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Press Release: RAVE Restaurant Group, Inc. Reports Second Quarter Financial Results

· 02/05/2021 08:30
RAVE RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended December 27, December December 27, December 29, 2020 29, 2019 2020 2019 REVENUES: $ 2,128 $ 2,830 $ 4,031 $ 5,706 COSTS AND EXPENSES: Cost of sales 75 115 153 249 General and administrative expenses 1,185 1,565 2,274 2,928 Franchise expenses 606 838 1,153 1,704 Gain on sale of assets - - - (11) Impairment of long-lived assets and other lease charges 4 193 21 341 Bad debt expense 88 36 115 28 Interest expense 23 24 46 51 Depreciation and amortization expense 43 49 87 96 Total costs and expenses 2,024 2,820 3,849 5,386 INCOME BEFORE TAXES 104 10 182 320 Income tax expense (benefit) 2 (4) 4 69 NET INCOME 102 14 178 251 INCOME PER SHARE OF COMMON STOCK - BASIC: $ 0.01 $ 0.00 $ 0.01 $ 0.02 INCOME PER SHARE OF COMMON STOCK - DILUTED: $ 0.01 $ 0.00 $ 0.01 $ 0.02 Weighted average common shares outstanding --- The Company recorded net income of $102 thousand for the second quarter of fiscal 2021 compared to net income of $14 thousand for the same period of the prior year. -- Total revenue decreased by $0.7 million to $2.1 million for the second quarter of fiscal 2021 compared to the same period of the prior year. -- Income before taxes was $104 thousand for the second quarter of fiscal 2021 compared to $10 thousand for the same period of the prior year. -- Pizza Inn domestic comparable store retail sales decreased 18% in the second quarter of fiscal 2021 compared to the same period of the prior year. -- Pie Five comparable store retail sales decreased 16% in the second quarter of fiscal 2021 compared to the same period of the prior year. -- On a fully diluted basis, net income increased $0.01 per share to $0.01 per share for the second quarter of fiscal 2021 compared to net income of $0.00 per share for the same period of the prior year. -- Cash and cash equivalents increased $3.3 million during the second quarter of fiscal 2021 to $6.3 million at December 27, 2020. -- Pizza Inn domestic unit count finished at 142. -- Pizza Inn international unit count finished at 32. -- Pie Five domestic unit count finished at 37.

RAVE Restaurant Group, Inc. Reports Second Quarter Financial Results

PR Newswire

DALLAS, Feb. 5, 2021

DALLAS, Feb. 5, 2021 /PRNewswire/ -- RAVE Restaurant Group, Inc. (NASDAQ: RAVE) today reported financial results for the second quarter ended December 27, 2020.

Second Quarter Highlights:

"While we continue to work through challenges presented by the pandemic, we are seeing strong indications that the team and strategy we've put into place are taking hold and yielding results in repositioning RAVE for long-term success," said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group, Inc. "We hold significant cash, have limited leverage, and were more profitable in Q2 during the pandemic than we were in Q2 a year ago before COVID-19 was declared a pandemic leading to dining room restrictions and closures."

"In Q2 at Pie Five we tested a new pricing strategy and product innovation called Panzano pan pizza. Test stores outperformed the rest of the Pie Five system by double digit percentages in increased traffic and sales. Panzano pan pizza is something most other fast-causal pizza players are hard-pressed to duplicate due to our oven technology and is amazingly craveable, using house-made dough and whole milk mozzarella shredded in-house from block. We are in the process of rolling this product and pricing strategy out to Pie Five stores nationally and expect to be completed in February. We anticipate significant other innovation to follow."

"At Pizza Inn, we are driving operations consistency and facilities improvements while launching our first pilot of a point-of-sale technology that we expect to be adopted system-wide. In addition to the Contactless Buffet To-Go and new Right-Way Buffet, we are eagerly awaiting vaccine distribution and reduced dine-in restrictions to launch key innovations specifically designed to enhance the buffet experience as families emerge from their homes and seek exciting dining experiences together, not just functional feeding," Solano concluded.

"Our results this quarter are once again a testament to the incredible efforts by our team to control costs amid the continuing effects of the pandemic," said Clint Fendley, Vice President of Finance of RAVE Restaurant Group, Inc. "Our focus on cost controls yielded another quarter of profitability as the income before taxes for the six months ended December 27, 2020 was $182 thousand. RAVE's cash balance of $6.3 million further bolsters our position as we deal with the lingering effects of the pandemic while working to revitalize both of our brands. Although we have experienced modest store closures, the closures have been less than we expected when the pandemic began and are a credit to the tenacity of our franchisees."

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, franchisee 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.

Founded in 1958, Dallas-based RAVE Restaurant Group [NASDAQ: RAVE] owns, operates, franchises and/or licenses more than 200 Pie Five Pizza Co. and Pizza Inn restaurants and Pizza Inn Express kiosks domestically and internationally. Pizza Inn is an international chain featuring freshly made pizzas, along with salads, pastas, and desserts. Pie Five Pizza Co. is a leader in the rapidly growing fast-casual pizza space. Pizza Inn Express, or PIE, is developing unique opportunities to provide freshly made pizza from non-traditional outlets. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "RAVE". For more information, please visit www.raverg.com.

Contacts:

Investor Relations

RAVE Restaurant Group, Inc.

469-384-5000

Media Relations

The Power Group

Kelly Miller

kelly@thepowergroup.com

469-620-1055 ext. 3006

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February 05, 2021 08:30 ET (13:30 GMT)