FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C.   20549
(Mark One)

[X]              ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended August 31, 19951996
                                             OR

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from _________________ to ______________________

Commission file number:  1-8308

                           LUBY'S CAFETERIAS, INC.                     
______________________________________________________________________________ 
                                                      
             (Exact name of registrant as specified in its charter)

       Delaware                                     74-1335253                
_________________________                ___________________________________
 (State of Incorporation)                (I.R.S. Employer Identification No.)

2211 Northeast Loop 410
Post Office Box 33069
San Antonio, Texas  78265-3069                  Area Code 210 654-9000
_______________________________________      _______________________________
(Address of principal executive office)      (Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:
                                                     Name of exchange on
        Title of Class                                which registered   
        ______________                              ______________________

Common Stock ($.32 par value)                       New York Stock Exchange

Common Stock Purchase Rights                        New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
                                                            ____

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 and (2) has been subject to such filing
requirements for the past 90 days.  Yes  X   No    
                                        ___      ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X][ ]

The aggregate market value of the shares of Common Stock of the registrant
held by non-affiliates of the registrant as of November 15, 1995,1996, was
approximately $484,097,000$476,448,000 (based upon the assumption that directors and
officers are the only affiliates).

As of November 15, 1995,1996, there were 23,334,50323,271,600 shares of the registrant's
Common Stock outstanding, exclusive of 4,068,5644,131,467 treasury shares.

Portions of the following documents are incorporated by reference into the
designated parts of this Form 10-K:  annual report to shareholders for the
fiscal year ended August 31, 19951996 (in Part II) and proxy statement relating to
19961997 annual meeting of shareholders (in Part III).

Item 1.  Business.

     Luby's Cafeterias, Inc. (the "Company") operates 190221 cafeterias under the
name "Luby's" located in suburban shopping areas in Arizona, Arkansas,
Florida, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma,
Tennessee, and Texas.  Of the 190221 cafeterias operated by the Company, 110128 are
at locations owned by the Company and 8093 are on leased premises.

     Luby's Cafeterias, Inc. was originally incorporated in Texas in 1959 and
was reincorporated in Delaware on December 31, 1991.  The Company's executive
offices are at 2211 Northeast Loop 410, P. O. Box 33069, San Antonio, Texas
78265-3069.

Marketing

     The Company's product strategy is to provide a wide variety of freshly-
prepared foods in an attractive and informal environment.  The Company's
research has shown that its products appeal to a broad range of value-oriented
consumers with particular success among senior citizens, families with
children, shoppers, and business people looking for a quick, healthy meal at a
reasonable price.

     Prior to 1991 the Company relied primarily on customers' word-of-mouth
recommendations and community relations activities to promote its business,
spending approximately .5% of sales annually on these efforts.  In 1991 the
Company began developing a new marketing program.  Based on favorable
results of radio and television advertising tests, the marketing budget
increased to approximately two percent of sales for fiscal 1995.1996.  The Company 
intends to continue expending the majority of the marketing budget on
television and radio advertising, as well as supporting the increased
local marketing activities of the individual cafeterias.

Operations

     The Company's operations combine the food quality and atmosphere of a
good restaurant with the simplicity and visual food selection of cafeteria
service.  Food is prepared in small quantities throughout serving hours, and
frequent quality checks are made.  Each cafeteria offers a broad and varied
menu and normally serves 12 to 14 entrees, 12 to 14 vegetable dishes, 22 to 25
salads, and 18 to 20 desserts.

     The Company's cafeterias cater primarily to shoppers and office or store
personnel for lunch and to families for dinner.  The Company's cafeterias are
open for lunch and dinner seven days a week.  All of the cafeterias sell
take-out orders, and most of them have separate food to go entrances.  Take-
out orders accounted for approximately ten percent of sales in fiscal 1995.1996.

     Each cafeteria is operated as a separate unit under the control of a
manager who has responsibility for day-to-day operations, including food
purchasing, menu planning, and personnel employment and supervision.  Each
cafeteria manager is compensated on the basis of his or her cafeteria's
profits.  Management believes that granting broad authority to its cafeteria
managers and compensating them on the basis of their performance are
significant factors in the profitability of its cafeterias.  Of the 190221
cafeteria managers employed by the Company, 156166 have been with the Company for
more than ten years.  Currently,Generally, an individual is employed for a period of
seven to ten years before he or she is considered qualified to become a
cafeteria manager.

     Each cafeteria cooks or prepares substantially all of the food served,
including breads and pastries.  The cafeterias prepare food from the same
recipes, with minor variations to suit local tastes, although menus are not
uniform in all of the Company's cafeterias on any particular day.  Menus are
prepared to reflect local and seasonal food preferences and to take advantage
of any special food purchasing opportunities.  Substantially all of the food
served by each cafeteria is purchased from local suppliers.  None of the
cafeterias are dependent upon any one supplier, and the Company believes that
alternative sources of supply are readily available. 

     Quality control teams, each consisting of experienced cooks and a
supervisor, help to maintain uniform standards of food preparation.  The teams
primarily assist in the training of new personnel during the opening of new
cafeterias.  The teams also visit the cafeterias periodically and work with
the regular staffs to check adherence to the Company's recipes, train
personnel in new techniques, and evaluate procedures for possible use
throughout the Company.

     The Company conducts a training program comprised of both on-the-job
training and classroom instruction in its training facilities in
San Antonio.  The training program is approximately fourthree months in duration.
Management personnel receive one week of classroom instruction and spend
the remaining time on practical training in operating cafeterias.  In order to
draw management trainees from regional talent pools, the Company has set
up satellite training schools in several key cafeterias to make on-the-job
training more accessible on a local level.

     As of August 31, 1995,1996, the Company had approximately 10,95011,680 employees,
consisting of 10,24310,890 nonmanagement cafeteria personnel; 585659 cafeteria
managers, associate managers, and assistant managers; and 122131 executive,
administrative, and clerical personnel.  Employee relations are considered to
be good, and the Company has never had a strike or work stoppage.

Expansion
 
     During the fiscal year ended August 31, 1995,1996, the Company relocated one
cafeteria in Beaumont,Port Arthur, Texas, closed one cafeteria in El Paso, Texas, and
opened 11 new cafeterias in North Little
Rock, Arkansas; Mission, Kansas; Hattiesburg, Mississippi; Kansas City,
Missouri; Nashville and Oak Ridge, Tennessee; and Fort Worth, Houston, Plano,
San Antonio, and Weslaco, Texas.  Since August 31, 1995, the Company has
opened four18 new cafeterias in Surprise, Arizona; Wichita, Kansas; Nashville,
Tennessee; and Arlington, Corpus Christi, Dallas, Fort Worth, Houston,
Kerrville, McKinney, San Antonio, and Tomball, Texas; for a net increase of
17 units for the fiscal year.

     On September 16, 1996, the Company acquired from Triangle FoodService
Corporation (formerly Wyatt Cafeterias, Inc.) 20 cafeteria locations, 
consisting of 12 owned sites and 8 leased locations.  On October 2, 1996,
the Company opened 15 of those units as "Luby's" cafeterias, located in
Hot Springs, Arkansas; Joplin, Missouri; and Abilene, Dallas, Del Rio,
Houston, Irving, Jacinto City, Laredo, McAllen, Mesquite, and Rosenberg,
Texas.  SinceIn addition, since August 31, 1995,1996, the Company has closedrelocated a
cafeteria located on leased premises in El Paso,Longview, Texas, and opened two new cafeterias in College Station
and San Antonio, Texas.

     EightTen new cafeterias are under construction in Arlington, Dallas,
Fort Worth, Houston,Peoria and Kerrville,Phoenix,
Arizona; Little Rock, Arkansas; St. Petersburg, Florida; Albuquerque, New
Mexico; Memphis, Tennessee; and Mesquite and San Antonio, Texas.  During 
fiscal 19961997, the Company expects to open 16 to 18in excess of 30 new cafeterias.cafeterias,
including the reopened units acquired from Triangle FoodService Corporation.

     The Company continually evaluates prospective new cafeteria sites and
typically has several sites for new cafeterias under active consideration at
any given time.  The rate at which new cafeterias are opened is governed by
the Company's policy of controlled growth, which takes into account the
resources and capabilities of all departments involved, including real estate,
construction, equipment, and operations.  It has been the Company's experience
that new cafeterias generally become profitable within three months after
opening.

