FORM 10-Q

              UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                              Washington, D. C. 20549

(Mark One)

[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28,May 31, 2001

                                     OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________________________   to _________________________________________

Commission file number:  1-8308

                                  LUBY'S, INC.Luby's, Inc.
_______________________________________________________________________________
           (Exact name of registrant as specified in its charter)

         Delaware                                           74-1335253
_______________________________________________________________________________________________________________________________________________________________
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                      Identification No.)

             2211 Northeast Loop 410, P. O. Box 33069
                        San Antonio, Texas                       78265-3069
_______________________________________________________________________________________________________________________________________________________________
        (Address of principal executive offices)              (Zip Code)

                                  210/654-9000
_______________________________________________________________________________________________________________________________________________________________
                (Registrant's telephone number, including area code)

_______________________________________________________________________________________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
 report)

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

   Common Stock:  22,422,943 shares outstanding as of April 16,July 13, 2001
                  (exclusive of 4,980,124 treasury shares)

                            Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                                      LUBY'S, INC.
                          CONSOLIDATED STATEMENTS OF INCOME

                                     (UNAUDITED)
Three Months Ended Six Months Ended February 28, February 29, February 28, February 29, 2001 2000 2001 2000 ____ ____ ____ ____ (Amounts in thousands except per share data) Sales $112,219 $121,924 $226,119 $245,068 Costs and expenses: Cost of food 28,984 29,823 58,344 60,222 Payroll and related costs 37,376 37,684 76,586 76,210 Occupancy and other operating expenses 41,678 39,280 81,390 78,685 Provision for asset impairments (See Note 4) 9,445 --- 10,199 --- General and administrative expenses 6,827 5,659 13,022 10,862 _______ _______ _______ _______ 124,310 112,446 239,541 225,979 _______ _______ _______ _______ Income (loss) from operations (12,091) 9,478 (13,422) 19,089 Interest expense (2,685) (1,253) (4,942) (2,309) Other income, net 278 389 777 1,299 _______ _______ _______ _______ Income (loss) before income taxes (14,498) 8,614 (17,587) 18,079 Income tax expense (benefit) (5,074) 2,997 (6,155) 6,291 _______ _______ _______ _______ Net income (loss) $ (9,424) $ 5,617 $(11,432) $ 11,788 _______ _______ _______ _______ Net income (loss) per share - basic and assuming dilution $(0.42) $0.25 $(0.51) $.53 _______ _______ _______ _______ Cash dividends declared per share $0.00 $0.20 $0.00 $.40Statements LUBY'S, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended Nine Months Ended May 31, May 31, 2001 2000 2001 2000 _____ ____ ____ ____ (Amounts in thousands except per share data) Sales $121,677 $126,281 $347,796 $371,349 Costs and expenses: Cost of food 30,305 32,954 88,649 93,177 Payroll and related costs 41,254 39,255 117,840 115,465 Occupancy and other operating expenses 42,512 39,381 123,903 118,066 Provision for asset impairments and store closings --- --- 10,199 --- General and administrative expenses 6,415 5,244 19,437 16,105 _______ _______ _______ _______ 120,486 116,834 360,028 342,813 _______ _______ _______ _______ Income (loss) from operations 1,191 9,447 (12,232) 28,536 Interest expense (3,534) (1,645) (8,475) (3,954) Other income, net 703 573 1,479 1,872 _______ _______ _______ _______ Income (loss) before income taxes (1,640) 8,375 (19,228) 26,454 Income tax expense (benefit) (574) 2,540 (6,730) 8,831 _______ _______ _______ _______ Net income (loss) $ (1,066) $ 5,835 $(12,498) $ 17,623 _______ _______ _______ _______ Net income (loss) per share - basic and assuming dilution $(0.05) $0.26 $(0.56) $0.79 _______ _______ _______ _______ Cash dividends per share $0.00 $0.20 $0.00 $0.60 _______ _______ _______ _______ Weighted average number of shares outstanding - basic 22,423 22,420 22,422 22,420 Weighted average number of shares outstanding - assuming dilution 22,632 22,420 22,475 22,422 22,420 22,421 22,420 Weighted average number of shares outstanding - assuming dilution 22,435 22,420 22,421 22,421 See accompanying notes.
Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) February 28,May 31, August 31, 2001 2000 ____ ___________ __________ (Thousands of dollars) ASSETS Current assets: Cash and cash equivalents $ 3,3367,591 $ 679 Short-term investments 5,935 --- Trade accounts and other receivables 448458 403 Food and supply inventories 3,9873,821 3,853 Prepaid expenses 2,0821,755 4,481 Income tax receivable 5,0616,949 3,749 Deferred income taxes 1,8852,207 1,540 ________ ________ Total current assets 16,79928,716 14,705 Property held for sale 13,2388,230 13,156 Investments and other assets 3561,896 4,858 Property, plant, and equipment - at cost, net 327,269324,186 338,124 ________ ________ $357,662$363,028 $370,843 ________ ________ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 19,86016,808 $ 19,843 Dividends payable --- 2,242 Accrued expenses and other liabilities 21,27326,976 24,040 Long-term debt classified as current (See Note 5) 123,000 --- ________ ________ Total current liabilities 164,13343,784 46,125 Long-term debt ---(Note 5) 123,000 116,000 Deferred income taxes and other credits 7,17410,336 10,162 Reserve for store closings 651604 1,815 Derivative financial instruments (See Note(Note 2) 9861,191 --- Shareholders' equity: Common stock 8,769 8,769 Paid-in capital 27,25227,847 27,202 Retained earnings 255,164254,097 266,596 Accumulated other comprehensive income (loss) (641)(Note 3) (774) --- Less cost of treasury stock (105,826) (105,826) ________ ________ Total shareholders' equity 184,718184,113 196,741 ________ ________ $357,662$363,028 $370,843 ________ ________ See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SixNine Months Ended February 28, February 29,May 31, 2001 2000 ____ ____ (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(12,498) $ (11,432) $ 11,78817,623 Adjustments to reconcile net income (loss)(loss ) to net cash provided by operating activities: Depreciation and amortization 11,581 11,01417,320 16,847 Provision for asset impairmentimpairments 10,199 --- Gain on disposal of assets (807) (357) Change(1,156) --- Non-cash stock compensation 558 --- Changes in operating assets and liabilities: Decrease (increase) in prepaid expenses 2,399 (24) Decrease in accrued expenses and other liabilities (2,767) (4,014) Increase in income tax receivable (1,312) (2,104) Increase (decrease) in deferred income taxes and other credits (2,988) 2,195 Decrease in reserve for store closings (1,164) (1,735) Other, net 11 59 _________ _________(3,214) (7,975) ________ ________ Net cash provided by operating activities 3,720 16,822 _________ _________11,209 26,495 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of property held for sale 3,4956,935 1,010 Purchases of land held for future use --- (2,414)(2,905) Purchases of property, plant, and equipment (12,939) (29,065) _________ _________(13,678) (40,827) Purchases of short-term investments (5,935) --- ________ ________ Net cash used in investing activities (9,444) (30,469) _________ _________(12,678) (42,722) CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under revolving credit agreement 7,000 23,00031,000 Dividends paid (2,242) (8,969)(13,452) Proceeds from borrowing against cash surrender value of officers' life insurance policies 3,623 --- _________ _________________ ________ Net cash provided by financing activities 8,381 14,031 _________ _________17,548 Net increase in cash and cash equivalents 2,657 3846,912 1,321 Cash and cash equivalents at beginning of period 679 286 _________ _________________ ________ Cash and cash equivalents at end of period $ 3,3367,591 $ 670 _________ _________1,607 See accompanying notes. Part I - FINANCIAL INFORMATION (continued) Item 1. Financial Statements (continued). LUBY'S, INC. NOTES TO FINANCIAL STATEMENTS February 28,May 31, 2001 (UNAUDITED) Note 1: Basis of Presentation The accompanying unaudited financial statements are presented in accordance with the requirements of Form 10-Q and, consequently, do not include all of the disclosures normally required by generally accepted accounting principles. All adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods have been made. All such adjustments are of a normal recurring nature. The results for the interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in Luby's annual report on Form 10-K for the year ended August 31, 2000. The accounting policies used in preparing these consolidated financial statements are the same as those described in Luby's annual report on Form 10-K. Note 2: Derivative Financial Instruments The Company adopted Statement of Financial Accounting Standards No. 133 (FAS 133), "Accounting for Derivative Instruments and Hedging Activities," and its amendments, Statements 137 and 138, on September 1, 2000. FAS 133 requires that all derivative instruments be recorded on the balance sheet at fair value. The Company has designated its interest rate swap agreements as cash flow hedge instruments. The swap agreements are used to manage exposure to interest rate movement by effectively changing the variable rate to a fixed rate. The critical terms of the interest rate swap agreements and the interest-bearing debt associated with the swap agreements are the same; therefore, the Company has assumed that there is no ineffectiveness in the hedge relationship. Changes in fair value of the interest rate swap agreements will be recognized in other comprehensive income, net of tax effects, until the hedged items are recognized in earnings. The Company has hedged its exposure to interest rate movement through June 30, 2002. At September 1, 2000, the swap agreements were in a favorable position by approximately $175,000. In accordance with the transition provisions of FAS 133, the net-of-tax cumulative effect of an accounting change adjustment on September 1, 2000, was $114,000 in accumulated other comprehensive income with a deferred income tax liability of $61,000. At February 28,May 31, 2001, the fair value of the swap agreements decreased to an unfavorable position; therefore, the derivative financial instruments were adjusted to a liability of $986,000.$1,191,000. Accumulated other comprehensive income (loss) was adjusted to an accumulated loss of $641,000$774,000 and the deferred income tax was adjusted to a $345,000$417,000 tax asset. As the swap agreements arewere deemed to be effective cash flow hedges, there was no income statement impact related to hedge ineffectiveness. TheIn anticipation of additional future unfavorable interest rate changes, the Company expects to reclassify approximately $215,000unraveled its swap agreements on July 2, 2001, for a cash payment of existing losses in accumulated other comprehensive income (loss), net of taxes, into net income (loss) through August 31, 2001.