Pizza Inn Holdings, Inc. Reports Results For Third Quarter Fiscal Year 2014 - WLNS TV 6 Lansing - Jackson | Your Local News Leader

Pizza Inn Holdings, Inc. Reports Results For Third Quarter Fiscal Year 2014

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SOURCE Pizza Inn Holdings Inc.

Company continues to grow Pie Five Pizza Co. concept

THE COLONY, Texas, May 14, 2014 /PRNewswire/ -- 

Pizza Inn Holdings, Inc.

Third Quarter Highlights:

  • Adjusted EBITDA decreased $0.2 million to a loss of $0.2 million compared to the same quarter of the prior year
  • Net loss increased $0.1 million from the comparable prior year quarter to a loss of $0.5 million
  • Pizza Inn domestic comparable store franchise retail sales increased 0.8% year over year
  • Company-owned restaurant sales increased 36.2% year over year
  • Pie Five Company-owned average weekly sales per store increased 16.9% year over year
  • Continued growth in pipeline of Pie Five franchise restaurant openings

Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today announced results for the third fiscal quarter ended March 30, 2014. The Company had a net loss in the third quarter of $0.5 million compared to a net loss of $0.4 million for the comparable period in the prior fiscal year. The increase in net loss from prior year was primarily due to higher general and administrative expenses, franchise costs attributable to growth of the Pie Five brand, and bad debt expense.

"The performance of the Pie Five concept was very strong in the third quarter," said Randy Gier, President and Chief Executive Officer. "Despite some negative weather impact early in the quarter, the average weekly sales per store for our thirteen Company-owned restaurants increased 16.9% year over year due to a 4.4% increase in comparable store sales and very strong results for the new restaurants opened in the past twelve months.  I'm particularly pleased that these strong trends have continued into the current quarter."

"The progress we've made at Pie Five to hone our site selection process and concept prototype has had a clear impact on the performance of our four new Company-owned restaurants (including one relocated restaurant) and four new franchised restaurants opened this fiscal year.  That group of eight new Pie Five restaurants generated average weekly sales per store in the third quarter that were 45% higher than that of the existing eleven Company-owned and franchised restaurants," continued Gier.

"Later this week, our Richmond franchisee will open the 20th restaurant in the Pie Five chain and we expect the number of Pie Five restaurants in operation to double by the end of the 2014 calendar year as our new franchisees open their first or second restaurants in markets across the country.  To fully capitalize on the momentum in the Pie Five concept we are also accelerating the development of Company-owned restaurants in multiple metropolitan areas.  To prepare for this growth we recently added several strong, experienced members to our management team, including a new Chief Financial Officer and a Vice President of Real Estate Development," continued Gier.

"The Pizza Inn system also demonstrated improved performance in the quarter, with an improved trend of comparable store sales and store count," said Gier. "The hard work by our restaurant support team and our Pizza Inn franchisees is paying off as we bring stability to the system", added Gier.

Total revenues for the third quarter and the comparable prior year quarter were $10.9 million and $9.8 million, respectively. Third quarter franchise revenue increased slightly as compared to the prior year as franchise fees from new Pie Five franchisees offset decreased international royalties. Additional franchise development fees previously received from Pie Five franchisees have been deferred and will be recognized as future restaurants are opened.

Third quarter food and supply sales increased by approximately $0.4 million, or 5.5%, as compared to the prior year primarily due to an increase in sales to franchisees as a result of increased domestic franchisee retail sales and higher food commodity costs passed through in prices. Third quarter Company-owned restaurant sales increased $0.7 million, or 36.2%, as compared to the prior year as a result of the opening of two new Company-owned Pie Five restaurants in the second half of fiscal 2013 and four new Company-owned Pie Five restaurants in fiscal 2014 (one of which was a relocation of an existing restaurant), partially offset by the closing of one Company-owned Pizza Inn restaurant at the completion of its lease in fiscal 2014. Third quarter general and administrative expenses increased $0.3 million over the prior year to support growth for new Company-owned Pie Five restaurants and a legal settlement related to patent litigation, partially offset by reduced stock compensation expense.

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 Pizza Inn Holdings.  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 Pizza Inn Holdings will be achieved.  

 About Pizza Inn Holdings, Inc.:

Headquartered in the Dallas suburb of The Colony, TX, Pizza Inn Holdings, 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, Pizza Inn Holdings Inc. owns and franchises approximately 275 restaurants. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "PZZI". For more information, please visit www.pizzainn.com.