     The costs of opening new cafeterias vary widely, depending on whether the
facilities are to be leased or owned, and if owned, on site acquisition and
construction costs.  The Company estimates that in recent years it has cost
$2,300,000 to $2,600,000 to construct, equip, and furnish a new cafeteria in a
freestanding building under normal conditions, including land acquisition
costs.  The approximate cost to finish out, equip, and furnish a new cafeteria
in a leased facility has ranged from $1,100,000$1,200,000 to $1,300,000.  During 
fiscal 1994 and 1995 a$1,400,000.  A new building
prototype has beenis now being utilized to reduce the initial investment in a typical
new location.

Waterstreet Joint Venture

     In January 1996 the Company announced a joint venture agreement with 
Waterstreet, Inc., a seafood restaurant company operating in Corpus Christi,
Fort Worth, and San Antonio, Texas.  The Company plans to build three "Water
Street Seafood Company" restaurants during fiscal 1997.  They will be leased
to the joint venture and operated by Waterstreet, Inc.  One joint venture
restaurant was opened in San Antonio in August 1996.

Service Marks

     The Company uses several service marks, including "Luby's,""Luby's" and believes
that such marks are of material importance to its business.  The Company has
federal service mark registrations for several of such marks.  

     The Company is not the sole user of the name "Luby's" in the cafeteria
business.  One cafeteria using the name "Luby's" and one cafeteria using the
name "Pat Luby's" are being operated in two different cities in Texas by two
different owners not affiliated with the Company.  The Company's legal counsel
is of the opinion that the Company has the paramount right to use the name
"Luby's" as a service mark in the cafeteria business in the United States and
that such other users can be precluded from expanding their use of the name as
a service mark. 

Competition and Other Factors

     The food service business is highly competitive, and there are numerous
restaurants and other food service operations in each of the markets where the
Company operates.  The quality of the food served, in relation to its price,
and public reputation are important factors in food service competition. 
Neither the Company nor any of its competitors has a significant share of the
total market in any area in which the Company competes.  The Company believes
that its principal competitors are conventional restaurants and other
cafeterias.  

     The Company's facilities and food products are subject to state and local
health and sanitation laws.  In addition, the Company's operations are subject
to federal, state, and local regulations with respect to environmental and
safety matters, including regulations concerning air and water pollution and
regulations under the Americans with Disabilities Act and the Federal
Occupational Safety and Health Act.  Such laws and regulations, in the
Company's opinion, have not materially affected its operations, although
compliance has resulted in some increased costs.

Item 2.  Properties.

     The Company owns the underlying land and buildings in which 110128 of its
cafeterias are located.  In addition, the Company owns several cafeteria sites
being held for future development.

     Of the 190221 cafeterias operated by the Company, 8093 are at locations held
under leases, including 4851 in regional shopping malls.  Most of the leases
provide for a combination of fixed-dollar and percentage rentals.  Most of the
leases require the lessee to pay additional amounts related to property taxes,
hazard insurance, and maintenance of common areas. 

     See Notes 4 and 7 of Notes to Financial Statements for information
concerning the Company's lease rental expenses, lease commitments, and
construction commitments.  Of the 8093 cafeteria leases, the current terms of 2026
expire from 19961997 to 2000, 212001, 25 from 20012002 to 2005,2006, and 3942 thereafter. 
Sixty-twoSeventy-six of the leases can be extended beyond their current terms at the
Company's option.

     A typical cafeteria seats 250 to 300 personsguests and contains 9,000 to 10,500
square feet of floor space.  A new building prototype is now being utilized
for new store openings in the latter part of fiscal 1997 which contains
approximately 8,000 square feet and seats 220 guests.  Most of the cafeterias
are located in modern buildings and all are in good condition. It is the
Company's policy to refurbish and modernize cafeterias as necessary to
maintain their appearance and utility.  The equipment in all cafeterias is
well maintained.  Several of the Company's cafeteria properties contain excess
building space which is rented to tenants unaffiliated with the Company.

     The 190221 cafeterias operated by the Company are located as follows
(locations are in Texas except as otherwise indicated):

                            Number                                Number 
Location                   of Units      Location                 of Units

Abilene                       12          Lubbock                       1
Albuquerque, New Mexico       2          Lufkin                        1
Amarillo                      2          McAllen                       23
Arlington                     23          McKinney                      1
Austin                        6          Memphis, Tennessee            3
Austin                        6Bartlesville, Oklahoma        1          Mesa, Arizona                 2
Bartlesville, OklahomaBaytown                       1          Mesquite                      1
Baytown2 
Beaumont                      1          Midland                       1
BeaumontBedford                       1          Mission, Kansas               1
BedfordBellmead                      1          Mission, Texas                1
Bellmead                      1          Morristown, Tennessee                1
Bossier City, Louisiana       1          Murfreesboro,Morristown, Tennessee         1
Broken Arrow, Oklahoma        1          Murfreesboro, Tennessee       1
Brownsville                   2          Muskogee, Oklahoma            1
BrownsvilleBryan/College Station         2          Nashville, Tennessee          2
Bryan/College Station3
Carrollton                    1          New Braunfels                 1
CarrolltonChandler, Arizona             1          North Little Rock, Arkansas   1
Chandler, ArizonaClearwater, Florida           1          Oak Ridge, Tennessee          1
Clearwater, FloridaConroe                        1          Odessa                        1
Conroe                        1          OklahomaCorpus Christi                4          Okalahoma City, Oklahoma      3
Corpus Christi                3Dallas                       13          Pasadena                      1
Dallas                        8Deer Park                     1          Pharr                         1
Deer ParkDel Rio                       1          Phoenix, Arizona              4
Denton                        1          Pinellas Park, Florida        1
DeSoto                        1          Plano                         2
Duncanville                   1          Port Arthur                   2
El Paso                       5          Richardson                    1
Fayetteville, Arkansas        1          Round RockRosenberg                     1
Fort Smith, Arkansas          1          San AngeloRound Rock                    1
Fort Worth                    79          San Antonio                  19Angelo                    1
Franklin, Tennessee           1          San Antonio                  21
Galveston                     1          San Marcos                    1
GalvestonGarland                       1          Santa Fe, New Mexico          1
GarlandGlendale, Arizona             1          Scottsdale, Arizona           1
Glendale, ArizonaGrand Prairie                 1          Sebring, Florida              1
Grand PrairieGrapevine                     1          Shawnee, Oklahoma             1
Grapevine                     1          Sherman                       1
Harlingen                     2          Shreveport, LouisianaSherman                       1 
Hattiesburg, Mississippi      1          Shreveport, Louisiana         1
Hot Springs, Arkansas         1          Stafford                      1
Houston                      2731          Sugar Land                    1
Humble                        1          Surprise, Arizona             1
Independence, Missouri        1          Tampa, Florida                2
Irving/Las Colinas            2          Temple                        1
TempleJacinto City                  1          Texarkana                     1
Joplin, Missouri              1          The Woodlands                 1
Kansas City, Missouri         2          Texarkana                     1
Killeen                       1          The Woodlands                 1
Kingwood                      1          Tomball                       1
Lake JacksonKerrville                     1          Topeka, Kansas                1
LaredoKilleen                       1          Tucson, Arizona               2
Kingwood                      1          Tulsa, Oklahoma               2
Lake Jackson                  1          Tyler                         2
Laredo                        2          Victoria                      1
Las Cruces, New Mexico        1          Tulsa, Oklahoma               2Waco                          1
Leavenworth, Kansas           1          Tyler                         2Weslaco                       1
Lewisville                    1          Victoria                      1Wichita, Kansas               2
Little Rock, Arkansas         1
Waco                          1
Longview                      1          Weslaco                      1

     The Company's corporate offices are located in a building owned by the
Company containing approximately 40,000 square feet of office space.  The
Company utilizes the space for its executive offices and related facilities.

     The Company maintains public liability insurance and property damage
insurance on its properties in amounts which management believes to be
adequate.

Item 3.  Legal Proceedings.

     There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company is a
party, or of which any of its property is the subject.  There are no material
legal proceedings to which any director, officer, or affiliate of the Company,
or any associate of any such director or officer, is a party, or has a
material interest, adverse to the Company.

Item 4.  Submission of Matters to a Vote of Security Holders.

     No matter was submitted during the fourth quarter of the fiscal year
ended August 31, 1995,1996, to a vote of security holders of the Company.

Item 4A.  Executive Officers of the Registrant.

     Certain information is set forth below concerning the executive officers
of the Company, each of whom has been elected to serve until the 19961997 annual
meeting of shareholders and until his successor is duly elected and qualified.
 
                          Served as
                           Officer       Positions with Company and
Name                        Since    Principal Occupation Last Five Years  Age
________________________  ________   ____________________________________  ___

John B. Lahourcade         1969Ralph Erben                1978       Chairman of the Board (since Jan.    65
                                      1996), Chief Executive Officer,
                                      Chairman of    71 the Executive 
                                      Committee, and Director; Chief Executive Officer
                                      1984-1990.
                                
