DALLAS, Sept. 23,
2022 /PRNewswire/ -- RAVE Restaurant Group, Inc.
(NASDAQ: RAVE) today reported financial results for the fourth
quarter and fiscal year ended June 26, 2022.
Fourth Quarter
Highlights:
- The Company recorded net income of $6.8
million for the fourth quarter of fiscal 2022 compared to
net income of $0.9 million for the
same period of the prior year.
- Income before taxes was $1.1
million for the fourth quarter of fiscal 2022 compared to
net income before taxes of $0.9
million for the same period of the prior year.
- Adjusted EBITDA was stable at $1.2
million for the fourth quarter of both fiscal 2022 and
fiscal 2021.
- Total revenue increased by $0.4
million to $2.8 million for
the fourth quarter of fiscal 2022 compared to the same period of
the prior year.
- The Company used $0.5 million to
repurchase shares of its common stock in the fourth quarter of
fiscal 2022.
- Pizza Inn domestic comparable store retail sales increased
13.5% in the fourth quarter of fiscal 2022 compared to the same
period of the prior year.
- Pie Five domestic comparable store retail sales increased 16.6%
in the fourth quarter of fiscal 2022 compared to the same period of
the prior year.
- On a fully diluted basis, net income increased $0.33 per share to $0.38 per share for the fourth quarter of fiscal
2022 compared to net income of $0.05
per share for the same period of the prior year.
- Cash and cash equivalents increased $0.5
million during the fourth quarter of fiscal 2022 to
$7.7 million at June 26, 2022.
- Pizza Inn domestic unit count finished at 128.
- Pizza Inn international unit count finished at 31.
- Pie Five domestic unit count finished at 31.
Annual Highlights:
- Net income improved by $6.5
million to $8.0 million in
fiscal 2022 compared to net income of $1.5
million in fiscal 2021.
- Income before taxes improved by $0.9
million to $2.4 million in
fiscal 2022 compared to $1.5 million
in fiscal 2021.
- Adjusted EBITDA of $2.8 million
for fiscal 2022 was an $0.8 million
increase from the prior year.
- On a fully diluted basis, the Company reported net income of
$0.45 per share in fiscal 2022
compared to $0.09 per share in the
prior year.
- RAVE total domestic comparable store retail sales increased
23.2% for the year ended June 26,
2022 compared to the same period of the prior year.
- Pizza Inn domestic comparable store retail sales increased
24.7% for the year ended June 26,
2022 compared to the same period of the prior year.
- Pie Five comparable store retail sales increased 17.1% for the
year ended June 26, 2022 compared to
the same period of the prior year.
- Total consolidated revenue increased by $2.1 million during fiscal 2022 to $10.7 million at June 26,
2022.
- Both fiscal 2022 and fiscal 2021 contained 52 weeks.
- Cash and cash equivalents decreased $0.6
million during fiscal 2022 to $7.7
million at June 26, 2022.
"After nine consecutive quarters of profitability, we are
transitioning from a turnaround to a stable company primed for
growth," said Brandon Solano, Chief
Executive Officer of RAVE Restaurant Group, Inc. "Our fourth
quarter and fiscal year show significant same store sales growth at
both Pizza Inn and Pie Five, net income growth, EBITDA growth, and
strong operating cash performance."
"While maintaining the discipline of strong cost controls, we
continue to invest in the future of our business," Solano said. "We
are laying the foundation upon which our future performance will be
built. We expect that key initiatives such as our Pizza Inn
rebranding efforts, reimagined Pizza Inn buffet experience, and Pie
Five menu relaunch, will provide returns long after our initial
investments."
Earlier in September, RAVE announced a modernized Pizza Inn
logo, a more confident version of the brand's mascot, Jojo, and a
fresh new retail design aimed at an enhanced consumer buffet
experience with built-in social media shareability.
Solano continued, "While the restaurant industry abandons
dine-in, we continue to lean into our differentiated strategy,
focusing on the value and variety of Pizza Inn's buffet while
opportunistically capturing delivery and carry-out. We know our
customers are hungry for a connection and an 'experience' with
their family, not just Covid-esq functional feeding, and we are
well positioned to deliver that need."
"Our strong sales growth and focus on restaurant economics has
significantly reduced closures, increased new store openings, and
produced the first Pizza Inn buffet unit count growth in 24
years."
