Pizza Inn, Inc. Reports Results for the First Quarter Fiscal Year 2006
PIZZA INN, INC.
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 http://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.,
Web site: http://www.pizzainn.com/