Ralph Erben                1978President
                                      prior to Jan. 1996.
 
John E. Curtis, Jr.        1982       President, Chief ExecutiveOperating Officer   6449
                                      (since 1990)Jan. 1996), Chief Financial
                                      Officer, member of the Executive
                                      Committee, and Director; Chief Operating Officer 1988-1990.
 
John E. Curtis, Jr.        1982       Executive Vice President, Chief       48
                                      Financial Officer, and Director    
                                      (since 1991); Senior
                                      Vice President and Chief Financial Officer 1988- 
                                      1995;1988-1995; Treasurer
                                      1990-1995.

William E. Robson          1982       Executive Vice President-Operations   5455
                                      and Director (since 1993); Senior
                                      Vice President-Operations 1992-1995;
                                      Senior Vice President-Operations  
                                      Development prior to 1992.

Clyde C. Hays III          1985       Senior Vice President-Operations      45
                                      (since 44
                                      1993)Jan. 1996); Vice President-
                                      Operations 1993-1995; Area Vice
                                      President prior to 1993.

Jimmy W. Woliver           1984       Senior Vice President-Operations.            58President-Operations      59
                                      (since Jan. 1996); Vice President-
                                      Operations prior to 1996.

Ronald E. Riemenschneider  1990       Vice President and Treasurer (since   3738
                                      1995); Controller 1990-1995.    

James R. Hale              1980       Secretary; Member of law firm of      6667
                                      Cauthorn Hale Hornberger Fuller
                                      Sheehan & Becker Incorporated
                                      since 1992; member of law firm of
                                      Cox & Smith Incorporated prior
                                      to 1992.

                                  PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder
          Matters.

Stock Prices and Dividends

     The Company's common stock is traded on the New York Stock Exchange under
the symbol LUB.  The following table sets forth, for the last two fiscal
years, the high and low sales prices on the New York Stock Exchange from the
consolidated transaction reporting system and the per share cash dividends
declared on the common stock.

      Fiscal Quarters                              Quarterly
      Ended                High        Low      Cash Dividend
      _________________   ______      ______    ______________

      November 30, 1993   $25.75      $20.88         $.15
      February 28, 1994   23.88       21.50          .15
      May 31, 1994         24.63       22.50          .15
      August 31, 1994      24.13       22.13          .165
      November 30, 1994    24.63       22.00          .165$24.63      $22.00         $.165
      February 28, 1995    23.25       22.00          .165
      May 31, 1995         22.88       18.50          .165
      August 31, 1995      21.25       19.25          .18
      November 30, 1995    22.88       19.88          .18
      February 29, 1996    23.00       20.13          .18
      May 31, 1996         25.25       20.38          .18
      August 31, 1996      25.25       22.50          .20
      
    As of September 8, 1995,13, 1996, there were approximately 4,6044,142 record holders of
the Company's common stock.

Item 6.  Selected Financial Data.