"Similarly, Pie Five is undergoing significant investment and
changes. After six months of testing, we are currently launching
the most significant menu transformation in the brand's history,
focusing on differentiated pizzas made for the individual and
eliminating large pizzas. We are also making operational and
hospitality improvements to personalize consumers' dine-in
experience while reducing third party delivery friction."
Clint Fendley, Chief Financial
Officer of RAVE Restaurant Group, Inc. further explained, "The
financial results for 2022's fiscal year exemplify the continuous
efforts put forth by our team to advance our position. During the
fiscal year 2022, we increased income before taxes by $0.9 million, reduced our debt by $1.8 million and fully recognized our deferred
tax asset of $5.7 million due to the
improving long term earnings and growth prospects for our Company.
During the fourth quarter of fiscal 2022, we also repurchased
shares of our common stock for the first time in a decade for
$0.5 million. Subsequent to fiscal
year 2022, we have used $1.1 million
to repurchase additional shares of our common stock. We look
forward to fiscal 2023 as we continue to invest in initiatives in
both brands that resonate with our customers and drive growth and
value for all stakeholders."
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 on 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.
Dallas-based RAVE Restaurant
Group [NASDAQ: RAVE] has inspired restaurant innovation and
countless customer smiles with its trailblazing pizza concepts. The
Company owns, franchises, licenses and supplies Pie Five and Pizza
Inn restaurants operating domestically and internationally. The
Pizza Inn experience is unlike your typical buffet. Since 1958,
Pizza Inn's house-made dough, house-shredded 100% whole milk
mozzarella cheese, fresh ingredients and house-made signature sauce
combined with friendly service solidified the brand to become
America's favorite hometown pizza place. This, in addition to its
small-town vibe, are the hallmarks of Pizza Inn restaurants. In
2011, RAVE introduced Pie Five Pizza, pioneering a fast-casual
pizza brand that transformed the classic pizzeria into a concept
offering personalization, sophisticated ingredients and speed. Pie
Five's craft pizzas are baked fresh daily and feature house-made
ingredients, creative recipes and craveable crust creations. For
more information, visit www.raverg.com, and follow on Instagram
@pizzainnofficial and @piefivepizza.
Contact:
Investor Relations
RAVE Restaurant Group, Inc.
469-384-5000
RAVE RESTAURANT
GROUP, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands,
except share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
June
26,
2022
|
|
June
27,
2021
|
|
June
26,
2022
|
|
June
27,
2021
|
REVENUES:
|
$
|
2,823
|
|
$
|
2,379
|
|
$
|
10,692
|
|
$
|
8,593
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
-
|
|
|
35
|
|
|
1
|
|
|
264
|
General and
administrative expenses
|
|
1,506
|
|
|
1,186
|
|
|
5,446
|
|
|
4,710
|
Franchise
expenses
|
|
809
|
|
|
612
|
|
|
3,284
|
|
|
2,394
|
Gain on sale of
assets
|
|
-
|
|
|
146
|
|
|
-
|
|
|
(10)
|
Impairment of
long-lived assets and other lease charges
|
|
6
|
|
|
-
|
|
|
6
|
|
|
21
|
Bad debt
expense
|
|
37
|
|
|
103
|
|
|
46
|
|
|
121
|
Interest
expense
|
|
-
|
|
|
23
|
|
|
61
|
|
|
92
|
Depreciation and
amortization expense
|
|
49
|
|
|
39
|
|
|
187
|
|
|
167
|
Total costs and
expenses
|
|
2,407
|
|
|
2,144
|
|
|
9,031
|
|
|
7,759
