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Pizza Inn, Inc. Reports 3rd Quarter Financial Results

PIZZA INN, INC. today reported $0.00 earnings per share for its quarter ended March 27, 2005 versus $0.06 earnings per share for the same quarter last year. The quarter resulted in a net loss of $20,000 versus net income of $617,000 for the same quarter last year on revenues of $13.4 million and $14.5 million, respectively. For the nine-month period, earnings per share were $0.03 versus $0.17 last year. Net income for the nine-month period was $316,000 versus $1,679,000 on revenues of $41.6 million versus $44.6 million last year.

Revenues decreased approximately 8% or $1.1 million from the prior year quarter primarily due to reduced sale prices on certain key ingredients and lower overall retail sales. Comparable chainwide retail sales were down 3.2% for the quarter. Financial results continue to be adversely impacted by product cost inflation of approximately 5% for the quarter, which was not passed through to franchisees. Additionally, legal fees increased approximately $390,000 for the quarter compared to the same quarter last year as a result of ongoing litigation and related matters.

Tim Taft, the Company's new chief executive officer commented, "Operating margins continue to be lower due to sustained product cost inflation that we have not passed on to franchisees, but the Company remains focused on increasing productivity efficiencies and controlling expenses. Substantial progress has been made on our improved unit-level business model as evidenced by strong openings of our newest locations in Madison, Mississippi and Garner, North Carolina. We feel a sense of urgency to capitalize on the positive momentum these openings have generated and continue this success in our upcoming store openings."

Pizza Inn, Inc. is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises over 400 restaurants with annual chainwide sales of approximately $160 million.

   For more information contact:
   Shawn Preator
   Chief Financial Officer
   469-384-5201
   3551 Plano Parkway
   The Colony, TX  75056

        For more information about the company, visit Pizza Inn at
                         https://www.pizzainn.com/



                             PIZZA INN, INC.
            (In thousands, except share and per share amounts)

            3rd Quarter
                                               March 27,         March 28,
                                                 2005              2004
  Revenue                                        $13,401           $14,549

  (Loss) Income before taxes                        ($31)             $936

  Net (Loss) Income                                 ($20)             $617

  Diluted earnings (loss) per share                $0.00             $0.06

  Basic earnings (loss) per share                  $0.00             $0.06

  Weighted average shares outstanding:
    Diluted                                   10,117,412        10,132,298
    Basic                                     10,088,505        10,078,619


            Nine Months
                                               March 27,          March 28,
                                                 2005               2004
  Revenue                                        $41,586           $44,576

  Income before taxes                               $489            $2,774

  Net Income                                        $316            $1,679

  Diluted earnings per share                       $0.03             $0.17

  Basic earnings per share                         $0.03             $0.17

  Weighted average shares outstanding:
    Diluted                                   10,142,295        10,113,654
    Basic                                     10,108,861        10,069,626

SOURCE: Pizza Inn, Inc.

CONTACT: Shawn Preator, Chief Financial Officer of Pizza Inn, Inc.,
+1-469-384-5201