UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 9, 2012
Pizza Inn Holdings, Inc.
(Exact name of registrant as specified in its charter)
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Missouri
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0-12919
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45-3189287
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3551 Plano Parkway, The Colony, Texas
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75056
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code (469) 384-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 Results of Operations and Financial Condition
On May 9, 2012, Pizza Inn Holdings, Inc. issued a press release discussing financial results of its third quarter of fiscal 2012 ended March 25, 2012, a copy of which is attached as Exhibit 99.1 hereto.
ITEM 9.01 Financial Statements and Exhibits
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(d)
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Exhibits
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Exhibit
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Description
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Number
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99.1
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Pizza Inn Holdings, Inc. press release dated May 9, 2012.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PIZZA INN, INC.
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Date: May 9, 2012
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By:
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/s/ Charles R. Morrison
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Charles R. Morrison, President
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and Chief Executive Officer
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FOR IMMEDIATE RELEASE
Contact:
Jerry L. Trojan
Chief Financial Officer
Pizza Inn Holdings, Inc.
469-384-5000
PIZZA INN HOLDINGS, INC. REPORTS RESULTS FOR
THIRD QUARTER FISCAL YEAR 2012
Pie Five Concept growth continues and is producing solid unit level performance
The Colony, Texas – May 9, 2012 -- PIZZA INN HOLDINGS, INC. (NASDAQ: PZZI)
Third Quarter Highlights:
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·
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Net income decreased $0.4million to $52 thousand
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·
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EBITDA decreased $0.5 million to $0.4 million
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Franchised domestic buffet-style restaurant same store sales decreased 1.1% while total franchised domestic same store sales declined 1.4%
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The Company opened an additional Pie Five restaurant
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Company-owned restaurant sales increased 45.8% to $1.7 million
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Pizza Inn Holdings, Inc. (NASDAQ: PZZI) today announced results for the third fiscal quarter ended March 25, 2012. Quarterly net income decreased $0.4 million year over year to $52 thousand, or $0.01 per share, compared to net income of $0.4 million, or $0.06 per share, for the same quarter of the prior fiscal year. The decline in net income was primarily attributable to lower food and supply sales,as well as pre-opening costs associated with new Company-owned Pie Five restaurants.Third quarter revenues were essentially unchanged at $10.6 million compared to $10.7 million for the same quarter of the prior fiscal year. Company-owned restaurant sales increased 45.8% to $1.7 million due primarily to new store openings. However, food and supply sales decreased by approximately $0.5 million, or 6.2%, due to a decrease in the average number of restaurants open in the current period, a 4.0% decrease in domestic franchisee retail sales and a decrease in non-proprietary food purchased from the Company by franchisees when compared to the prior year period.
For the nine months ended March 25, 2012, net income was $0.4 million, or $0.05 per share, compared to $0.9 million, or $0.12 per share, for the same period in the prior fiscal year. The decline in net income was primarily attributableto a $0.7 million decline in food and supply sales,$0.2 million of pre-opening costs associated with the opening of four Pie Five stores during the nine months ended March 25, 2012, and $0.6 million of costs associated with preparing the Company to support the growth of the Pie Five business and the franchising of Pizza Inn in China.Revenues increased $0.4 million, or 1.3%, to $32.1 million for the nine months ended March 25, 2012 compared to $31.7 million during the same period in the prior fiscal year. Domestic franchise buffet-style restaurant same store sales increased 0.1% while total domestic franchise same store sales decreased 0.1% compared to the prior fiscal year. For the nine months of fiscal 2012, Company store restaurant sales increased $1.2 million, or 40.6%, to $4.2 million due to new store openings.
FOR IMMEDIATE RELEASE
Contact:
Jerry L. Trojan
Chief Financial Officer
Pizza Inn Holdings, Inc.
469-384-5000
"We are excited about the progress we have made in our expansion of the Pie Five concept,” commented Charlie Morrison, President and CEO. “Our results reflect the growing popularity of the Pie Five brand as evidenced in the solid store level contribution during our ramp-up phase. Additionally,our quarterly results reflect the investments in people, technology and support required to ensure that this concept is positioned properly for future growth.”
