Pizza Inn, Inc. Announces Results for Fiscal Year 2011

A New Concept and Strong Same Store Sales are the Basis for Continued Earnings Growth

Fourth Quarter and Fiscal Year Highlights:

  • The Company opened the first ″Pie Five Pizza Company″ prototype restaurant on June 3, 2011 and results have exceeded expectations
  • Net income for the year increased 16.6% to $1.4 million
  • Fourth quarter revenue increased 10.0% and fiscal year revenueincreased 5.3%
  • Domestic same store sales increased 4.3% in the fourth quarter driven by a 5.0% increase in same store sales for domestic buffet-style restaurants
  • Revenue from international operations increased 10.7% to $1.1 million for the fiscal year
  • Fiscal year sales for Company owned restaurants increased 45.7% driven by two new buffet-style restaurants added in the first two fiscal quarters of 2011

THE COLONY, Texas, Sept. 14, 2011 // GLOBE NEWSWIRE // -- Pizza Inn, Inc. (Nasdaq:PZZI) today announced results for the fourth quarter and fiscal year ended June 26, 2011. Net income increased to $407,000, or $0.05 per share, for the fourth quarter compared to net income of $49,000, or $0.01 per share, for the same quarter of the prior fiscal year. Revenues for the fourth quarter increased 10.0% to $11.3 million compared to $10.3 million for the same quarter of the prior fiscal year. Domestic same store sales increased 4.3% for the fourth fiscal quarter compared to the same quarter of the prior fiscal year driven by a 5.0% increase in same store sales for the buffet-style concept.

Net income increased 16.6% year over year to $1.4 million, or $0.17 per share, for fiscal 2011 compared to net income of $1.2 million, or $0.15 per share, for the prior fiscal year. Revenues increased 5.3% to $43.0 million compared to $40.9 million for the prior fiscal year. Domestic same store sales for fiscal 2011 decreased 0.4% compared to the prior fiscal year but showed a 0.3% increase in same store sales for the buffet-style concept. EBITDA increased 17.3%, or $0.4 million, to $2.9 million for fiscal 2011compared to $2.5 million in the prior fiscal year.

″We are very pleased with the results of our fourth quarter and fiscal year, along with the opening of our first Pie Five prototype restaurant,″ commented Charlie Morrison, President and CEO. ″Our net income and EBITDA results for fiscal 2011 were significantly improved despite the negative impact of a one-time $0.3 million charge for settlement costs in the fourth quarter. The Pizza Inn brand performance remains strong with continued positive same store sales growth resulting from ongoing investments made by our franchisees. Our pipeline for new Pizza Inn franchise openings in the U.S. and international business continues to fill, with the potential to open another 15 new Pizza Inn restaurants worldwide in fiscal 2012. Our new concept, Pie Five Pizza Company, has seen great success in the early stages of the development of the brand. We expect to open additional company owned Pie Five restaurants in fiscal 2012 as well as begin franchising.″

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 Pizza Inn's control. 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 Pizza Inn's objectives and plans will be achieved.

Pizza Inn, 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 Company.″ The Company and its distribution division, Norco Restaurant Services Company, are headquartered in The Colony, Texas. The Company's common stock is listed on the Nasdaq Capital Market under the symbol ″PZZI.″

The Pizza Inn logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4933

PIZZA INN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
     
     
  Year Ended
  June 26, June 27,
REVENUES: 2011 2010
     
Food and supply sales $ 34,939 $ 33,945
Franchise revenue 3,934 4,067
Restaurant sales 4,163 2,858
  43,036 40,870
     
COSTS AND EXPENSES:    
Cost of sales 35,021 33,023
Franchise expenses 2,086 1,950
General and administrative expenses 3,120 3,449
Costs associated with store closure 319 --
Settlement costs 300 --
Provision for bad debts 85 155
Interest expense 65 62
  40,996 38,639
     
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES 2,040 2,231
     
Income tax expense 621 884
     
INCOME FROM CONTINUING OPERATIONS 1,419 1,347
Loss from discontinued operations    
(net of income tax benefit of $32 and $98, respectively) (62) (183)
     
NET INCOME $ 1,357 $ 1,164
     
EARNINGS (LOSS) PER SHARE OF COMMON STOCK - BASIC:  
Income from continuing operations $ 0.18 $ 0.17
Loss from discontinued operations $ (0.01) $ (0.02)
Net income $ 0.17 $ 0.15
     
EARNINGS (LOSS) PER SHARE OF COMMON    
STOCK - DILUTED:    
Income from continuing operations $ 0.18 $ 0.17
Loss from discontinued operations $ (0.01) $ (0.02)
Net income $ 0.17 $ 0.15
     
Weighted average common shares outstanding - basic 8,011 8,011
     
Weighted average common shares outstanding - diluted 8,019 8,011
 
PIZZA INN, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
     
  June 26, June 27,
ASSETS 2011 2010
     
CURRENT ASSETS    
Cash and cash equivalents $ 949 $ 761
Accounts receivable, less allowance for doubtful accounts of $162 and $178, respectively 3,128 2,678
Income tax receivable 553 62
Inventories 1,829 1,489
Deferred income tax assets 822 723
Prepaid expenses and other 232 276
Total current assets 7,513 5,989
     
LONG-TERM ASSETS    
Property, plant and equipment, net 3,196 2,167
Long-term notes receivable 51 --
Deferred income tax assets, net of current portion -- 48
Deposits and other 392 132
  $ 11,152 $ 8,336
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable - trade $ 2,103 $ 1,783
Deferred revenues 202 236
Accrued expenses 1,557 1,238
Bank debt 333 110
Total current liabilities 4,195 3,367
     
LONG-TERM LIABILITIES    
Deferred gain on sale of property 109 134
Deferred revenues, net of current portion 165 207
Bank debt, net of current portion 482 220
Deferred tax liability 360 --
Other long-term liabilities -- 27
Total liabilities 5,311 3,955
     
COMMITMENTS AND CONTINGENCIES    
     
SHAREHOLDERS' EQUITY    
Common stock, $.01 par value; authorized 26,000,000 shares; issued 15,130,319 shares; outstanding 8,010,919 shares 151 151
Additional paid-in capital 9,009 8,906
Retained earnings 21,317 19,960
Treasury stock at cost    
7,119,400 shares (24,636) (24,636)
Total shareholders' equity 5,841 4,381
  $ 11,152 $ 8,336
PIZZA INN, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
               
               
      Additional     Treasury  
  Common Stock Paid-in Retained Treasury Stock  
  Shares Amount Capital Earnings Shares at Cost Total
               
               
BALANCE, JUNE 28, 2009 8,011 $ 151 $ 8,741 $ 18,796 (7,119) $ (24,636) $ 3,052
               
Stock compensation expense -- -- 165 -- -- -- 165
Net income -- -- -- 1,164 -- -- 1,164
               
BALANCE, JUNE 27, 2010 8,011 $ 151 $ 8,906 $ 19,960 (7,119) $ (24,636) $ 4,381
               
Stock compensation expense -- -- 103 -- -- -- 103
Net income -- -- -- 1,357 -- -- 1,357
               
BALANCE, JUNE 26, 2011 8,011 $ 151 $ 9,009 $ 21,317 (7,119) $ (24,636) $ 5,841
 
PIZZA INN, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
     
     
  Fiscal Year Ended
  June 26, June 27,
  2011 2010
Net Income $ 1,357 $ 1,164
Interest Expense 65 62
Taxes 621 884
Depreciation and Amortization 851 357
EBITDA $ 2,894 $ 2,467

###

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