Pizza Inn Inc. (PZZI, Financial) filed Quarterly Report for the period ended 2010-12-26.
Pizza Inn Inc. has a market cap of $15 million; its shares were traded at around $1.91 with and P/S ratio of 0.4. Mutual Fund and Other Gurus that owns PZZI: Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Total revenues for the three month period ended December 26, 2010 remained flat at $10.4 million compared to the same period in the prior fiscal year. Food and supply sales and franchise revenue each decreased by $0.1 million while restaurant sales increased $0.2 million primarily due to the opening and acquisition of new Company stores in fiscal 2011. Total revenues for the six month period ended December 26, 2010 increased 2.8%, or $0.6 million, to $21.0 million from $20.4 million in the same period in the prior fiscal year primarily due to an increase in restaurant sales from the opening and acquisition of new Company stores in fiscal 2011.
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 December 26, 2010 decreased 1.5%, or $0.1 million, to $8.5 million from $8.6 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the decrease, driven primarily by 2.0% lower retail sales compared to the same period in the prior fiscal year. Food and supply sales for the six month period ended December 26, 2010 increased 1.1%, or $0.2 million, to $17.2 million from $17.0 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the increase, driven primarily by higher commodity prices compared to the same period in the prior fiscal year.
Franchise revenue, which includes income from domestic and international royalties and license fees, decreased 8.7%, or $87,000, for the three month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. The decrease was primarily due to a decrease in domestic royalties of 6.7%, or $54,000, driven primarily by a 2.6% decrease in comparable store sales. Domestic royalties were also impacted by the 0% First Year Royalties incentive program the Company has in place for new franchised Buffet Units opened during the past two fiscal years. The program provides for zero royalties to be paid in the first year of operation, 2% royalties in the second year of operation and then the standard 4% royalties for the remainder of the 20 year franchise agreement. This program was implemented to stimulate demand for the Company s new buffet concept at a time when franchise development activities had declined due to overall economic conditions. In fiscal years 2010 and 2011, there were seven new domestic Buffet Units opened that benefitted from the incentive. Royalties waived under the incentive program increased $38,000 to $58,000 for the three months ended December 26, 2010 compared to $20,000 in the same period last year. For the six months ended December 26, 2010 franchise revenue decreased 6.0%, or $124,000, compared to the comparable period for the prior fiscal year. The decrease was primarily due to a decrease in domestic royalties of 8.0%, or $133,000, as a result of a 3.8% decrease in comparable store sales. In addition, the Company received a one time benefit in the prior year due to a $44,000 royalty buy-out. These lower royalty amounts were offset by higher franchise fees, including the signing of a new area development agreement with an existing franchise area developer. Royalties waived under the 0% First Year Royalties incentive program increased $96,000 to $131,000 for the six months ended December 26, 2010 compared to $35,000 in the same period last year.
Restaurant sales, which consist of revenue generated by Company-owned restaurants, increased 20.0%, or $158,000, to $949,000 for the three month period ended December 26, 2010 compared to $791,000 for the comparable period in the prior fiscal year. Restaurant sales increased 39.0%, or $0.6 million, to $1.9 million for the six month period ended December 26, 2010 compared to $1.3 million for the comparable period in the prior fiscal year. These increases were primarily due to the opening of two new stores in Fort Worth, Texas and Lewisville, Texas in August, 2010 and December, 2010, respectively. The Company also acquired a new Delco store in Fort Worth, Texas in September, 2010. The Company store located in Plano, Texas closed in September, 2010.
General and administrative expenses remained flat at $0.8 million, for the three month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. Increased Company store general and administrative expenses, primarily due to pre-opening expenses associated with the newest Company owned store in Lewisville, Texas, were offset by lower legal and professional fees compared to the same period in the prior fiscal year. General and administrative expenses increased 3.5%, or $56,000, for the six month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. The increase was primarily due to a $147,000 increase in Company store general and administrative expenses primarily due to pre-opening expenses associated with the newest Company owned stores in Fort Worth, Texas and Lewisville, Texas , as well as a $32,000 increase in legal fees related to a franchisee lawsuit. These increases were offset by a $65,000 decrease in payroll associated primarily with earned bonuses in the prior year, a $39,000 decrease in other professional fees and a $19,000 decrease in occupancy costs.
