THE COLONY, Texas, May 7, 2008 (PRIME NEWSWIRE) -- Pizza Inn, Inc. (Nasdaq:PZZI) today reported basic and diluted net income of $0.09 per share for its third fiscal quarter ended March 23, 2008 compared to $0.05 per share in the same quarter in the prior fiscal year. The quarter resulted in net income of $898,000, versus net income of $457,000 for the same quarter in the prior fiscal year, on revenues of $11,668,000 and $11,583,000, respectively.
Operating performance for the third quarter of fiscal year 2008 included the following:
* Comparable domestic buffet restaurant sales increased 1.8% for the
third quarter and 3.4% year-to-date from the prior fiscal year.
* Comparable domestic chain-wide sales increased 1.1% for the third
quarter and 2.3% year-to-date from the prior fiscal year.
* General and administrative expenses were lower by 23% for the
third quarter and 43% year-to-date compared to the prior fiscal
year.
* The Company recorded income of $714,000 related to the release of
a valuation allowance against its deferred tax asset. This amount
was offset by an expense of $498,000 for income taxes estimated
for the nine months ended March 23, 2008.
As of April 7, 2008, the Company had repurchased substantially all of the 1,016,000 shares of Company stock authorized under the 2007 Stock Purchase Plan, approved by the Board of Directors in the fourth quarter of fiscal 2007.
Charlie Morrison, President and CEO, commented, "We are making excellent progress toward our goal of revitalizing the Pizza Inn brand. We continue to see momentum in our sales performance even in a tough economic environment. As we celebrate our 50th anniversary this year, our franchisees and supplier partners are focused on executing the fundamentals that have fueled our five decades of success, including the delivery of fresh, hot pizzas to customers at home or in our restaurants with an unmatched level of service."
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 the restaurant and entertainment industries, success of franchise operations, negative publicity, seasonality, government regulations, weather and commodity, insurance and labor costs.
Pizza Inn, Inc. (www.pizzainn.com) is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. The Company is a franchisor and food and supply distributor to a system of franchised and company owned restaurants operating both domestically and internationally under the trade name "Pizza Inn."
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
March 23, March 25, March 23, March 25,
2008 2007 2008 2007
-------- -------- -------- --------
REVENUES:
Food and supply sales $ 10,316 $ 10,202 $ 32,269 $ 30,822
Franchise revenue 1,181 1,195 3,643 3,502
Restaurant sales 171 186 529 574
-------- -------- -------- --------
11,668 11,583 36,441 34,898
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of sales 9,554 9,568 30,156 29,472
Franchise expenses 623 619 1,949 2,037
General and administrative
expenses 661 857 2,017 3,531
Severance 4 -- 383 --
Provision for bad debts 100 20 158 20
Loss (gain) on sale of
assets 2 (6) 9 (570)
Other income -- -- -- (179)
(Recovery) provision for
litigation costs -- -- (284) 302
Interest expense -- 2 -- 475
-------- -------- -------- --------
10,944 11,060 34,388 35,088
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE TAXES 724 523 2,053 (190)
Income taxes (216) -- (216) --
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 940 523 2,269 (190)
Loss from discontinued
operations, net of income
tax benefit (42) (66) (173) (262)
-------- -------- -------- --------
NET INCOME (LOSS) $ 898 $ 457 $ 2,096 $ (452)
-------- -------- -------- --------
EARNINGS PER SHARE OF COMMON
STOCK - BASIC:
Income (loss) from con-
tinuing operations $ 0.10 $ 0.06 $ 0.23 $ (0.02)
Loss from discontinued
operations $ (0.01) $ (0.01) $ (0.02) $ (0.02)
-------- -------- -------- --------
Net income (loss) $ 0.09 $ 0.05 $ 0.21 $ (0.04)
======== ======== ======== ========
EARNINGS PER SHARE OF COMMON
STOCK - DILUTED:
Income (loss) from con-