Five Year Summary of Operations
(Thousands of dollars except per share data)
Years ended August 31,
1996 1995 1994 1993 1992 1991 ________ ________ ________ ________ ________ Sales $450,128 $419,024 $390,692 $367,757 $346,359 $328,236 Costs and expenses: Cost of food 110,008 103,611 98,223 92,957 86,507 83,273 Payroll and related costs 124,333 113,952 104,543 99,233 95,963 90,612 Occupancy and other operating expenses 132,595 123,907 113,546 104,958 99,590 90,746 General and administrative expenses 20,217 18,672 15,330 15,967 15,101 16,348 ________ ________ ________ ________ ________ 387,153 360,142 331,642 313,115 297,161 280,979 Income from operations 62,975 58,882 59,050 54,642 49,198 47,257 Other income (expenses): Interest expense (2,130) (1,749) - - - - Interest and other 1,697 1,805 1,385 1,574 1,319 1,591 ________ ________ ________ ________ ________ (433) 56 1,385 1,574 1,319 1,591 ________ ________ ________ ________ ________ Income before income taxes and accounting change 62,542 58,938 60,435 56,216 50,517 48,848 Provision for income taxes 23,334 21,923 22,663 20,687 17,924 16,502 ________ ________ ________ ________ ________ Income before accounting change 39,208 37,015 37,772 35,529 32,593 32,346 Cumulative effect of change in accounting for income taxes - - 1,563 - - - ________ ________ ________ ________ ________ Net income (a) $ 39,208 $ 37,015 $ 39,335 $ 35,529 $ 32,593 $ 32,346 Income per share before accounting change $ 1.66 $ 1.55 $ 1.45 $ 1.31 $ 1.19 $ 1.18 Net income per common share $ 1.66 $ 1.55 $ 1.51 $ 1.31 $ 1.19 $ 1.18 Cash dividend declared per common share $ .74 $ .68 $ .62 $ .56 $ .51 $ .47 At year-end: Total assets $335,290 $312,380 $289,668 $302,099 $276,319 $260,704 Long-term debt $ 41,000 $ - $ - $ - $ 1,384 $ 1,851 Number of cafeterias 204 187 176 168 162 150 (a) Net income in 1994 includes the cumulative effect of change in accounting for income taxes of $1,563, or $.06 per share.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources During the last three years the Company has financedfunded all capital expenditures from internally-generated funds, cash equivalents, short-term borrowings, and short-term borrowings.long-term debt. Capital expenditures for fiscal 19951996 were $37,246,000,$48,529,000, a 25%30% increase from fiscal 1994.1995. This increase in capital expenditures resulted in part from the opening of 1119 new cafeterias in fiscal 19951996, including one relocation, as compared to eight12 in fiscal 1994. The1995, which also included one relocation. In addition, the Company also purchased teneight sites as land held for future use compared to fiveten land sites purchased during fiscal 1994.1995. Capital commitments budgeted for fiscal 1997 include the purchase of 20 cafeteria locations from Triangle FoodService Corporation, formerly Wyatt Cafeterias, Inc., for approximately $14 million in cash. On October 2, 1996, 15 of these locations opened as "Luby's." Capital expenditures during fiscal 1997 to repair and refurbish these units will range from $2 million to $3 million. In addition to these locations, plans for fiscal 1997 include the opening of 16 to 18approximately 15 new cafeterias: 12 to 13seven on sites owned by the Company, two on land held under long-term ground leases, and two to threesix in regional shopping malls. In addition, antwo existing unit on leased premisesunits will be relocatedrelocated: one from a neighborhood shopping center to a site owned by the Company. At the end of September 1995 the Company closedregional mall, and one of its El Paso cafeterias which had been in operation since 1951. The age and condition of the downtown location, in additionfrom a leased premise to the impact of the Mexican peso devaluation, were the key factors in this decision.a freestanding cafeteria on land held under a long-term ground lease. Therefore, a net increase of 15 to 17approximately 30 cafeterias is anticipated in fiscal 1996.1997. As part of a joint venture agreement with Waterstreet, Inc. signed in January 1996, the Company also plans to build three seafood restaurants during fiscal 1997: two on sites owned by the Company and one on land held under a long-term ground lease. These "Water Street Seafood Company" restaurants will be leased by the joint venture from the Company and operated by Waterstreet, Inc. In addition, as of August 31, 1996, the Company owned 11 undeveloped cafeteria sites, and several land site acquisitions were in varying stages of negotiation. As a result of all the capital commitments discussed above, the Company expects a substantial increase in the total capital expenditures for fiscal 1997. Construction costs for the new cafeterias and seafood restaurants are expected to be funded by cash flow from operations, cash currently held in cash equivalent investments, and short-term borrowings. In addition, as of August 31, 1995, the Company owned 13 undeveloped cafeteria sites, and several land site acquisitions were in varying stages of negotiation.long-term debt. The Company generated cash from operations of $56,398,000$60,354,000 in fiscal 1995.1996. The Company had a balance of $57,000,000$41,000,000 outstanding at August 31, 1995,1996, under a $100,000,000 line-of-credit agreementcredit facility with a bank.syndication of four banks. At August 31, 1995,1996, the Company had a working capital deficit of $79,316,000$35,096,000 which compares to the prior year's working capital deficit of $38,228,000.$79,316,000. The working capital position declinedimproved during fiscal 19951996 due primarily to the $40,000,000 increaserenegotiation of the short-term facility to long-term debt. The Board of Directors authorized the purchase in short-term borrowings under the lineopen market of creditup to fund capital expenditures and treasury1,000,000 shares of the Company's outstanding common stock purchases.through December 31, 1997. During fiscal 19951996 the Company purchased 2,000,000252,200 shares of its common stock at a cost of $45,176,000,$5,997,000, which are being held as treasury stock. The Company believes that funds generated from operations and short-term or long-term financing from external sources, which can be obtained on terms acceptable to the Company, are adequate for its foreseeable needs. Results of Operations Fiscal 1996 Compared to Fiscal 1995 Sales increased $31,104,000, or 7%, due in part to the addition of 18 new cafeterias in fiscal 1996 and 11 cafeterias in fiscal 1995. The average sales volume of cafeterias opened over one year increased slightly to $2,332,000 in fiscal 1996 from $2,321,000 in fiscal 1995 due primarily to higher average tray prices over the prior year. The same-store customer count trend was negative for the first time since 1992. This decline was not wholly unexpected because all but four of the current year openings occurred in existing markets. Accordingly, our market share improved in these areas; however, customer traffic and sales at established cafeterias were negatively impacted. This, combined with increased competition and the lack of full recovery from the peso devaluation in fiscal 1995, resulted in the negative same-store customer count trend. Cost of food increased $6,397,000, or 6%, due primarily to the increase in sales. Food cost margins improved from the price increase on the Lu Ann Platter, which took effect on December 1, 1995. Payroll and related costs increased $10,381,000, or 9%, due primarily to the increase in sales, higher wages for hourly employees in existing cafeterias, and higher wage costs associated with increased expansion over the prior year. As the expansion rate increases for fiscal 1997 and the new Federal minimum wage increases effective October 1, 1996, the Company anticipates that payroll and related costs will increase as a percentage of sales over fiscal 1996. The Company implemented a 3% to 4% price increase on September 15, 1996, to help offset the pressure on profit margins. Occupancy and other operating expenses increased $8,688,000, or 7%, due primarily to the increase in sales and the opening of 18 new cafeterias. Since all preopening costs are expensed as incurred, the preopening expense amount included in occupancy and other operating expenses for fiscal 1997 will significantly increase due to the higher expansion rate, especially in the first quarter. During fiscal 1997 the Company plans to maintain the budget for advertising expense at 25 of sales. General and administrative expenses increased $1,545,000, or 8%, due primarily to two additional area vice president positions, higher management trainee salaries, and higher moving expenses, all associated with the increased expansion. Interest expense of $2,130,000 for fiscal 1996 was incurred in conjunction with borrowings under the credit facility and is net of $1,100,000 capitalized on qualifying properties. The increase over fiscal 1995 of $381,000, or 22%, was due to higher average outstanding borrowings. The provision for income taxes increased $1,411,000, or 6%, due to higher income before income taxes. The Company's effective income tax rate increased slightly from 37.2% in fiscal 1995 to 37.3% in fiscal 1996. Fiscal 1995 Compared to Fiscal 1994 Sales increased $28,332,000, or 7%, due in part to the addition of 11 new cafeterias in fiscal 1995 and eight cafeterias in fiscal 1994. The average sales volume of cafeterias opened over one year increased to $2,321,000 in fiscal 1995 from $2,287,000 in fiscal 1994. The increase resulted from the implementation of new marketing programs and from higher average tray prices over the prior year. Cost of food increased $5,388,000, or 5%, due primarily to the increase in sales. Food cost margins improved from the price increase on the Lu Ann Platter, which took effect on December 1, 1994, and an additional price increase on selected individual items effective June 10, 1995. Payroll and related costs increased $9,409,000, or 9%, due primarily to the increase in sales, higher wages for hourly employees in existing cafeterias, and higher wage costs associated with increased expansion over the prior year. As the expansion rate increases for fiscal 1996, the Company anticipates that payroll and related costs will increase as a percentage of sales over fiscal 1995. Occupancy and other operating expenses increased $10,361,000, or 9%, due primarily to the increase in sales, the opening of 11 new cafeterias, higher advertising expenditures, higher costs for a new uniform program, and higher costs for paper supplies. For fiscal 1996 the Company plans to maintain the budget for advertising expense at 2% of sales. General and administrative expenses increased $3,342,000, or 22%, due primarily to the higher Company contribution to the profit sharing and retirement plan as determined by the plan's provisions, which increased approximately $3,000,000 over fiscal 1994. The Company expects the contribution for fiscal 1996 to be more comparable to fiscal 1995, increasing only approximately $200,000 over fiscal 1995. Interest