“We are disappointed that our food and supply sales have decreased during the quarter and year-to-date. We have beenworking collaboratively with our franchisees to develop and testnew products and marketing initiatives to enhance system-wide revenue for the Pizza Inn brand.We are also working with our franchisees to evaluate impactednon-proprietary food products we sellin an effort to lower our costs without compromising our long-standing quality. We believe these initiatives should support a return to historical product sales relative to franchisee retail sales,” Mr. Morrison concluded.
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 Pizza Inn Holdings. 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 Pizza Inn Holdings will be achieved.
Pizza Inn Holdings, Inc. is an owner, franchisor and supplier of a system of restaurants operating domestically and internationally under the trademarks “Pizza Inn” and “Pie Five Pizza Company.” 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.”
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PIZZA INN HOLDINGS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share amounts)
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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March 25,
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March 27,
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March 25,
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March 27,
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|||||||||||||
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2012
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2011
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2012
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2011
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REVENUES
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$ | 10,646 | $ | 10,721 | $ | 32,129 | $ | 31,708 | ||||||||
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COSTS AND EXPENSES:
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Cost of sales
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8,863 | 8,679 | 26,724 | 25,854 | ||||||||||||
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Franchise expenses
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592 | 472 | 1,565 | 1,288 | ||||||||||||
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General and administrative expenses
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1,016 | 823 | 2,986 | 2,577 | ||||||||||||
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Costs associated with store closure
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- | - | - | 319 | ||||||||||||
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Bad debt
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35 | 15 | 65 | 70 | ||||||||||||
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Interest expense
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38 | 21 | 71 | 49 | ||||||||||||
| 10,544 | 10,010 | 31,411 | 30,157 | |||||||||||||
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INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
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102 | 711 | 718 | 1,551 | ||||||||||||
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Income taxes
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35 | 254 | 252 | 554 | ||||||||||||
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INCOME FROM CONTINUING OPERATIONS
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67 | 457 | 466 | 997 | ||||||||||||
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Loss from discontinued operations, net of taxes
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(15 | ) | (15 | ) | (45 | ) | (47 | ) | ||||||||
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NET INCOME
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$ | 52 | $ | 442 | $ | 421 | $ | 950 | ||||||||
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EARNINGS PER SHARE OF COMMON STOCK - BASIC:
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Income from continuing operations
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$ | 0.01 | $ | 0.06 | $ | 0.06 | $ | 0.13 | ||||||||
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Loss from discontinued operations
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- | - | (0.01 | ) | (0.01 | ) | ||||||||||
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Net income
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$ | 0.01 | $ | 0.06 | $ | 0.05 | $ | 0.12 | ||||||||
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EARNINGS PER SHARE OF COMMON STOCK - DILUTED:
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Income from continuing operations
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$ | 0.01 | $ | 0.06 | $ | 0.06 | $ | 0.13 | ||||||||
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Loss from discontinued operations
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- | - | (0.01 | ) | (0.01 | ) | ||||||||||
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Net income
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$ | 0.01 | $ | 0.06 | $ | 0.05 | $ | 0.12 | ||||||||
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Weighted average common shares outstanding - basic
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8,021 | 8,011 | 8,015 | 8,011 | ||||||||||||
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Weighted average common and
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potential dilutive common shares outstanding
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8,385 | 8,016 | 8,322 | 8,013 | ||||||||||||
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PIZZA INN HOLDINGS, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands, except share amounts)
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March 25,
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June 26,
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ASSETS
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2012 (unaudited)
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2011
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 694 | $ | 949 | ||||
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Accounts receivable, less allowance for bad debts
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of $223 and $162, respectively
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3,335 | 3,128 | ||||||
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Inventories
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1,689 | 1,829 | ||||||
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Income tax receivable
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653 | 553 | ||||||
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Deferred income tax assets
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776 | 822 | ||||||
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Prepaid expenses and other
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326 | 232 | ||||||
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Total current assets
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7,473 | 7,513 | ||||||
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LONG-TERM ASSETS
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Property, plant and equipment, net
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4,788 | 3,196 | ||||||
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Long-term notes receivable
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22 | 51 | ||||||
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Deposits and other
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477 | 392 | ||||||
| $ | 12,760 | $ | 11,152 | |||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable - trade
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$ | 2,101 | $ | 2,103 | ||||
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Accrued expenses
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1,360 | 1,557 | ||||||
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Deferred revenues
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191 | 202 | ||||||
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Bank debt
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765 | 333 | ||||||
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Total current liabilities
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4,417 | 4,195 | ||||||
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LONG-TERM LIABILITIES
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Bank debt, net of current portion
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1,096 | 482 | ||||||
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Deferred tax liability
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605 | 360 | ||||||