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
Gain on forgiveness of
PPP loan
|
|
-
|
|
|
657
|
|
|
-
|
|
|
657
|
Employee retention
credit
|
|
704
|
|
|
-
|
|
|
704
|
|
|
-
|
Total other
income
|
|
704
|
|
|
657
|
|
|
704
|
|
|
657
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
TAXES
|
|
1,120
|
|
|
892
|
|
|
2,365
|
|
|
1,491
|
Income tax
benefit
|
|
5,667
|
|
|
34
|
|
|
5,657
|
|
|
29
|
NET
INCOME
|
|
6,787
|
|
|
926
|
|
|
8,022
|
|
|
1,520
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME PER SHARE OF
COMMON STOCK - BASIC:
|
$
|
0.38
|
|
$
|
0.05
|
|
$
|
0.45
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME PER SHARE OF
COMMON STOCK - DILUTED:
|
$
|
0.38
|
|
$
|
0.05
|
|
$
|
0.45
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
17,958
|
|
|
18,005
|
|
|
17,993
|
|
|
17,307
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common and potential dilutive common
shares outstanding
|
|
17,958
|
|
|
18,803
|
|
|
17,993
|
|
|
18,105
|
RAVE RESTAURANT
GROUP, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(In thousands,
except share amounts)
|
(Unaudited)
|
|
|
June
26,
2022
|
|
June
27,
2021
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
7,723
|
|
$
|
8,330
|
Accounts receivable,
less allowance for bad debts of
$27 and $47, respectively
|
|
1,981
|
|
|
911
|
Notes receivable,
current
|
|
172
|
|
|
901
|
Deferred contract
charges, current
|
|
36
|
|
|
35
|
Prepaid expenses and
other current assets
|
|
146
|
|
|
196
|
Total current
assets
|
|
10,058
|
|
|
10,373
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
365
|
|
|
445
|
Operating lease right
of use asset, net
|
|
1,664
|
|
|
2,085
|
Intangible assets
definite-lived, net
|
|
232
|
|
|
183
|
Notes receivable, net
of current portion
|
|
201
|
|
|
52
|
Deferred tax asset,
net
|
|
5,772
|
|
|
—
|
Deferred contract
charges, net of current portion
|
|
224
|
|
|
207
|
Total
assets
|
$
|
18,516
|
|
$
|
13,345
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Accounts payable -
trade
|
$
|
669
|
|
$
|
644
|
Accrued
expenses
|
|
1,082
|
|
|
924
|
Other current
liabilities
|
|
81
|
|
|
46
|
Operating lease
liability, current
|
|
490
|
|
|
465
|
Short term
loan
|
|
30
|
|
|
250
|
Convertible notes
short term, net of unamortized debt issuance costs and
discounts
|
|
—
|
|
|
1,576
|
Deferred revenues,
current
|
|
538
|
|
|
626
|
Total current
liabilities
|
|
2,890
|
|
|
4,531
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Operating lease
liability, net of current portion
|
|
1,421
|
|
|
1,911
|
Deferred revenues, net
of current portion
|
|
793
|
|
|
1,170
|
Total
liabilities
|
|
5,104
|
|
|
7,612
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES (SEE NOTE K)
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Common stock, $.01 par
value; authorized 26,000,000 shares; issued 25,090,058 and 25,090,058
shares, respectively; outstanding 17,511,430 and 18,004,904 shares,
respectively
|
|
251
|
|
|
251
|
Additional paid-in
capital
|
|
37,384
|
|
|
37,215
|
Retained
earnings/(accumulated deficit)
|
|
826
|
|
|
(7,196)
|
Treasury stock at
cost
|
|
|
|
|
|
Shares in treasury:
7,578,628 and 7,085,154, respectively
|
|
(25,049)
|
|
|
(24,537)
|
Total shareholders'
equity
|
|
13,412
|
|
|
5,733
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
18,516
|
|
$
|
13,345
|
RAVE RESTAURANT
GROUP, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Fiscal Year
Ended
|
|
June
26,
2022
|
|
June
27,
2021
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
$
|
8,022
|
|
$
|
1,520
|
Adjustments to
