Pizza Inn: Rave Restaurant Group, Inc. Reports First Quarter Financial Results

The following excerpt is from the company's SEC filing.
Dallas, Texas –
RAVE Restaurant Group, Inc. (NASDAQ: RAVE)
today reported financial results for the first quarter ended September 26, 2021.
First Quarter Highlights:
The Company recorded net income of $285 thousand for the
quarter of fiscal
compared to net income of $76 thousand for the same period of the prior year.
Income before taxes was $288 thousand for the
compared to net income before taxes of $78 thousand for the same period of the prior year.
Total revenue increased by $0.7 million to $2.6 million for the
compared to the same period of the prior year.
Pizza Inn d omestic comparable store
retail sales increased 25% in the
Pie Five comparable store retail
sales increased 18% i
On a fully diluted basis, net income increased $0.02 per share to $0.02 per share for the
compared to net income of $0.00 per share for the same period of the prior year.
Cash and cash equivalents decreased $0.5 million during the
to $7.9 million at
Pizza Inn domestic unit count finished at 133.
Pizza Inn international unit count finished at 32.
Pie Five domestic unit count finished at 33.
"The valiant efforts of our franchisees and team members have been crucial to accomplishing our sixth consecutive quarter of profitability," said Brandon Solano, Chief
Executive Officer of RAVE Restaurant Group, Inc. "Our strong sales recovery and focus on cost control is paying off with strong earnings growth despite the pandemic, supply chain disruptions, and labor market upheaval."
"Our first quarter net income before tax of $288 thousand marks the sixth consecutive quarter of positive income and is 269% better than year ago, demonstrating our brands’
resilience and strong connection with our customers.  Our franchisees are gritty, refusing to concede to the labor market shortage and continuing to staff their stores and open dining rooms when many competitors are limiting service options, hours
and days of operation," said Solano. "This is RAVE’s best streak of positive income in nearly a decade as we generate positive operating income and hold nearly $8.0 million in cash."
"In our first quarter, Pizza Inn saw strong consumer demand for our new House Pan Pizza as we highlighted the differences between our house made dough and competitors'
frozen dough and frozen cheese.  We will continue to innovate with new products and offers for our customers as we close out this calendar year and look forward to 2022.  At Pie Five, we continued to push on the category’s hottest trend of stuffed
crust by elevating the experience and introducing Pie Five’s Parmesan Crunch Stuffed Crust pizza with a trial-driving value offer," Solano said. "More recently, we began testing Korean Barbeque Steak pizza as we continue to differentiate our menu and
attract not only pizza, but fast-casual occasions.”
“Despite the ongoing challenges related to the Delta variant, we were able to report a strong first quarter with revenue of $2.6 million and adjusted EBITDA of $0.4
million," said Clint Fendley, Chief Financial Officer of RAVE Restaurant Group, Inc.  "As our revenue continues to recover from its suppressed pandemic levels, we intend to maintain our focus on increasing sales and profitability for both of our
brands.”
Non-GAAP Financial Measures
The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and
discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for
planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles.
The Company considers EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and
other parties interested in our industry. The Company believes that EBITDA is helpful to investors in evaluating its results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. The
Company believes that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management
also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes.
“EBITDA” represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents earnings before interest, taxes, depreciation and
amortization, stock compensation expense, severance, gain/loss sale of assets, costs related to impairment and other lease charges, franchise default and closed store revenue/expense, and closed and non-operating store costs. A reconciliation of
these non-GAAP financial measures to net income is included with the accompanying financial statements.
Note Regarding Forward Looking Statements
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 RAVE Restaurant Group, Inc. 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 RAVE Restaurant Group, Inc. will be achieved.
About RAVE Restaurant Group, Inc.
Founded in 1958, Dallas-based RAVE Restaurant Group [NASDAQ: RAVE] franchises and/or licenses Pie Five Pizza Co. and Pizza Inn restaurants and Pizza Inn Express kiosks
domestically and internationally. Pizza Inn is an international chain featuring freshly made pizzas, along with salads, pastas, and desserts. Pie Five Pizza Co. is a leader in the rapidly growing fast-casual pizza space. Pizza Inn Express, or PIE, is
developing unique opportunities to provide freshly made pizza from non-traditional outlets. The Company’s common stock is listed on the Nasdaq Capital Market under the symbol “RAVE”. For more information, please visit
www.raverg.com
Contact:
Investor Relations
469-384-5000
RAVE RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 27,
REVENUES:
COSTS AND EXPENSES:
Cost of sales
General and administrative expenses
Franchise expenses
Impairment of long-lived assets and other lease charges
Bad debt expense
Interest expense
Depreciation and amortization expense
Total costs and expenses
INCOME BEFORE TAXES
Income tax expense
NET INCOME
INCOME PER SHARE OF COMMON STOCK - BASIC:
INCOME PER SHARE OF COMMON STOCK - DILUTED:
Weighted average common shares outstanding - basic
18,005
15,451
Weighted average common and potential dilutive common shares outstanding
18,803
16,249
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 27,
ASSETS
CURRENT ASSETS
Accounts receivable, less allowance for
bad debts
of $25 and $47, respectively
Notes receivable, current
Deferred contract charges, current
Prepaid expenses and other
Total current assets
10,373
LONG-TERM ASSETS
Property, plant and equipment, net
Operating lease right of use asset, net
Intangible assets definite-lived, net
Notes receivable, net of current portion
Deferred contract charges, net of current portion
Total assets
12,576
13,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable - trade
Accrued expenses
Other current liabilities
Operating lease liability, current
Short term loan, current
Convertible notes short term, net of unamortized debt issuance costs and discounts
Deferred revenues, current
Total current liabilities
LONG-TERM LIABILITIES
Operating lease liability, net of current portion
Deferred revenues, net of current portion
Total liabilities
Common stock, $.01 par value; authorized
26,000,000
shares; issued 25,090,058 and 25,090,058 shares, respectively;
outstanding 18,004,904 and
18,004,904 shares, respectively
Additional paid-in capital
37,257
37,215
Accumulated deficit
(6,911
(7,196
Treasury stock at cost
Shares in treasury: 7,085,154 and 7,085,154, respectively
(24,537
Total shareholders’ equity
Total liabilities and shareholders’ equity
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
September 27, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to
cash
used in operating activities:
Stock compensation expense
Amortization of operating right of use assets
Amortization of intangible assets definite-lived
Amortization of debt issue costs
Provision for bad debt
Changes in operating assets and liabilities:
Deposits and other
Accounts payable - lease termination impairments
Cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments received on notes receivable
Purchase of intangible assets definite-lived
Purchase of property, plant and equipment
Cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Equity issuance costs - ATM offering
Cash used in financing activities
Net decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes
Non-cash activities:
Conversion of notes to common shares
Operating lease right of use assets at adoption
Operating lease liability at adoption
ADJUSTED EBITDA
Severance
Franchisee default and closed store revenue
Closed and non-operating store costs

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever Pizza Inn Holdings makes a similar move, sign up!

Auto Refresh

Feedback