Pizza Inn Holdings, Inc. Reports Results for Third Quarter Fiscal Year 2012

Pie Five Concept Growth Continues and is Producing Solid Unit Level Performance

Pizza Inn Holdings, Inc. Reports Results for Third Quarter Fiscal Year 2012
Pizza Inn Holdings, Inc. Reports Results for Third Quarter Fiscal Year 2012

Third Quarter Highlights:

  • Net income decreased $0.4 million to $52 thousand
  • EBITDA decreased $0.5 million to $0.4 million
  • Franchised domestic buffet-style restaurant same store sales decreased 1.1% while total franchised domestic same store sales declined 1.4%
  • The Company opened an additional Pie Five restaurant
  • Company-owned restaurant sales increased 45.8% to $1.7 million

The Colony, TX  (RestaurantNews.com)  Pizza Inn Holdings, Inc. (Nasdaq:PZZI) today announced results for the third fiscal quarter ended March 25, 2012. Quarterly net income decreased $0.4 million year over year to $52 thousand, or $0.01 per share, compared to net income of $0.4 million, or $0.06 per share, for the same quarter of the prior fiscal year. The decline in net income was primarily attributable to lower food and supply sales, as well as pre-opening costs associated with new Company-owned Pie Five restaurants. Third quarter revenues were essentially unchanged at $10.6 million compared to $10.7 million for the same quarter of the prior fiscal year. Company-owned restaurant sales increased 45.8% to $1.7 million due primarily to new store openings. However, food and supply sales decreased by approximately $0.5 million, or 6.2%, due to a decrease in the average number of restaurants open in the current period, a 4.0% decrease in domestic franchisee retail sales and a decrease in non-proprietary food purchased from the Company by franchisees when compared to the prior year period.

For the nine months ended March 25, 2012, net income was $0.4 million, or $0.05 per share, compared to $0.9 million, or $0.12 per share, for the same period in the prior fiscal year. The decline in net income was primarily attributable to a $0.7 million decline in food and supply sales, $0.2 million of pre-opening costs associated with the opening of four Pie Five stores during the nine months ended March 25, 2012, and $0.6 million of costs associated with preparing the Company to support the growth of the Pie Five business and the franchising of Pizza Inn in China. Revenues increased $0.4 million, or 1.3%, to $32.1 million for the nine months ended March 25, 2012 compared to $31.7 million during the same period in the prior fiscal year. Domestic franchise buffet-style restaurant same store sales increased 0.1% while total domestic franchise same store sales decreased 0.1% compared to the prior fiscal year. For the nine months of fiscal 2012, Company store restaurant sales increased $1.2 million, or 40.6%, to $4.2 million due to new store openings.

“We are excited about the progress we have made in our expansion of the Pie Five concept,” commented Charlie Morrison, President and CEO. “Our results reflect the growing popularity of the Pie Five brand as evidenced in the solid store level contribution during our ramp-up phase. Additionally, our quarterly results reflect the investments in people, technology and support required to ensure that this concept is positioned properly for future growth.”

“We are disappointed that our food and supply sales have decreased during the quarter and year-to-date. We have been working collaboratively with our franchisees to develop and test new products and marketing initiatives to enhance system-wide revenue for the Pizza Inn brand. We are also working with our franchisees to evaluate impacted non-proprietary food products we sell in an effort to lower our costs without compromising our long-standing quality. We believe these initiatives should support a return to historical product sales relative to franchisee retail sales,” Mr. Morrison concluded.

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 the control of Pizza Inn Holdings. 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 the objectives and plans of Pizza Inn Holdings will be achieved.

Pizza Inn Holdings, Inc. is an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademarks “Pizza Inn” and “Pie Five Pizza Company.” 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.”

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