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Pizza Inn profits drop on Pie Five investment

Pizza Inn Holdings Inc. reported results for the second quarter of fiscal year 2012, including a decrease in net income – from $0.3 million to $0.1 million – due to the investment costs of opening its new Pie Five concept. Those costs came in at $0.2 million.

Additionally, extra costs were accrued to support the company's growth in franchising in China.

The company opened three new Pie Five restaurants during the quarter, putting the concept's footprint at five. Three more company-owned stores are expected to open before July, and Pizza Inn is currently offering Pie Five franchises in non-registration states.

Also during the quarter, revenue was flat, as a decrease in food and supply sales was offset by a 32.2 percent increase in company-owned restaurant sales. EBITDA dropped from $0.4 million to $0.3 million.

Domestic buffet-style restaurant same-store sales increased 0.4 percent, while total domestic same-store sales fell 0.2 percent.

Pizza Inn's revenue from international franchising increased 26.4 percent to $0.3 million.

A total of seven franchised and company owned restaurants were opened in the quarter.

"We have invested in people and infrastructure in anticipation of continued growth of our Pie Five concept," said Charlie Morrison, president and CEO. "We were also pleased to see same-store sales growth in our Pizza Inn brand remain solid at 1.1 percent domestically and 0.9 percent internationally for the first half of the year."

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