fbpx

Pizza Inn, Inc. Reports Results for the First Quarter Fiscal Year 2006

PIZZA INN, INC. today reported a net loss per share for its first quarter ended September 25, 2005 of ($0.04) versus $0.03 earnings per share for the same quarter last year. The quarter resulted in a net loss of ($393,000) versus net income of $285,000 for the same quarter last year on revenues of $12.9 million and $14.4 million, respectively.

  First Quarter FY 2006 versus First Quarter FY 2005 Results

   *  Diluted EPS was ($0.04) versus $0.03 on a net loss of ($393,000)
      versus net income of $285,000.

   *  Revenues decreased approximately 11% or $1.6 million primarily due to
      lower comparable chainwide retail sales, fewer net stores and the
      effect of Hurricane Katrina (combined total is approximately
      $1.2 million).  Additionally, equipment sales decreased $241,000 and
      international sales of food and equipment decreased $119,000.

   *  Comparable chainwide retail sales were down 3.5%.

   *  Legal fees increased approximately $363,000 as the result of ongoing
      litigation and related matters.

   *  Energy costs increased approximately $156,000.

   *  General and administrative expenses included non-cash executive stock
      compensation expense of $103,000 for approximately 560,000 stock
      option rights granted previously to the chief executive officer and
      members of the board of directors.  The prior year did not include any
      non-cash compensation expense.

The Company's President and CEO, Tim Taft, commented, "Despite the temporary negative impact of Hurricane Katrina on our financial results, our primary concern is with the people of the Gulf Region and our operators there. We must, however, remain focused on the fundamentals of our business, from concept development to unit-level profitability. In the coming weeks we will introduce our new buffet concept in the Dallas and Houston markets, featuring a more progressive approach to our brand and its profitability. In addition, a new franchisee selection program will roll out in November of this year, targeting strategic markets throughout the chain. Also, as our Product and Purchasing Committee reduces costs in the operating system, our marketing efforts have been refocused to illuminate the brand's core competency — a tradition of serving quality food and hospitality."

Certain statements in this press release, other than historical information, may be considered forward-looking statements, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, and are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Pizza Inn's operating results, performance or financial condition are its ability to implement its growth strategies, national, regional and local economic conditions affecting the restaurant/entertainment industry, competition within each of the restaurant and entertainment industries, store sales cannibalization, success of its franchise operations, negative publicity, fluctuations in quarterly results of operations, including seasonality, government regulations, weather, commodity, insurance and labor costs.

Pizza Inn, Inc. is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. Pizza Inn franchises approximately 385 restaurants and owns five restaurants with annual chainwide sales of approximately $160 million.

   Pizza Inn, Inc.             For more information contact:
   3551 Plano Parkway          Shawn Preator
   The Colony, TX  75056       Chief Financial Officer
                               (469) 384-5201

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

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

                                                    Three Months Ended
                                             September 25,     September 26,
  REVENUES:                                         2005              2004

    Food and supply sales                        $11,308           $12,822
    Franchise revenue                              1,180             1,340
    Restaurant sales                                 218               255
    Other income                                     147               ---
                                                  12,853            14,417

  COSTS AND EXPENSES:
    Cost of sales                                 11,132            12,192
    Franchise expenses                               808               626
    General and administrative expenses            1,401             1,022
    Interest expense                                 169               136
                                                  13,510            13,976

  (LOSS) INCOME BEFORE INCOME TAXES                 (657)              441

    Provision for income taxes                      (264)              156

  NET (LOSS) INCOME                                $(393)             $285

  Basic (loss) earnings per common share          $(0.04)            $0.03

  Diluted (loss) earnings per common share        $(0.04)            $0.03

  Weighted average common shares                  10,108            10,134

  Weighted average common and potential
   dilutive common shares                         10,150            10,169

SOURCE: Pizza Inn, Inc.

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