HOUSTON-Luby’s Inc. experienced increases insame-store sales and reduced its debt during thirdquarter of fiscal 2005, putting the restaurantoperator in much better fiscal and operational healththan it has been for several years.

“Our focus on stronger operations, exciting newproducts and a targeted advertising message is growingsales,” says Luby’s president and CEO Chris Pappas.Sales in the third quarter were $77 million, anincrease of 6.5% compared to the same period lastyear. (The restaurateur characterizes all sales assame-store sales.) “This is the sixth consecutivequarter of same-store sales growth,” Pappas pointsout.

Luby’s profit increased to $3.7 million during thethird quarter fiscal 2005, or 15 cents per share fullydiluted, compared to $375,000, or two cents per sharefully diluted for same period fiscal 2004. Pappas saysthat Luby’s has posted increased profitability forfour out of the five previous quarters.

Similarly, income from continuing operations increaseda whopping 128.6% to $6.1 million from $2.7 millionfor the third quarter of fiscal 2004.

Luby’s bottom-line is getting in shape, too. “Our debt continues to decline,” Pappas says. “Our debt is at the lowest point in over nine years.” The restaurateur reduced its total debt by $16.8 million in the third quarter of fiscal 2005. The debt was paid off by cash generated from operations and proceeds from real estate sales. Currently, the company has $8.3 million in cash and another $11.3 million in real estate properties on the sales block.

Looking forward, Pappas says that Luby’s will continueto focus on improving operations and growing sales. In particular, the restaurateur will start updating and renovating the dining rooms in its stores now that the kitchens–or “back of the house” as Pappas describes them–-have been improved.

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