Investor Presentation March 23, 2015

Investor Presentation
March 23, 2015
Safe Harbor Statement
Statements made in this presentation and on the conference call,
including statements made during the question-and-answer session,
regarding Luby’s future financial and operating results, as well as
plans for expansion of the Company's business, including the
expected financial performance of the Company's prototype
restaurants and future openings, are forward-looking statements.
These statements include risks and uncertainties, including but not
limited to, general business conditions, the impact of competition,
success of operating initiatives, changes in the constant cost and
supply of food and labor and seasonality of the Company's business,
taxes, inflation, governmental regulations, and availability of
credit, as well as other risks and uncertainties disclosed in the
Company's periodic reports on Forms 10-K and Forms 10-Q.
2
Forward Looking Statements
Some of the statements in this presentation constitute “forward looking statements” about Luby’s, Inc. and it’s subsidiaries
that involve risks, uncertainties and assumptions, including without limitation, our discussion and analysis of our financial
condition and results of operations. These forward looking statements generally can be identified by use of phrases such as
“believe,”“plan,”“expect,” “anticipate,”“intend,”“forecast” or other similar words or phrases in conjunction with a
discussion of future operating or financial performance. Descriptions of our objectives, goals, targets, plans, strategies,
costs, anticipated capital expenditures, expected cost savings, costs of our store rebranding initiatives, expansion of our
foodservice offerings, potential acquisitions, and potential new store openings and dealer locations, are also forward
looking statements. These statements represent our present expectations or beliefs concerning future events and are not
guarantees. Such statements speak only as of the date they are made, and we do not undertake any obligation to update
any forward looking statement.
Acceptance of the Management Presentation further constitutes your acknowledgement and agreement that neither
Luby’s, Inc. (“Luby’s”) nor any of its directors, employees, controlling persons, agent or advisers (collectively, the
“Representatives”) makes any express or implied representation or warranty as to the accuracy or completeness of the
information contained herein and shall have no liability to the recipient or its Representatives relating to or arising from the
use of the information contained herein or any omissions there from.
We caution that forward looking statements involve risks and uncertainties and are qualified by important
factors that could cause actual events or results to differ materially from those expressed or implied in any such forward
looking statements. For a discussion of these factors and other risks and uncertainties, please refer to our filings with the
Securities and Exchange Commission (“the SEC”). We intend for the forward looking statements to be covered by the Safe
Harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995, and are
including this statement for purpose of complying with these Safe Harbor provisions.
Page 3
Non-GAAP Measures
We evaluate segment performance based on store level profit, which excludes general and administrative
expense, depreciation expense, opening costs, net interest expense and other non-operating income and
expense. The Company has three reportable segments: Company-owned restaurants, Franchise operations
and Culinary contract services
This Non-GAAP measure, store level profit or segment level profit, is defined for each business segment below,
is not intended to replace or provide for more prominence over any GAAP measurement. We do believe the
