Pizza Inn Inc. (PZZI, Financial) filed Quarterly Report for the period ended 2010-09-26.
Pizza Inn Inc. has a market cap of $15.9 million; its shares were traded at around $1.98 with and P/S ratio of 0.4.
Total revenues for the three month period ended September 26, 2010 increased 6.3%, or $0.6 million, to $10.6 million from $10.0 million in the same period in the prior fiscal year. Food and supply sales increased by $0.3 million driven primarily by the increase in commodity prices, and restaurant sales increased $0.4 million primarily due to the opening of a new Company store in the second quarter of fiscal 2010.
Food and supply sales by Norco include food and paper products and other distribution revenues. Food and supply sales for the three month period ended September 26, 2010 increased 3.7%, or $0.3 million, to $8.7 million from $8.4 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the increase, driven primarily by a 23% increase in cheese prices compared to the same period in the prior fiscal year.
Franchise revenue, which includes income from royalties, license fees and area development and foreign master license sales, decreased 3.5% or $37,000 for the three month period ended September 26, 2010 compared to the comparable period for the prior fiscal year. Domestic royalties decreased to $0.8 million in the first quarter of fiscal year 2011 from $0.9 million the prior year as a result of 3.5% lower retail sales from units closed in the current fiscal year, a 4.8% decrease in comparable store sales, a one-time royalty buy-out of $44,000 in the prior year and the “0% First Year Royalty” incentive program the Company had in place for new buffet franchise units signed by the end of the prior fiscal year. These lower royalty amounts were offset by higher domestic franchise fees, including the signing of a new area development agreement with an existing franchise area developer.
General and administrative expenses increased 7.5%, or $58,000, for the three month period ended September 26, 2010 compared to the comparable period for the prior fiscal year. The increase was primarily due to increased general and administrative expenses associated with the newest Company owned store in Fort Worth, Texas of $61,000, and a $68,000 increase in legal fees related to a franchisee lawsuit. These increases were offset by a $59,000 decrease in payroll associated with earned bonuses in the prior year.
On January 11, 2010, the Company entered into a Loan Agreement with Amegy Bank National Association (“Amegy”) providing for a $2.0 million revolving credit facility (with a $250 thousand letter of credit subfacility) and a $1.0 million term loan facility.
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Pizza Inn Inc. has a market cap of $15.9 million; its shares were traded at around $1.98 with and P/S ratio of 0.4.
Highlight of Business Operations:
Basic and diluted income per common share decreased to $0.02 for the three month period ended September 26, 2010 compared to $0.05 for the comparable period ended September 27, 2009. Net income for the three month period ended September 26, 2010 decreased $237,000 to $129,000 from $336,000 for the comparable period in the prior fiscal year, on revenues of $10.6 million for the three month period ended September 26, 2010 and $10.0 million for the comparable period in the prior fiscal year. The decrease in net income during the three month period ended September 26, 2010, was primarily due to a $0.3 million non-recurring entry to record final amortization and depreciation on a Company restaurant that was closed during the period.Total revenues for the three month period ended September 26, 2010 increased 6.3%, or $0.6 million, to $10.6 million from $10.0 million in the same period in the prior fiscal year. Food and supply sales increased by $0.3 million driven primarily by the increase in commodity prices, and restaurant sales increased $0.4 million primarily due to the opening of a new Company store in the second quarter of fiscal 2010.
Food and supply sales by Norco include food and paper products and other distribution revenues. Food and supply sales for the three month period ended September 26, 2010 increased 3.7%, or $0.3 million, to $8.7 million from $8.4 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the increase, driven primarily by a 23% increase in cheese prices compared to the same period in the prior fiscal year.
Franchise revenue, which includes income from royalties, license fees and area development and foreign master license sales, decreased 3.5% or $37,000 for the three month period ended September 26, 2010 compared to the comparable period for the prior fiscal year. Domestic royalties decreased to $0.8 million in the first quarter of fiscal year 2011 from $0.9 million the prior year as a result of 3.5% lower retail sales from units closed in the current fiscal year, a 4.8% decrease in comparable store sales, a one-time royalty buy-out of $44,000 in the prior year and the “0% First Year Royalty” incentive program the Company had in place for new buffet franchise units signed by the end of the prior fiscal year. These lower royalty amounts were offset by higher domestic franchise fees, including the signing of a new area development agreement with an existing franchise area developer.
General and administrative expenses increased 7.5%, or $58,000, for the three month period ended September 26, 2010 compared to the comparable period for the prior fiscal year. The increase was primarily due to increased general and administrative expenses associated with the newest Company owned store in Fort Worth, Texas of $61,000, and a $68,000 increase in legal fees related to a franchisee lawsuit. These increases were offset by a $59,000 decrease in payroll associated with earned bonuses in the prior year.
On January 11, 2010, the Company entered into a Loan Agreement with Amegy Bank National Association (“Amegy”) providing for a $2.0 million revolving credit facility (with a $250 thousand letter of credit subfacility) and a $1.0 million term loan facility.
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