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

The following excerpt is from the company's SEC filing.
Dallas, Texas –
RAVE Restaurant Group, Inc. (NASDA
Q: RAVE) today reported financial results for the fourth quarter ended
June 27, 2021.
Fourth Quarter Highlights:
The Company recorded net income of $926 thousand for the
quarter of fiscal
compared to net income of $31 thousand for the
same period of the prior year.
Income before taxes was $892 thousand for the
compared to net income before taxes of $32 thousand for the same period of
the prior year.
Total revenue increased by $0.8 million to $2.4 million for the
compared to th e same period of the prior year.
Pizza Inn domestic comparable store retail sales increased 63% in the
Pie Five comparable store retail
sales increased 36% in the fourth quarter of fiscal 2021
compared to the same period of the prior year.
On a fully diluted basis, net income increased $0.05 per share to $0.05 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 increased $1.8 million during the
to $8.3 million at
Pizza Inn domestic unit count finished at 135.
Pizza Inn international unit count finished at 32.
Pie Five domestic unit count finished at 33.
Annual Highlights:
Net income improved by $5.7 million to $1.5 million in fiscal 2021 compared to a net loss of $4.2 million in fiscal 2020.
Net income before tax improved by $1.7 million to $1.5 million in fiscal 2021 compared to a loss of $0.2 million in fiscal 2020.
Adjusted EBITDA of $2.0 million for fiscal 2021 was a $1.4 million increase from the prior year.
On a fully diluted basis, the Company reported net income of $0.09 per share in fiscal 2021 compared to a net loss of $0.28 per share in the prior year.
RAVE total domestic comparable store retail sales decreased 2.0% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year.
Pizza Inn domestic comparable store retail sales decreased 1.0% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year.
Pie Five comparable store retail sales decreased 6.2% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year.
Total consolidated revenue decreased by $1.4 million in fiscal 2021 to $8.6 million.
Both fiscal 2021 and fiscal 2020 contained 52 weeks.
Cash and cash equivalents increased $5.4 million in fiscal 2021 to $8.3 million.
“We are pleased that the heroic efforts of our franchisees and team members have resulted in our fifth consecutive quarter of profitability. Our maniacal focus on cost control and relentless consumer-facing innovation is paying off with
improving sales and consistent earnings despite the pandemic and the latest variant,” said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group. “Our fourth quarter net income of $.9M marks the fifth consecutive quarter of positive
income, showing sequential improvement each quarter, in a pandemic, while running a buffet brand. This is RAVE’s best streak of positive income in nearly a decade. While our fourth quarter income includes a one-time PPP loan forgiveness, we are
generating positive operating income, have limited leverage and hold more than $8M in cash.”
“In Q4 we capitalized 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. Earlier in the year we introduced our Panzano Pan
pizza as well as our Impossible Tuscan meatball,” said Solano. “Pie Five now offers three significant innovations a majority of our fast casual pizza competitors do not: pan pizza, plant-based meat pizza and stuffed crust. We will continue to focus
on driving same store sales with innovation and strong operations.”
“Pizza Inn’s core product significantly improved this year with our new garlic butter crust, transition to house-shredded 100% whole-milk mozzarella and our classic house-made dough. This month we introduced our House Pan Pizza with a campaign
to highlight the differences between our house-made dough and Pizza Hut’s frozen dough and frozen cheese. We have significant innovation in our pipeline and can’t wait to share them with our customers,” said Solano.
"The financial results for fiscal 2021 underscore the tremendous efforts by our team at RAVE to advance our turnaround despite the many challenges facing the restaurant industry," said Clint Fendley, Chief Financial Officer of RAVE Restaurant
Group, Inc. "We increased our cash from operations by $1.8 million and our cash and cash equivalents by $5.4 million, reduced our debt, and posted one of the best years of profitability for RAVE in a decade. We look forward to 2022 as we continue
to invest in both brands in order to ignite growth in future periods."
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] owns, operates, franchises and/or licenses 200 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
Twelve Months Ended
June 28,
REVENUES:
10,028
COSTS AND EXPENSES:
Cost of sales
General and administrative expenses
Franchise expenses
Gain on sale of assets
Impairment of long-lived assets and other lease charges
Bad debt expense
Interest expense
Depreciation and amortization expense
Total costs and expenses
10,183
OTHER INCOME:
Gain on forgiveness of PPP loan
Total other income
INCOME (LOSS) BEFORE TAXES
Income tax (benefit) expense
NET INCOME (LOSS)
(4,233
INCOME (LOSS) PER SHARE OF COMMON STOCK - BASIC:
INCOME (LOSS) PER SHARE OF COMMON STOCK - DILUTED:
Weighted average common shares outstanding - basic
18,005
15,194
17,307
15,144
Weighted average common and potential dilutive common shares outstanding
18,803
15,992
18,105
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 28, 2020
ASSETS
CURRENT ASSETS
Restricted cash
Accounts receivable, less allowance for bad debts  of $47 and $269, 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
Deposits and other
Total assets
13,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable - trade
Accounts payable - lease termination impairments
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
Convertible notes, net of current portion
Operating lease liability, net of current portion
Deferred revenues, net of current portion
Other long-term liabilities
Total liabilities
Common stock, $.01 par value; authorized 26,000,000 shares; issued 25,090,058 and 22,550,376  shares, respectively; outstanding 18,004,904 and 15,465,222 shares,
respectively
Additional paid-in capital
37,215
33,531
Accumulated deficit
(7,196
(8,716
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)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Stock compensation expense
Amortization of operating right of use assets
Amortization of debt issue costs
Gain on the sale of assets
Provision for bad debt
Bad debt on notes receivable
Deferred income tax
Changes in operating assets and liabilities:
Inventories
Cash provided by/(used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments received on notes receivable
Proceeds from sale of assets
Purchase of intangible assets definite-lived
Purchase of property, plant and equipment
Cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock
Equity issuance costs - ATM offering
Proceeds from PPP loan
Cash provided by financing activities
Net increase/(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
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets
Total cash, cash equivalents and restricted cash
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
Stock compensation expense (income)
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