Luby’s F1Q09 Earnings Call Notes

General Outlook

-Luby’s reported a loss of $.08 per diluted share during F1Q09. While restaurant sales declined 7.9%, culinary service business growth was up 74% yoy, and is exceeding expectations off of a low base.

-The company reiterates that 2009 will be a difficult operating environment and that it plans to open 1 or 2 new restaraunts in the coming year.

-Same-store sales were down 3.8% , although part of this impact is a result of the calendar year shift and Hurricane Ike.

-The company expects CAPEX in 2009 of $12M-$17M.

-Lower input prices were not factored into the company’s outlook, although Luby’s management acknowledges that 2H09 may see lower input prices which would result expanding margins.

-Labor prices are up due to increases in minimum wages affecting more of the company’s employees.

Culinary Services Business

-Luby’s culinary service business looks strong and management believes that sales will be 20%-30% higher yoy.

-Luby’s now operates its culinary service business at 11 locations and this segment remains a future driver of earnings.

-The 74% increase suggests that management is being somewhat conservative in its culinary service guidance, and management says that it is being conservative here due to the business being fairly new. However, a lot of the increase can be attributed to an increase in traffic at Bailor Hospital and the launch of 1 new contract. Sales in culinary services were flat sequentially.

-Management also said that they are in discussions with potential clients “all the time”. The company is looking to leverage the existing infrastructure it has put in place in this business and add new clients.