THE COLONY, Texas, Nov. 9, 2010 (GLOBE NEWSWIRE) -- Pizza Inn, Inc. (Nasdaq:PZZI) today reported net income of $0.1 million, or $0.02 per share, for the fiscal quarter ended September 26, 2010, versus net income of $0.4 million, or $0.05 per share, for the same quarter of the prior fiscal year. Total revenue for the first fiscal quarter of 2011 increased 6.3%, to $10.6 million from $10.0 million in the same period of fiscal 2010.

Highlights for the first quarter of fiscal year 2011 included:
  • Comparable domestic buffet restaurant sales decreased 4.2% for the first quarter of fiscal 2011 compared to the same quarter of the prior fiscal year.
  • Chain-wide comparable domestic restaurant sales decreased 4.8% for the first quarter of fiscal 2011 compared to the same quarter of the prior fiscal year.
  • The Company opened a new Company-owned restaurant during the quarter and acquired a fourth restaurant during the period. By year end, the Company expects to operate five restaurants with the opening of another location in Lewisville, Texas.
  • The Company recorded $0.3 million in costs associated with store closure attributable to a change in the estimated useful life of equipment and leasehold improvements resulting from the Company's decision to close its Plano, Texas store. In the absence of this item, pre-tax income from continuing operations would have been $0.5 million compared to $0.6 million for the same period last year.

Charlie Morrison, President and CEO, commented, "The competitive landscape continues to be challenging, but the year-to-year comparisons of our same store sales have improved for the last two quarters.  We continue to open new, productive franchise locations as well as more company stores and have a pipeline of franchise and company-operated stores slated to open this fiscal year and next. In addition, during the quarter we signed a new 20 year development agreement with one of our three long-term area developers which demonstrates the confidence our franchisees have in the brand."

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. ( www.pizzainn.com) 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
  September 26, September 27,
REVENUES: 2010 2009
     
Food and supply sales  $ 8,702  $ 8,395
Franchise revenue  1,025  1,062
Restaurant sales  905  543
     
   10,632  10,000
     
COSTS AND EXPENSES:
Cost of sales  8,704  8,116
Franchise expenses  523  467
General and administrative expenses  835  777
Costs associated with store closure  319  --
Bad debt  15  15
Interest expense  10  14
   10,406  9,389
     
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES  226  611
 Income Taxes  72  206
INCOME FROM CONTINUING OPERATIONS  154  405
     
Loss from discontinued operations, net of taxes  (25)  (39)
NET INCOME  $ 129  $ 366
     
EARNINGS PER SHARE OF COMMON STOCK - BASIC:
Income from continuing operations  $ 0.02  $ 0.05
Loss from discontinued operations  --   -- 
Net income  $ 0.02  $ 0.05
     
EARNINGS PER SHARE OF COMMON STOCK - DILUTED:
     
Income from continuing operations  $ 0.02  $ 0.05
Loss from discontinued operations  --   -- 
Net income  $ 0.02  $ 0.05
     
Weighted average common shares outstanding - basic 8,011 8,011
     
Weighted average common and potential dilutive common shares outstanding 8,011 8,011
 
 
PIZZA INN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
     
  September 26, June 27,
ASSETS 2010 (unaudited) 2010
     
CURRENT ASSETS  
Cash and cash equivalents  $793  $761
Accounts receivable, less allowance for bad debts of $192 and $178, respectively  2,684  2,678
Income tax receivable  --  184
Inventories  1,565  1,489
Property held for sale  16  16
Deferred income tax assets  723  723
Prepaid expenses and other  356  260
Total current assets  6,137  6,111
     
LONG-TERM ASSETS  
Property, plant and equipment, net  2,289  2,167
Deferred income tax assets  62  48
Deposits and other  116  132
   $8,604  $8,458
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES  
Accounts payable - trade  $1,496  $1,783
Deferred revenues  340  236
Accrued expenses  1,271  1,360
Bank debt  152  110
Total current liabilities  3,259  3,489
     
LONG-TERM LIABILITIES
Deferred gain on sale of property  128  134
Deferred revenues  196  207
Bank debt  451  220
Other long-term liabilities  30  27
Total liabilities  4,064  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  8,936  8,906
Retained earnings  20,089  19,960
Treasury stock at cost  
Shares in treasury: 7,119,400 and 7,119,400, respectively  (24,636)  (24,636)
Total shareholders' equity   4,540  4,381
   $8,604  $8,458
PIZZA INN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
     
  Three Months Ended
  September 26, September 27,
  2010 2009
     
CASH FLOWS FROM OPERATING ACTIVITIES:
     
Net income  $ 129  $ 366
Adjustments to reconcile net income to cash used for operating activities:
Depreciation and amortization  428  72
Stock compensation expense  30  37
Provision for bad debts  14  15
Changes in operating assets and liabilities:
Notes and accounts receivable  165  (122)
Inventories  (76)  12
Accounts payable - trade  (286)  (64)
Accrued expenses  (106)  (43)
Deferred revenue  92  177
Prepaid expenses and other  (86)  (281)
Cash provided by operating activities  304  169
     
CASH FLOWS FROM INVESTING ACTIVITIES:
     
Capital expenditures  (545)  (539)
Cash used for investing activities  (545)  (539)
     
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in line of credit, net  273  24
Cash overdraft  --  163
Cash provided by financing activities   273  187
     
Net increase (decrease) in cash and cash equivalents  32  (183)
Cash and cash equivalents, beginning of period  761  274
Cash and cash equivalents, end of period  $ 793  $ 91
CONTACT:  Pizza Inn, Inc.          Nancy Ellefson, VP of Finance          469-384-5000

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