THE COLONY, Texas - Feb. 11, 2015 // PRNewswire // - RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the second quarter of fiscal 2015 ended December 28, 2014.
RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today announced results for its second quarter of fiscal 2015 ended December 28, 2014. The Company's net loss of $0.4 million in the second quarter was similar to the comparable period in the prior fiscal year. Year-to-date net loss improved by $0.1 million to a net loss of $0.7 million, while Adjusted EBITDA for the first six months improved by $0.4 million to a profit of $0.1 million.
"The first half of our fiscal year was critical to establishing our growth foundation," said Randy Gier, CEO. "Pizza Inn recorded its third consecutive quarter of positive comp sales, reflecting a clear stabilization of our legacy brand. Pie Five continues to report double digit comps, while we invest resources to open new Company and franchisee restaurants," added Gier.
Total revenues for the second quarter of fiscal 2015 and the comparable prior year quarter were $11.1 million and $10.0 million, respectively, an increase of 11.0% 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 comparable store retail sales increased 6.4% from the same period in the prior year. "We are pleased with the growth of the Pizza Inn brand, resulting from focused improvement of ingredient qualities, cooperative marketing programs and store remodeling," said Gier. "Importantly, our momentum is continuing into the current quarter as a result of close cooperation with our franchisees around key sales and operations initiatives."
For Pie Five, system-wide retail sales increased 118% for the second quarter of fiscal 2015 when compared to the same period in the prior year driven by a 62.5% increase in average units open and a 31.6% increase in the system-wide average weekly sales. Average weekly sales by $3,543 to $14,759 for the second quarter of fiscal 2015 compared to the same period of the prior year. Comparable store retail sales, which is reported for restaurants open 18 months or longer during the quarter, increased by 16.9% for the most recent fiscal quarter compared to the same period in the prior year. The increase in average weekly sales was due to both the strong sales increase in existing Company-owned restaurants and higher than average sales levels of newer franchised and Company-owned restaurants.
"The story continues for Pie Five," said Gier, "We continue to see both strong comps and steady improvement in average weekly volumes. Consumers continue to embrace the concept and increase their visit frequency. We continue to refine our real estate selection and deliver stronger new store opening support. Our ability to simultaneously grow both comparable store retail sales and average unit volumes is a testament to a sustainable, expandable investment model for ourselves and our franchisees," concluded Gier.
For the second quarter of fiscal 2015, revenue from the Franchising and Food and Supply Distribution segment increased $0.6 million, or 7.3%.
Second quarter revenues from the Company-owned Restaurants segment increased $0.5 million, or 23.5%, compared to the prior year. This increase was primarily the net result of an increase in comparable store retail sales.
Seven new Pie Five restaurants were opened by the Company and franchisees in the second quarter fiscal 2015, bringing the fiscal quarter-end total to 31 restaurants. In the Pizza Inn system, franchisees opened 3 new restaurants for the quarter while closing 2 restaurants, ending the fiscal quarter at 252 total Pizza Inn Company-owned and franchised restaurants worldwide.
"We are on track with our development plans to aggressively, but intelligently, expand the Pie Five brand," said Gier. "Given the current leases executed for new Company-owned and franchised restaurants and the pipeline of new potential sites, we expect to end the 2015 fiscal year with 60 to 65 total restaurants open in the Pie Five system, which includes an estimated 25 to 28 total Company-owned restaurants."
"Since the start of the current third fiscal quarter, we have already opened an additional two Company-owned and three franchised restaurants. While construction is never an exact science, we are on track to open high quality sites within our targeted range for the year," added Gier.
During the second quarter of fiscal 2015, the Company signed four new franchise development agreements to develop up to 72 additional Pie Five restaurants in Michigan, Wisconsin, Colorado, Indiana and Kentucky. The Company currently has Pie Five franchise restaurant development commitments for a total of up to 329 restaurants.
Gier continued, "We are pleased that our pipeline of new restaurants is coming to fruition. We have been selective in bringing on high quality, experienced franchise operators, and diligent in holding out for high quality sites to open Pie Five Company-owned and franchised restaurants."
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, pre-opening expense, impairment, gain/loss on sale of assets, lease charges and costs related to closed restaurants. A reconciliation of Adjusted EBITDA to net income is included with the accompanying financial 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 RAVE Restaurant Group, Inc. 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 RAVE Restaurant Group, Inc. will be achieved.
Headquartered in the Dallas suburb of The Colony, TX, RAVE Restaurant Group, 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, RAVE Restaurant Group, Inc. owns and franchises approximately 280 restaurants. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "RAVE". For more information, please visit www.raverestaurantgroup.com.
SOURCE RAVE Restaurant Group, Inc.
RAVE Restaurant Group, Inc.
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SOURCE RAVE Restaurant Group, Inc.
Founded in 1958, Dallas-based RAVE Restaurant Group owns, operates and franchises Pie Five Pizza Co. and Pizza Inn restaurants domestically and internationally.