$1,255,000. Note 3: Comprehensive Income (Loss) The Company's comprehensive income (loss) is comprised of net income (loss) and adjustments to derivative financial instruments. The components of comprehensive income (loss) are as follows: Three Months Ended February 28, February 29,May 31, 2001 2000 ____ _________ (Thousands of dollars) Net income (loss) $(9,424) $5,617$(1,066) $5,835 Other comprehensive income (loss), net of taxes: Net derivative income (loss), net of taxes of $297 (552)$123 (228) --- Reclassification adjustment for (gains) losses included in net income (loss), net of taxes of $10 18$51 95 --- _______ ______ Comprehensive income (loss) $(9,958) $5,617$(1,199) $5,835 _______ ______ SixNine Months Ended February 28, February 29,May 31, 2001 2000 ____ _________ (Thousands of dollars) Net income (loss) $(11,432) $11,788$(12,498) $17,623 Other comprehensive income (loss), net of taxes: Cumulative effect of a change in accounting for derivative financial instruments upon adoption of FAS 133, net of taxes of $61 114 --- Net derivative income (loss), net of taxes of $405 (753)$528 (981) --- Reclassification adjustment for (gains) losses included in net income (loss), net of taxes of $1 (2)$50 93 --- _________________ _______ Comprehensive income (loss) $(12,073) $11,788 ________ _______$(13,272) $17,623 Note 4: Impairment of Long-Lived Assets and Store Closings During fiscal year 2001, the Company recorded a pretax charge to operating costs of $10.2 million of asset impairment charges in accordance with Statement of Financial Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets to be Disposed of." The asset impairment for$9.4 million of the current quarter was $9.4 million. The charge related to the impairment of 13 restaurant properties. These properties have experienced specific unfavorable market conditions that have contributed to their impairment. The carrying values of the assets were written down to the estimated future discounted cash flows or fully written off in the case of negative future cash flows. Estimated future cash flows were based on a regression analysis of averages for similar restaurants, discounted at the Company's weighted average cost of capital. Three of the 13 properties arewere designated for closure prior to May 31,and were closed April 30, 2001. The remaining $755,000 of impairment chargescharge was recorded during the quarter ended November 30, 2000, in accordance with FAS 121 for assets related to surplus properties held for sale, which were written down to the lower of their historical costs or estimated net realizable values. In fiscal years 2000 and 1998 the Company also recorded a pretax charge to operating costs of $14.5 million and $36.9 million, respectively, for asset impairments and store closings. In late fiscal 2000 the Company reviewed its restaurants from a capital strategy standpoint to determine whether the closing of certain units could positively impact sales and profitability at nearby locations while also providing capital funds from the sale of these properties to invest in other more profitable capital projects, such as food-to- gofood-to-go drive-thru expansions. As a result of this review and continual evaluation of possible impairments, the Company recorded a pretax charge of $14.5 million during the fourth quarter of fiscal 2000 for store closings, associated closing costs, asset impairment charges in accordance with FAS 121 and other unusual charges. The principal components of the 2000 charge were as follows: - $7.7 million for the closing of 15 restaurants that had not met the Company's return on invested capital and sales growth requirements. Fourteen of the 15 units were closed prior toas of February 2001, and the remaining store is planned for closure prior to August 31, 2001. The charge included the cost to write down the properties and equipment to net realizable value and estimated costs for the settlement of lease obligations, legal and professional fees, severance costs, and other exit costs. - $3.2 million for asset impairments of six restaurant properties which the Company continues to operate. The carrying values of the assets were written down to the estimated future discounted cash flows or fully written off in the case of negative future cash flows. Estimated future cash flows were based on a regression analysis of averages for similar restaurants, discounted at the Company's weighted average cost of capital. - $1.3 million for the write-down of computer-related equipment and software. The write-down included the abandonment of a payroll- relatedpayroll-related software package and several point-of-sale (POS) systems. The POS systems were replaced with new touch-screen systems to provide better information and customer service, especially in the food-to-go expansions. As these items were abandoned, the remaining book value of these assets was written off. - $1.2 million additional write-down on surplus properties held for sale. These properties were written down to the lower of their historical carrying costs or estimated net realizable values. - $1.1 million related to other unusual charges. The primary component of this charge was the write-off of the remaining asset balance related to L&W Seafood, Inc., a joint venture originally established between the Company and Waterstreet, Inc. Prior to August 31, 2000, all restaurant employees of the Company were notified of the possibility of their termination due to future restaurant closures. As of February 28,May 31, 2001, approximately 295300 employees have been terminated, and approximately 30 additional employees will be terminated when the remaining restaurant is closed during the coming year. The severance cost for these employees was accrued and included in the store closing charge noted above. During 1998 the Company recorded a similar pretax charge of $36.9 million as a result of the adoption of its strategic plan, which included the disposition, relocation, and write-down of several restaurants that had not met management's financial return expectations. The principal components of the 1998 charge were (1) $14.7 million for the closing of 14 underperforming restaurants; (2) $10.7 million for the closing and relocation of 16 restaurants to optimize their market potential; (3) $11.4 million for asset impairments of 13 restaurants which the Company continues to operate; and (4) $0.1 million additional write- down on surplus properties held for sale. At February 28,May 31, 2001, the balance in the reserve for store closings was $651,000.$604,000. All material cash outlays related to the 1998 pretax charge have been made as of February 28, 2001.November 2000. It is anticipated that all material cash outlays required for the 2000 pretax charge will be made prior to August 31, 2001. The following table presents a summary of the types and amounts recognized as accrued expenses together with cash payments made against such accruals through the period ended February 28,May 31, 2001: _____________________________________________________ Legal And Lease Profes- Work Other Settlement sional force Exit Total Costs Fees Severance Costs Reserve _____________________________________________________ (Thousands of dollars) Reserve balance at August 31, 1998 $ 4,537 $ 985 $ 260 $ 390 $ 6,172 Additions/transfers/transfer/ (reductions) (224) 150 56 (257) (275) Cash payments (406) (135) (244) (45) (830) _______ _______ _______ _______ _______ Reserve balance at August 31, 1999 3,907 1,000 72 88 5,067 Additions/transfers/ (reductions) 675 350 375 300 1,700 Cash payments (3,817) (975) (72) (88) (4,952) _______ _______ _______ _______ _______ Reserve balance at August 31, 2000 765 375 375 300 1,815 Additions/transfers/ (reductions) 450 (200) (55) (195) --- Cash payments (715) --- (306) (143) (1,164)(190) (1,211) _______ _______ _______ _______ _______ Reserve balance at February 29,May 31, 2001 $ 500 $ 175 $ 14 $ (38)(85) $ 651604 _______ _______ _______ _______ _______ Note 5:5. Debt The Company has a $125 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 June 30, 2002, at the lower of the prime rate or other rate options available at the time of borrowing. As of February 28,May 