news releases

Pizza Inn Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2014 Financial Results
Company financial performance strengthens with accelerating growth of Pie Five and strong comparable sales at Pizza Inn and Pie Five
PR Newswire
THE COLONY, Texas

THE COLONY, Texas, Sept. 23, 2014 /PRNewswire/ -- Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today reported financial results for the fourth quarter and fiscal year ended June 29, 2014.

http://photos.prnewswire.com/prnvar/20140923/147993

Fourth Quarter Highlights:

    --  Pizza Inn domestic comparable sales increased 1.5% from the same period
        in the prior year.
    --  Pie Five comparable store sales increased 12.9% from the same period in
        the prior year.
    --  Pie Five Company-owned average weekly sales per store increased 25.2%
        year over year.
    --  Company-owned restaurant sales from continuing operations increased
        42.6% year over year, or 53.6% when prior year quarter is normalized to
        13 weeks.
    --  Adjusted EBITDA, a non-GAAP financial measure, increased by $0.3 million
        sequentially over the previous quarter to $0.1 million.
    --  Net losses improved by $0.3 million over the same quarter of the prior
        year to a loss of $0.4 million.

Annual Highlights:

    --  Pizza Inn domestic comparable store franchisee retail sales decreased
        1.1% year over year.
    --  Pie Five Company-owned average weekly sales per store increased 12.4%
        year over year.
    --  Company-owned restaurant sales increased 33.0% year over year, or 35.5%
        when prior year is normalized to 52 weeks.
    --  The Company continued to invest in infrastructure to support future Pie
        Five growth, contributing to an Adjusted EBITDA loss of $0.5 million, a
        decrease of $1.1 million compared to prior year.
    --  Net loss increased $0.3 million from prior year to a loss of $1.6
        million

Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today announced results for the fourth fiscal quarter and year ended June 29, 2014. The Company's net loss in the fourth quarter improved by $0.3 million over the comparable period in the prior fiscal year to $0.4 million from a loss of $0.7 million. Conversely, the Company's net loss for the 2014 fiscal year increased $0.3 million to $1.6 million compared to a net loss of $1.3 million in the prior fiscal year. The increase in net loss from prior year was primarily due to higher general and administrative expenses and franchise costs attributable to growth of the Pie Five brand, as well as lower food and supply sales. The fourth fiscal quarter and fiscal year 2014 had 13 and 52 weeks, respectively, as compared to 14 and 53 weeks, respectively, in the same periods of the prior fiscal year.

"Fiscal 2014 was an investment year as we continued to build the talent and infrastructure to effectively grow both of our restaurant brands. That investment is reflected in the losses recorded for the last several quarters," said Randy Gier, President and Chief Executive Officer. "We are very pleased to see the improving financial performance each of the last three quarters, and especially pleased with the most recent quarter results which we believe reflect our turning the corner on this investment of resources. Both of our brands recorded strong positive comparable store sales growth for the fourth quarter, a trend that has continued in the first quarter of fiscal 2015," added Gier.

Fourth Quarter 2014 Operating Results

Total revenues for the fourth quarter of fiscal 2014 and the comparable prior year quarter were $10.9 million and $10.4 million, respectively. When the prior year period is normalized to 13 weeks, fourth quarter franchise revenue increased by 1.5% year over year. Additional franchise development fees previously received from Pie Five franchisees have been deferred and will be recognized as future restaurants are opened.

Pizza Inn domestic franchisee sales for comparable stores increased 1.5% from the same period in the prior year. "We are very pleased to report positive comparable store sales for domestic franchisees in the Pizza Inn system. These results reflect the hard work that we have undertaken in partnership with our franchise leadership to improve quality, drive consistent operating standards, create aligned marketing programs, establish tools, and instill training to run better, more profitable restaurants," said Gier. "We have terrific franchise leaders with whom we are working very closely to restore growth to Pizza Inn. Comparable store sales trends have strengthened each of the last four quarters, with the most recent quarter reporting the first year over year increase in nearly three years. Improving sales and profitability has helped to slow the rate of restaurant closures, and is beginning to instill greater interest in building new restaurants. We have only begun this journey, but appreciate the dedication of all of our franchisees to the work that is required to achieve excellence for our flagship brand," Gier stated.

Pie Five comparable store sales for the fourth quarter of fiscal 2014 increased 12.9% when compared to the same period in the prior year. Average weekly sales in Company-owned Pie Five restaurants increased 25.2% reflecting both strong comparable store sales growth and higher average sales of Company-owned restaurants opened during fiscal 2014.

Gier explained, "We have worked hard over the past two years to refine our Pie Five concept to respond to consumer feedback, to improve site selection through rigorous analysis of each opening, to enhance marketing productivity, and to establish replicable, scalable operating processes. The continued improving results are a direct reflection of that work. We are not only seeing strong positive comparable store sales in our existing restaurants, we are also seeing newer restaurants opening that are sustaining at higher sales levels than the previous restaurants. This is leading to an acceleration of new restaurant openings and additional franchise signings."

