Pizza Inn, Inc.
Ronnie Parker, President of Pizza Inn, stated, "This centralization of our three corporate locations into one new facility should allow us to become more efficient, more effective, and better able to support our existing and future franchisee base. We believe it will establish the platform for long-term growth of the Company and the chain."
The Company also announced that it expects earnings for the quarter ending December 24, 2000 to be around 5 cents per share versus 6 cents for the same period a year ago. Gross revenues are expected to come in about 4 percent below the $16.3 million in revenues posted in the year ago quarter due to lower same store sales compared to the same period last year as well as reduced revenues from lower cheese prices. The Company is scheduled to release fiscal second quarter earnings the third week of January.
Pizza Inn also announced that the Board of Directors has suspended payment of quarterly dividends, effective immediately. Future dividend policy will be determined by the Board based on, among other things, the Company's operating results, debt levels, loan agreement provisions, and cash requirements.
"Pizza Inn is always evaluating the best opportunities to increase shareholder value. While recent uses of cash have focused on share repurchase and the payment of a quarterly dividend, we feel the best long-term strategy at this time is to suspend the dividend and use the cash to reduce debt and support growth projects. The Company's share buy-back program will remain in effect, with future purchases determined by market conditions and cash flow," said Mr. Parker.
Pizza Inn also announced a set of operating initiatives designed to improve the Company's operating performance and current sales trends. Mr. Parker stated, "While our recent comparable store sales trends have been down almost 4% for the latter half of the calendar year, the Company is focusing its revenue growth efforts on store remodelings, the January launch of a chainwide mailer advertising program, individual franchisee focus on promoting the chain's high quality signature pizza line, and the implementation of our self serve buffet concept in new locations and selected existing units. As a franchising company, we continue our main focus of finding ways to help make our franchisees more successful."
Company staff and executives recently completed a series of regional meetings with franchisees designed to address operational issues, launch new quality service training materials, stress the ongoing remodel program, and generate additional interest in multi-unit openings within the existing franchisee base. The Company also has a chainwide convention being planned for the spring of 2001 to continue the emphasis on these initiatives. Said Mr. Parker, "As a 40 year old chain, we can not stress enough the importance of remodeling older restaurants. Success in this area should not only increase existing franchisee sales and profitability in those units, but also enhance our image in some of our older markets as well."
The Company also reported that its new self serve buffet concept is now being implemented in its franchise system. This restaurant concept offers items from Pizza Inn's full dine-in menu, and features delivery and carryout as well as a self serve buffet and beverage station. A self serve buffet restaurant can be freestanding or located in strip centers, and typically ranges in size from 2,000 to 2,500 square feet and seats 40 to 70 customers.
"This new Pizza Inn concept allows us to offer the advantages of a full serve restaurant in a down-sized, more cost effective format. We believe its lower initial investment costs and a streamlined operational layout will be an attractive option to both new and existing franchisees," said Mr. Parker.
For more information contact: Ronald W. Parker President (972) 701-9955
For more information about the company, visit Pizza Inn at http://www.pizzainn.com/
SOURCE: Pizza Inn, Inc.
Contact: Ronald W. Parker, President of Pizza Inn, Inc., 972-701-9955