Luby's Tastes Like Taxes: Fool by Numbers

On Tuesday, Dec. 19, restaurant operator Luby's (NYSE: LUB  ) released first-quarter 2007 earnings for the period ended Nov. 22.

• Management proudly pointed out that year-over-year same-store sales grew for the 12th consecutive quarter. It isn't quite as happy about the minuscule 1.7% same-store growth rate.
• But Luby's did set aside $1.1 million of income taxes in this quarter, compared with $18,000 in the year-ago period. The company has been in the habit of booking tax benefits rather than paying anything, ever since a horrendous 2001 essentially hit the reset button on its books.
• The hefty increase in operational cash flow is the result of major sequential changes on the balance sheet, like a $5.5 million jump in accounts payable and $2.1 million more in accrued expenses.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$73,868	$72,582	1.8%
Net Profit	$1,915	$2,223	(13.9%)
EPS	$0.07	$0.08	(12.5%)
Diluted Shares	27102	27325	(0.8%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	73.2%	72.9%	0.3
Operating Margin	3.9%	4.6%	(0.7)
Net Margin	2.6%	3.1%	(0.5)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$18,650	$4,855	284.1%
Accounts Rec.	$616	$460	33.9%
Inventory	$3,724	$3,638	2.4%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$15,373	$17,142	(10.3%)
Long-Term Debt	$0	$10,000	(100%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops.	$11,861	$3,751	216.2%
Capital Expenditures	$3,012	$2,336	28.9%
Free Cash Flow	$8,849	$1,415	525.4%
Owner Earnings	$2,488	$3,440	(27.7%)

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here .