Fourth quarter fiscal 2014 food and supply sales decreased by $0.1 million, or 1.5%, compared to the same quarter of the prior year. However, when the prior year period is normalized to 13 weeks, fourth quarter food and supply sales increased over the prior year by $0.4 million, or 6.0%, primarily due to increased average weekly domestic franchisee retail sales.

Fourth quarter Company-owned restaurant sales from continuing operations increased $0.7 million, or 42.6%, compared to the prior year as a result of the opening of one new Company-owned Pie Five restaurant in the fourth quarter of fiscal 2013 and four new Company-owned Pie Five restaurants in fiscal 2014 (one of which was a relocation of an existing restaurant), partially offset by the closing of two Company-owned Pizza Inn restaurants. Fourth quarter general and administrative expenses decreased $0.1 million.

Fiscal Year 2014 Operating Results

Total revenues for the 2014 fiscal year and prior year were $42.2 million and $41.2 million, respectively. Fiscal 2014 franchise revenue decreased by $0.1 million compared to the prior year, primarily due to one less week in fiscal year 2014. A decrease in franchise fees and royalties from Pizza Inn franchisees was largely offset by increased royalties and franchise fees from Pie Five franchisees. Additional franchise development fees previously received from Pie Five franchisees have been deferred and will be recognized as future restaurants are opened.

Fiscal 2014 food and supply sales decreased by $1.3 million, or 4.3%, compared to the prior year, primarily due to decreased Pizza Inn domestic franchisee retail sales. However, based on a comparable 52 week year, fiscal 2014 food and supply sales decreased by only $0.7 million, or 2.4%.

Fiscal 2014 Company-owned restaurant sales increased $2.5 million, or 33.0%, compared to the prior year as a result of the opening of two new Company-owned Pie Five restaurants in the second half of fiscal 2013 and four new Company-owned Pie Five restaurants in fiscal 2014 (one of which was a relocation of an existing restaurant). Fiscal 2014 general and administrative expenses increased $0.3 million over the prior year primarily to support growth for new Company-owned Pie Five restaurants and future growth plans.

Development Review

Nine new Pie Five restaurants were opened by the Company and franchisees in fiscal 2014, including one in the fourth quarter, to bring the fiscal year-end total to 20 stores. Franchisees opened 24 new Pizza Inn restaurants for the year while closing 21 restaurants, ending the fiscal year at 253 total Pizza Inn Company and franchise stores.

"The five Pie Five restaurants opened by franchisees so far in fiscal 2015 are off to a strong start, and we remain on track to nearly double our fiscal year end Pie Five restaurant count by the end of the calendar year," said Gier.

During fiscal 2014, the Company signed nine new franchise development agreements to develop up to 131 Pie Five restaurants and has signed two additional development agreements during the first quarter of fiscal 2015. The Company currently has Pie Five franchise restaurant development commitments for a total of up to 229 restaurants.

Gier continued, "Most importantly, we have prepared and resourced our organization with the tools, the talent, and the systems to reliably replicate and expand. In our business, there is no substitute for great operations delivering comeback food quality and service that surprises on every visit. We are prepared to support our franchisees and to run our own restaurants at world class standards even as we ramp up new restaurant openings."

Gier concluded, "As a result of continued strength in our restaurant performance we will be accelerating Pie Five Company-owned restaurant growth in the coming quarters by expanding the development of Company-owned Pie Five restaurants into several new metropolitan markets in addition to the continued development of the Dallas-Fort Worth market."

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in evaluating operating performance. These non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, stock compensation expense and impairment on long lived assets and other lease charges. A reconciliation of Adjusted EBITDA to net income is included with the accompanying financial statements. The fourth fiscal quarter and fiscal year 2014 had 13 and 52 weeks, respectively, as compared to 14 and 53 weeks, respectively, in the same periods of the prior year. For purposes of certain year to year comparisons, fourth quarter and full year fiscal 2013 results have been divided by the actual number of weeks in the respective period and then multiplied by the comparable number of weeks in the same period of fiscal 2014.

Note Regarding Forward Looking Statements

Certain statements in this press release, other than historical information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created thereby. These forward-looking statements are based on current expectations that involve numerous risks, uncertainties and assumptions. Assumptions relating to these forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions, regulatory framework and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Pizza Inn Holdings. Although the assumptions underlying these forward-looking statements are believed to be reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that any forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such information should not be regarded as a representation that the objectives and plans of Pizza Inn Holdings will be achieved.

