news releases
PIZZA INN, INC.
* Comparable buffet restaurant sales increased 0.6% for the quarter.
Domestic chain-wide comparable restaurant sales decreased 1.3% for the
quarter.
* Total domestic chain-wide restaurant sales decreased 6% for the
quarter due to the decrease in comparable restaurant sales and a net
reduction in franchised restaurants.
* Excluding the impact of gains on sale of assets and rental income, the
Company's revenues decreased approximately 8%, or $1,028,000,
primarily due to the Company's recent decision to reduce the prices of
key food and supply products sold to franchisees through the Company's
distribution division, lower chain-wide restaurant sales, as discussed
above, lower cheese prices, and lower equipment sales. The resulting
reductions in food and supply sales and royalty revenue were partially
offset by increased restaurant sales at company-owned restaurants as a
result of the opening of three company-owned buffet restaurants in
fiscal year 2006.
* During the quarter, the Company incurred $375,000 of legal fees, as
compared to $442,000 in the prior year, which is reflected in general
and administrative expenses.
* During the quarter, the Company incurred non-cash stock compensation
expense of $55,000 as compared to $94,000 in the prior year, which is
reflected in general and administrative expenses.
* During the quarter, the Company recognized a $108,000 benefit from the
reduction to the provision for litigation costs due to the reduction
of accounts payable to PepsiCo as a result of the Company's recent
settlement with PepsiCo, which is broken out separately in the
statement of operations.
The Company's President and CEO, Tim Taft, commented, "Much has been accomplished in the pursuit of turning around this brand. Franchisees report being healthier than they have been in a long while and, with the recent hiring of Charlie Morrison (CFO) and Susan Gray (Training, HR), we have a complete management team capable of significantly affecting our positive momentum."
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 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, national, regional and local economic conditions affecting the restaurant/ entertainment industry, competition within each of the restaurant and entertainment industries, store sales cannibalization, success of its franchise operations, negative publicity, fluctuations in quarterly results of operations, including seasonality, government regulations, weather, 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 282 domestic and 77 international restaurants and owns three restaurants with annual domestic and international chain-wide sales of approximately $145 million.
For more information contact:
Charlie Morrison
Chief Financial Officer
(469) 384-5203
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
December 24, December 25, December 24, December 25,
2006 2005 2006 2005
REVENUES:
Food and supply
sales $10,232 $11,215 $20,620 $22,523
Franchise revenue 1,118 1,199 2,307 2,379
Restaurant sales 375 339 745 557
Gain on sale of assets 554 --- 564 147
Rental income 146 --- 179 ---
12,425 12,753 24,415 25,606
COSTS AND EXPENSES:
Cost of sales 10,207 11,060 20,385 22,153
Franchise expenses 746 793 1,418 1,601
General and
administrative
expenses 1,154 1,581 2,745 3,171
Provision for
litigation costs (108) --- 302 ---
Interest expense 274 199 474 368
12,273 13,633 25,324 27,293
INCOME (LOSS) BEFORE
INCOME TAXES 152 (880) (909) (1,687)
Credit for income taxes --- (279) --- (596)
NET INCOME (LOSS) $152 $(601) $(909) $(1,091)
Basic income (loss)
per common share $0.01 $(0.06) $(0.09) $(0.11)
Diluted income (loss)
per common share $0.01 $(0.06) $(0.09) $(0.11)
Weighted average common
shares outstanding 10,138 10,108 10,138 10,119
Weighted average common
and potential dilutive
common shares
outstanding 10,138 10,108 10,138 10,119
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 24, June 25,
ASSETS 2006 2006
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $287 $184
Accounts receivable, less allowance
for doubtful accounts of $331 and
$324, respectively 2,625 2,627
Accounts receivable -- related parties 364 452
Notes receivable, current portion,
less allowance 28 52
Inventories 1,560 1,772
Assets held for sale 383 ---
Current deferred income tax asset 1,138 1,145
Prepaid expenses and other 411 299
Total current assets 6,796 6,531
LONG-TERM ASSETS
Property, plant and equipment, net 1,008 11,921
Non-current notes receivable 16 20
Re-acquired development territory, net 335 431
Deposits and other 305 98
$8,460 $19,001
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable -- trade $2,843 $2,217
Accrued litigation expenses 410 2,800
Other accrued expenses 1,839 1,991
Current portion of long-term debt --- 8,044
Total current liabilities 5,092 15,052
LONG-TERM LIABILITIES
Other long-term liabilities 654 437
5,746 15,489
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value;
authorized 26,000,000 shares;
issued 15,090,319 and 15,090,319
shares, respectively; outstanding
10,138,494 and 10,138,494 shares,
respectively 151 151
Additional paid-in capital 8,523 8,426
Retained earnings 13,684 14,593
Accumulated other comprehensive loss --- (14)
Treasury stock at cost
Shares in treasury: 4,951,825 and
4,951,825, respectively (19,644) (19,644)
Total shareholders' equity 2,714 3,512
$8,460 $19,001
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
December 24, December 25,
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(909) $(1,091)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization 448 568
Deferred rent expense 3 31
Stock compensation expense 97 197
Litigation expense accrual 302 ---
Gain on sale of assets (564) (147)
Deferred revenue 196 ---
Changes in operating assets and liabilities:
Notes and accounts receivable 118 195
Inventories 212 (425)
Accounts payable -- trade 626 645
Accrued expenses (3,096) (385)
Prepaid expenses and other (331) 70
Cash used in operating activities (2,898) (342)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 11,319 474
Capital expenditures (248) (1,315)
Cash provided by (used for)
investing activities 11,071 (841)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs (26) ---
Change in line of credit, net --- 1,381
Repayments of long-term bank debt (8,044) (209)
Proceeds from exercise of stock options --- 22
Cash (used for) provided by
financing activities (8,070) 1,194
Net increase in cash and cash equivalents 103 11
Cash and cash equivalents, beginning
of period 184 173
Cash and cash equivalents, end of period $287 $184
SOURCE: Pizza Inn, Inc.
CONTACT: Charlie Morrison, Chief Financial Officer of Pizza Inn, Inc.,
+1-469-384-5203
Web site: http://www.pizzainn.com/