Attached files

file filename
8-K - PIZZA INN HOLDINGS, INC. - PIZZA INN HOLDINGS, INC /MO/pizza8k050812.htm
FOR IMMEDIATE RELEASE

Contact:
Jerry L. Trojan
Chief Financial Officer
Pizza Inn Holdings, Inc.
469-384-5000
 
PIZZA INN HOLDINGS, INC. REPORTS RESULTS FOR
THIRD QUARTER FISCAL YEAR 2012

Pie Five Concept growth continues and is producing solid unit level performance

 
The Colony, Texas – May 9, 2012 -- PIZZA INN HOLDINGS, INC. (NASDAQ: PZZI)
 
Third Quarter Highlights:
 
·  
Net income decreased $0.4million 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
 
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 attributableto 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.
 
 
 
 

 
 
FOR IMMEDIATE RELEASE

Contact:
Jerry L. Trojan
Chief Financial Officer
Pizza Inn Holdings, Inc.
469-384-5000
 
 
 
 
"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 beenworking collaboratively with our franchisees to develop and testnew products and marketing initiatives to enhance system-wide revenue for the Pizza Inn brand.We are also working with our franchisees to evaluate impactednon-proprietary food products we sellin 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.”
 
 

 
 

 
 
PIZZA INN HOLDINGS, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In thousands, except per share amounts)
 
(Unaudited)
 
                         
                         
                         
   
Three Months Ended
   
Nine Months Ended
 
   
March 25,
   
March 27,
   
March 25,
   
March 27,
 
   
2012
   
2011
   
2012
   
2011
 
                         
REVENUES
  $ 10,646     $ 10,721     $ 32,129     $ 31,708  
                                 
COSTS AND EXPENSES:
                               
Cost of sales
    8,863       8,679       26,724       25,854  
Franchise expenses
    592       472       1,565       1,288  
General and administrative expenses
    1,016       823       2,986       2,577  
Costs associated with store closure
    -       -       -       319  
Bad debt
    35       15       65       70  
Interest expense
    38       21       71       49  
      10,544       10,010       31,411       30,157  
                                 
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
    102       711       718       1,551  
Income taxes
    35       254       252       554  
INCOME FROM CONTINUING OPERATIONS
    67       457       466       997  
                                 
Loss from discontinued operations, net of taxes
    (15 )     (15 )     (45 )     (47 )
NET INCOME
  $ 52     $ 442     $ 421     $ 950  
                                 
EARNINGS PER SHARE OF COMMON STOCK - BASIC:
                               
Income from continuing operations
  $ 0.01     $ 0.06     $ 0.06     $ 0.13  
Loss from discontinued operations
    -       -       (0.01 )     (0.01 )
Net income
  $ 0.01     $ 0.06     $ 0.05     $ 0.12  
                                 
EARNINGS PER SHARE OF COMMON STOCK - DILUTED:
                               
                                 
Income from continuing operations
  $ 0.01     $ 0.06     $ 0.06     $ 0.13  
Loss from discontinued operations
    -       -       (0.01 )     (0.01 )
Net income
  $ 0.01     $ 0.06     $ 0.05     $ 0.12  
                                 
Weighted average common shares outstanding - basic
    8,021       8,011       8,015       8,011  
                                 
Weighted average common and
                               
potential dilutive common shares outstanding
    8,385       8,016       8,322       8,013  

 
 

 
 
PIZZA INN HOLDINGS, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(In thousands, except share amounts)
 
             
   
March 25,
   
June 26,
 
ASSETS
 
2012 (unaudited)
   
2011
 
             
CURRENT ASSETS
           
Cash and cash equivalents
  $ 694     $ 949  
Accounts receivable, less allowance for bad debts
               
of $223 and $162, respectively
    3,335       3,128  
Inventories
    1,689       1,829  
Income tax receivable
    653       553  
Deferred income tax assets
    776       822  
Prepaid expenses and other
    326       232  
Total current assets
    7,473       7,513  
                 