About Pizza Inn Holdings, Inc.:

Headquartered in the Dallas suburb of The Colony, TX, Pizza Inn Holdings, Inc., is an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademarks "Pizza Inn" and "Pie Five Pizza Co." Pizza Inn is an international pizza chain featuring traditional and specialty pizzas, as well as freshly made pastas, sandwiches, and desserts. Pie Five Pizza Co. is a fast-casual concept offering individual pizzas made to order and cooked in less than five minutes. Founded in 1958, Pizza Inn Holdings, Inc. owns and franchises approximately 273 restaurants. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "PZZI". For more information, please visit www.pizzainn.com.

Contact:
Investor Relations
Pizza Inn Holdings, Inc.
469-384-5000


                                                         PIZZA INN HOLDINGS, INC.

                                                  CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 (In thousands, except per share amounts)



                                                                                        Year Ended                    Three Months Ended
                                                                                        ----------                    ------------------

                                                            June 29,                             June 30,              June 29,               June 30,

                                                                                        2014                   2013                    2014                    2013
                                                                                        ----                   ----                    ----                    ----


    REVENUES:                                                                        $42,224                $41,181                 $10,943                 $10,414


    COSTS AND EXPENSES:

                                              Cost of sales                             36,325                 34,767                   9,297                   8,640

                                              Franchise expenses                         2,931                  2,390                     781                     715

                                              General and administrative expenses        4,373                  4,106                   1,059                   1,111

                                              Pre-opening expenses                         161                    286                       1                      37

                                               Impairment of long-lived assets and
                                               other lease charges                         253                    766                     253                     766

                                              Bad debt                                     253                    205                      50                      70

                                              Interest expense                             142                    244                      29                      47

                                                                                      44,438                 42,764                  11,470                  11,386
                                                                                      ------                 ------                  ------                  ------


    LOSS FROM CONTINUING OPERATIONS BEFORE
     TAXES                                                                                                                                                (972)

                                                                                     (2,214)               (1,583)                  (527)


                                              Income tax benefit                         (760)                 (504)                  (233)                  (334)
                                                                                       -----


    LOSS FROM CONTINUING OPERATIONS                                                                                                                       (638)

                                                                                     (1,454)               (1,079)                  (294)


                                               Loss from discontinued operations,
                                               net of taxes                              (113)                 (182)                   (74)                   (55)


    NET LOSS                                                              $(1,567)               $(1,261)                $(368)                 $(693)
                                                                           -------                 -------                  -----                   -----


    LOSS PER SHARE OF COMMON STOCK - BASIC:

                                              Loss from continuing operations          $(0.17)               $(0.13)                $(0.04)                $(0.08)

                                              Loss from discontinued operations        $(0.01)               $(0.03)                $(0.01)                $(0.01)

                                              Net loss                                 $(0.18)               $(0.16)                $(0.05)                $(0.09)
                                              ========


    LOSS PER SHARE OF COMMON STOCK - DILUTED:

                                              Loss from continuing operations          $(0.16)               $(0.13)                $(0.03)                $(0.08)

                                              Loss from discontinued operations        $(0.01)               $(0.02)                $(0.01)                $(0.01)

                                              Net loss                                 $(0.17)               $(0.15)                $(0.04)                $(0.09)
                                              ========


    Weighted average common shares
     outstanding -basic

                                                                                       8,635                  8,031                   8,058                   8,021
                                                                                       =====                  =====                   =====                   =====


    Weighted average common
     shares outstanding -diluted                                                       9,173

                                                                                                            8,310                   8,525                   8,143
                                                                                                                                                           =====


                                                                PIZZA INN HOLDINGS, INC.

                                                               CONSOLIDATED BALANCE SHEETS

                                                          (In thousands, except share amounts)


                                                                                               June 29,                   June 30,

    ASSETS                                                                                              2014                       2013
                                                                                                        ----                       ----


    CURRENT ASSETS

                           Cash and cash
                           equivalents                                                  $2,796                       $919

                          Accounts receivable,
                           less allowance for
                           doubtful accounts
                           of $276 and $228,
                           respectively                                                                            3,139

                                                                                       3,276

                          Notes receivable                                                  81                        292

                          Inventories                                                    1,703                      1,615

                           Income tax
                           receivable                                                      386                        343

                           Deferred income tax
                           assets                                                          951                        882

                           Prepaid expenses and
                           other                                                           173                        307


                                                Total current assets                                      9,366                      7,497


    LONG-TERM ASSETS

                           Property, plant and
                           equipment, net                                                5,133                      4,711

                           Long-term notes
                           receivable                                                      134                         40

                           Long-term deferred
                           tax asset                                                       939                        168

                          Deposits and other                                               396                        119

                                                Total assets                                            $15,968                    $12,535
                                                                                                        =======                    =======

    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES

                           Accounts payable -
                           trade                                                        $2,023                     $1,572