presentation of store level profit or segment level profit is useful to investors in understanding our restaurant level
operational performance compared to previous periods and to other competitors.
•Company-owned restaurant segment: Restaurant sales less Cost of food less Payroll and related costs less
Other operating expenses less Occupancy costs without allocation of G&A, depreciation, interest or other
expenses
•Franchise operations segment: Franchise revenue without allocation of G&A, depreciation, interest or other
expenses
•Culinary contract services segment: Culinary contract service sales less cost of culinary contract services
without allocation of G&A, depreciation, interest or other expenses
We evaluate total company performance on EBITDA. This Non-GAAP measure is defined as income from
continuing operations before interest, income taxes, depreciation and amortization. It is also before asset
impairment charges and gains and losses on dispositions. EBITDA does not include net other income. EBITDA
was presented because it is frequently used by security analysts, investors, and other interested parties, in
addition to and not in lieu of Generally Accepted Accounting Principles (GAAP). EBITDA is not a measurement
of financial performance under GAAP and should not be considered an alternative to income from continuing
operations. A reconciliation of income from continuing operations to EBITDA for each period presented is
provided.
4
Appealing Brands
Luby’s Culinary
Services launched in 2006
with a mission to redefine the
food contract service industry.
To be the best, not necessarily
the biggest, is the daily mantra
across this growing brand that
is designed to serve the
corporate, hospital and higher
education market.
Luby’s Cafeterias
Fuddruckers has been
was founded in 1947 in San
Antonio, TX with a mission to
be the most successful
cafeteria company in America.
By serving customers
convenient, great-tasting,
home-style meals at an
excellent value in a friendly
environment.
delivering uncompromised
quality and in-your-face
freshness while inspiring guests
to build their own World’s
Greatest Hamburger ® since
1980. Fuddruckers Hamburgers
is known for its lively
atmosphere, premium-cut,
grilled-to-order beef, scratchmade buns and market fresh
produce.
Cheeseburger in
Paradise offers a laid back
beach party atmosphere where
guests can leave the stress of
everyday life behind and enjoy
an ice cold beverage. A place
where the food is awesome,
the cocktails are hand crafted
and you can enjoy a one-of-akind Kicked Back Vibe.
5
Proven Management Team
 Chris Pappas
– President, CEO, Director of Luby’s Inc. since March 2001
– More than 38 years of experience in restaurant industry
 Peter Tropoli
– COO since 2011; General Counsel and SVP Administration since 2001
– 17 Years in restaurant industry
 Scott Gray, CPA
– SVP and CFO since 2007; Finance and audit roles at Luby’s since 2001
– 18 Years in restaurant industry
 Todd Coutee
– SVP Operations since 2011
– 24 Years in restaurant industry, including 12 years in the contract services
6
Investment Highlights
 Expanding our footprint & Growing the Company
– Opening new restaurants - locations with tested prototypes achieving higher
sales leading to higher returns
– Growing our national brand Fuddruckers franchise store count
– Expanding Culinary Contract Services business
 Deploying capital for growth
– Achieving new restaurant pipeline growth objectives
– Remodeling existing restaurant portfolio to achieve better customer sales
– Converting/relocating existing restaurants to maximize future returns and growth
 Executing plan to turnaround acquired brand
 Working to expand margins at same-store locations
7
Luby’s, Inc. - Well Established & Growing

