Summary of LUBYS INC - Yahoo! Finance

Results of Operations and Financial Condition, Costs Associated with Exit or Disposal A

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 15, 2009, the Company released a press release announcing the results of the fourth quarter ended August 26, 2009. A copy of that release is attached as Exhibit 99.1. The information and exhibit furnished under Item 2.02 of this Current Report on Form 8-K shall not be deemed to be "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 2.05 Costs Associated with Exit or Disposal Activities.

On October 15, 2009, the Company announced that it has initiated a Cash Flow Improvement and Capital Redeployment Plan (the "Plan") focused on improving cash flow from operations, which includes the closure of 25 underperforming stores by the end of the first quarter of fiscal year 2010. The Board of Directors of the Company approved the Plan on October 12, 2009. Five stores have already closed in the first quarter of fiscal 2010, one store closed in the fourth quarter of fiscal 2009 and an additional 19 stores are expected to close by early November 2009. All but three of the affected stores are located on sites owned by the Company. The Company anticipates that the sites owned by the Company will be sold in an orderly manner over the next 36 months. After these closures, the Company will operate 95 restaurant locations and 15 culinary contract service locations and have 28 owned properties held for sale. In addition, the Company anticipates that approximately five to ten additional locations may be added to the Plan and closed within the next 24 months depending on future cash flow performance and lease terminations.

In conjunction with the 25 store closures, the Company incurred a non-cash, pre-tax impairment charge in the fourth quarter of 2009 of $19.0 million related to properties held for sale, properties held for future use and properties in use. The Company also estimates that it will incur approximately $4.0 to $4.6 million in cash expenditures during fiscal year 2010 related to the Plan, which include: (1) severance-related payments and benefits of approximately $1.9 million, (2) payments of remaining accounts payable and other liabilities of approximately $2.1 million, and (3) other store closure-related costs of approximately $0.6 million.

The estimated costs and charges above are preliminary and may vary materially based on various factors, including timing in execution of the Plan and changes in management's assumptions and projections.

Information regarding the Plan is included in the October 15, 2009 press release attached hereto as Exhibit 99.1.