THE COLONY, Texas, Sept. 23, 2009 (GLOBE NEWSWIRE) -- Pizza Inn, Inc. (Nasdaq:PZZI) today reported net income of $1.2 million, or $0.14 per share, for the fiscal year ended June 28, 2009, versus net income of $2.8 million, or $0.29 per share, for the prior fiscal year. The $0.15 difference in earnings per share is driven primarily by two factors. Due to a change in the availability and use of its net loss carryforwards, the Company reported tax expense of $0.5 million in fiscal year 2009 compared to a tax benefit of $0.1 million in fiscal year 2008, representing $0.07 of the earnings per share difference. In addition, the Company incurred litigation settlement expenses of $0.3 million in fiscal year 2009 versus a litigation settlement benefit of $0.3 million in fiscal year 2008, representing another $0.06 of the earnings per share difference. In the absence of these items, earning per share would have been $0.23 for fiscal year 2009 compared to $0.25 for fiscal year 2008.
Highlights for the fourth quarter and fiscal year 2009 included:
- Sales from Company-owned restaurants increased 153%, or $1.1 million, in fiscal 2009 compared to the prior year, primarily due to the opening of the buffet location in Denton, Texas in October of 2008.
- Comparable domestic buffet restaurant sales decreased 1.3% for fiscal 2009 and 3.8% for the fourth quarter compared to the prior fiscal year.
- Total comparable domestic restaurant sales decreased 2.0% for fiscal 2009 and 4.4% for the fourth quarter compared to the prior fiscal year.
- Buffet unit and total unit closures for the fourth quarter and fiscal year 2009 were at their lowest in the last ten years.
Charlie Morrison, President and CEO, commented, "Despite the tough economic conditions, we are seeing positive results from the changes we have made to the Pizza Inn concept. Comparable buffet restaurant sales have trended ahead of pizza segment averages, which is encouraging for the continued momentum of the brand. Our successful new buffet prototype, combined with a great incentive program for franchise development, has delivered 13 new buffet franchise agreements for the coming fiscal year. These new franchise agreements include both new and existing franchisees. We also opened our third company-owned restaurant in Ft. Worth, Texas last week and have plans to continue expanding our company-owned store base 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 an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademark "Pizza Inn." 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 28, June 29,
2009 2008
-------- --------
REVENUES:
Food and supply sales $ 37,793 $ 43,807
Franchise revenue 4,180 4,970
Restaurant sales 1,873 741
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43,846 49,518
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COSTS AND EXPENSES:
Cost of sales 36,355 40,819
Franchise expenses 1,929 2,538
General and administrative expenses 3,217 2,911
Severance 68 391
Provision for bad debts 75 146
Loss on sale of assets -- 9
Provision for (recovery of) litigation costs 263 (284)
Interest expense 57 46
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41,964 46,576
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INCOME FROM CONTINUING
OPERATIONS BEFORE TAXES 1,882 2,942
Income tax expense (benefit) 531 (99)
-------- --------
INCOME FROM CONTINUING OPERATIONS 1,351 3,041
Loss from discontinued
operations, net of income tax benefit (179) (216)
-------- --------
NET INCOME $ 1,172 $ 2,825
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EARNINGS (LOSS) PER SHARE OF COMMON
STOCK - BASIC:
Income from continuing operations $ 0.16 $ 0.31
Loss from discontinued operations $ (0.02) $ (0.02)
-------- --------
Net income $ 0.14 $ 0.29
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EARNINGS (LOSS) PER SHARE OF COMMON
STOCK - DILUTED:
Income from continuing operations $ 0.16 $ 0.31
Loss from discontinued operations $ (0.02) $ (0.02)
-------- --------
Net income $ 0.14 $ 0.29
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Weighted average common
shares outstanding - basic 8,580 9,761
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Weighted average common
shares outstanding - diluted 8,580 9,789
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PIZZA INN, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 28, June 29,
2009 2008
-------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 274 $ 1,157
Accounts receivable, less allowance for
doubtful accounts of $203 and $128,
respectively 2,559 2,773
Income tax receivable 80 272
Inventories 1,371 1,396
Property held for sale 17 301
Deferred income tax assets 618 555
Prepaid expenses and other 233 241
-------- --------
Total current assets 5,152 6,695
LONG-TERM ASSETS
Property, plant and equipment, net 1,743 635
Deferred income tax assets 86 237
Re-acquired development territory, net -- 46
Deposits and other 81 222
-------- --------
$ 7,062 $ 7,835
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 1,806 $ 2,380
Deferred revenues 132 134
Accrued expenses 1,009 1,182
-------- --------
Total current liabilities 2,947 3,696
LONG-TERM LIABILITIES
Deferred gain on sale of property 159 184
Deferred revenues, net of current portion 246 283
Bank debt 621 --
Other long-term liabilities 37 18
-------- --------
Total liabilities 4,010 4,181
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COMMITMENTS AND CONTINGENCIES
(See Notes F and I)
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized
26,000,000 shares; issued 15,130,319 and
15,130,319 shares, respectively; outstanding
8,010,919 and 9,104,361 shares, respectively 151 151
Additional paid-in capital 8,741 8,543
Retained earnings 18,796 17,624
Treasury stock at cost
Shares in treasury: 7,119,400 and 6,025,958,
respectively (24,636) (22,664)
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Total shareholders' equity 3,052 3,654
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$ 7,062 $ 7,835
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PIZZA INN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
-------------------
June 28, June 29,
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,172 $ 2,825
Adjustments to reconcile net income to cash
provided by (used for) operating activities:
Depreciation and amortization 290 342
Provision for bad debt 75 146
Stock compensation expense 198 51
Loss on sale of assets -- 9
Deferred income taxes 88 (334)
Changes in operating assets and liabilities:
Notes and accounts receivable 258 (196)
Income tax receivable 80 (272)
Inventories 25 122
Accounts payable - trade (574) 298
Accrued expenses (175) (489)
Prepaid expenses and other 80 (83)
-------- --------
Cash provided by operating activities 1,517 2,419
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets -- 108
Capital expenditures (1,049) (249)
-------- --------
Cash used for investing activities (1,049) (141)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings of long-term bank debt 621 --
Purchases of treasury stock (1,972) (3,020)
Proceeds from exercise of stock options -- 20
-------- --------
Cash used for financing activities (1,351) (3,000)
-------- --------
Net decrease in cash and cash equivalents (883) (722)
Cash and cash equivalents, beginning of year 1,157 1,879
-------- --------
Cash and cash equivalents, end of year $ 274 $ 1,157
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