                          Accrued expenses                                                 926                        792

                          Deferred rent                                                    163                        249

                          Deferred revenues                                                177                        169

                          Bank debt                                                        500                        669


                                                Total current liabilities                                 3,789                      3,451


    LONG-TERM LIABILITIES

                           Bank debt, net of
                           current portion                                                 267                      1,856

                           Deferred tax
                           liability                                                         -                         -

                           Deferred rent, net
                           of current portion                                              822                        708

                           Deferred revenues,
                           net of current
                           portion                                                         791                        370

                           Deferred gain on
                           sale of property                                                 34                         59

                           Other long-term
                           liabilities                                                      23                         22


                                                Total liabilities                                         5,726                      6,466
                                                                                                          -----                      -----


    COMMITMENTS AND CONTINGENCIES


    SHAREHOLDERS' EQUITY

                           Common stock, $.01
                           par value;
                           authorized
                           26,000,000                                                                                 153

                          shares; issued
                           16,240,412 and
                           15,312,680 shares,
                           respectively;
                           outstanding
                           9,121,012 and
                           8,193,280 shares,
                           respectively                                                    162

                           Additional paid-in
                           capital                                                      15,905                     10,174

                          Retained earnings                                             18,811                     20,378

                           Treasury stock at
                           cost

                           7,119,400 shares                                           (24,636)                  (24,636)
                                                                                       -------                    -------

                                                Total shareholders' equity                               10,242                      6,069
                                                                                                         ------                      -----

                                                 Total liabilities and
                                                 shareholders' equity                                   $15,968                    $12,535
                                                                                                        =======                    =======


                                                                                          PIZZA INN HOLDINGS, INC.

                                                                                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                               (In thousands)


                                                                      Year Ended                          Three Months Ended
                                                                      ----------                          ------------------

                                                                       June 29,                                June 30,                June 29,           June 30,

                                                                                   2014                                     2013                     2014                2013
                                                                                   ----                                     ----                     ----                ----


    CASH FLOWS FROM OPERATING ACTIVITIES:


                       Net loss                                                $(1,567)                                $(1,261)                  $(368)             $(693)

                       Adjustments to
                        reconcile net
                        loss to cash
                        (used in)
                        provided by
                        operating
                        activities:

                        Impairment of fixed assets and
                        other assets                                                253                                      766                      253                 766

                       Depreciation and amortization                              1,454                                    1,304                      398                 346

                       (Gain) loss on the sale of assets                           (97)                                     129                     (57)                  -

                       Provision for bad debt                                        48                                       25                    (155)               (19)

                       Stock compensation expense                                    68                                      150                       23                  15

                       Deferred income taxes                                      (840)                                   (671)                   (289)              (428)

                        Changes in
                        operating assets
                        and liabilities:                                                                                                              -                  -

                       Notes and accounts receivable                               (70)                                   (283)                     478               (111)

                       Income tax receivable                                       (41)                                      88                     (41)                 88

                       Inventories                                                 (88)                                     237                    (102)               (93)

                       Prepaid expenses and other                                 (213)                                     247                      154                 349

                       Deferred revenue                                             404                                        -                     128                (61)

                       Accounts payable - trade                                     451                                       10                    (155)                 31

                       Accrued expenses                                             163                                      (7)                     253               (136)
                                                                                    ---                                      ---                      ---                ----

                          Cash (used) provided by operating
                           activities                                                                                                                                   54

                                                                                   (75)                                     734                      520
                                                                                    ---                                      ---                      ---


    CASH FLOWS FROM INVESTING ACTIVITIES:


                        Proceeds from
                        sale of assets                                              106                                      184                       48                   -

                        Capital
                        expenditures                                            (2,068)                                 (2,244)                    (81)              (697)

                       Cash used for investing activities                       (1,962)                                 (2,060)                    (33)              (697)
                                                                                 ------                                   ------                      ---                ----


    CASH FLOWS FROM FINANCING ACTIVITIES:


                        Borrowings of
                        bank debt                                                     -                                   3,460                  (3,288)              3,460

                        Repayments of
                        bank debt                                               (1,758)                                 (2,677)                 (1,840)            (2,677)

                        Proceeds from
                        sale of stock                                             5,590                                      872                    5,590             (2,288)

                        Proceeds from
                        exercise of
                        stock options                                                82                                        -                   1,482               2,252
                       ----------

                        Cash provided by financing
                        activities                                                3,914                                    1,655                    1,944                 747
                                                                                  -----                                    -----                    -----                 ---


    Net increase (decrease) in cash and
     cash equivalents                                                           1,877                                                                                 104

                                                                                              329                                2,431

    Cash and cash equivalents, beginning
     of year                                                                      919                                      590                      365                 815
                                                                                  ---                                      ---

    Cash and cash equivalents, end of
     year                                                                      $2,796                                     $919                   $2,796                $919
                                                                               ======                                     ====                   ======                ====


                                          SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION


    CASH PAID FOR:


                       Interest                                                    $142                                     $296                      $29                 $48

                       Income taxes (refunded) paid                                 $17                                    $(67)                     $16                 $17


                                                                                     PIZZA INN HOLDINGS, INC.