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Deferred revenues, net of current portion
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135 | 165 | ||||||
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Deferred gain on sale of property
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90 | 109 | ||||||
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Other long-term liabilities
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28 | - | ||||||
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Total liabilities
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6,371 | 5,311 | ||||||
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COMMITMENTS AND CONTINGENCIES
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SHAREHOLDERS' EQUITY
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Common stock, $.01 par value; authorized 26,000,000
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shares; issued 15,140,319 and 15,130,319 shares, respectively;
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outstanding 8,020,919 and 8,010,919 shares, respectively
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151 | 151 | ||||||
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Additional paid-in capital
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9,136 | 9,009 | ||||||
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Retained earnings
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21,738 | 21,317 | ||||||
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Treasury stock at cost
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Shares in treasury: 7,119,400
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(24,636 | ) | (24,636 | ) | ||||
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Total shareholders' equity
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6,389 | 5,841 | ||||||
| $ | 12,760 | $ | 11,152 | |||||
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PIZZA INN HOLDINGS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands)
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(Unaudited)
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Nine Months Ended
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March 25,
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March 27,
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2012
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2011
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$ | 421 | $ | 950 | ||||
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Adjustments to reconcile net income to
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cash provided by operating activities:
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Depreciation and amortization
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663 | 689 | ||||||
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Stock compensation expense
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104 | 73 | ||||||
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Deferred tax
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46 | 189 | ||||||
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Provision for litigation costs
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Provision for bad debts
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65 | 70 | ||||||
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Net income adjusted for non-cash items
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1,299 | 1,971 | ||||||
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Changes in operating assets and liabilities:
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Notes and accounts receivable
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(394 | ) | (634 | ) | ||||
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Inventories
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140 | (218 | ) | |||||
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Accounts payable - trade
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(2 | ) | (112 | ) | ||||
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Accrued expenses
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76 | 7 | ||||||
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Deferred revenue
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(60 | ) | 10 | |||||
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Prepaid expenses and other
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(175 | ) | (130 | ) | ||||
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Net changes in operating assets and liabilities
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(415 | ) | (1,077 | ) | ||||
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Cash provided by operating activities
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884 | 894 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Capital expenditures
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(2,208 | ) | (1,520 | ) | ||||
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Cash used by investing activities
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(2,208 | ) | (1,520 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from exercise of stock options
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23 | - | ||||||
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Borrowings of bank debt
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1,795 | 660 | ||||||
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Repayments of bank debt
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(749 | ) | (91 | ) | ||||
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Cash provided by financing activities
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1,069 | 569 | ||||||
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Net decrease in cash and cash equivalents
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(255 | ) | (57 | ) | ||||
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Cash and cash equivalents, beginning of period
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949 | 761 | ||||||
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Cash and cash equivalents, end of period
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$ | 694 | $ | 704 | ||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
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CASH PAYMENTS FOR (FROM):
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| Interest | $ | 55 | $ | 49 | ||||
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Income taxes - net
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37 | 510 | ||||||
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PIZZA INN HOLDINGS, INC.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
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(In thousands)
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Three Months Ended
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March 25,
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March 27,
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2012
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2011
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Net Income
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$ | 52 | $ | 442 | ||||
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Interest Expense
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38 | 21 | ||||||
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Taxes
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35 | 254 | ||||||
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Depreciation and Amortization
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269 | 143 | ||||||
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EBITDA
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$ | 394 | $ | 860 | ||||
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Nine Months Ended
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March 25,
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March 27,
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| 2012 | 2011 | |||||||
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Net Income
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$ | 421 | $ | 950 | ||||
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Interest Expense
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71 | 49 | ||||||
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Taxes
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252 | 554 | ||||||
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Depreciation and Amortization
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650 | 689 | ||||||
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EBITDA
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$ | 1,394 | $ | 2,242 | ||||