expense for fiscal 1995 was incurred in conjunction with borrowings under the line-of-credit agreement and is net of $895,000 capitalized on qualifying properties. The provision for income taxes decreased $740,000, or 3%, due in part to lower income before income taxes. The Company's effective income tax rate decreased slightly from 37.5% in fiscal 1994 to 37.2% in fiscal 1995. Fiscal 1994 Compared to Fiscal 1993 Sales increased $22,935,000, or 6%, due in part to the addition of eight new cafeterias in fiscal 1994 and six cafeterias in fiscal 1993. The average sales volume of cafeterias opened over one year increased to $2,287,000 in fiscal 1994 from $2,223,000 in fiscal 1993. The increase resulted from the implementation of new marketing programs and from improved economies in some trade areas. Cost of food increased $5,266,000, or 6%, due primarily to the increase in sales. Payroll and related costs increased $5,310,000, or 5%, with the opening of eight new cafeterias. During the past several years, the Company has instituted various programs to address the related payroll cost of workers' compensation insurance; and these efforts, coupled with the revised Texas workers' compensation law, resulted in lower workers' compensation costs during fiscal 1994. Occupancy and other operating expenses increased $8,588,000, or 8%, due primarily to the increase in sales; the opening of eight new cafeterias; higher advertising expenditures; and higher managers' salaries, which were based on the profitability of the cafeterias. General and administrative expenses decreased $637,000, or 4%, due primarily to the lower Company contribution to the profit sharing and retirement plan as determined by the plan's provisions. The decline was partially offset by higher costs under employee benefit plans which were based on the earnings growth of the Company. The provision for income taxes increased $1,976,000, or 10%, due to higher income from operations and the new federal income tax rates that were effective January 1, 1993. The Company's effective income tax rate increased from 36.8% in fiscal 1993 to 37.5% in fiscal 1994. The Company adopted the Financial Accounting Standards Board's Statement No. 109, "Accounting for Income Taxes," in fiscal 1994, as discussed in Note 6 of Notes to Financial Statements. Inflation The Company's policy is to maintain stable menu prices without regard to seasonal variations in food costs. General increases in costs of food, wages, supplies, and services make it necessary for the Company to increase its menu prices from time to time. To the extent prevailing market conditions allow, the Company intends to adjust menu prices to maintain profit margins. Item 8. Financial Statements and Supplementary Data. LUBY'S CAFETERIAS, INC. FINANCIAL STATEMENTS Years Ended August 31, 1996, 1995, 1994, and 19931994 with Report of Independent Auditors Report of Independent Auditors The Board of Directors and Shareholders Luby's Cafeterias, Inc. We have audited the accompanying balance sheets of Luby's Cafeterias, Inc. at August 31, 19951996 and 1994,1995, and the related statements of income, shareholders' equity, and cash flows for each of the three years in the period ended August 31, 1995.1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Luby's Cafeterias, Inc. at August 31, 19951996 and 1994,1995, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 1995,1996, in conformity with generally accepted accounting principles. As discussed in Note 6 to the financial statements, in 1994 the Company changed its method of accounting for income taxes. ERNST & YOUNG LLP San Antonio, Texas October 3, 19951, 1996 Luby's Cafeterias, Inc. Balance Sheets August 31 1996 1995 1994 ________ _______ (Thousands of Dollars) Assets Current assets: Cash and cash equivalents $ 12,3922,687 $ 10,90912,392 Trade accounts and other receivables 541 311 275 Food and supply inventories 4,517 4,034 3,851 Prepaid expenses 3,195 2,849 2,840 Deferred income taxes 418 629 259 ________ ________ Total current assets 11,358 20,215 18,134 Investments and other assets - at cost: Land held for future use 8,040 9,820 10,867 Other assets 4,303 3,188 2,835 ________ ________ Total investments and other assets 12,343 13,008 13,702 Property, plant, and equipment - at cost, less accumulated depreciation and amortization (Note 2)311,589 279,157 257,832 ________ ________ Total assets $335,290 $312,380 $289,668 ________ ________ Liabilities and Shareholders' Equity Current liabilities: Short-term borrowings (Note 3)$ - $ 57,000 $ 17 000 Accounts payable - trade 14,568 10,969 10,341 Dividends payable 4,796 4,196 4,144 Accrued expenses and other liabilities (Note 11)24,336 24,895 21,927 Income taxes payable 2,754 2,471 2,950 ________ ________ Total current liabilities 46,454 99,531 56,362 Deferred income taxes and other credits 22,163 20,145 19,780 Commitments (Notes 4, 5, and 7) - - Shareholders' equity (Notes 5 and 8):equity: Common stock, $.32 par value; authorized 100,000,000 shares, in 1995 and 1994, issued 27,403,067 shares in 1995 and 1994 8,769 8,769 Paid-in capital 26,945 26,945 Retained earnings 267,374 248,973 229,014 Less cost of treasury stock, 3,425,525 shares in 1996 and 4,089,935 shares in 1995 and 2,285,257 shares in 1994(77,415) (91,983) (51,202) ________ ________ Total shareholders' equity 225,673 192,704 213,526 ________ ________ Total liabilities and shareholders' equity $335,290 $312,380 $289,668 ________ ________ See accompanying notes. Luby's Cafeterias, Inc. Statements of Income Years Ended August 31 1996 1995 1994 1993 ________ ________ ________ (Thousands of dollars except per share data) Sales $450,128 $419,024 $390,692 $367,757 Costs and expenses: Cost of food 110,008 103,611 98,223 92,957 Payroll and related costs 124,333 113,952 104,543 99,233 Occupancy and other operating expenses 132,595 123,907 113,546 104,958 General and administrative expenses 20,217 18,672 15,330 15,967 ________ ________ ________ 387,153 360,142 331,642 313,115 ________ ________ ________ Income from operations 62,975 58,882 59,050 54,642 Interest expense (2,130) (1,749) - - Other income, net 1,697 1,805 1,385 1,574 ________ ________ ________ Income before income taxes and cumulative effect of change in method of accounting for income taxes 62,542 58,938 60,435 56,216 Provision for income taxes (Note 6):taxes: Current 20,940 21,750 18,909 20,401 Deferred 2,394 173 3,754 286 ________ ________ ________ 23,334 21,923 22,663 20,687 ________ ________ ________ Income before cumulative effect of change in method of accounting for income taxes 39,208 37,015 37,772 35,529 Cumulative effect as of August 31, 1993 of change in method of accounting for income taxes (Note 6)- - 1,563 - ________ ________ ________ Net income $ 39,208 $ 37,015 $ 39,335 $ 35,529 ________ ________ ________ Earnings per share: Income before cumulative effect of change in method of accounting for income taxes $ 1.66 $ 1.55 $ 1.45 $ 1.31 Cumulative effect of change in method of accounting for income taxes - - .06 - ________ ________ ________ Net income per share (Note 9)$ 1.66 $ 1.55 $ 1.51 $ 1.31 ________ ________ ________ See accompanying notes. Luby's Cafeterias, Inc. Statements of Shareholders' Equity
Common Stock Total Issued Treasury Paid-In Retained Shareholders' Shares Amount Shares Amount Capital Earnings Equity __________________________________________________________________________________________ (Amounts in thousands except per share data) Balance at August 31, 1992 27,403 $8,769 (270) $ (4,252) $26,945 $185,789 $217,251 Net income for the year - - - - - 35,529 35,529 Common stock issued under stock option plan, net of shares tendered in partial payment - - 113 1,605 92 (2) 1,695 Cash dividends, $.555 per share - - - - - (15,102) (15,102) Purchases of treasury stock - - (19) (425) - - (425) _______ ______ ______ _______ _______ _______ _______ Balance at August 31, 1993 27,403 $ 8,769 (176) (3,072)$(3,072) $ 27,037 206,214 238,948$206,214 $238,948 Net income for the year - - - - - 39,335 39,335 Common stock issued under stock option plan, net of shares tendered in partial payment - - 159 3,360 (92) (744) 2,524 Cash dividends, $.615 per share - - - - - (15,791) (15,791) Purchases of treasury stock - - (2,268) (51,490) - - (51,490) _____________ ______ ______ _______ _______ _______ _______ Balance at August 31, 1994 27,403 8,769 (2,285) (51,202) 26,945 229,014 213,526 Net income for the year - - - - - 37,015 37,015 Common stock issued under employee bene- fit plans, net of shares tendered in partial payment - - 195 4,395 - (1,086) 3,309 Cash dividends, $.675 per share - - - - - (15,970) (15,970) Purchases of treasury stock - - (2,000) (45,176) - - (45,176) _____________ ______ ______ _______ _______ _______ _______ Balance at August 31, 1995 27,403 $8,7698,769 (4,090) $(91,983) $26,945 $248,973 $192,704(91,983) 26,945 248,973 192,704 Net income for the year - - - - - 39,208 39,208 Common stock issued under employee bene- fit plans, net of shares tendered in partial payment and including tax benefits - - 916 20,565 - (3,218) 17,347 Cash dividends, $.74 per share - - - - - (17,589) (17,589) Purchases of treasury stock - - (252) (5,997) - - (5,997) ______ ______ ______ _______ _______ _______ _______ Balance at August 31, 1996 27,403 $ 8,769 (3,426) $(77,415) $ 26,945 $267,374 $225,673 ______ ______ ______ _______ _______ _______ _______ See accompanying notes.