                                                                           RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

                                                                                          (In thousands)

                  The Company provided detailed explanation of this non-GAAP financial measure, including a discussion of the usefulness and purpose of the measure, in its Form
                                                                10-K filed with the Securities and Exchange Commission on 23, 2014.


                                                          Fiscal Year Ended                     Three Months Ended
                                                         -----------------                     ------------------

                                                               June 29                               June 30,                               June 29                              June 30,

                                                                          2014                                    2013                                    2014                                 2013
                                                                          ----                                    ----                                    ----                                 ----

     Net Loss                                                         $(1,567)                               $(1,261)                                 $(368)                              $(693)

     Interest Expense                                                      142                                     244                                      29                                   47

     Income Tax Benefit--
      Continuing Operations                                              (760)                                  (504)                                  (233)                               (334)

     Income Tax Benefit--
      Discontinued Operations                                             (58)                                   (94)                                   (38)                                (72)

     Stock compensation expense                                             68                                     150                                      23                                   15

     Impairment of long-lived
      assets and other lease
      charges                                                              253                                     766                                     253                                  766

     Depreciation and amortization                                       1,454                                   1,304                                     398                                  347
                                                                         -----                                   -----

     Adjusted EBITDA                                                    $(468)                                   $605                                     $64                                  $76
                                                                         =====                                    ====                                     ===                                  ===

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SOURCE: Pizza Inn Holdings, Inc.

Pizza Inn Holdings, Inc. Reports Fourth Quarter and Fiscal Year 2014 Financial Results

Company financial performance strengthens with accelerating growth of Pie Five and strong comparable sales at Pizza Inn and Pie Five

PR Newswire

THE COLONY, Texas, Sept. 23, 2014 /PRNewswire/ -- Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today reported financial results for the fourth quarter and fiscal year ended June 29, 2014.

Fourth Quarter Highlights:

  • Pizza Inn domestic comparable sales increased 1.5% from the same period in the prior year.
  • Pie Five comparable store sales increased 12.9% from the same period in the prior year.
  • Pie Five Company-owned average weekly sales per store increased 25.2% year over year.
  • Company-owned restaurant sales from continuing operations increased 42.6% year over year, or 53.6% when prior year quarter is normalized to 13 weeks.
  • Adjusted EBITDA, a non-GAAP financial measure, increased by $0.3 million sequentially over the previous quarter to $0.1 million.
  • Net losses improved by $0.3 million over the same quarter of the prior year to a loss of $0.4 million.

Annual Highlights:

  • Pizza Inn domestic comparable store franchisee retail sales decreased 1.1% year over year.
  • Pie Five Company-owned average weekly sales per store increased 12.4% year over year.
  • Company-owned restaurant sales increased 33.0% year over year, or 35.5% when prior year is normalized to 52 weeks.
  • The Company continued to invest in infrastructure to support future Pie Five growth, contributing to an Adjusted EBITDA loss of $0.5 million, a decrease of $1.1 million compared to prior year.
  • Net loss increased $0.3 million from prior year to a loss of $1.6 million

Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today announced results for the fourth fiscal quarter and year ended June 29, 2014. The Company's net loss in the fourth quarter improved by $0.3 million over the comparable period in the prior fiscal year to $0.4 million from a loss of $0.7 million.  Conversely, the Company's net loss for the 2014 fiscal year increased $0.3 million to $1.6 million compared to a net loss of $1.3 million in the prior fiscal year. The increase in net loss from prior year was primarily due to higher general and administrative expenses and franchise costs attributable to growth of the Pie Five brand, as well as lower food and supply sales.  The fourth fiscal quarter and fiscal year 2014 had 13 and 52 weeks, respectively, as compared to 14 and 53 weeks, respectively, in the same periods of the prior fiscal year.

"Fiscal 2014 was an investment year as we continued to build the talent and infrastructure to effectively grow both of our restaurant brands.  That investment is reflected in the losses recorded for the last several quarters," said Randy Gier, President and Chief Executive Officer. "We are very pleased to see the improving financial performance each of the last three quarters, and especially pleased with the most recent quarter results which we believe reflect our turning the corner on this investment of resources.  Both of our brands recorded strong positive comparable store sales growth for the fourth quarter, a trend that has continued in the first quarter of fiscal 2015," added Gier.

