updated 5/10/2011 5:46:57 PM ET 2011-05-10T21:46:57

THE COLONY, Texas, May 10, 2011 (GLOBE NEWSWIRE) -- PIZZA INN, INC. (Nasdaq:PZZI)

Third Quarter Highlights:

  • Net income increased 22% to $442,000 compared to $362,000 in 2010
  • Earnings per share of $0.06 in 2011 compared to $0.05 in 2010
  • Revenueincreased 5.3%
  • Domestic same store sales increased 1.8% driven by a 2.3% increase in same store sales for domestic buffet-style restaurants
  • Sales for Company owned restaurants increased 49% driven by new restaurants added in the previous two fiscal quarters

Pizza Inn, Inc. (Nasdaq:PZZI) today announced results for the third fiscal quarter ended March 27, 2011. Net income increased 22% year over year to $442,000, or $0.06 per share, compared to net income of $362,000, or $0.05 per share, for the same quarter of the prior fiscal year. Revenues increased 5.3% to $10.7 million compared to $10.2 million for the same quarter of the prior fiscal year. Domestic same store sales increased 1.8% for the third fiscal quarter compared to the prior fiscal year driven by a 2.3% increase in same store sales for the buffet-style concept. 

For the nine months ended March 27, 2011, Company revenues were $31.7 million compared to $30.6 million for the same period in the prior fiscal year. Net income for the nine months ended March 27, 2011 was $1.0 million, or $0.12 per share, compared to $1.1 million, or $0.14 per share, for the same period in the prior fiscal year. The decline in net income was primarily attributable to $0.3 million of depreciation expense associated with the closure of a Company store opened prior to the rollout of the new buffet prototype.

"We are very pleased with our third quarter results," commented Charlie Morrison, President and CEO. "We have returned our chain to positive same stores sales growth led by the efforts of a strong and resilient group of franchise partners who can weather any storm. Our franchisees have been aggressively investing in remodeling their restaurants and are working harder than ever to fight price competition with the best product quality and service in the industry. In addition, we expect to open more than 20 new restaurants worldwide in fiscal 2011, providing even more opportunities for pizza lovers to enjoy our fresh-made, crackery thin crust pizzas."

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 Pizza Inn's control. 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 Pizza Inn's objectives and plans will be achieved. 

Pizza Inn, Inc. is an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademark "Pizza Inn." 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."

The Pizza Inn logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4933

PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
         
  Three Months Ended Nine Months Ended
REVENUES: March 27,

2011
March 28,

2010
March 27,

2011
March 28,

2010
         
Food and supply sales  $ 8,650  $ 8,378  $ 25,841  $ 25,389
Franchise revenue  937  1,041  2,879  3,107
Restaurant sales  1,134  760  2,988  2,094
   10,721  10,179  31,708  30,590
         
COSTS AND EXPENSES:        
Cost of sales  8,679  8,163  25,856  24,740
Franchise expenses  518  524  1,422  1,421
General and administrative expenses  777  865  2,448  2,474
Costs associated with store closure  -  -  319  -
Bad debt  15  15  70  55
Interest expense  21  26  49  52
   10,010  9,593  30,164  28,742
         
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES  711  586  1,544  1,848
Income taxes  246  186  523  615
INCOME FROM CONTINUING OPERATIONS  465  400  1,021  1,233
         
Loss from discontinued operations, net of taxes  (23)  (38)  (71)  (118)
NET INCOME  $ 442  $ 362  $ 950  $ 1,115
         
EARNINGS PER SHARE OF COMMON STOCK - BASIC:        
Income from continuing operations  $ 0.06  $ 0.05  $ 0.13  $ 0.15
Loss from discontinued operations  -   -   (0.01)  (0.01)
Net income  $ 0.06  $ 0.05  $ 0.12  $ 0.14
         
EARNINGS PER SHARE OF COMMON STOCK - DILUTED:        
Income from continuing operations  $ 0.06  $ 0.05  $ 0.13  $ 0.15
Loss from discontinued operations  -   -   (0.01)  (0.01)
Net income  $ 0.06  $ 0.05  $ 0.12  $ 0.14
         
Weighted average common shares outstanding - basic 8,011 8,011 8,011 8,011
         
Weighted average common and potential dilutive common shares outstanding 8,016 8,011 8,013 8,011
 
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
     
ASSETS March 27,

2011 (unaudited)
June 27,

2010
     
CURRENT ASSETS    
Cash and cash equivalents $ 704 $ 761
Accounts receivable, less allowance for bad debts of $247 and $178, respectively  3,041  2,678
Income tax receivable  321  184
Inventories  1,707  1,489
Deferred income tax assets  704  723
Prepaid expenses and other  291  276
Total current assets  6,768  6,111
     
LONG-TERM ASSETS    
Property, plant and equipment, net  3,009  2,167
Long-term notes receivable  67  -
Deferred income tax assets  -  48
Deposits and other  233  132
  $ 10,077 $ 8,458
LIABILITIES AND SHAREHOLDERS' EQUITY    
CURRENT LIABILITIES    
Accounts payable - trade $ 1,671 $ 1,783
Deferred revenues  276  236
Accrued expenses  1,411  1,360
Bank debt  333  110
Total current liabilities  3,691  3,489
     
LONG-TERM LIABILITIES    
Deferred gain on sale of property  115  134
Deferred tax liability  122  -
Deferred revenues  176  207
Bank debt  566  220
Other long-term liabilities  3  27
Total liabilities  4,673  4,077
     
COMMITMENTS AND CONTINGENCIES     
SHAREHOLDERS' EQUITY    
Common stock, $.01 par value; authorized 26,000,000 shares; issued 15,130,319 and 15,130,319 shares, respectively; outstanding 8,010,919 and 8,010,919 shares, respectively  151  151
Additional paid-in capital  8,979  8,906
Retained earnings  20,910  19,960
Treasury stock at cost    
Shares in treasury: 7,119,400 and 7,119,400, respectively  (24,636)  (24,636)
Total shareholders' equity   5,404  4,381
  $ 10,077 $ 8,458
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
     
  Nine Months Ended
  March 27,

2011
March 28,

2010
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
     
Net income  $ 950  $ 1,115
Adjustments to reconcile net income to cash provided by operating activities:    
Depreciation and amortization  689  258
Stock compensation expense  73  122
Deferred tax  189  -
Provision for bad debts  70  55
Net income adjusted for non-cash items  1,971  1,550
Changes in operating assets and liabilities:    
Notes and accounts receivable  (634)  (652)
Inventories  (218)  (192)
Accounts payable - trade  (112)  (100)
Accrued expenses  7  712
Deferred revenue  10  160
Prepaid expenses and other  (130)  (232)
Net changes in operating assets and liabilities  (1,077)  (304)
Cash provided by operating activities  894  1,246
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
     
Capital expenditures  (1,520)  (650)
Cash used by investing activities  (1,520)  (650)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Change in line of credit, net  569  (291)
Cash provided (used) by financing activities   569  (291)
     
Net increase (decrease) in cash and cash equivalents  (57)  305
Cash and cash equivalents, beginning of period  761  274
Cash and cash equivalents, end of period  $ 704  $ 579
CONTACT: Nancy Ellefson
         VP of Finance
         Pizza Inn, Inc.
         469-384-5000

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