090		$	1,960		$	1,385		$	2,855

assets (Member)

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	February 13, 2013		August 29, 2012
Total assets:
Company-owned restaurants	$	195,071	$	182,287
Culinary contract services		3,557		3,774
Franchising		14,701		15,352
Corporate		30,613		29,604
Total	$	243,942	$	231,017