Fourth Quarter 2014 Operating Results

Total revenues for the fourth quarter of fiscal 2014 and the comparable prior year quarter were $10.9 million and $10.4 million, respectively. When the prior year period is normalized to 13 weeks, fourth quarter franchise revenue increased by 1.5% year over year.  Additional franchise development fees previously received from Pie Five franchisees have been deferred and will be recognized as future restaurants are opened.

Pizza Inn domestic franchisee sales for comparable stores increased 1.5% from the same period in the prior year.  "We are very pleased to report positive comparable store sales for domestic franchisees in the Pizza Inn system.  These results reflect the hard work that we have undertaken in partnership with our franchise leadership to improve quality, drive consistent operating standards, create aligned marketing programs, establish tools, and instill training to run better, more profitable restaurants," said Gier.  "We have terrific franchise leaders with whom we are working very closely to restore growth to Pizza Inn.  Comparable store sales trends have strengthened each of the last four quarters, with the most recent quarter reporting the first year over year increase in nearly three years.  Improving sales and profitability has helped to slow the rate of restaurant closures, and is beginning to instill greater interest in building new restaurants.  We have only begun this journey, but appreciate the dedication of all of our franchisees to the work that is required to achieve excellence for our flagship brand," Gier stated.    

Pie Five comparable store sales for the fourth quarter of fiscal 2014 increased 12.9% when compared to the same period in the prior year.  Average weekly sales in Company-owned Pie Five restaurants increased 25.2% reflecting both strong comparable store sales growth and higher average sales of Company-owned restaurants opened during fiscal 2014. 

Gier explained, "We have worked hard over the past two years to refine our Pie Five concept to respond to consumer feedback, to improve site selection through rigorous analysis of each opening, to enhance marketing productivity, and to establish replicable, scalable operating processes.  The continued improving results are a direct reflection of that work.  We are not only seeing strong positive comparable store sales in our existing restaurants, we are also seeing newer restaurants opening that are sustaining at higher sales levels than the previous restaurants.  This is leading to an acceleration of new restaurant openings and additional franchise signings." 

Fourth quarter fiscal 2014 food and supply sales decreased by $0.1 million, or 1.5%, compared to the same quarter of the prior year.  However, when the prior year period is normalized to 13 weeks, fourth quarter food and supply sales increased over the prior year by $0.4 million, or 6.0%, primarily due to increased average weekly domestic franchisee retail sales. 

Fourth quarter Company-owned restaurant sales from continuing operations increased $0.7 million, or 42.6%, compared to the prior year as a result of the opening of one new Company-owned Pie Five restaurant in the fourth quarter of fiscal 2013 and four new Company-owned Pie Five restaurants in fiscal 2014 (one of which was a relocation of an existing restaurant), partially offset by the closing of two Company-owned Pizza Inn restaurants.  Fourth quarter general and administrative expenses decreased $0.1 million.

Fiscal Year 2014 Operating Results

Total revenues for the 2014 fiscal year and prior year were $42.2 million and $41.2 million, respectively. Fiscal 2014 franchise revenue decreased by $0.1 million compared to the prior year, primarily due to one less week in fiscal year 2014.  A decrease in franchise fees and royalties from Pizza Inn franchisees was largely offset by increased royalties and franchise fees from Pie Five franchisees. Additional franchise development fees previously received from Pie Five franchisees have been deferred and will be recognized as future restaurants are opened.

Fiscal 2014 food and supply sales decreased by $1.3 million, or 4.3%, compared to the prior year, primarily due to decreased Pizza Inn domestic franchisee retail sales.  However, based on a comparable 52 week year, fiscal 2014 food and supply sales decreased by only $0.7 million, or 2.4%. 

Fiscal 2014 Company-owned restaurant sales increased $2.5 million, or 33.0%, compared to the prior year as a result of the opening of two new Company-owned Pie Five restaurants in the second half of fiscal 2013 and four new Company-owned Pie Five restaurants in fiscal 2014 (one of which was a relocation of an existing restaurant).  Fiscal 2014 general and administrative expenses increased $0.3 million over the prior year primarily to support growth for new Company-owned Pie Five restaurants and future growth plans.

Development Review

Nine new Pie Five restaurants were opened by the Company and franchisees in fiscal 2014, including one in the fourth quarter, to bring the fiscal year-end total to 20 stores.  Franchisees opened 24 new Pizza Inn restaurants for the year while closing 21 restaurants, ending the fiscal year at 253 total Pizza Inn Company and franchise stores.

"The five Pie Five restaurants opened by franchisees so far in fiscal 2015 are off to a strong start, and we remain on track to nearly double our fiscal year end Pie Five restaurant count by the end of the calendar year," said Gier.

During fiscal 2014, the Company signed nine new franchise development agreements to develop up to 131 Pie Five restaurants and has signed two additional development agreements during the first quarter of fiscal 2015.  The Company currently has Pie Five franchise restaurant development commitments for a total of up to 229 restaurants.