31, 2001, the balance outstanding under the line-of-credit agreement iswas $123 million. TheA portion of the remaining portion ofbalance on the line of credit, is$1.1 million, has been committed to fund obligations under letters of credit. The credit facility was amended effective June 29, 2001, to include only one financial covenant relative to EBITDA (Earnings Before Interest, Taxes, Depreciation, and thereforeAmortization) and an extension of the Company hasagreement term to April 30, 2003. Additional term extensions are also available if certain conditions are met. There is no ability to borrow additional funds under itsthe credit facility. The credit facility contains business covenants,Per the new amendment, scheduled principal payments will be required and annual limits have been set for capital expenditures. In addition to the scheduled principal payments, the Company made a $1 million principal payment on July 6, 2001, which impose certain financial restrictions onreduced the Company.principal balance owed to $122 million. As a resultpart of the asset impairment, lower same-store sales, and other unusual charges recorded in the second quarter, the Company is not in compliance with the Leverage Ratio and the Net Worth covenants as required by its credit facility. In an effort to cure these defaults under itsamended credit facility, the Company will pay interest at prime, plus an applicable margin as defined in the amendment, on all debt outstanding. Based upon the new covenant, the Company is no longer in discussions with its banks regarding permanent amendments. Due to the pending naturedefault. Note 6: Related Parties A Director of the amendments,Company is also the Chief Operating Officer of an investment firm that provides investment services for the Company's debt associated withprofit sharing plan (the Plan). During the facility is classified as a current liability innine months ended May 31, 2001, the February 28, 2001, financial statements. Upon successful completion ofPlan paid the amendments, which the Company anticipates will include an extension in the term of the credit facility, theinvestment firm approximately $50,000 for its services. The recently hired Chief Executive Officer and Chief Operating Officer of the Company own a restaurant company, which provides services to Luby's. The services include general business consulting, basic equipment maintenance, specialized equipment fabrication, and warehousing support. The total cost of these services for the nine months ended May 31, 2001, has been estimated at $100,000. All costs to date were incurred in the third quarter after the chief officers were hired. The Chief Executive Officer and the Chief Operating Officer have personally committed to loanloaning the Company a total of $10 million before the end of the fiscal year to support the Company's future daily cash needs. The Company received an installment toward this commitment of $3 million on July 2, 2001, and the remainder on July 5, 2001. The recently hired Chief Financial Officer and Senior Vice President of Administration provide financial and legal services to the restaurant company owned by the Chief Executive Officer and the Chief Operating Officer of the Company. Compensation for the services provided by the Chief Financial Officer and Senior Vice President of Administration to the separate restaurant company are funded by that organization. Part I - FINANCIAL INFORMATION (continued) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources _______________________________ Cash and cash equivalents increased by $2,657,000$6,912,000 from the end of the preceding fiscal year to February 28,May 31, 2001. All capital expenditures for fiscal 2001 are being funded from cash flows from operations, cash equivalents, and long-term debt. Capital expenditures for the sixnine months ended February 28,May 31, 2001, were $12,939,000.$13,678,000. As of February 28,May 31, 2001, the Company owned 2718 properties held for sale, including teneight undeveloped land sites. The Company also has two properties held for future use. To fund capital expenditures, the Company required external financing and borrowed funds under a $125 million line-of-credit agreement. As of February 28,May 31, 2001, the amount outstanding under this line of credit is $123 million. The remainingA portion of the remaining amount under the line of credit, $1.1 million, is committed to fund obligations under letters of credit and therefore the Company hascredit. There is no ability to borrow additional funds under itsthe credit facility. As a result of the asset impairment, lower same-store sales, and other unusual charges recorded in the second quarter, the Company is not in compliance at February 28, 2001, with certain financial covenants as required by its credit facility. In an effort to cure these defaults under its credit facility, the Company is in discussions with its banks regarding permanent amendments. Due to the current pending nature of the amendments, the Company's debt associated with the facility is classified as a current liability in the February 28, 2001, financial statements. Upon successful completion of the amendments, which the Company anticipates will include an extension in the term of the credit facility, the recently hired Chief Executive Officer and Chief Operating Officer have committed to loan the Company a total of $10 million to support future daily cash needs. Interest Rate Swap Agreements _____________________________ The Company has two interest rate swap agreements (swaps) that fix the rate on a portion of the floating-rate debt outstanding under its revolving line of credit. The swaps fix interest at a rate of 6.50% in the notional amounts of $30 million and $15 million and both terminate as of June 30, 2002. The differential to be paid or received as interest rates change is accrued and recognized as an adjustment to interest expense related to the debt. The related amount payable to or receivable from counterparties is included in other liabilities or assets. The fair values of these agreements are estimated by obtaining quoted market prices. The swap agreements were in an unfavorable market value position of approximately $986,000$1,191,000 as of February 28,May 31, 2001. The Company unraveled its swap agreements effective July 2, 2001, for a cash payment of $1,255,000, in anticipation of additional future unfavorable interest rate changes. Trends and Uncertainties _________________________________________________ FAS 121 requires the Company to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company considers a history of operating losses or negative cash flows to be its main indicators of potential impairment. Assets are generally evaluated for impairment at the restaurant level. If a restaurant continues to incur negative cash flows or operating losses, an impairment or restaurant closing charge may be recognized in future periods. Reserve for Store ClosingClosings __________________________ Of the 13 restaurants impaired in the first sixnine months of 2001, three arewere designated for closure.closure and were closed April 30, 2001. The reserve for store closure as of February 28, 2001,closings was not increased for the effect of these three restaurants as most employees will transfertransferred to nearby locations and the properties are either owned or the relativerelated leases have expired. During the sixnine months ended February 28,May 31, 