Luby's Cafeterias, Inc. Statements of Cash Flows Years Ended August 31 1996 1995 1994 1993 ________ ________ ________ (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 39,208 $ 37,015 $ 39,335 $ 35,529 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,693 16,417 15,700 15,415 Cumulative effect of change in method of accounting - - (1,563) - (Gain) loss on disposal of land held for future use - (106) 69 - (Gain) loss on disposal of property, plant, and equipment 31 (313) 23 - ________ ________ ________ Cash provided by operating activities before changes in operating assets and liabilities 56,932 53,013 53,564 50,944 Changes in operating assets and liabilities: (Increase) decrease in trade accounts and other receivables (230) (36) 327 (361) (Increase) decreaseIncrease in food and supply inventories (483) (183) (425) 216 (Increase)Increase in prepaid expenses (346) (9) (373) (214) (Increase)Increase in other assets (1,115) (353) (460) (153) Increase (decrease) in accounts payable - trade 2,441 1,368 (87) 2,033 Increase (decrease) in accrued expenses and other liabilities (337) 3,082 (4,832) 2,678 Increase (decrease) in income taxes payable 1,263 (479) 157 (210) Increase (decrease) in deferred income taxes and other credits 2,229 (5) 4,275 457 _______ ________ ________ Net cash provided by operating activities 60,354 56,398 52,146 55,390 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of land held for future use - 495 955 - Proceeds from disposal of property, plant, and equipment 153 474 182 162 Purchases of land held for future use (5,776) (7,531) (3,470) (512) Purchases of property, plant, and equipment (42,753) (29,715) (26,252) (17,771) _______ ________ ________ Net cash used in investing activities (48,376) (36,277) (28,585) (18,121) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common under stock option plans 16,145 3,196 2,524 1,695 Net proceeds from(payments) of short-term borrowings (57,000) 40,000 17,000 Proceeds from long-term debt 268,000 - Principal payments- Reductions of long-term debt (227,000) - - (1,847) Purchases of treasury stock (4,839) (45,916) (50,750) (425) Dividends paid (16,989) (15,918) (15,731) (14,681) _______ _______ _______ Net cash used in financing activities (21,683) (18,638) (46,957) (15,258) _______ _______ _______ Net increase (decrease) in cash and cash equivalents (9,705) 1,483 (23,396) 22,011 Cash and cash equivalents at beginning of year 12,392 10,909 34,305 12,294 ________ ________ ________ Cash and cash equivalents at end of year $ 2,687 $ 12,392 $ 10,909 $ 34,305 ________ ________ ________ See accompanying notes. Luby's Cafeterias, Inc. Notes to Financial Statements August 31, 1995,1996, 1994, and 19931994 1. Significant Accounting Policies Nature of Operations Luby's Cafeterias, Inc. (the Company), based in San Antonio, Texas, owns and operates cafeterias in the southern United States. As of August 31, 1996, the Company operated a total of 204 units. The Company locates its cafeterias convenient to shopping and business developments as well as to residential areas. Accordingly, the cafeterias cater primarily to shoppers, store and office personnel at lunchtime, and to families at dinner. Inventories The food and supply inventories are stated at the lower of cost (first-in, first-out) or market. Depreciation and Amortization Luby's Cafeterias, Inc. (the Company)The Company depreciates the cost of plant and equipment over their estimated useful lives using both straight-line and accelerated methods. Leasehold improvements are amortized over the related lease lives, which are in some cases shorter than the estimated useful lives of the improvements. Long-Lived Assets In March 1995, the Financial Accounting Standards Board (FASB) issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement No. 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company will adopt Statement 121 in the first quarter of 1997 and, based on current circumstances, does not believe the effect of adoption will be material. Statement of Cash Flows For purposes of the statement of cash flows, the Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents. Preopening Expenses New store preopening costs are expensed as incurred. Advertising Expenses Advertising costs are expensed as incurred. Income Taxes Deferred income taxes are computed using the liability method. Under this method, 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. Stock Options Proceeds from the sale of common stock issued under the stock option plans and related tax benefits which accrue to the Company are accounted for as capital transactions, and no charges or credits are made to income in connection with the plans. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates. 2. Property, Plant, and Equipment The cost and accumulated depreciation of property, plant, and equipment at August 31, 19951996 and 1994,1995, together with the related estimated useful lives used in computing depreciation and amortization, are reflected below: Estimated 1996 1995 1994 Useful Lives ________ ________ _______________ (Thousands of dollars) Land $ 66,40574,699 $ 58,35266,405 - Cafeteria equipment and furnishings 117,227 106,540 99,867 3 to 10 years Buildings 209,404 181,389 166,287 20 to 40 years Leasehold and leasehold improvements 46,403 43,752 41,104 Term of leases Office furniture and equipment 2,536 2,271 1,862 5 to 10 years Transportation equipment 688 674 655 5 years Construction in progress 7,506 9,225 5,899 - ________ ________ 458,463 410,256 374,026 Less accumulated depreciation and amortization 146,874 131,099 116,194 ________ ________ $311,589 $279,157 $257,832 ________ ________ Total interest expense incurred for 1996, 1995, and 1994 was $3,230,000, $2,644,000, and 1993 was $2,644,000, $288,000, and $327,000, respectively, which approximated the amount paid in each year. In 1994 and 1993, substantially all of theseThe amounts were capitalized on qualifying properties. Inproperties in 1996, 1995, and 1994 were $1,100,000, $895,000, was capitalized on qualifying properties.and $288,000, respectively. 3. Debt The Company has a $112,000,000 credit facility with a bank. As part of this credit agreement, the Company has a $100,000,000 line-of-credit which expires in December 1995. As of August 31, 1995, the balance$57,000,000 in short-term borrowings was outstanding was $57,000,000, and $61,000,000 was the maximum amount outstanding during the period.under a $100 million line-of-credit which expired in December 1995. The average amount outstanding during the year and the weighted average interest rate for short-term borrowings based on the number of days outstanding were $40,400,000 andwas 6.4%, respectively. for 1995. During 1996 the Company entered into a new $100 million credit facility with a syndication of four banks. As part of this credit facility, the Company has a revolving credit agreement which allows borrowings for varying periods through February 27, 2001, at the lower of the prime rate or other rate options available at the time of borrowing. The credit facility also providesincludes a maximum commitment for letters of credit of $12,000,000.$20 million. The Company pays a facility fee of .1% on the total commitment. The credit facility contains business covenants which, among other things, impose certain financial restrictions on the Company relating primarily to leverage and net worth. As of August 31, 1996, the balance outstanding under the revolving credit agreement was $41 million at an interest rate of 5.7%. At August 31, 1995,1996, letters of credit of approximately $10,379,000$4,244,000 have been issued as security for the payment of insurance obligations classified as accrued expenses on the balance sheet. 4. Leases The Company conducts a major part of its operations from facilities which are leased under noncancelable lease agreements. Most of the leases are for periods of ten to 25 years and provide for contingent rentals based on sales in excess of a base amount. Approximately 80% of the leases contain renewal options ranging from five to 30 years. Annual future minimum lease payments under noncancelable operating leases as of August 31, 1995,1996, are as follows: (Thousands of dollars) Years ending August 31: 19961997 $ 5,687 1997 5,7166,386 1998 5,6416,570 1999 5,5846,623 2000 5,3976,470 2001 6,231 Thereafter 46,603 __________52,516 _______ Total minimum lease payments $ 74,628 __________$84,796 _______ Total rent expense for operating leases for the years ended August 31, 1996, 1995, 1994, and 19931994 was as follows: 1996 1995 1994 1993 ________ ________ ________ (Thousands of dollars) Minimum rentals $ 5,807 $ 5,477 $ 5,141 $ 4,850 Contingent rentals 1,126 1,229 1,436 1,380 ________ ________ ________ $ 6,933 $ 6,706 $ 6,577 $ 6,230 ________ ________ ________ 5. Employee Benefit Plans and Agreements Incentive Compensation The Company has various incentive compensation plans covering officers and other key employees that are based upon the achievement of specified earnings goals and performance factors. Awards under the plans are payable in cash and/or in shares of common stock. Charges to expense for current and future distributions under the plans amounted to $400,000, $431,000, and $1,481,000 in 1996, 1995, and $1,098,000 in 1995, 1994, and 1993, respectively. No shares of common stock were issued underDuring the plans during the two-year periodyears ended August 31, 1994. During the year ended August 31,1996, 1995, and 1994, 10,590, 4,820, and -0- shares of common stock were issued under the plans out of treasury stock.stock, respectively. Stock Option Plans The Company had an Employee Stock Option Plan for executive and other key salaried employees. Under the terms of the stock option plan, nonqualified options and incentive stock options totaling 225,000 shares of the Company's common stock could be granted at prices not less than 100% of fair market value at date of grant. Options were exercisable for such periods as the Compensation Committee determined, but not for more than ten years from date of grant. All options outstanding under this plan either expired or were exercised as of August 31, 1995. In 1990 the Company adopted a new Management Incentive Stock Plan to replace the current Employee Stock Option Plan and to provide for market-based incentive awards, including stock options, stock appreciation rights, restricted stock, and performance share awards. Under the terms of the Management Incentive Stock Plan, nonqualified options and incentive stock options totaling 2,700,000 shares of the Company's common stock are reserved for grants to the officer group, certain administrative personnel, and cafeteria management personnel. Stock options may be granted at prices not less than 100% of fair market value at date of grant. Options granted to the participants of the plan are exercisable over staggered periods and expire, depending upon the type of grant, in five to seven years. The plan provides for various vesting methods, depending upon the category of personnel. Following is a summary of activity in the stock option plans for the three years ended August 31, 1996, 1995, 1994, and 1993:1994:
Common Option Price Shares Options Options Per Share Reserved Outstanding Exercisable ________________ _________ ___________ ___________ Balances - August 31, 19921993 $14.83 to $18.09 2,806,413 1,990,967 225,502 Granted 16.50 to 23.25 - 218,950 - Became exercisable 15.00 to 17.88 - - 210,531 Cancelled or expired 15.00 to 23.25 - (182,029) (71,880) Exercised 14.83 to 17.88 (151,719) (151,719) (151,719) _________ _________ ________ Balances - August 31, 1993 14.83 to 23.25$23.25 2,654,694 1,876,169 212,434 Granted 21.75 to 21.75 - 370,725 - Became exercisable 15.00 to 23.25 - - 246,327 Cancelled or expired 15.00 to 23.25 - (139,294) (41,633) Exercised 14.83 to 17.88 (191,366) (191,366) (191,366) _________ _________ _______ Balances - August 31, 1994 15.00 to 23.25 2,463,328 1,916,234 225,762 Granted 22.75 to 23.75 - 136,100 - Became exercisable 15.00 to 23.75 - - 582,379 Cancelled or expired 15.00 to 23.75 - (95,467) (43,552) Exercised 15.00 to 21.75 (209,753) (209,753) (209,753) _________ _________ _______ Balances - August 31, 1995 15.00 to 23.75 2,253,575 1,747,114 554,836 Granted 21.00 to 21.63 - 223,648 - Became exercisable 15.00 to 23.75 - - 1,167,766 Cancelled or expired 16.42 to 23.75 - (53,415) (38,903) Exercised 15.00 to 23.25 (980,600) (980,600) (980,600) _________ _________ ________ Balances - August 31, 19951996 $15.00 to $23.75 2,253,575 1,747,114 554,8361,272,975 936,747 703,099 _________ _________ ________