Gier continued, "Most importantly, we have prepared and resourced our organization with the tools, the talent, and the systems to reliably replicate and expand.  In our business, there is no substitute for great operations delivering comeback food quality and service that surprises on every visit.  We are prepared to support our franchisees and to run our own restaurants at world class standards even as we ramp up new restaurant openings."

Gier concluded, "As a result of continued strength in our restaurant performance we will be accelerating Pie Five Company-owned restaurant growth in the coming quarters by expanding the development of Company-owned Pie Five restaurants into several new metropolitan markets in addition to the continued development of the Dallas-Fort Worth market."

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in evaluating operating performance.  These non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles.  Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, stock compensation expense and impairment on long lived assets and other lease charges.  A reconciliation of Adjusted EBITDA to net income is included with the accompanying financial statements.  The fourth fiscal quarter and fiscal year 2014 had 13 and 52 weeks, respectively, as compared to 14 and 53 weeks, respectively, in the same periods of the prior year.  For purposes of certain year to year comparisons, fourth quarter and full year fiscal 2013 results have been divided by the actual number of weeks in the respective period and then multiplied by the comparable number of weeks in the same period of fiscal 2014.

Note Regarding Forward Looking Statements

Certain statements in this press release, other than historical information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created thereby. These forward-looking statements are based on current expectations that involve numerous risks, uncertainties and assumptions.  Assumptions relating to these forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions, regulatory framework and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Pizza Inn Holdings.  Although the assumptions underlying these forward-looking statements are believed to be reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that any forward-looking statements will prove to be accurate.  In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such information should not be regarded as a representation that the objectives and plans of Pizza Inn Holdings will be achieved.  

About Pizza Inn Holdings, Inc.:

Headquartered in the Dallas suburb of The Colony, TX, Pizza Inn Holdings, Inc., is an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademarks "Pizza Inn" and "Pie Five Pizza Co." Pizza Inn is an international pizza chain featuring traditional and specialty pizzas, as well as freshly made pastas, sandwiches, and desserts. Pie Five Pizza Co. is a fast-casual concept offering individual pizzas made to order and cooked in less than five minutes. Founded in 1958, Pizza Inn Holdings, Inc. owns and franchises approximately 273 restaurants. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "PZZI". For more information, please visit www.pizzainn.com.

Contact:
Investor Relations
Pizza Inn Holdings, Inc.
469-384-5000

PIZZA INN HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)





















Year Ended


Three Months Ended



June 29,


June 30,


June 29,


June 30,



2014


2013


2014


2013










REVENUES:

$ 42,224


$ 41,181


$ 10,943


$ 10,414










COSTS AND EXPENSES:









Cost of sales

36,325


34,767


9,297


8,640


Franchise expenses

2,931


2,390


781


715


General and administrative expenses

4,373


4,106


1,059


1,111


Pre-opening expenses

161


286


1


37


Impairment of long-lived assets and other lease charges

253


766


253


766


Bad debt

253


205


50


70


Interest expense

142


244


29


47



44,438


42,764


11,470


11,386










LOSS FROM CONTINUING OPERATIONS BEFORE TAXES

(2,214)


(1,583)


(527)


(972)











Income tax benefit

(760)


(504)


(233)


(334)










LOSS FROM CONTINUING OPERATIONS

(1,454)


(1,079)


(294)


(638)











Loss from discontinued operations, net of taxes

(113)


(182)


(74)


(55)










NET LOSS

$ (1,567)


$ (1,261)


$    (368)


$    (693)










LOSS PER SHARE OF COMMON STOCK - BASIC:









Loss from continuing operations

$   (0.17)


$   (0.13)


$   (0.04)


$   (0.08)


Loss from discontinued operations

$   (0.01)


$   (0.03)


$   (0.01)


$   (0.01)


Net loss

$   (0.18)


$   (0.16)


$   (0.05)


$   (0.09)










LOSS PER SHARE OF COMMON STOCK - DILUTED:









Loss from continuing operations

$   (0.16)


$   (0.13)


$   (0.03)


$   (0.08)


Loss from discontinued operations

$   (0.01)


$   (0.02)


$   (0.01)


$   (0.01)


Net loss

$   (0.17)


$   (0.15)


$   (0.04)


$   (0.09)










Weighted average common shares outstanding - basic

8,635


8,031


8,058


8,021










Weighted average common shares outstanding - diluted

9,173


8,310


8,525


8,143

 

PIZZA INN HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)







June 29,


June 30,

ASSETS



2014


2013









CURRENT ASSETS






Cash and cash equivalents

$

2,796

$

919


Accounts receivable, less allowance for doubtful accounts of $276 and $228, respectively


