THE COLONY, Texas, May 5 /PRNewswire-FirstCall/ -- PIZZA INN, INC. today reported a net loss per share for its third quarter ended March 26, 2006 of ($0.05) versus earnings of $0.00 per share for the same quarter last year. The quarter resulted in a net loss of ($477,000) versus a net loss of ($20,000) for the same quarter last year on revenues of $12.8 million and $13.4 million, respectively.
Third Quarter FY 2006 versus Third Quarter FY 2005 Results
* Diluted EPS was ($0.05) versus $0.00 on a net loss of ($477,000) versus
a net loss of ($20,000) for the same quarter last year.
* Same store buffet restaurant sales increased 1.1% for the quarter and
same store chainwide retail sales increased 0.4% for the quarter.
* Total revenues decreased approximately 4%, or $589,000, primarily due
to 2.6% overall lower chainwide retail sales as a result of fewer net
stores and lower cheese prices. The resulting reductions in food and
supply sales and royalty revenues were partially offset by higher
company-owned restaurant sales due to the opening of three new company
buffet restaurants in the current fiscal year.
* Losses for company-owned restaurants increased approximately $140,000
to ($238,000).
* Salaries increased approximately $134,000 due to increased staffing
levels and severance payments made.
* Energy costs increased approximately $114,000.
* General and administrative expenses included non-cash stock
compensation expense of $88,000 for approximately 560,000 stock option
rights granted previously. The prior year did not include any non-cash
compensation expense.
The Company's President and CEO, Tim Taft, commented, "Following months of research and preparation, we implemented the first phase of our marketing plan in January of this year and are already seeing encouraging results from these efforts. In addition, the renewed trust and confidence our franchise partners have in the brand's new direction is producing positive results. We continue to work together to establish the proper direction for Pizza Inn, one focused on our competitive strengths and advantages. Although sales performance is improving at Pizza Inn, we have not lost sight of our opportunity to improve its operating performance."
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. is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises approximately 378 restaurants and currently owns four restaurants with annual chainwide sales of approximately $155 million.
Pizza Inn, Inc. For more information contact:
3551 Plano Parkway Kevin Kleiner
The Colony, TX 75056 Controller
(469) 384-5203
For more information about the company, visit Pizza Inn at http://www.pizzainn.com/ .
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
March 26, March 27, March 26, March 27,
REVENUES: 2006 2005 2006 2005
Food and supply sales $11,131 $11,859 $33,654 $36,981
Franchise revenue 1,200 1,319 3,579 3,884
Restaurant sales 512 223 1,069 721
12,843 13,401 38,302 41,586
COSTS AND EXPENSES:
Cost of sales 11,225 11,241 33,451 35,125
Franchise expenses 783 723 2,384 2,044
General and administrative
expenses 1,363 1,311 4,461 3,497
13,371 13,275 40,296 40,666
OPERATING (LOSS) INCOME (528) 126 (1,994) 920
Gain on sale of asset 2 --- 149 ---
Interest expense (211) (157) (579) (431)
(LOSS) INCOME BEFORE
INCOME TAXES (737) (31) (2,424) 489
Provision for income taxes (260) (11) (856) 173
NET (LOSS) INCOME $(477) $(20) $(1,568) $316
Basic (loss) earnings per
common share $(0.05) $--- $(0.15) $0.03
Diluted (loss) earnings per
common share $(0.05) $--- $(0.15) $0.03
Weighted average common shares 10,138 10,089 10,118 10,109
Weighted average common and
potential dilutive common
shares 10,188 10,117 10,164 10,142
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
March 26, June 26,
ASSETS 2006 2005
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $190 $173
Accounts receivable, less allowance
for doubtful accounts of $209 and
$360, respectively 2,894 3,419
Accounts receivable - related parties 465 622
Notes receivable, current portion,
less allowance for doubtful accounts
of $0 and $11, respectively 63 ---
Inventories 1,996 1,918
Property held for sale --- 301
Deferred tax assets, net 1,011 193
Prepaid expenses and other 353 355
Total current assets 6,972 6,981
LONG-TERM ASSETS
Property, plant and equipment, net 13,340 12,148
Property under capital leases, net --- 12
Long-term receivable 10 ---
Long-term receivable - related party 313 314
Goodwill 153 ---
Reacquired development territory 479 623
Deposits and other 196 177
$21,463 $20,255
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $2,558 $1,962
Accrued expenses 1,896 1,374
Current portion of long-term debt 8,648 406
Current portion of capital lease
obligations --- 11
Total current liabilities 13,102 3,753
LONG-TERM LIABILITIES
Long-term debt --- 7,297
Long-term capital lease obligations --- 13
Deferred tax liability, net --- 3
Other long-term liabilities 523 283
13,625 11,349
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value;
authorized 26,000,000 shares; issued
15,090,319 and 15,046,319 shares,
respectively; outstanding 10,138,494
and 10,094,494 shares, respectively 151 150
Additional paid-in capital 8,371 8,005
Retained earnings 19,014 20,582
Accumulated other comprehensive loss (54) (187)
Treasury stock at cost
Shares in treasury: 4,951,825 and
4,951,825, respectively (19,644) (19,644)
Total shareholders' equity 7,838 8,906
$21,463 $20,255
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
March 26, March 27,
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $(1,568) $316
Adjustments to reconcile net (loss)
income to cash provided by operating
activities:
Depreciation and amortization 884 861
Gain on property held for sale (159) ---
Provision for bad debt 100 30
Utilization of deferred taxes --- (20)
Stock compensation expense 285 ---
Deferred rent 32 ---
Changes in assets and liabilities:
Notes and accounts receivable 491 (358)
Inventories (79) (435)
Accounts payable - trade 596 786
Accrued expenses (166) (711)
Prepaid expenses and other 158 51
Cash provided by operating
activities 574 520
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 589 ---
Capital expenditures (2,165) (721)
Cash used for investing
activities (1,576) (721)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term bank debt
and capital lease obligations (110) (102)
Borrowings of bank debt 1,047 ---
Stock repurchase --- (160)
Proceeds from exercise of stock
options 82 16
Cash provided by (used for)
financing activities 1,019 (246)
Net increase (decrease) in cash and
cash equivalents 17 (447)
Cash and cash equivalents, beginning
of period 173 617
Cash and cash equivalents, end of
period $190 $170
