DALLAS - May 13, 2015 // PRNewswire // - RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the third quarter of fiscal 2015 ended March 29, 2015.
RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today announced results for its third quarter of fiscal 2015 ended March 29, 2015. The Company's net loss of $0.6 million in the third quarter was $0.1 million greater than the comparable period in the prior fiscal year and included a $0.3 million impairment charge for one of its two Company-owned Pizza Inn restaurants. Year-to-date net loss remained consistent with prior year, while Adjusted EBITDA for the first nine months improved by $0.6 million to a positive $0.3 million.
"We are very pleased with our results from the third quarter and believe the results reflect a continuation of our vision and steady quarter to quarter improvements," said Randy Gier, Chief Executive Officer of Rave Restaurant Group, Inc. "Pie Five continues its very impressive comp sales growth and new store development as it pioneers the emerging fast casual pizza segment. Furthermore, Pizza Inn recorded its fourth consecutive quarter of positive comp sales, which we view as a sign that we're returning this great brand to stability after a number of years of challenging results."
Total revenues for the third quarter of fiscal 2015 and the comparable prior year quarter were $11.9 million and $10.9 million, respectively, an increase of 9.1% 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 6.0% from the same period in the prior year.
"Consistency is key," said Gier. "Pizza Inn has recorded positive comps in 49 of the last 52 weeks. This brand is back due to the hard work of our franchisees aligned around a few key initiatives to increase quality, improve service, reduce costs and enable our general managers to run better restaurants.
"It's been many years since the Pizza Inn brand has been able to deliver a sustained growth path several quarters in a row, and so far in the current quarter we have maintained positive comps despite more difficult prior year comparison," added Gier. "I couldn't be more proud of the team – our franchisees, our operations and marketing team along with the Restaurant Support Center in their efforts to turn around our flagship brand."
For Pie Five, system-wide retail sales increased 109% for the third quarter of fiscal 2015 when compared to the same period in the prior year driven by a 84.2% increase in average units open and a 10.6% increase in the system-wide average weekly sales. The increase in average weekly sales was due to both strong sales in existing Company-owned restaurants and higher than average sales levels of newer restaurants. Comparable store retail sales increased by 9.5% for the most recent fiscal quarter compared to the same period in the prior year.
"Pie Five continues its Cinderella story," said Gier. "The concept continues to resonate with consumers as we roll across the country. Our customers are not only coming back, they are coming back more often, spending more, and bringing their friends with them. So far in the current quarter Pie Five's comparable store retail sales continue to trend positive even while comparing against double digit positive comps in the prior year."
Nine new Pie Five restaurants were opened by the Company and franchisees in the third quarter fiscal 2015, bringing the fiscal quarter-end total to 40 restaurants. During the third quarter of fiscal 2015, the Company signed two new franchise development agreements to develop up to 34 additional Pie Five restaurants in Arkansas, Delaware, Pennsylvania, New Jersey and Maryland. The Company currently has Pie Five franchise restaurant development commitments for a total of up to 351 restaurants.
"Our new store pipeline is coming to fruition," said Gier. "Since the end of the quarter, an additional seven Pie Five restaurants have opened, and we are on track to end the fiscal year near 60 restaurants."
In the Pizza Inn system, franchisees opened three new restaurants for the quarter while closing two restaurants, ending the fiscal quarter at 253 total Pizza Inn Company-owned and franchised restaurants worldwide. In addition, there were major remodels/relocations of two buffet restaurants during the quarter.
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 300 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.
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SOURCE RAVE Restaurant Group, Inc.
Investor Relations
RAVE Restaurant Group, Inc.
469-384-5000
Founded in 1958, Dallas-based RAVE Restaurant Group owns, operates and franchises Pie Five Pizza Co. and Pizza Inn restaurants domestically and internationally.