THE COLONY, Texas — Fiscal 2005, ended June 26, was a tough one for Pizza Inn. Net income was $204,000, down from $2.24 million in 2004. According to a news release, revenue for the period was $55.3 million versus $60 million in the comparable period. Comparable-store sales for the period were down 1.5 percent.

Much of the 400-unit chain's profit drop was tied to $1.45 million spent on legal fees related to arbitration and lawsuits connected to the departures of two former executives. The company also attributed revenue declines to reduced sale prices on key ingredients supplied to operators through its commissary, Norco.

For the fourth quarter ended June 26, 2005, the chain lost $112,000 versus a profit of $564,000 for the same quarter last year. Revenues for the period were $13.7 million, down from $15.4 million last year. Comp-store sales were down 1.5 percent.

The company blamed the 11 percent revenue drop on lower cheese prices, decreased equipment sales and reduced sale prices on key ingredients.

Tim Taft, who was appointed president and chief executive of the company in April, said the company's goal is to "reenergize the brand by focusing on the fundamentals of customer satisfaction, growth and unit-level profitability."

He said the company is investing in consumer research and a new buffet concept to be rolled out in Dallas and Houston in the fall.

Taft said Pizza Inn also is working with franchisees to boost product consistency and overall profitability.

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