Deferred Compensation Deferred compensation agreements exist for several key management employees, all of whom are officers and/current or directors.former officers. Under the agreements, the Company is obligated to provide for each such employee or his beneficiaries, during a period of ten years after the employee's death, disability, or retirement, annual benefits ranging from $15,500 to $43,400. The estimated present value of future benefits to be paid is being accrued over the period from the effective date of the agreements until the expected retirement dates of the participants. The net expense incurred for this plan for the years ended August 31, 1996, 1995, 1994, and 19931994 amounted to $239,000, $79,000, and $78,000, respectively. The Company also has a Supplemental Executive Retirement Plan (SERP) for key executives and $76,000, respectively.officers. The SERP is a "target" benefit plan, with the annual lifetime benefit based upon a percentage of average salary during the final five years of service at age 65, offset by several sources of income including benefits payable under deferred compensation agreements, if applicable, the profit sharing plan, and Social Security. SERP benefits will be paid from the Company's assets. The net expense incurred for this plan for the year ended August 31, 1996, was $80,000, and the unfunded accumulated benefit obligation as of August 31, 1996, was approximately $250,000. Profit Sharing The Company has a profit sharing plan and retirement trust covering substantially all employees who have attained the age of 21 years and have completed one year of continuous service. The plan is administered by a corporate trustee, is a "qualified plan" under Section 401(a) of the Internal Revenue Code, and provides for the payment of the employee's vested portion of the plan upon retirement, termination, disability, or death. The plan is funded by contributions of a portion of the net earnings of the Company. The plan provides that for each fiscal year in which the Company's net income (before income taxes and before any contribution to the plan) meets certain minimum standards, the Company is obligated to contribute to the plan, at a minimum, an amount equal to a defined percentage of the participants' compensation. In no event will the required contribution exceed 10% of the Company's income before income taxes and before any contribution to the plan. The Company's annual contribution to the plan amounted to $5,100,000, $4,888,000, and $1,886,000, for 1996, 1995, and $2,942,000 for 1995, 1994, and 1993, respectively. 6. Income Taxes Effective September 1, 1993, theThe Company adopted FASB Statement No. 109, "Accounting for Income Taxes.Taxes," Under Statement No. 109, the liability method is used in accounting for income taxes. Under this method, 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. Prior to the adoption of Statement No. 109, income tax expense was determined using the deferred method. Deferred tax expense was based on items of income and expense that were reported in different years in the financial statements and tax returns and were measured at the tax rate in effect in the year the difference originated. As permitted by Statement No. 109, the Company has elected not to restate the financial statements of any prior years.1994. The effect of the change on pretax income from continuing operations for the yearsyear ended August 31, 1994, and 1993, was not material; however, the cumulative effect of the change increased net income in fiscal 1994 by $1,563,000, or $.06 per share. The tax effect of temporary differences results in deferred income tax assets and liabilities as of August 31 as follows: 1996 1995 1994 ________ ___________ (Thousands of dollars) Deferred tax liabilities: Amortization of capitalized interest $ 522494 $ 546522 Depreciation and amortization 19,085 17,566 17,263 Deferred compensation (779) (766) (908) Other 1,083 378 256 _______ _______ Total deferred tax liabilitesliabilities 19,883 17,700 17,157 Deferred tax asset: Workers' compensation insurance 418 629 259 _______ _______ Net deferred tax liabilities $19,465 $17,071 $16,898 _______ _______ The components of deferred income tax expense for 1993 as recorded prior to the adoption of Statement No. 109 are as follows: 1993 ______ (Thousands of dollars) Workers' compensation insurance $ (551) Amortization of capitalized interest 87 Depreciation and amortization 554 Deferred compensation (69) Prepaid expense 97 Property taxes 158 Other 10 ______ $ 286 ______ The Omnibus Budget Reconciliation Act of 1993 increased the federal tax rate to 35% beginning January 1, 1993. Accordingly, a blend of the old and new rates is used for the tax year ended August 31, 1993. The reconciliation of the provision for income taxes to the expected income tax expense (computed using the statutory tax rate) is as follows: 1996 1995 1994 1993 Amount % Amount % Amount % _______ ____ _______ ____ _______ ____ (Thousands of dollars and as a percent of pretax income) Normally expected income tax expense $21,890 35.0% $20,628 35.0% $21,152 35.0% $19,490 34.7% State income taxes 1,488 2.4 1,616 2.7 1,625 2.7 1,579 2.8 Jobs tax credits (1) - (151) (.2) (260) (.4) (392) (.7) Other differences (43) (.1) (170) (.3) 146 .2 10 - _______ ____ _______ ____ ______ ____ $ 21,923$23,334 37.3% $21,923 37.2% $ 22,663$22,663 37.5% $20,687 36.8% _______ ____ _______ ____ ______ ____ Cash payments for income taxes for 1996, 1995, and 1994 were $19,677,000, $22,229,000, and 1993 were $22,229,000, $18,752,000, and $20,611,000, respectively. 7. Commitments At August 31, 1995,1996, the Company had tenseven cafeterias under construction. The aggregate unexpended costs under the construction contracts were approximately $7,952,000.$5,469,000. The Company has unconditionally guaranteed a $2,000,000 loan under a line of credit for an unrelated limited partnership in exchange for advertising rights and a participation in future profits of the venture. 8. Common Stock In 1991 the Board of Directors adopted a Shareholder Rights Plan and declared a dividend of one common stock purchase right for each outstanding share of common stock. The rights are not initially exercisable. The rights may become exercisable under circumstances described in the Plan if any person or group (an Acquiring Person) becomes the beneficial owner of 15% or more of the common stock. Once the rights become exercisable, each right will be exercisable to purchase, for $27.50 (the Purchase Price), one-half of one share of common stock, par value $.32 per share, of the Company. If any person becomes the beneficial owner of 15% or more of the common stock, each right will entitle the holder, other than the Acquiring Person, to purchase for the Purchase Price a number of shares of the Company's common stock having a market value of four times the Purchase Price. The Board of Directors authorized the purchase in the open market of up to 1,000,000 shares of the Company's outstanding common stock through December 31, 1997. During fiscal 19951996 the Company purchased 2,000,000252,200 shares of its common stock at a cost of $45,176,000,$5,997,000, which are being held as treasury stock. 9. Per Share Information The weighted average number of shares used in the net income per share computation was 23,688,813 for 1996, 23,908,087 for 1995, and 25,981,840 for 1994, and 27,194,502 for 1993.1994. 10. Business Segments The Company operates exclusively in the domestic cafeteria business. 11. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities at August 31 consisted of: 1996 1995 1994 _______ _______ (Thousands of dollars) Salaries and bonuses $ 6,185 $ 7,542 $ 7,866 Rent 777 841 922 Taxes, other than income 5,742 4,886 4,847 Profit sharing plan 5,057 4,888 1,886 Insurance 6,273 6,417 6,136 Other 302 321 270 _______ _______ $24,336 $24,895 $21,927 _______ _______ 12.11. Quarterly Financial Information (Unaudited) The following is a summary of quarterly unaudited financial information for 1996 and 1995: Three Months Ended November 30, February 29, May 31, August 31, 1995 and 1994:1996 1996 1996 ________ ________ ________ _________ (Thousands of dollars except per share data) Sales $108,337 $108,835 $117,132 $115,824 Gross profit 51,027 52,634 57,140 54,986 Net income 8,565 9,322 10,964 10,357 Net income per share .37 .40 .46 .43 Three Months Ended November 30, February 28, May 31, August 31, 1994 1995 1995 1995 ________ ________ ________ _________ (Thousands of dollars except per share data) Sales $101,446 $100,570 $106,899 $110,109 Gross profit 48,361 48,446 51,523 53,131 Net income 8,683 8,582 9,907 9,843 Net income per share .35 .36 .42 .42 Three Months Ended November 30, February 28, May 31, August 31, 1993 1994 1994 1994 ________ ________ ________ _________ (Thousands12. Subsequent Event On September 16, 1996, the Company purchased the assets of dollars except per share data) Sales $94,166 $93,719 $101,060 $101,747 Gross profit 44,197 44,815 49,670 49,244 Income before cumulative effect of change20 cafeteria locations from Triangle FoodService Corporation, formerly Wyatt Cafeterias, Inc., for approximately $14 million in method of accounting (a) 8,605 8,581 10,386 10,200 Net income 10,168 8,581 10,386 10,200 Income per share before cumulative effect of change in method of accounting (a) .32 .33 .40 .40 Net income per share .38 .33 .40 .40 (a) See Note 6 for information on the cumulative effect of the change in method of accounting.cash. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant. There is incorporated in this Item 10 by reference that portion of the Company's definitive proxy statement for the 19961997 annual meeting of shareholders appearing therein under the captions "Election of Directors" and "Information Concerning Directors and Executive Officers." See also the information in Item 4A of Part I of this Report. Item 11. Executive Compensation. There is incorporated in this Item 11 by reference that portion of the Company's definitive proxy statement for the 19961997 annual meeting of shareholders appearing therein under the caption "Executive Compensation." Item 12. Security Ownership of Certain Beneficial Owners and Management. There is incorporated in this Item 12 by reference that portion of the Company's definitive proxy statement for the 19961997 annual meeting of shareholders appearing therein under the captions "Principal Shareholders" and "Management Shareholders." Item 13. Certain Relationships and Related Transactions. There is incorporated in this Item 13 by reference that portion of the Company's definitive proxy statement for the 19961997 annual meeting of shareholders appearing therein under the caption "Certain Relationships and Related Transactions." PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) Documents. 