RAVE Restaurant Group, Inc. Reports Third Quarter Financial Results
May 06, 2021 // Franchising.com // Dallas, Texas - RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the third quarter ended March 28, 2021.
Third Quarter Highlights:
- The Company recorded net income of $0.4 million for the third quarter of fiscal 2021 compared to a net loss of $4.5 million for the same period of the prior year.
- Total revenue decreased by $0.5 million to $2.2 million for the third quarter of fiscal 2021 compared to the same period of the prior year.
- Income before taxes was $0.4 million for the third quarter of fiscal 2021 compared to a net loss before taxes of $0.5 million for the same period of the prior year.
- Pizza Inn domestic comparable store retail sales decreased 3% in the third quarter of fiscal 2021 compared to the same period of the prior year.
- Pie Five comparable store retail sales remained relatively stable in the third quarter of fiscal 2021 compared to the same period of the prior year.
- On a fully diluted basis, net income increased $0.32 per share to $0.02 per share for the third quarter of fiscal 2021 compared to a net loss of $0.30 per share for the same period of the prior year.
- Cash and cash equivalents increased $0.2 million during the third quarter of fiscal 2021 to $6.5 million at March 28, 2021.
- Pizza Inn domestic unit count finished at 137.
- Pizza Inn international unit count finished at 33.
- Pie Five domestic unit count finished at 35.
“We are pleased that the heroic efforts of our management, franchisees, and team members have resulted in another profitable quarter amidst a pandemic and significant government restrictions,” said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group, Inc. “While we are pleased with this quarter’s results, much work remains. We intend to continue our focus on innovation, operations consistency, technology upgrades, and cost controls to drive value and consistency for our customers and shareholders and position RAVE, Pizza Inn, and Pie Five for long term success."
"RAVE’s Q3 net income of $0.4 M marks the fourth consecutive quarter of net income and shows sequential improvement each quarter, in a pandemic, while running a buffet brand," said Solano. We hold significant cash, have limited leverage, and have resolved our NASDAQ listing deficiencies. We have a strong team, a sound strategy, and gritty franchisees committed to winning.”
“In Q3, Pizza Inn launched garlic-buttery crust system wide,” Solano said. “Based on our research, this is a big consumer idea that holds significant opportunity. We also believe the value and variety of the Pizza Inn Buffet can capitalize on pent-up consumer demand for real, authentic, in-person, dining experiences with families and friends. We have another buffet innovation we’ve been holding for this moment that we expect to launch this month. Lastly, in Q3 we selected Pepsi Cola as Pizza Inn’s exclusive soft drink supplier and will be transitioning from Coke in the coming months. Our franchisees and customers are excited to dine out with their families and be refreshed with Pepsi, Dr. Pepper, Cheerwine, and Mountain Dew, among others.”
“At Pie Five we completed the roll out of our Panzano Pan pizza and new pricing strategy during the most recent quarter,” said Solano. “This month we expect to introduce a differentiated pizza innovation with strong freshness/better-for-you cues, becoming the first among major fast-casual pizza brands to do so. We have partnered with a well-known brand in a growing segment of the food service industry for this upcoming launch.”
"Our third quarter results represent the fourth consecutive quarter of profitability for RAVE despite the challenges presented by the pandemic," said Clint Fendley, Vice President of Finance of RAVE Restaurant Group, Inc. "Our team is poised and ready to deliver innovative menu items aimed at driving traffic and revenue growth for our franchisees as we remain optimistic for an improving environment for the restaurant industry."
Non-GAAP Financial Measures
The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, 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.
The Company considers EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and other parties interested in our industry. The Company believes that EBITDA is helpful to investors in evaluating its results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. The Company believes that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes.
“EBITDA” represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, stock compensation expense, severance, gain/loss sale of assets, costs related to impairment and other lease charges, franchise default and closed store revenue/expense, and closed and non-operating store costs. A reconciliation of these non-GAAP financial measures to net income is included with the accompanying financial statements.
Note Regarding Forward Looking 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.
SOURCE RAVE Restaurant Group, Inc.
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