Trade on NYSE since 1982

Approximately $400M in Annual Revenues

System-wide sales $540M (including Fuddruckers Franchises)

FY2015 Q2 Trailing Annual EBITDA of $16M

Operate primarily 95 Luby’s Cafeterias, 72 Fuddruckers restaurants, and 8
Cheeseburger in Paradise Restaurants

Operated Luby’s Cafeterias for 66+ years, Fuddruckers for 4+ Years, and
Cheeseburger in Paradise almost 2 years

Support 107 Fuddruckers franchises across the United States (including
Puerto Rico), Canada, Mexico, Dominican Republic, Italy, Panama, Chile

Providing Contract Culinary Services at 24 locations
8
MILESTONES
 July 2007 - Announce new 50 over 5 years unit growth plan
 Aug 2007 - First new Luby’s Prototype; Mar 08, store 2, July 08, store 3 (relocation),
Aug 08, store 4
 Nov 2008 - Market crash (stop growth); Oct 2009 - Cash Flow Improvement and
Redeployment Plan Announced (closed 23 units)
 July 2010 - Acquired (110+) Fuddruckers franchise and selected (59+) company units;
 FY 2011 - Began acquiring pipeline locations for Luby’s and Fuddruckers brands for
future new unit growth, began sale of domestic and international Fuddruckers
franchise units; Relo new Luby’s Sept 2011
 Aug 2012 - Design and open first Combo (Multi Brand) property in Pearland TX
 Dec 2012 - Acquired 23 leased locations for existing concept turn-around or sites to
convert to Fuddruckers
 FY 2014 - Converted 3 Cheeseburger in Paradise units to Fuddruckers, Closed 15
locations, began planning for more conversions to Fuddruckers
 FY 2014 – 15 store openings, including 12 new restaurant locations
 FY2015 – Opened three Fuddruckers (one converted from Cheeseburger in Paradise)
and opened first Combo location outside Texas: Jackson, MS
 See slide #20 and recent news releases at www.lubysinc.com/investors
9
Total Revenue
Total Revenue
450
400
350
($MM))
300
250
200
349
350
2011
2012
384
394
398
2013
2014
LTM FY2015 Q2
150
245
100
50
2010
Confidential
10
10
10
EBITDA
EBITDA = Income from Continuing Operations + Income Taxes + Depreciation + Interest Expense + Net Loss/(Gain) on Dispositions + Asset
Impairments + Non-cash compensation expense + Share based compensation expense - Other Income
Confidential
11
11
11
Investing to Grow
Confidential
12
12
Capital Allocation Strategy
 Balance between capital allocation approaches:
– “Capital intensive” investments with new restaurants
– “Low/no capital requirement” investments with Culinary Contract
Service and Fuddruckers Franchise Business segments
 Develop restaurant prototypes for growth, primarily
through combo units where we build a Luby’s and
Fuddruckers side-by-side
 Reinvest in existing restaurants to sustain and grow cash
flow
 Maintain acceptable debt levels
13
Real Estate Strategy
 50%/50% Owned/Leased Properties
 Owning locations offers greater flexibility when time to relocate/exit
as capital can be “recycled” into another location and building.
Represents a long term asset for shareholder value and site
flexibility.
 Match own versus lease decision to the property purpose
– Combo locations require larger parcel of land where “buy” economics are
typically superior
– Cafeteria locations also require larger parcel of land and a customized building
where owning is typically, but not always, preferred
– Fuddruckers units offer more flexibility in configurations and size and are often
more suitable in leased locations
14
FY2015 Restaurant Counts
15
Store Level Profit &
Restaurant Unit Economics
Combo
(Luby's/Fudds)
Low
Total Investment
$
5,800 $
Average Unit Volume
EBITDAR
EBITDAR Margin
$
$
3,600 $
700 $
19%
Store Level Profit
Store level Profit %
$
540 $
15%
Return on Investment
12%
Combo
(Luby's/Fudds)
High1
Luby's
Cafeterias 2
5,800 $
Fuddruckers3
4,500 $
1,900
$
$
3,200 $
700 $
22%
1,300
250
19%
740+ $
16%+
588 $
18%
150
12%
16%
13%
4,500+
900+
20%+
16%+
Comp to Company Average AUV
Comp to Company Average EBITDAR
2,500
475
1,500
350
Total Investment includes Purchase of Land (or Capitalization of Rent) + Building and Equipment + Opening Costs
EBITDAR = Store Level Profit before Occupancy Costs (Occupancy Costs as defined in SEC Form 10-K)
AUV = Annual Unit (Sales) Volume
Notes:
1
Combos: High Range based on first year actual results of prototype combo unit ($5.3M sales, $1.1M EBITDAR)
2
Cafeterias: AUV and EBITDAR based on FY2013 results from five units opened since 2008
3
Fuddruckers: AUV and EBITDAR based on FY2013 results at 2 units (second year of operations)
Combo brand growth focus:
 opportunity for sales and profit upside
16
Sites for future development
(As of March 23, 2015)
 Luby’s Cafeteria & Fuddruckers Hamburgers Combo
= 4 Restaurants


Victoria, TX
Flowood, MS
 1 Additional Dual Restaurant Location
(2 Restaurants)

Dallas, TX (The Colony) – Configuration to be determined
 1 Fuddruckers Hamburgers

Northbrook, IL (Leased location)
* All properties currently owned or under lease
17
Fuddruckers – Franchise Pipeline
(As of March 23, 2015)
Location/Country Count
3/22/2015
Opened
Remaining
in Pipeline
Omaha
2
Dominican Republic
3
Orange County
10
South Florida
7
North Dakota
5
Maine
1
Panama/Aruba
10
Chile
10
Italy/Poland/Switzerland
10
Columbia
10
Central Florida
8
1
2
2
1
1
2
-
2
2
10
5
3
1
9
9
8
10
8
Total
9
67
76
Timeline of openings per development agreements:
FY2015:
5
FY2016:
11
FY2017:
9
Pipeline reflects collection of $1,185k of Franchisee Fees to be earned
as stores open from the Pipeline.
18
Current Initiatives
 Cheeseburger