1. Financial Statements The following financial statements are filed as part of this Report: Balance sheets at August 31, 19951996 and 19941995 Statements of income for each of the three years in the period ended August 31, 19951996 Statements of shareholders' equity for each of the three years in the period ended August 31, 19951996 Statements of cash flows for each of the three years in the period ended August 31, 19951996 Notes to financial statements Report of independent auditors 2. Financial Statement Schedules All schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the financial statements and notes thereto. 3. Exhibits The following exhibits are filed as a part of this Report: 2 - Agreement and Plan of Merger dated November 1, 1991, between Luby's Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 3(a) - Certificate of Incorporation of Luby's Cafeterias, Inc., a Delaware corporation, as in effect February 28, 1994 (filed as Exhibit 3(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1994, and incorporated herein by reference). 3(b) - Bylaws of Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 3(b)Amendment to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(a) - Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1-8308, and incorporated herein by reference). 4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) - Promissory Note (Loan Agreement) dated September 30, 1995, in favor on NationsBank of Texas, N.A., in the maximum amount of $100,000,000. 10(a) - Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference). 10(b) - Annual Incentive Plan for Area Vice PresidentsBylaws of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(c) - Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(e) to the Company's Annual Report of Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(d) - Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders on JanuaryJuly 12, 1984 (filed as Exhibit 10(f) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1984, and incorporated herein by reference). 10(e) - Employment Contract dated January 8, 1988, between Luby's Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1988, and incorporated herein by reference). 10(f) - Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference). 10(g) - Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference). 10(h) - Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 13, 1995 (filed as Exhibit 10(h) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 11 - Statement re computation of per share earnings. 99(a) - Consent of Ernst & Young LLP. 99(b) - Consent of Ernst & Young LLP. (b) Reports on Form 8-K. No reports on Form 8-K have been filed during the last quarter of the period covered by this Report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Date: November 21, 1995 LUBY'S CAFETERIAS, INC. (Registrant) By: RALPH ERBEN ___________________________ Ralph Erben, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature and Date Name and Title JOHN B. LAHOURCADE John B. Lahourcade, Chairman of _______________________________ the Board and Director November 21, 1995 RALPH ERBEN Ralph Erben, President, Chief _______________________________ Executive Officer, and Director November 21, 1995 JOHN E. CURTIS, JR. John E. Curtis, Jr., _______________________________ Executive Vice President, Chief November 21, 1995 Financial Officer, and Director WILLIAM E. ROBSON William E. Robson, Executive Vice ________________________________ President and Director November 21, 1995 RONALD E. RIEMENSCHNEIDER Ronald E. Riemenschneider, Vice ________________________________ President, Treasurer, and November 21, 1995 Principal Accounting Officer LAURO F. CAVAZOS Laura F. Cavazos, Director ________________________________ November 21, 1995 DAVID B. DAVISS David B. Daviss, Director ________________________________ November 21, 1995 ROGER R. HEMMINGHAUS Roger R. Hemminghaus, Director ________________________________ November 21, 1995 WALTER J. SALMON Walter J. Salmon, Director ________________________________ November 21, 1995 GEORGE H. WENGLEIN George H. Wenglein, Director ________________________________ November 21, 1995 JOANNE WINIK Joanne Winik, Director ________________________________ November 21, 1995 EXHIBIT INDEX Number Document 2 - Agreement and Plan of Merger dated November 1, 1991, between Luby's Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 3(a) - Certificate of Incorporation of Luby's Cafeterias, Inc., a Delaware corporation, as in effect February 28, 1994 (filed as Exhibit 3(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1994, and incorporated herein by reference). 3(b)1996. 3(c) - Bylaws of Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference).currently in effect. 4(a) - Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1-8308, and incorporated herein by reference). 4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) - Promissory Note (Loan Agreement)Credit Agreement dated September 30, 1995, in favor ofFebruary 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A., in (filed as Exhibit 4(e) to the maximum amount of $100,000,000.Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(a) - Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference). 10(b) - Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(c) - Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(d) - Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 12, 1984 (filed as Exhibit 10(f) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1984, and incorporated herein by reference). 10(e) - Employment Contract dated January 8, 1988, between Luby's Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1988, and incorporated herein by reference). 10(f) - Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference). 10(g) - Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference). 10(h) - Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 13, 1995 (filed as Exhibit 10(h) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 10(i) - Employment Contract dated January 12, 1996, between Luby's Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(j) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996. 10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996. 11 - Statement re computation of per share earnings. 21 - Subsidiaries of Luby's Cafeterias, Inc. 99(a) - Consent of Ernst & Young LLP. 99(b)(b) Reports on Form 8-K. No reports on Form 8-K have been filed during the last quarter of the period covered by this Report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Date: November 26, 1996 LUBY'S CAFETERIAS, INC. (Registrant) By: JOHN E. CURTIS, JR. ___________________________ John E. Curtis, Jr., President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature and Date Name and Title RALPH ERBEN Ralph Erben, Chairman _______________________________ of the Board, Chief Executive November 26, 1996 Officer, and Director JOHN E. CURTIS, JR. John E. Curtis, Jr., President, _______________________________ Chief Operating Officer, Chief November 26, 1996 Financial Officer, and Director WILLIAM E. ROBSON William E. Robson, Executive Vice ________________________________ President-Operations, and Director November 26, 1996 RONALD E. RIEMENSCHNEIDER Ronald E. Riemenschneider, Vice ________________________________ President, Treasurer, and November 26, 1996 Principal Accounting Officer LAURO F. CAVAZOS Lauro F. Cavazos, Director ________________________________ November 26, 1996 DAVID B. DAVISS David B. Daviss, Director ________________________________ November 26, 1996 ROGER R. HEMMINGHAUS Roger R. Hemminghaus, Director ________________________________ November 26, 1996 JOHN B. LAHOURCADE John B. Lahourcade, Director ________________________________ November 26, 1996 WALTER J. SALMON Walter J. Salmon, Director ________________________________ November 26, 1996 GEORGE H. WENGLEIN George H. Wenglein, Director ________________________________ November 26, 1996 JOANNE WINIK Joanne Winik, Director ________________________________ November 26, 1996 EXHIBIT INDEX Exhibit Page 2 - Agreement and Plan of Merger dated November 1, 1991, between Luby's Cafeterias, Inc., a Texas corporation, and Luby's Cafeterias, Inc., a Delaware corporation (filed as Exhibit 2 to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 3(a) - Certificate of Incorporation of Luby's Cafeterias, Inc., a Delaware corporation, as in effect February 28, 1994 (filed as Exhibit 3(a) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1994, and incorporated herein by reference). 3(b) - Amendment to Bylaws of Luby's Cafeterias, Inc. adopted July 12, 1996. 3(c) - Bylaws of Luby's Cafeterias, Inc. as currently in effect. 4(a) - Description of Common Stock Purchase Rights of Luby's Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective April 26, 1991, File No. 1-8308, and incorporated herein by reference). 4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1991, and incorporated herein by reference). 4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement dated April 16, 1991 (filed as Exhibit 4(d) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and incorporated herein by reference). 4(e) - Credit Agreement dated February 27, 1996, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(e) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(a) - Form of Deferred Compensation Agreement entered into between Luby's Cafeterias, Inc. and various officers (filed as Exhibit 10(b) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1981, and incorporated herein by reference). 10(b) - Annual Incentive Plan for Area Vice Presidents of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(c) - Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1983, and incorporated herein by reference). 10(d) - Performance Unit Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 12, 1984 (filed as Exhibit 10(f) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1984, and incorporated herein by reference). 10(e) - Employment Contract dated January 8, 1988, between Luby's Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1988, and incorporated herein by reference). 10(f) - Management Incentive Stock Plan of Luby's Cafeterias, Inc. (filed as Exhibit 10(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1989, and incorporated herein by reference). 10(g) - Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit 10(g) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 1994, and incorporated herein by reference). 10(h) - Nonemployee Director Stock Option Plan of Luby's Cafeterias, Inc. approved by the shareholders on January 13, 1995 (filed as Exhibit 10(h) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1995, and incorporated herein by reference). 10(i) - Employment Contract dated January 12, 1996, between Luby's Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 1996, and incorporated herein by reference). 10(j) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan dated May 30, 1996. 10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July 18, 1996. 11 - Statement re computation of per share earnings. 21 - Subsidiaries of Luby's Cafeterias, Inc. 99(a) - Consent of Ernst & Young LLP.