LONG-TERM ASSETS
               
Property, plant and equipment, net
    4,788       3,196  
Long-term notes receivable
    22       51  
Deposits and other
    477       392  
    $ 12,760     $ 11,152  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
CURRENT LIABILITIES
               
Accounts payable - trade
  $ 2,101     $ 2,103  
Accrued expenses
    1,360       1,557  
Deferred revenues
    191       202  
Bank debt
    765       333  
Total current liabilities
    4,417       4,195  
                 
LONG-TERM LIABILITIES
               
Bank debt, net of current portion
    1,096       482  
Deferred tax liability
    605       360  
Deferred revenues, net of current portion
    135       165  
Deferred gain on sale of property
    90       109  
Other long-term liabilities
    28       -  
Total liabilities
    6,371       5,311  
                 
COMMITMENTS AND CONTINGENCIES
               
                 
SHAREHOLDERS' EQUITY
               
Common stock, $.01 par value; authorized 26,000,000
               
shares; issued 15,140,319 and 15,130,319 shares, respectively;
               
outstanding 8,020,919 and 8,010,919 shares, respectively
    151       151  
Additional paid-in capital
    9,136       9,009  
Retained earnings
    21,738       21,317  
Treasury stock at cost
               
Shares in treasury: 7,119,400
    (24,636 )     (24,636 )
Total shareholders' equity
    6,389       5,841  
    $ 12,760     $ 11,152  
 
 
 
 

 
 
PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(In thousands)
 
(Unaudited)
 
             
   
Nine Months Ended
 
   
March 25,
   
March 27,
 
   
2012
   
2011
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
             
Net income
  $ 421     $ 950  
Adjustments to reconcile net income to
               
cash provided by operating activities:
               
Depreciation and amortization
    663       689  
Stock compensation expense
    104       73  
Deferred tax
    46       189  
Provision for litigation costs
               
Provision for bad debts
    65       70  
Net income adjusted for non-cash items
    1,299       1,971  
Changes in operating assets and liabilities:
               
Notes and accounts receivable
    (394 )     (634 )
Inventories
    140       (218 )
Accounts payable - trade
    (2 )     (112 )
Accrued expenses
    76       7  
Deferred revenue
    (60 )     10  
Prepaid expenses and other
    (175 )     (130 )
Net changes in operating assets and liabilities
    (415 )     (1,077 )
Cash provided by operating activities
    884       894  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
                 
Capital expenditures
    (2,208 )     (1,520 )
Cash used by investing activities
    (2,208 )     (1,520 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from exercise of stock options
    23       -  
Borrowings of bank debt
    1,795       660  
Repayments of bank debt
    (749 )     (91 )
Cash provided by financing activities
    1,069       569  
                 
Net decrease in cash and cash equivalents
    (255 )     (57 )
Cash and cash equivalents, beginning of period
    949       761  
Cash and cash equivalents, end of period
  $ 694     $ 704  
                 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
                 
                 
CASH PAYMENTS FOR (FROM):
               
                 
 Interest    55      49  
 Income taxes - net
    37       510  
 
 
 
 

 
 
PIZZA INN HOLDINGS, INC.
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
 
(In thousands)
 
             
             
             
             
   
Three Months Ended
 
   
March 25,
   
March 27,
 
   
2012
   
2011
 
 Net Income
  $ 52     $ 442  
 Interest Expense
    38       21  
 Taxes
    35       254  
 Depreciation and Amortization
    269       143  
 EBITDA
  $ 394     $ 860  
                 
                 
   
Nine Months Ended
 
   
March 25,
   
March 27,
 
      2012       2011  
 Net Income
  $ 421     $ 950  
 Interest Expense
    71       49  
 Taxes
    252       554  
 Depreciation and Amortization
    650       689  
 EBITDA
  $ 1,394     $ 2,242