Company Posts Positive Same Store Sales Growth and Earnings in Q1
November 05, 2007: 05:30 PM EST
THE COLONY, Texas, Nov. 5 /PRNewswire-FirstCall/ — Pizza Inn, Inc. today reported net income of $0.03 per share in its first fiscal quarter ended September 23, 2007 versus a net loss of ($0.10) per share in the same quarter in the prior fiscal year. The quarter resulted in net income of $345,000 versus a net loss of ($1,061,000) for the same quarter in the prior fiscal year on revenues of $12.1 million and $11.8 million respectively. Operating performance for the first quarter of fiscal year 2008 included the following:
-- Comparable buffet restaurant sales increased 3.4% for the first
quarter.
-- Total domestic chain-wide comparable restaurant sales increased 1.4%
for the first quarter.
-- The Company recorded a charge of $300,000 or ($0.03) per share, in the
quarter related to the departure of the company's previous CEO. After
adjusting for this expense, the Company would have posted diluted
earnings per share of $0.06.
-- General and administrative expenses for the first quarter were lower by
approximately 59%, or $914,000, due primarily to lower legal fees
related to various litigation issues settled during fiscal 2007.
-- Interest expense decreased 100%, or $200,000, compared to the same
quarter in the prior fiscal year due to the Company eliminating all
outstanding debt in December 2006.
Operating results for the first quarter mark the fourth consecutive profitable quarter for Pizza Inn, further strengthening the Company’s financial and cash positions. It also marks seven consecutive months of comparable buffet sales growth.
Charlie Morrison, Interim CEO and Chief Financial Officer, commented, “Our momentum in same store sales through remodeling and operational execution demonstrates our progress in revitalizing the Pizza Inn brand. Working with our franchisee leadership, we are closing in on modifications to our buffet restaurant, taking the best elements of our existing prototype and combining these with a service and hospitality platform that deliver an exceptional customer experience in a more efficient restaurant. This new prototype will be introduced in 2008 as a company-owned restaurant and will be offered through our domestic and international franchise sales channels.”
Further details of the new prototype will be released in the near future.
Certain statements in this press release, other than historical information, may be considered forward-looking statements, within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, and are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Pizza Inn’s operating results, performance or financial condition are its ability to implement its growth strategies; success of its franchise operations; national, regional and local economic conditions affecting the restaurant industry; competition within the restaurant industry; restaurant sales cannibalization; negative publicity; fluctuations in quarterly results of operations, including seasonality; government regulations; weather; and commodity, insurance and labor costs.
Pizza Inn, Inc. (http://www.pizzainn.com) is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises approximately 346 restaurants and owns one restaurant with annual domestic and international chain-wide sales of approximately $145 million.
Contact:
Danny Meisenheimer
VP of Brand Management
Pizza Inn, Inc.
469-384-5000
[email protected]
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 23, September 24,
REVENUES: 2007 2006
Food and supply sales $10,779 $10,388
Franchise revenue 1,116 1,189
Restaurant sales 183 190
12,078 11,767
COSTS AND EXPENSES:
Cost of sales 10,072 9,929
Franchise expenses 620 672
General and administrative expenses 635 1,549
Severance 300 -
Bad debt 23 -
Gain on sale of assets - (10)
Other income - (33)
Provision for litigation costs - 410
Interest expense - 200
11,650 12,717
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 428 (950)
Income taxes - -
INCOME (LOSS) FROM CONTINUING
OPERATIONS 428 (950)
Income (loss) from discontinued
operations, net of taxes (83) (111)
NET INCOME (LOSS) 345 (1,061)
EARNINGS PER SHARE OF COMMON STOCK -
BASIC:
Income (loss) from continuing
operations $0.04 $(0.09)
Income (loss) from discontinued
operations (0.01) $(0.01)
Net income (loss) $0.03 $(0.10)
EARNINGS PER SHARE OF COMMON STOCK -
DILUTED:
Diluted income (loss) per common share
Income (loss) from continuing
operations $0.04 $(0.09)
Income (loss) from discontinued
operations (0.01) (0.01)
Net income (loss) $0.03 $(0.10)
Weighted average common shares
outstanding - basic 10,166 10,138
Weighted average common and
potential dilutive common shares
outstanding 10,167 10,138
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Three Months Ended
September 23, September 24,
2007 2006
Net income (loss) $345 $(1,061)
Interest rate swap (loss) gain -
(net of tax expense
of $0 and $29, respectively) - (34)
Comprehensive income (loss) $345 $(1,095)
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
September 23, June 24,
ASSETS 2007 2007
CURRENT ASSETS
Cash and cash equivalents $1,320 $1,879
Accounts receivable, less allowance
for bad debts of $472 and $451,
respectively 3,074 2,716
Notes receivable, current portion 7 8
Inventories 1,334 1,518
Property held for sale 336 336
Deferred income tax assets 458 458
Prepaid expenses and other 251 165
Total current assets 6,780 7,080
LONG-TERM ASSETS
Property, plant and equipment, net 752 778
Notes receivable 12 12
Re-acquired development territory, net 190 239
Deposits and other 115 85
$7,849 $8,194
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $1,780 $2,082
Accrued expenses 1,458 1,805
Total current liabilities 3,238 3,887
LONG-TERM LIABILITIES
Deferred gain on sale of property 203 209
Deferred revenues 301 314
Other long-term liabilities 20 7
Total liabilities 3,762 4,417
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $.01 par value;
authorized 26,000,000
shares; issued 15,121,518 and
15,120,319 shares, respectively;
outstanding 10,153,689 and
10,168,494 shares, respectively 151 151
Additional paid-in capital 8,471 8,471
Retained earnings 15,144 14,799
Treasury stock at cost
Shares in treasury: 4,967,829 and
4,951,825, respectively (19,679) (19,644)
Total shareholders' equity 4,087 3,777
$7,849 $8,194
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
September 23, September 24,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $345 $(1,061)
Adjustments to reconcile net income
(loss) to cash (used) provided by
operating activities:
Depreciation and amortization 84 311
Severance accrual expense 300 -
Deferred rent expense - 2
Stock compensation expense - 42
Litigation expense accrual - 410
Gain on sale of assets - (10)
Provision for bad debts 23 -
Deferred revenue - 112
Changes in operating assets and
liabilities:
Notes and accounts receivable (380) 406
Inventories 184 62
Accounts payable - trade (302) (138)
Accrued expenses (646) 30
Prepaid expenses and other (92) 51
Cash (used) provided by operating
activities (484) 217
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets - 10
Capital expenditures (40) (94)
Cash used for investing activities (40) (84)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs - (25)
Change in line of credit, net - (6)
Repayments of long-term bank debt - (102)
Repurchase of common stock (35) -
Cash used for financing activities (35) (133)
Net decrease in cash and cash
equivalents (559) -
Cash and cash equivalents, beginning
of period 1,879 184
Cash and cash equivalents, end of
period $1,320 $184
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Three Months Ended
September 23, September 24,
2007 2006
CASH PAYMENTS FOR:
Interest $- $200
Income taxes - -
NON CASH FINANCING AND INVESTING
ACTIVITIES:
Capital lease obligations incurred
Loss on interest rate swap $- $(27)