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Pizza Inn Inc. has a market cap of $15 million; its shares were traded at around $1.91 with and P/S ratio of 0.4. Mutual Fund and Other Gurus that owns PZZI: Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Highlight of Business Operations:
Basic and diluted income per common share remained flat at $0.05 for the three month period ended December 26, 2010 compared to the comparable period in the prior fiscal year. Net income for the three month period ended December 26, 2010 remained flat at $0.4 million compared to the comparable period in the prior fiscal year, on revenues of $10.4 million for both the three month period ended December 26, 2010 and the comparable period in the prior fiscal year. Basic and diluted income per common share decreased to $0.06 for the six month periods ended December 26, 2010 compared to $0.09 for the comparable period ended December 27, 2009. Net income for the six month period ended December 26, 2010 decreased $0.3 million to $0.5 million from $0.8 million for the comparable period in the prior fiscal year, on revenues of $21.0 million for the six month period ended December 26, 2010 and $20.4 million for the comparable period in the prior fiscal year. The decrease in net income during the six month period ended December 27, 2010 is 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 first quarter of fiscal 2011.Total revenues for the three month period ended December 26, 2010 remained flat at $10.4 million compared to the same period in the prior fiscal year. Food and supply sales and franchise revenue each decreased by $0.1 million while restaurant sales increased $0.2 million primarily due to the opening and acquisition of new Company stores in fiscal 2011. Total revenues for the six month period ended December 26, 2010 increased 2.8%, or $0.6 million, to $21.0 million from $20.4 million in the same period in the prior fiscal year primarily due to an increase in restaurant sales from the opening and acquisition of new Company stores in fiscal 2011.
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 December 26, 2010 decreased 1.5%, or $0.1 million, to $8.5 million from $8.6 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the decrease, driven primarily by 2.0% lower retail sales compared to the same period in the prior fiscal year. Food and supply sales for the six month period ended December 26, 2010 increased 1.1%, or $0.2 million, to $17.2 million from $17.0 million in the same period in the prior fiscal year. Domestic food and paper sales accounted for the increase, driven primarily by higher commodity prices compared to the same period in the prior fiscal year.
Franchise revenue, which includes income from domestic and international royalties and license fees, decreased 8.7%, or $87,000, for the three month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. The decrease was primarily due to a decrease in domestic royalties of 6.7%, or $54,000, driven primarily by a 2.6% decrease in comparable store sales. Domestic royalties were also impacted by the 0% First Year Royalties incentive program the Company has in place for new franchised Buffet Units opened during the past two fiscal years. The program provides for zero royalties to be paid in the first year of operation, 2% royalties in the second year of operation and then the standard 4% royalties for the remainder of the 20 year franchise agreement. This program was implemented to stimulate demand for the Company s new buffet concept at a time when franchise development activities had declined due to overall economic conditions. In fiscal years 2010 and 2011, there were seven new domestic Buffet Units opened that benefitted from the incentive. Royalties waived under the incentive program increased $38,000 to $58,000 for the three months ended December 26, 2010 compared to $20,000 in the same period last year. For the six months ended December 26, 2010 franchise revenue decreased 6.0%, or $124,000, compared to the comparable period for the prior fiscal year. The decrease was primarily due to a decrease in domestic royalties of 8.0%, or $133,000, as a result of a 3.8% decrease in comparable store sales. In addition, the Company received a one time benefit in the prior year due to a $44,000 royalty buy-out. These lower royalty amounts were offset by higher franchise fees, including the signing of a new area development agreement with an existing franchise area developer. Royalties waived under the 0% First Year Royalties incentive program increased $96,000 to $131,000 for the six months ended December 26, 2010 compared to $35,000 in the same period last year.
Restaurant sales, which consist of revenue generated by Company-owned restaurants, increased 20.0%, or $158,000, to $949,000 for the three month period ended December 26, 2010 compared to $791,000 for the comparable period in the prior fiscal year. Restaurant sales increased 39.0%, or $0.6 million, to $1.9 million for the six month period ended December 26, 2010 compared to $1.3 million for the comparable period in the prior fiscal year. These increases were primarily due to the opening of two new stores in Fort Worth, Texas and Lewisville, Texas in August, 2010 and December, 2010, respectively. The Company also acquired a new Delco store in Fort Worth, Texas in September, 2010. The Company store located in Plano, Texas closed in September, 2010.
General and administrative expenses remained flat at $0.8 million, for the three month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. Increased Company store general and administrative expenses, primarily due to pre-opening expenses associated with the newest Company owned store in Lewisville, Texas, were offset by lower legal and professional fees compared to the same period in the prior fiscal year. General and administrative expenses increased 3.5%, or $56,000, for the six month period ended December 26, 2010 compared to the comparable period for the prior fiscal year. The increase was primarily due to a $147,000 increase in Company store general and administrative expenses primarily due to pre-opening expenses associated with the newest Company owned stores in Fort Worth, Texas and Lewisville, Texas , as well as a $32,000 increase in legal fees related to a franchisee lawsuit. These increases were offset by a $65,000 decrease in payroll associated primarily with earned bonuses in the prior year, a $39,000 decrease in other professional fees and a $19,000 decrease in occupancy costs.
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