2001, the Company had cash outlays related to itsthe reserve, which originally resulted from write-downs taken in fiscal year 2000 and fiscal year 1998. The write-downs were the result of the Company's continuing efforts to redeploy both capital and human resources to improve the Company's financial performance and strengthen the organization. The 2000 write-down resulted in a pretax charge to operating costs of $14.5 million during the fourth quarter for store closings, associated closing costs, asset impairment charges in accordance with Statement of Financial Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets to be Disposed of," and other unusual charges. The principal components of the 2000 charge were (1) $7.7 million for the closing of 15 restaurants that had not met the Company's return on invested capital and sales growth requirements - 14 of the 15 units have been closed as of February 2001, and the remaining store is planned for closure prior to August 31, 2001; (2) $3.2 million for asset impairments of six restaurant properties which the Company continues to operate; (3) $1.3 million for the write-down of computer-related equipment and software; (4) $1.2 million additional write-down on surplus properties held for sale; and (5) $1.1 million related to other unusual charges. The 1998 write-down resulted in a pretax charge to operating costs of $36.9 million for stores that were closed, relocated, or impaired. The principal components of the 1998 charge were (1) $14.7 million for the closing of 14 underperforming restaurants; (2) $10.7 million for the closing and relocation of 16 restaurants to optimize their market potential; (3) $11.4 million for asset impairments of 13 restaurants which the Company continues to operate; and (4) $0.1 million additional write-down on surplus properties held for sale. See further discussion of the 2000 and 1998 pretax chargeswrite-downs in Note 4 of the Notes to Consolidated Financial Statements for the period ended February 28,May 31, 2001. At February 28, 2001, the balance in the reserve for store closings was $651,000. All material cash outlays related to the 1998 pretax charge had beenwere made as of November 30, 2000. It is anticipated that all material cash outlays required for the 2000 pretax charge will be made prior to August 31, 2001. At May 31, 2001, the balance in the reserve for store closings was $604,000, which relates to the 2000 pretax charge. The following table presents a summary of the types and amounts recognized as accrued expenses together with cash payments made against such accruals for the quarternine months ended February 28,May 31, 2001: _____________________________________________________ Legal And Lease Profes- Work Other Settlement sional force Exit Total Costs Fees Severance Costs Reserve _____________________________________________________ (Thousands of dollars) Reserve balance at August 31, 2000 $ 765 $ 375 $ 375 $ 300 $ 1,815 Additions/transfers/ (reductions) 450 (200) (55) (195) --- Cash payments (715) --- (306) (143) (1,164)(190) (1,211) _______ _______ _______ _______ _______ Reserve balance at February 28, 2001 $ 500 $ 175 $ 14 $ (38)(85) $ 651604 _______ _______ _______ _______ _______ Results of Operations _____________________ Quarter ended February 28,May 31, 2001, compared to the quarter ended February 29,May 31, 2000 ____________________________________________________________________________ Sales decreased $9,705,000,$4,604,000, or 8.0%3.6%, due to the closing of three restaurants in fiscal year 2000 and 1417 restaurants in fiscal year 2001, and excluding a leap day in fiscal year 2000, a decline of 5.3% during the quarter in sales volumes at restaurants opened over 18 months. This2001; this decrease was partially offset by the opening of 11 new restaurants during fiscal year 2000 and one restaurant in fiscal year 2001. Same-store sales declined 0.4% during the quarter at restaurants opened over 18 months. Additionally, in April 2001, the Company effected a 50 cent price increase on its signature Lu Ann Plate. The bundled offerings of the Luby's Platter and the "Big2Do" were in turn discontinued. Cost of food decreased $839,000,$2,649,000, or 2.8%8.0%, due primarily to the decline in sales. As a percentage of sales, food costs were higherlower due to recent couponing, our drive to increase dinner traffic by offering higher-end entrees such as steak, shrimp, and fresh fish, and increasedthe move from deeply discounted bundled meal offerings. Payroll and related costs decreased $308,000,increased $1,999,000, or 0.8%5.1%, due primarily to store closures offset byhigher hourly labor costs and higher workers' compensation costs. Occupancy and other operating expenses increased $2,398,000,$3,131,000, or 6.1%8.0%, due primarily to increased utility costs due to higher rates;rates, higher property taxes related to new stores and remodels;remodels, higher expenditures related to improving the general condition of the restaurants, and higher depreciation expense associated with the new stores, restaurant remodels, and an increase in technology-related spending.increased management compensation. In addition, advertising expense was higher due to the timing of expenditures. General and administrative expenses increased $1,171,000, or 22.3%, due primarily to higher officer salaries due to non-cash compensation related to new management stock options and increased legal and professional fees related to the debt restructuring. These increases were partially offset by lower management incentive pay as a result ofmanager trainee salaries due to fewer trainees and lower sales and profits. General and administrative expenses increased $1,168,000, or 20.6%, due primarily to increased consulting services and higher legal and professional fees related to the proxy and debt restructuring. These increases were offset by lower profit sharing and bonus expenses. During the current quarter, the Company recorded a pretax charge to operating costs of $9,445,000 as a result of asset impairment charges in accordance with Statement of Financial Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets to be Disposed of." The charge related to 13 restaurant properties, which were written down to their estimated fair value. These properties have experienced specific unfavorable market conditions that have contributed to their impairment. The carrying values of the assets were written down to the estimated future discounted cash flows or fully written off in the case of negative future cash flows. Estimated future cash flows were based on a regression analysis of averages for similar restaurants, discounted at the Company's weighted average cost of capital. Three of the properties have been designated for closure.travel-related costs. Interest expense increased $1,432,000,$1,889,000, or 114.3%114.8%, from the first quarter of fiscal 2000 due to higher borrowings under the line-of-credit agreement and higher interest rates. Other income decreased $111,000increased $130,000 due to property tax late payment penalties and other miscellaneous costs, which were partially offset by higher gains on the salessale of properties. IncomeThe income tax benefit increased $8,071,000,$3,114,000, or 269.3%122.6%, due primarily to lower income before income taxes. This was also raised by a slightan increase in the effective income tax rate from 34.8%30.3% to 35.0%. SixIn the prior year, the Company settled several tax items favorably which