DALLAS - Sept. 24, 2015 // PRNewswire // - RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the fourth quarter of fiscal 2015 ended June 28, 2015.
RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today announced results for its fourth quarter and fiscal year ended June 28, 2015. The Company's net loss of $0.6 million in the fourth quarter was $0.2 million greater than the comparable period in the prior fiscal year primarily due to increased pre-opening expenses. Similarly, net loss for fiscal 2015 was $0.2 million greater than prior year, and included a $0.3 million impairment charge for one of its two Company-owned Pizza Inn restaurants and $0.7 million of pre-opening expenses. Adjusted EBITDA for the year improved by $0.9 million to a positive $0.6 million.
"We're ending the year with great momentum as the Pie Five brand continues to build and expand, and our Pizza Inn brand recorded an increase in total retail sales," said Randy Gier, Chief Executive Officer for Rave Restaurant Group, Inc. "The $0.9 million improvement to achieve a positive adjusted EBITDA is a significant milestone in our journey. Notably, we've built talent and put in place significant infrastructure to support the scaling of Pie Five through both company and franchise restaurant development."
Total revenues for the fourth quarter of fiscal 2015 and the comparable prior year quarter were $13.9 million and $10.9 million, respectively, an increase of 26.7% 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 0.2% from the same period in the prior year.
For Pie Five, system-wide retail sales increased 168% for the fourth quarter of fiscal 2015 when compared to the same period in the prior year driven by a 139% increase in average units open and an 11.1% increase in the system-wide average weekly sales. The increase in average weekly sales was due to both strong sales in comparable restaurants and higher than average sales levels of newer franchise restaurants. Comparable store retail sales increased by 6.7% for the most recent fiscal quarter compared to the same period in the prior year.
"This completes the fifth consecutive quarter of positive comp sales for our heritage brand, which is a significant accomplishment as we now overlap positive comp sales from the prior year," said Gier. "Similarly, Pie Five has delivered strong positive comps over positive comps, a direct reflection of the affinity that consumers are showing for the brand and concept. Comp trends for both concepts have flattened out in the current quarter, with Pie Five slightly positive and Pizza Inn slightly negative, as we are comparing against particularly high comps in the prior year and due to variances in timing of Pie Five advertising and the absence of a year over year price increase."
Total revenues for the fiscal year 2015 and the comparable prior year were $48.2 million and $42.2 million, respectively, an increase of 14.2% 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 4.1% from the prior year.
For Pie Five, system-wide retail sales increased 131% for fiscal 2015 when compared to the prior year, driven by a 91% increase in average units open and a 19.6% increase in the system-wide average weekly sales. The increase in average weekly sales was due to both strong sales in comparable restaurants and higher than average sales levels of newer franchise restaurants. Comparable store retail sales increased by 11.2% compared to the prior year.
"This was a breakout year for Pizza Inn brand--the work we've been doing with our franchisees to put the Pizza Inn brand on track is paying off with outstanding sales results," said Gier. "Pie Five is on fire –We consider double digit comp growth in our first full year of reported comps across a significant store base outstanding performance in a tough industry."
In the fourth quarter of fiscal 2015, 14 new Pie Five restaurants were opened, comprised of 7 Company-owned restaurants and 7 franchised restaurants, bringing the fiscal year-end total unit count to 54 restaurants. So far in the current quarter the Company has signed and previously announced 3 new franchise development agreements for up to 58 additional Pie Five restaurants in 5 states. The Company currently has Pie Five franchise restaurant development commitments totaling over 400 restaurants.
"We are on track to finish the current quarter at 68 total restaurants. Given the current leases executed for new company-owned and franchised restaurants, we expect to end the second quarter of the 2016 fiscal year with around 90 total restaurants open in the Pie Five system, which includes an estimated 38 total company-owned restaurants," said Gier. "The pace of our new restaurant openings is increasing and that is a direct reflection of the resources we have invested to support our rapid growth as well as the strong franchise partners we've added to the system."
In the Pizza Inn system, franchisees opened eight new restaurants during the year while closing eleven restaurants, ending the fiscal year at 250 total Pizza Inn Company-owned and franchised restaurants worldwide.
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.
Founded in 1958, Dallas-based RAVE Restaurant Group [NASDAQ: RAVE] owns, operates and franchises more than 300 Pie Five Pizza Co. and Pizza Inn restaurants domestically and internationally. Pie Five Pizza Co. is a leader in the rapidly growing fast-casual pizza space offering made to order pizzas made in under five minutes. Pizza Inn is an international chain featuring freshly made pizzas, along with salads, pastas, and desserts. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "RAVE". For more information, please visit www.raverg.com.
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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.