Conversions to Fuddruckers: targeting 9 total with 4 completed to date
Existing units: new menu innovation and further guest engagement
 Fuddruckers



¼ pound burger at a value price
Speed of Service Measurement / Kitchen Displays
Enhanced Restaurant Guest Service Program
 Remodel Program at all brands


Encourages increased guest frequency
Enhances guest experience
 Luby’s Cafeteria

Everyday value and service
19
Recent Developments
 Currently have 2 restaurants in process of conversion from
Cheeseburger in Paradise to Fuddruckers
 Currently have 1 restaurant being readied for opening
(conversion from Koo Koo Roo brand to Fuddruckers)
 Closed 15 Cheeseburger locations, 6 for disposal, 9 for
conversion to Fuddruckers (4 completed to date)
 Opened first Combo location outside of Texas on Feb 19th, 2015
–
Located in Jackson, Mississippi
–
Broke our sales records for an opening period
20
FINANCIAL HIGHLIGHTS
21
Pre-Tax Income
22
STORE-LEVEL PROFIT
FY15 Q2
23
Trailing Four Quarters Results by Segment
Store Level Profit (without CIP) of 12.2% for trailing 4 quarters
vs. 14.3% in prior trailing 4 quarters
24
Total Company Same Store Sales
25
FY15Q2 RESTAURANT SALES YOY
26
LUBY’S CAFETERIA
HISTORICAL SAME STORE SALES
27
FUDDRUCKERS BRAND
SAME-STORE SALES
28
FY15Q2 Sales Volumes by Unit ($000's)
29
FY14Q2 Sales Volumes by Unit ($000's)
30
Balance Sheet
31
FY2015 Capital investments
($MM)
FY13
Total
Land
$
FY14
Total
FY15
Q1
$ 12.2
14.7
16.9
1.3
0.8
2.1
Remodels/Conversions
5.4
6.5
0.5
1.1
1.6
Recurring/Maint.
6.4
10.6
1.8
2.3
4.1
$ 31.3
$ 46.2
7.4
$ 11.0
Total
32
$
-
3.6
$
$
3.2
FY15
YTD
4.8
New Construction
$
FY15
Q2
$
3.2
Guidance for FY2015
(As of March 23, 2015)
 Same-store sales growth at our core Luby’s and Fuddruckers brands
 Improve store level profit at new restaurants and enhance profitabilty
at our core brand legacy locations; lower general and administrative
expenses
 FY2015 Capital Spend of $20 to $22 million
 FY2015 Restaurant Openings:
 3 new Company-owned restaurants:
 One new stand-alone Fuddruckers
 One Combo unit (2 restaurants)
 At least 7 new Fuddruckers franchise locations, some in the U.S. and
some internationally
33
Reconciliation of Store Level Profit to
Income from Continuing Operations
($000s)
Quarter Ended
February 11,
February 12,
2015
2014
(12 weeks)
(12 weeks)
Two Quarters Ended
February 11,
February 12,
2015
2014
(24 weeks)
(24 weeks)
Store level profit
9,519
9,399
16,812
18,484
Plus:
Sales from vending revenue
Sales from culinary contract services
Sales from franchise revenue
120
3,771
1,605
115
3,979
1,545
244
8,369
3,186
227
8,249
3,060
683
3,331
4,772
8,074
218
(1,377)
(1)
568
(86)
62
(1,229)
682
3,496
4,473
8,118
1,329
16
(1)
292
(260)
(1,526)
(1,581)
1,608
7,282
9,830
15,777
218
(1,087)
(2)
1,024
(273)
(1,721)
(4,045)
1,031
7,169
8,792
16,184
1,539
67
(3)
545
(556)
(2,474)
(2,274)
Less:
Opening Costs
Cost of culinary contract services
Depreciation and amortization
General and administrative expenses
Provision for asset impairments
Net loss on disposition of property and equipment Interest
Interest Income
Interest Expense
Other Income, net
Provision for income taxes
Loss from continuing operations
34
GAAP Reconciliation ($000s)
35