contributed to a lower effective tax rate. Nine months ended February 28,May 31, 2001, compared to the sixnine months ended February 29,May 31, 2000 __________________________________________________________________________________________________________________________________________________________ Sales decreased $18,949,000,$23,553,000, or 7.7%6.3%, due to the closing of three restaurants in fiscal 2000 and 1417 restaurants in fiscal year 2001, and excluding a leap day in fiscal year 2000, a decline of 6.2% during the six-month period in sales volumes at restaurants opened over 18 months. This2001; this decrease was partially offset by the opening of 11 new restaurants during fiscal 2000 and one restaurant in fiscal year 2001. Excluding a leap day in fiscal year 2000, same store sales declined 4.5% during the nine-month period at restaurants opened over 18 months. Additionally, in April 2001, the Company effected a 50 cent price increase on its signature Lu Ann Plate. The bundled offerings of the Luby's Plate and the "Big2Do" were in turn discontinued. Cost of food decreased $1,878,000,$4,528,000, or 3.1%4.9%, due primarily to the decline in sales. As a percentage of sales, food costs were higherlower due to recent couponing, our drive to increase dinner traffic by offering higher-end entrees such as steak, shrimp, and fresh fish, and increasedthe move from deeply discounted bundled meal offerings. Payroll and related costs increased $376,000,$2,375,000, or 0.5%2.1%, primarily due to higher hourly labor costs and higher workers' compensation costs, which were partially offset by lower payroll costs related to store closures.compensations costs. Occupancy and other operating expenses increased $2,705,000,$5,837,000, or 3.4%4.9%, due primarily to increased utility costs due to higher rates;rates and higher rent expense due to new stores and the timing of percentage rentals; higher property taxesexpenditures related to new stores and remodels; and higher depreciation expense associatedimproving the general condition of the restaurants. The provision for asset impairments of $10,199,000 during the current year relates the pretax charge to operating costs which resulted from asset impairment charges in accordance with the new stores, restaurant remodels, and an increase in technology-related spending. These increases were partially offset by lower advertising expense dueStatement of Financial Accounting Standards No. 121 (FAS121), "Accounting for the Impairment of Long Lived Assets to a change in the timing of expenditures and lower management incentive pay as a result of lower sales and profits.be Disposed of." See Note 4. General and administrative expenses increased $2,160,000,$3,332,000, or 19.9%20.7%, due primarily to higher officers' salaries related to incentive options for new executive management, as well as a separation agreement negotiated with Luby's former President and CEO, increased consulting services, and higher legal and professional fees related to the proxy and debt restructuring. These increases were offset by lower profit sharing and bonus expenses. During the period, the Company recorded a pretax charge to operating costs of $10,199,000 as a result of asset impairment charges in accordance with Statement of Financial Accounting Standards No. 121 (FAS 121), "Accounting for the Impairment of Long-Lived Assets to be Disposed of." The charge related to surplus properties held for sale and 13 restaurant properties which were written down to their estimated fair value.expense. Interest expense increased $2,633,000,$4,521,000, or 114.0%114.3%, from the first sixnine months of fiscal 2000 due to higher borrowings under the line-of-credit agreement and higher interest rates. Other income decreased $522,000$393,000 due primarily to property tax late payment penalties and other miscellaneous costs. IncomeThese decreases were offset by higher gains on property sales. The income tax benefit increased $12,446,000,$15,561,000, or 197.8%176.2%, due primarily to lower income before income taxes. This was also raised by a slight increase in the effective income tax rate from 34.8%33.4% to 35.0%. In the prior year, the Company settled several items favorably which contributed to a lower effective tax rate Forward-Looking Statements __________________________ The Company wishes to caution readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements made from time to time in news releases, reports, proxy statements, registration statements, and other written communications (including the preceding sections of this Management's Discussion and Analysis), as well as oral statements made from time to time by representatives of the Company. Except for historical information, matters discussed in such oral and written communications are forward-looking statements that involve risks and uncertainties, including but not limited to general business conditions, the impact of competition, the success of operating initiatives, changes in the cost and supply of food and labor, the seasonality of the Company's business, taxes, inflation, governmental regulations, and the availability of credit, as well as other risks and uncertainties disclosed in periodic reports on Form 10-K. Item 3. Quantitative and Qualitative Disclosure about Market Risk _______ _________________________________________________________ Excluding the interest rate swap agreements (swaps) in the combined notional amount of $45 million, the Company has borrowed under its revolving credit agreement at prime or other rate options available at the time of borrowing. The other rate options arewere increased or decreased according to the Company's performance in comparison to existing bank covenants. As of February 28,May 31, 2001, the total amount of debt subject to interest rate fluctuations was $78 million under its revolving credit agreement. A 1% change in interest rates would result in an increase or decrease in interest expense of $780,000 per year. Part II - OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds. _______ __________________________________________ Effective as of March 8, 2001, the Company amended the Rights Agreement dated as of April 16, 1991 (as amended effective as of December 19, 1991, February 7, 1995, and May 29, 1995) between the Company and American Stock Transfer & Trust Company as Rights Agent. The amendment modifies the Rights Agreement which governs the common stock purchase rights associated with each outstanding share of common stock of the Company. The amendment modifies the definition of "Acquiring Person" and "Distribution Date" as used in the Rights Agreement, exempts certain persons from the operation of the Rights Agreement, and extends the final expiration date of the common stock purchase rights, among other things. The Company filed a Form 8-A/A with the Securities and Exchange Commission on March 22, 2001, in which it amended the description of the common stock purchase rights as they were described in the Company's Form 8-A dated April 16, 1991. The description of the common stock purchase rights is qualified in its entirety by reference to these filings. The general effect of modification to the Rights Agreement is to extend the protections afforded to the shareholders of the Company by the agreement for an additional two years. Item 3. Defaults Upon Senior Securities _______ _______________________________ See Part I -- Note 5: Debt. Part II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. ______ ____________________________________________________ (a) The 2001 annual meeting of shareholders of Luby's, Inc. was held on January 12, 2001. (b) The directors elected at the meeting were Ronald K. Calgaard, Roger R. Hemminghaus, and Jimmy W. Woliver. The other directors whose terms continued after the meeting are Judith B. Craven, David B. Daviss, Arthur R. Emerson, Robert T. Herres, Walter J. Salmon, and Joanne Winik. (c) The matters voted upon at the meeting were (i) the election of three directors to serve until the 2004 Annual Meeting of Shareholders; (ii) the approval of the appointment of Ernst & Young LLP as auditors for the 2001 fiscal year; and (iii) to act upon the following nonbinding shareholder proposals: (a) proposal to limit CEO compensation, (b) proposal regarding board meeting agendas, (c) proposal to declassify the board of directors, and (d) proposal to remove antitakeover provisions. (d) With respect to the election of directors, the results of the voting were: Shares Voted Shares Broker Nominee For Abstained Nonvotes _______________________ ____________ __________ _________ Ronald K. Calgaard 10,209,575 2,751,006 -0- Roger R. Hemminghaus 10,736,295 2,222,427 -0- Jimmy W. Woliver 11,349,204 1,918,181 -0- Elise Jones Freeman 3,575,998 27,589 -0- Herbert Leslie Goldberg 3,443,291 148,028 -0- Thomas C. Palmer 3,162,972 132,460 -0- (e) With respect to the approval of the appointment of auditors, the results of the voting were: Shares voted "for" 16,078,882 Shares voted "against" 381,908 Shares abstaining 101,554 Broker nonvotes -0- (f) With respect to the nonbinding shareholder proposals: (1) Proposal to limit CEO compensation: Shares voted "for" 5,999,580 Shares voted "against" 8,335,754 Shares abstaining 1,174,319 Broker nonvotes -0- (2) Proposal regarding board meeting agendas: Shares voted "for" 5,797,428 Shares voted "against" 9,461,580 Shares abstaining 250,656 Broker nonvotes -0- (3) Proposal to declassify the board of directors: Shares voted "for" 8,810,394 Shares voted "against" 6,079,591 Shares abstaining 619,668 Broker nonvotes -0- (4) Proposal to remove antitakeover provisions: Shares voted "for" 9,535,570 Shares voted "against" 5,696,575 Shares abstaining 277,504 Broker nonvotes -0- Part II - OTHER INFORMATION (continued) Item 6. Exhibits and Reports on Form 8-K. _______ _________________________________ (a) Exhibits 3(a) Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference). 3(b) Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, 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. 1-8308,1 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 QuarterlyQuarterl 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) Amendment No. 4 dated March 8, 2001, to Rights Agreement dated April 16, 1991 (filed as Exhibit 99.1 to the Company's Report on Form 8-A12B/8 A12B/A on March 22, 2001, and incorporated herein by Reference)reference). 4(f) 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). 4(g) First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(h) ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(j) Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(k) Third Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Certain Lenders, and Bank of America, N.A. (filed as Exhibit 4(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). 4(l) Fourth Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Bank of America and other creditors of its bank group. 4(m) Deed of Trust, Assignment, Security Agreement, and Financing Statement dated July 2001, executed as part of the Fourth Amendment to the Credit Agreement. 4(n) Subordination and Intercreditor Agreement dated June 29, 2001, between Harris J. and Christopher J. Pappas, Bank of America, N.A. (as the bank group agent), and Luby's, Inc. 4(o) Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $1,500,000.00 4(p) Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $1,500,000.00. 4(q) Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $3,500,000.00. 4(r) Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $3,500,000.00. 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) Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(c) 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(d) Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(e) 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(f) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(g) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(h) Amended and Restated Nonemployee Director Stock Option Plan of Luby's, Inc. approved by the shareholders of Luby's, Inc. on January 14, 2000 (filed as Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2000, 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 (filed as Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference).* 10(k)10(j) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(l)10(k) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(m)10(l) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999 (filed as Exhibit 10(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference.)* 10(n)10(m) Severance Agreement between Luby's, Inc. and Barry J.C. Parker dated December 19, 2000 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 2000, and incorporated herein by reference).* 10(o)10(n) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(p)10(o) Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference).* 10(q)10(p) Form of Change in Control Agreement entered into between Luby's, Inc., and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference).* 10(r)10(q) Luby's, Inc. Deferred Compensation Plan effective June 1, 1999 (filed as Exhibit 10(cc) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference).* 10(s) 10(r) Registration Rights Agreement dated March 9, 2001, by and among Luby's, Inc. Christopher J. Pappas, and Harris J. Pappas (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated hereby by reference). 10(t)10(s) Purchase Agreement dated March 9, 2001, by and among Luby's, Inc., Harris J. Pappas and Christopher J. Pappas (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference). 10(u)10(t) Employment Agreement dated March 9, 2001, between Luby's, Inc. and Christopher J. Pappas (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(v)10(u) Employment Agreement dated March 9, 2001, between Luby's, Inc. and Harris J. Pappas (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(w)10(v) Luby's, Inc. Incentive Bonus Plan for Fiscal 2001 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference).* 10(w) Luby's Inc. Stock Option granted to Christopher J. Pappas on March 9, 2001.* 10(x) Luby's Inc. Stock Option granted to Harris J. Pappas on March 9, 2001.* 11 Statement re computation of per share earnings. 99(a) Corporate Governance Guidelines of Luby's Cafeterias, Inc., as amended July 20, 2000 (filed as Exhibit 99(a) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). *Denotes management contract or compensatory plan or arrangement. (b) Reports on Form 8-K No reportsThe Company filed a report on Form 8-K have been filed duringdated March 15, 2001, relating to the quarter for which this report is filed.employment of Harris J. and Christopher J. Pappas, the agreement of Messrs. Pappas to purchase $10 million in subordinated convertible notes, the election of Messrs. Pappas to the Board of Directors of the Company, and an amendment to the Company's shareholder right plan. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LUBY'S, INC. (Registrant) By: /s/CHRISTOPHER J. PAPPAS ________________________________________________________ Christopher J. Pappas President and Chief Executive Officer By: /s/ERNEST PEKMEZARIS _________________________:________________________________ Ernest Pekmezaris Senior Vice President and Chief Financial Officer Dated: AprilJuly 16, 2001 EXHIBIT INDEX Number Document _______ __________Page 3(a) Certificate of Incorporation of Luby's, Inc., as currently in effect (filed as Exhibit 3(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference). 3(b) Bylaws of Luby's, Inc. as currently in effect (filed as Exhibit 3(c) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, 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. 1-8308,1 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) Amendment No. 4 dated March 8, 2001, to Rights Agreement dated April 16, 1991 (filed as Exhibit 99.1 to the Company's Report on Form 8-A12B/8- A12B/A on March 22, 2001, and incorporated herein by Reference)reference). 4(f) 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). 4(g) First Amendment to Credit Agreement dated January 24, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference). 4(h) ISDA Master Agreement dated June 17, 1997, between Luby's Cafeterias, Inc. and NationsBank, N.A., with Schedule and Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(i) ISDA Master Agreement dated July 2, 1997, between Luby's Cafeterias, Inc. and Texas Commerce Bank National Association, with Schedule and Confirmation dated July 2, 1997 (filed as Exhibit 4(h) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(j) Second Amendment to Credit Agreement dated July 3, 1997, among Luby's Cafeterias, Inc., Certain Lenders, and NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1997, and incorporated herein by reference). 4(k) Third Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Certain Lenders, and Bank of America, N.A. (filed as Exhibit 4(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). 4(l) Fourth Amendment to Credit Agreement dated October 27, 2000, among Luby's, Inc., Bank of America and other creditors of its bank group. 4(m) Deed of Trust, Assignment, Security Agreement, and Financing Statement dated July 2001, executed as part of the Fourth Amendment to the Credit Agreement. 4(n) Subordination and Intercreditor Agreement dated June 29, 2001, between Harris J. and Christopher J. Pappas, Bank of America, N.A. (as the bank group agent), and Luby's, Inc. 4(o) Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $1,500,000.00. 4(p) Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $1,500,000.00. 4(q) Convertible Subordinated Promissory Note dated June 29, 2001, between Christopher J. Pappas and Luby's, Inc. in the amount of $3,500,000.00. 4(r) Convertible Subordinated Promissory Note dated June 29, 2001, between Harris J. Pappas and Luby's, Inc. in the amount of $3,500,000.00. 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) Form of Amendment to Deferred Compensation Agreement between Luby's Cafeterias, Inc. and various officers and former officers adopted January 14, 1997 (filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(c) 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(d) Amendment to Management Incentive Stock Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(k) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(e) 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(f) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as Exhibit 10(m) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(g) Amendment to Nonemployee Director Deferred Compensation Plan of Luby's Cafeterias, Inc. adopted March 19, 1998 (filed as Exhibit 10(o) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(h) Amended and Restated Nonemployee Director Stock Option Plan of Luby's, Inc. approved by the shareholders of Luby's, Inc. on January 14, 2000 (filed as Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 29, 2000, 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 (filed as Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1996, and incorporated herein by reference).* 10(k)10(j) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 14, 1997 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1997, and incorporated herein by reference).* 10(l)10(k) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted January 9, 1998 (filed as Exhibit 10(u) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(m)10(l) Amendment to Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan adopted May 21, 1999 (filed as Exhibit 10(q) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference.)* 10(n)10(m) Severance Agreement between Luby's, Inc. and Barry J.C. Parker dated December 19, 2000 (filed as Exhibit 10(r) to the Company's Quarterly Report on Form 10-Q for the quarter ended November 30, 2000, and incorporated herein by reference).* 10(o)10(n) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock Plan adopted March 19, 1998 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1998, and incorporated herein by reference).* 10(p)10(o) Luby's Incentive Stock Plan adopted October 16, 1998 (filed as Exhibit 10(cc) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, and incorporated herein by reference).* 10(q)10(p) Form of Change in Control Agreement entered into between Luby's, Inc., and each of its Senior Vice Presidents as of January 8, 1999 (filed as Exhibit 10(aa) to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 1999, and incorporated herein by reference).* 10(r)10(q) Luby's, Inc. Deferred Compensation Plan effective June 1, 1999 (filed as Exhibit 10(cc) to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 1999, and incorporated herein by reference).* 10(s)10(r) Registration Rights Agreement dated March 9, 2001, by and among Luby's, Inc. Christopher J. Pappas, and Harris J. Pappas (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated hereby by reference). 10(t)10(s) Purchase Agreement dated March 9, 2001, by and among Luby's, Inc., Harris J. Pappas and Christopher J. Pappas (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference). 10(u)10(t) Employment Agreement dated March 9, 2001, between Luby's, Inc. and Christopher J. Pappas (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(v)10(u) Employment Agreement dated March 9, 2001, between Luby's, Inc. and Harris J. Pappas (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K dated March 9, 2001, and incorporated herein by reference).* 10(w)10(v) Luby's, Inc. Incentive Bonus Plan for Fiscal 2001 (filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference).* 10(w) Luby's Inc. Stock Option granted to Christopher J. Pappas on March 9, 2001.* 10(x) Luby's Inc. Stock Option granted to Harris J. Pappas on March 9, 2001.* 11 Statement re computation of per share earnings. 99(a) Corporate Governance Guidelines of Luby's Cafeterias, Inc., as amended July 20, 2000 (filed as Exhibit 99(a) to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000, and incorporated herein by reference). *Denotes management contract or compensatory plan or arrangement. (b) Reports on Form 8-K The Company filed a report on Form 8-K dated March 15, 2001, relating to the employment of Harris J. and Christopher J. Pappas, the agreement of Messrs. Pappas to purchase $10 million in subordinated convertible notes, the election of Messrs. Pappas to the Board of Directors of the Company, and an amendment to the Company's shareholder right plan.