tinuing operations $ 0.10 $ 0.06 $ 0.23 $ (0.02)
Loss from discontinued
operations $ (0.01) $ (0.01) $ (0.02) $ (0.02)
-------- -------- -------- --------
Net income (loss) $ 0.09 $ 0.05 $ 0.21 $ (0.04)
======== ======== ======== ========
Weighted average common
shares outstanding
- basic 9,634 10,138 9,955 10,139
======== ======== ======== ========
Weighted average common
shares outstanding
- diluted 9,670 10,139 9,987 10,139
======== ======== ======== ========
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
March 23, March 25, March 23, March 25,
2008 2007 2008 2007
-------- -------- -------- --------
Net income (loss) $ 898 $ 457 $ 2,096 $ (452)
Interest rate swap gain -
(net of tax expense of $0)
for all periods -- -- -- 14
-------- -------- -------- --------
Comprehensive income
(loss) $ 898 $ 457 $ 2,096 $ (438)
======== ======== ======== ========
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
March 23, June 24,
2008 2007
-------- --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,013 $ 1,879
Accounts receivable, less allowance for
bad debts of $589 and $451, respectively 3,067 2,716
Notes receivable, current portion 6 8
Inventories 1,385 1,518
Property held for sale 313 336
Deferred income tax assets, net 1,105 458
Prepaid expenses and other assets 273 165
-------- --------
Total current assets 7,162 7,080
LONG-TERM ASSETS
Property, plant and equipment, net 600 778
Notes receivable 9 12
Re-acquired development territory, net 78 239
Deposits and other assets 104 85
-------- --------
$ 7,953 $ 8,194
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 1,677 $ 2,082
Accrued expenses 1,817 1,805
-------- --------
Total current liabilities 3,494 3,887
LONG-TERM LIABILITIES
Deferred gain on sale of property 190 209
Deferred revenues 295 314
Other long-term liabilities 23 7
-------- --------
Total liabilities 4,002 4,417
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized
26,000,000 shares; issued 15,123,909 and
15,120,319 shares, respectively; outstanding
9,499,417 and 10,168,494 shares, respectively 151 151
Additional paid-in capital 8,485 8,471
Retained earnings 16,894 14,799
Treasury stock at cost
Shares in treasury: 5,624,492 and
4,951,825, respectively (21,579) (19,644)
-------- --------
Total shareholders' equity 3,951 3,777
-------- --------
$ 7,953 $ 8,194
======== ========
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
--------------------
March 23, March 25,
2008 2007
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,096 $ (452)
Adjustments to reconcile net income (loss) to
cash provided (used) by operating activities:
Depreciation and amortization 275 561
Deferred tax (647) (9)
Stock compensation expense 14 145
Provision for litigation costs -- 302
Loss (gain) on sale of assets 9 (570)
Provision for bad debts 158 20
Changes in operating assets and liabilities:
Notes and accounts receivable (504) 269
Inventories 133 192
Accounts payable - trade (405) 205
Accrued expenses (419) (3,476)
Prepaid expenses and other (84) 735
-------- --------
Cash provided (used) by operating activities 1,057 (2,078)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 108 11,325
Capital expenditures (96) (246)
-------- --------
Cash provided by investing activities 12 11,079
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs -- (26)
Repayments of long-term bank debt -- (8,044)
Repurchase of common stock (1,935) --
-------- --------
Cash used for financing activities (1,935) (8,070)
-------- --------
Net (decrease) increase in cash and
cash equivalents (866) 931
Cash and cash equivalents, beginning of period 1,879 184
-------- --------
Cash and cash equivalents, end of period $ 1,013 $ 1,115
======== ========
PIZZA INN, INC.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
(In thousands)
(Unaudited)
Nine Months Ended
----------------------
March 23, March 25,
2008 2007
------- -------
CASH PAYMENTS FOR:
Interest $ -- $ 495
Income taxes paid (refunded) 195 (680)
NON CASH FINANCING AND INVESTING ACTIVITIES:
Gain on interest rate swap $ -- $ 22