reconcile net income to cash provided by/ operating activities:
|
|
|
|
|
|
Impairment of
long-lived assets and other lease charges
|
|
6
|
|
|
21
|
Stock compensation
expense
|
|
169
|
|
|
80
|
Depreciation and
amortization
|
|
140
|
|
|
131
|
Amortization of
operating right of use assets
|
|
421
|
|
|
569
|
Amortization of
intangible assets definite-lived
|
|
47
|
|
|
36
|
Amortization of debt
issue costs
|
|
21
|
|
|
27
|
Gain on the sale of
assets
|
|
—
|
|
|
(10)
|
Allowance for bad
debts
|
|
46
|
|
|
7
|
Bad debt on notes
receivable
|
|
—
|
|
|
114
|
Gain on forgiveness of
PPP loan
|
|
—
|
|
|
(657)
|
Deferred tax asset,
net
|
|
(5,772)
|
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(1,116)
|
|
|
47
|
Notes
receivable
|
|
80
|
|
|
(119)
|
Deferred contract
charges
|
|
(18)
|
|
|
33
|
Prepaid expenses and
other current assets
|
|
50
|
|
|
(22)
|
Deposits and
other
|
|
—
|
|
|
5
|
Accounts payable -
trade
|
|
25
|
|
|
198
|
Accounts payable -
lease termination impairments
|
|
—
|
|
|
(428)
|
Accrued
expenses
|
|
158
|
|
|
149
|
Other current
liabilities
|
|
35
|
|
|
46
|
Operating lease
liability
|
|
(465)
|
|
|
(793)
|
Deferred
revenues
|
|
(465)
|
|
|
582
|
Other long-term
liabilities
|
|
—
|
|
|
(51)
|
Cash provided by
operating activities
|
$
|
1,384
|
|
$
|
1,485
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Payments received on
notes receivable
|
|
500
|
|
|
47
|
Proceeds from sale of
assets
|
|
—
|
|
|
1
|
Purchases of
intangible assets definite-lived
|
|
(96)
|
|
|
(74)
|
Purchases of property,
plant and equipment
|
|
(66)
|
|
|
(212)
|
Cash provided
by/(used in) investing activities
|
|
338
|
|
|
(238)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Purchase of treasury
stock
|
|
(512)
|
|
|
—
|
Proceeds from issuance
of common stock
|
|
—
|
|
|
3,761
|
Equity issuance costs
- ATM offering
|
|
—
|
|
|
(131)
|
Payment of convertible
notes
|
|
(1,597)
|
|
|
—
|
Payment of short term
loan
|
|
(220)
|
|
|
250
|
Cash (used
in)/provided by financing activities
|
|
(2,329)
|
|
|
3,880
|
|
|
|
|
|
|
Net (decrease)/increase
in cash and cash equivalents
|
|
(607)
|
|
|
5,127
|
Cash and cash
equivalents, beginning of period
|
|
8,330
|
|
|
3,203
|
Cash and cash
equivalents, end of period
|
$
|
7,723
|
|
$
|
8,330
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
CASH PAID
FOR:
|
|
|
|
|
|
Interest
|
$
|
64
|
|
$
|
64
|
Income
taxes
|
$
|
31
|
|
$
|
23
|
RAVE RESTAURANT
GROUP, INC.
|
ADJUSTED
EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
June
26,
2022
|
|
June
27,
2021
|
|
June
26,
2022
|
|
June
27,
2021
|
Net income
|
$
|
6,787
|
|
$
|
926
|
|
$
|
8,022
|
|
$
|
1,520
|
Interest
expense
|
|
-
|
|
|
23
|
|
|
61
|
|
|
92
|
Income taxes
|
|
(5,667)
|
|
|
(34)
|
|
|
(5,657)
|
|
|
(29)
|
Depreciation and
amortization
|
|
49
|
|
|
39
|
|
|
187
|
|
|
167
|
EBITDA
|
$
|
1,169
|
|
$
|
954
|
|
$
|
2,613
|
|
$
|
1,750
|
Stock compensation
expense
|
|
42
|
|
|
41
|
|
|
169
|
|
|
80
|
Severance
|
|
20
|
|
|
23
|
|
|
53
|
|
|
23
|
Pre-opening
costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Gain on sale of
assets
|
|
-
|
|
|
146
|
|
|
-
|
|
|
(10)
|
Impairment of
long-lived assets and other lease charges
|
|
6
|
|
|
-
|
|
|
6
|
|
|
21
|
Franchisee default and
closed store revenue
|
|
(17)
|
|
|
(16)
|
|
|
(38)
|
|
|
(170)
|
Closed and
non-operating store costs
|
|
(1)
|
|
|
36
|
|
|
3
|
|
|
271
|
Adjusted
EBITDA
|
$
|
1,219
|
|
$
|
1,184
|
|
$
|
2,806
|
|
$
|
1,965
|
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SOURCE RAVE Restaurant Group, Inc.