3,276


3,139


Notes receivable


81


292


Inventories


1,703


1,615


Income tax receivable


386


343


Deferred income tax assets


951


882


Prepaid expenses and other


173


307




Total current assets


9,366


7,497









LONG-TERM ASSETS






Property, plant and equipment, net


5,133


4,711


Long-term notes receivable


134


40


Long-term deferred tax asset


939


168


Deposits and other


396


119




Total assets

$

15,968

$

12,535

LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES






Accounts payable - trade

$

2,023

$

1,572


Accrued expenses


926


792


Deferred rent


163


249


Deferred revenues


177


169


Bank debt


500


669




Total current liabilities


3,789


3,451









LONG-TERM LIABILITIES






Bank debt, net of current portion


267


1,856


Deferred tax liability


-


-


Deferred rent, net of current portion


822


708


Deferred revenues, net of current portion


791


370


Deferred gain on sale of property


34


59


Other long-term liabilities


23


22




Total liabilities


5,726


6,466









COMMITMENTS AND CONTINGENCIES













SHAREHOLDERS' EQUITY






Common stock, $.01 par value; authorized 26,000,000

shares; issued 16,240,412 and 15,312,680 shares, respectively; outstanding 9,121,012 and 8,193,280 shares, respectively


162


153


Additional paid-in capital


15,905


10,174


Retained earnings


18,811


20,378


Treasury stock at cost







 7,119,400 shares


(24,636)


(24,636)




Total shareholders' equity 


10,242


6,069




Total liabilities and shareholders' equity

$

15,968

$

12,535

 

PIZZA INN HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)














Year Ended


Three Months Ended




June 29,


June 30,


June 29,


June 30,




2014


2013


2014


2013











CASH FLOWS FROM OPERATING ACTIVITIES:


















Net loss

$ (1,567)


$ (1,261)


$    (368)


$    (693)


Adjustments to reconcile net loss to cash  (used in) provided by operating activities:










Impairment of fixed assets and other assets

253


766


253


766



Depreciation and amortization

1,454


1,304


398


346



(Gain) loss on the sale of assets

(97)


129


(57)


-



Provision for bad debt

48


25


(155)


(19)



Stock compensation expense

68


150


23


15



Deferred income taxes

(840)


(671)


(289)


(428)


Changes in operating assets and liabilities:





-


-



Notes and accounts receivable

(70)


(283)


478


(111)



Income tax receivable

(41)


88


(41)


88



Inventories

(88)


237


(102)


(93)



Prepaid expenses and other

(213)


247


154


349



Deferred revenue

404


-


128


(61)



Accounts payable - trade

451


10


(155)


31



Accrued expenses

163


(7)


253


(136)



   Cash (used) provided by operating activities

 

(75)


 

734


520


54











CASH FLOWS FROM INVESTING ACTIVITIES:



















Proceeds from sale of assets

106


184


48


-


Capital expenditures

(2,068)


(2,244)


(81)


(697)



Cash used for investing activities

(1,962)


(2,060)


(33)


(697)











CASH FLOWS FROM FINANCING ACTIVITIES:



















Borrowings of bank debt

-


3,460


(3,288)


3,460


Repayments of bank debt

(1,758)


(2,677)


(1,840)


(2,677)


Proceeds from sale of stock

5,590


872


5,590


(2,288)


Proceeds from exercise of stock options

82


-


1,482


2,252



Cash provided by financing activities

3,914


1,655


1,944


747











Net increase (decrease) in cash and cash equivalents

1,877


 

329


2,431


104

Cash and cash equivalents, beginning of year

919


590


365


815

Cash and cash equivalents, end of year

$   2,796


$      919


$   2,796


$      919











SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION















CASH PAID FOR:




















Interest

$      142


$      296


$        29


$        48



Income taxes (refunded) paid

$        17


$      (67)


$        16


$        17

 

PIZZA INN HOLDINGS, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands)

The Company provided detailed explanation of this non-GAAP financial measure, including a discussion of the usefulness and purpose of the measure, in its Form 10-K filed with the Securities and Exchange Commission on 23, 2014. 












 Fiscal Year Ended 


 Three Months Ended 



 June 29 


 June 30, 


 June 29 


 June 30, 



2014


2013


2014


2013

 Net Loss 


$  (1,567)


$   (1,261)


$     (368)


$      (693)

 Interest Expense 


142


244


29


47

 Income Tax Benefit--Continuing Operations 


(760)


(504)


(233)


(334)

 Income Tax Benefit--Discontinued Operations 


(58)


(94)


(38)


(72)

 Stock compensation expense 


68


150


23


15

 Impairment of long-lived assets and other lease charges 


253


766


253


766

 Depreciation and amortization 


1,454


1,304


398


347

 Adjusted EBITDA 


$     (468)


$       605


$        64


$         76

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SOURCE Pizza Inn Holdings, Inc.