Contact:
Tim Mullany
Chief Financial Officer
Pizza Inn Holdings, Inc.
469-384-5000

 


PIZZA INN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)






































Three Months Ended


Nine Months Ended





March 30,


March 24,


March 30,


March 24,





2014


2013


2014


2013























REVENUES:

$           10,912


$             9,781


$           31,281


$           30,767












COSTS AND EXPENSES:









Cost of sales

9,570


8,460


27,028


26,127


General and administrative expenses

1,130


840


3,314


2,995


Franchise expenses

677


608


2,150


1,675


Pre-opening expenses

4


82


160


249


Bad debt

93


45


203


135


Interest expense

34


58


113


197





11,508


10,093


32,968


31,378












LOSS FROM CONTINUING OPERATIONS BEFORE TAXES

(596)


(312)


(1,687)


(611)


Income tax benefit

(159)


(22)


(527)


(170)

LOSS FROM CONTINUING OPERATIONS

(437)


(290)


(1,160)


(441)













Loss from discontinued operations, net of taxes

(14)


(100)


(39)


(127)

NET LOSS

$               (451)


$               (390)


$            (1,199)


$               (568)












EARNINGS PER SHARE OF COMMON STOCK - BASIC:









Loss from continuing operations

$              (0.05)


$              (0.04)


$              (0.14)


$              (0.05)


Loss from discontinued operations

-


(0.01)


-


(0.02)


Net loss

$              (0.05)


$              (0.05)


$              (0.14)


$              (0.07)












EARNINGS PER SHARE OF COMMON STOCK - DILUTED:




















Loss from continuing operations

$              (0.05)


$              (0.04)


$              (0.13)


$              (0.05)


Loss from discontinued operations

-


(0.01)


-


(0.02)


Net loss

$              (0.05)


$              (0.05)


$              (0.13)


$              (0.07)












Weighted average common shares outstanding - basic

8,771


8,021


8,566


8,021












Weighted average common and









potential dilutive common shares outstanding

9,290


8,267


9,109


8,198

 




PIZZA INN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)





















ASSETS



 

March 30,

2014

(unaudited)


 

June 30,

2013











CURRENT ASSETS







Cash and cash equivalents


$

365

$

919


Accounts receivable, less allowance for bad debts








of $417 and $228, respectively



3,679


3,139


Notes receivable



123


292


Inventories



1,601


1,615


Income tax receivable



343


343


Deferred income tax assets



943


882


Prepaid expenses and other



336


307



Total current assets




7,390


7,497











LONG-TERM ASSETS







Property, plant and equipment, net



5,652


4,711


Long-term notes receivable



14


40


Long-term deferred tax asset



657


168


Deposits and other



430


119



Total assets



$

14,143

$

12,535











LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES







Accounts payable - trade


$

2,178

$

1,572


Accrued expenses



1,611


1,749


Deferred revenues



154


169


Bank debt



375


669



Total current liabilities




4,318


4,159











LONG-TERM LIABILITIES







Bank debt, net of current portion



750


1,856


Deferred revenues, net of current portion



680


370


Deferred gain on sale of property



40


59


Other long-term liabilities



70


22



Total liabilities




5,858


6,466











COMMITMENTS AND CONTINGENCIES  (See Note 3)
















SHAREHOLDERS' EQUITY







Common stock, $.01 par value; authorized 26,000,000








shares; issued 15,849,615 and 15,312,680 shares, respectively;







outstanding 8,730,215 and 8,193,280 shares, respectively



158


153


Additional paid-in capital



13,584


10,174


Retained earnings



19,179


20,378


Treasury stock at cost








Shares in treasury: 7,119,400 



(24,636)


(24,636)



   Total shareholders' equity




8,285


6,069







$

14,143

$

12,535




PIZZA INN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
















Nine Months Ended







March 30,


March 24







2014


2013










CASH FLOWS FROM OPERATING ACTIVITIES:














      Net loss


$             (1,199)


$                (568)


      Adjustments to reconcile net loss to 






cash (used) provided by operating activities:






Depreciation and amortization

1,056


958



(Gain) loss on sale of assets

(40)


129



Stock compensation expense

45


135



Deferred taxes

(551)


(243)



Provision for bad debts

203


44


      Changes in operating assets and liabilities:






Notes and accounts receivable

(548)


(172)



Inventories

14


330



Accounts payable - trade

606


(21)



Accrued expenses

(90)


129



Deferred revenue

276


61



Prepaid expenses and other

(367)


(102)



Cash (used) provided by operating activities

(595)


680










CASH FLOWS FROM INVESTING ACTIVITIES:





      Proceeds from sale of assets

58


184


      Capital expenditures

(1,987)


(1,547)



Cash used for investing activities

(1,929)


(1,363)










CASH FLOWS FROM FINANCING ACTIVITIES:





      Proceeds from sale of stock

3,288


-


      Proceeds from stock options

82


-


      Borrowings of bank debt

-


3,160


      Repayments of bank debt

(1,400)


(2,252)



Cash provided by financing activities 

1,970


908










Net increase (decrease) in cash and cash equivalents

(554)


225

Cash and cash equivalents, beginning of period

919


590

Cash and cash equivalents, end of period

$                  365


$                  815




























SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION



















CASH PAYMENTS FOR:














Interest


$                  113


$                  248


Income taxes - net

$                      1


$                  (84)






























Three Months Ended


Nine Months Ended



March 30,


March 24,


March 30,


March 24,



2014


2013


2014


2013

 Net loss 


$              (451)


$              (390)


$           (1,199)


$              (568)

 Interest expense 


34


58


113


197

 Income Taxes - Continuing Operations 


(159)


(22)


(527)


(170)

 Income Taxes - Discontinued Operations 


(7)


(8)


(20)


(66)

 Stock compensation expense 


15


45


45


135

 Depreciation and amortization 


370


340


1,056


958

 Adjusted EBITDA 


$              (198)


$                 23


$              (532)


$               486

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