Pizza Inn, Inc. Reports Results for First Quarter Fiscal Year 2009

Chain Reports Sixth Straight Quarter of Positive Domestic Buffet Restaurant Same Store Sales Growth


THE COLONY, Texas, Nov. 12, 2008 (GLOBE NEWSWIRE) -- Pizza Inn, Inc. (Nasdaq:PZZI) today reported net income of $293,000, or $0.03 per share, for the first quarter ended September 28, 2008, versus net income of $345,000, or $0.03 per share, for the first quarter of the prior fiscal year. Highlights for the first quarter included:



 * Comparable domestic buffet restaurant sales increased 1.1% for the
   first quarter of fiscal 2009 compared to the same period of the
   prior fiscal year.
 * Total domestic restaurant sales decreased 3.4% for the first
   quarter of fiscal 2009 compared to the same period of the prior
   fiscal year.
 * The first quarter of fiscal 2009 represented the sixth consecutive
   quarter of domestic same store sales growth compared to the prior
   year.
 * General and administrative expenses decreased 21% in the first
   quarter of fiscal 2009 compared to the same period of the prior
   year due primarily to lower severance expense.

Charlie Morrison, President and CEO, commented, "Our same store sales performance has remained positive in these difficult economic times, which is indicative of the continued progress we are making in restoring the Pizza Inn brand. Our newest Company-owned restaurant in Denton, TX opened in mid-October and the initial sales results have been above expectations. This new Company restaurant will be the foundation for the development of Company and franchisee restaurants in the future."

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. (www.pizzainn.com) is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises approximately 320 restaurants and owns two restaurants with annual and domestic and international chain-wide sales of approximately $135 million.

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



                        PIZZA INN, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except per share amounts)
                          (Unaudited)

                                                 Three Months Ended
                                                 -------------------
                                                 Sept. 28,  Sept. 23,
 REVENUES:                                         2008       2007
                                                 --------   --------
  Food and supply sales                          $ 10,134   $ 10,779
  Franchise revenue                                 1,064      1,116
  Restaurant sales                                    190        183
                                                 --------   --------
                                                   11,388     12,078
                                                 --------   --------
 COSTS AND EXPENSES:
  Cost of sales                                     9,655     10,072
  Franchise expenses                                  479        620
  General and administrative expenses                 687        621
  Severance                                            37        300
  Bad debt                                             15         23
  Interest expense                                     12         14
                                                 --------   --------
                                                   10,885     11,650
                                                 --------   --------

 INCOME FROM CONTINUING OPERATIONS BEFORE TAXES       503        428
  Income taxes                                        161         --
                                                 --------   --------
 INCOME FROM CONTINUING OPERATIONS                    342        428
     Loss from discontinued operations, net of
      taxes                                           (49)       (83)
                                                 --------   --------
 NET INCOME                                           293        345
                                                 --------   --------

 EARNINGS PER SHARE OF COMMON STOCK - BASIC:
  Income from continuing operations              $   0.04   $   0.04
  Loss from discontinued operations                 (0.01)  $  (0.01)
                                                 --------   --------
  Net income                                     $   0.03   $   0.03
                                                 ========   ========

 EARNINGS PER SHARE OF COMMON STOCK - DILUTED:
  Income from continuing operations              $   0.04   $   0.04
  Loss from discontinued operations                 (0.01)     (0.01)
                                                 --------   --------
  Net income                                     $   0.03   $   0.03
                                                 ========   ========

 Weighted average common shares outstanding
  - basic                                           8,946     10,166
                                                 ========   ========
 Weighted average common and
  potential dilutive common shares outstanding      8,970     10,167
                                                 ========   ========

                                     PIZZA INN, INC.
                          CONDENSED CONSOLIDATED BALANCE SHEETS
                          (In thousands, except share amounts)

                                               Sept. 28,
 ASSETS                                           2008       June 29,
                                              (unaudited)     2008
                                                --------    --------
 CURRENT ASSETS
  Cash and cash equivalents                     $    153    $  1,157
  Accounts receivable, less allowance for bad
   debts of $142 and $128, respectively            2,703       2,773
  Notes receivable, current portion                    8           6
  Income tax receivable                              120         272
  Inventories                                      1,416       1,396
  Property held for sale                             299         301
  Deferred income tax assets                         555         555
  Prepaid expenses and other                         396         235
                                                --------    --------
    Total current assets                           5,650       6,695

 LONG-TERM ASSETS
  Property, plant and equipment, net                 996         635
  Notes receivable                                     3           7
  Deferred income tax assets                         237         237
  Re-acquired development territory, net              --          46
  Deposits and other                                 165         215
                                                --------    --------
                                                $  7,051    $  7,835
                                                ========    ========
 LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES
  Accounts payable - trade                      $  1,514    $  2,380
  Cash overdraft                                     582          --
  Accrued expenses                                 1,001       1,316
  Short-term debt                                    301          --
                                                --------    --------
    Total current liabilities                      3,398       3,696

 LONG-TERM LIABILITIES
  Deferred gain on sale of property                  178         184
  Deferred revenues                                  277         283
  Other long-term liabilities                         11          18
                                                --------    --------
    Total liabilities                              3,864       4,181
                                                --------    --------

 COMMITMENTS AND CONTINGENCIES

 SHAREHOLDERS' EQUITY
  Common stock, $.01 par value; authorized
   26,000,000 shares; issued 15,130,319 and
   15,130,319 shares, respectively;
   outstanding 8,788,262 and 9,104,361 shares,
   respectively                                      151         151
  Additional paid-in capital                       8,598       8,543
  Retained earnings                               17,917      17,624
  Treasury stock at cost
   Shares in treasury: 6,342,057 and 6,025,958,
    respectively                                 (23,479)    (22,664)
                                                --------    --------
    Total shareholders' equity                     3,187       3,654
                                                --------    --------
                                                $  7,051    $  7,835
                                                ========    ========

                                 PIZZA INN, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

                                                  Three Months Ended
                                                 --------------------
                                                 Sept. 28,  Sept. 23,
                                                   2008       2007
                                                  -------   -------

 CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income                                      $   293   $   345
  Adjustments to reconcile net income to
   cash used for operating activities:
   Depreciation and amortization                       83        84
   Severance accrual expense                           --       300
   Stock compensation expense                          55        --
   Provision for bad debts                             15        23
  Changes in operating assets and liabilities:
   Deferred revenue                                    12        --
   Notes and accounts receivable                      209      (380)
   Inventories                                        (20)      184
   Accounts payable - trade                          (866)     (302)
   Accrued expenses                                  (327)     (646)
   Prepaid expenses and other                        (120)      (92)
                                                  -------   -------
   Cash used for operating activities                (666)     (484)
                                                  -------   -------

 CASH FLOWS FROM INVESTING ACTIVITIES:

  Capital expenditures                               (407)      (40)
                                                  -------   -------
   Cash used for investing activities                (407)      (40)
                                                  -------   -------

 CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in line of credit, net                       301        --
  Cash overdraft                                      582        --
  Repurchase of common stock                         (814)      (35)
                                                  -------   -------
   Cash provided by (used) for financing
    activities                                         69       (35)
                                                  -------   -------

 Net decrease in cash and cash equivalents         (1,004)     (559)
 Cash and cash equivalents, beginning of period     1,157     1,879
                                                  -------   -------
 Cash and cash equivalents, end of period         $   153   $ 1,320
                                                  =======   =======


            

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