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Pizza Inn Holdings, Inc. Reports Results for First Quarter Fiscal Year 2013

Pizza Inn Holdings, Inc. Reports Results for First Quarter Fiscal Year 2013

Company Continues to Grow Pie Five Pizza Co. Concept

THE COLONY, Texas, Nov. 7, 2012 (GLOBE NEWSWIRE) -- PIZZA INN HOLDINGS, INC.
(Nasdaq:PZZI)

First Quarter Fiscal Year 2013 Highlights:

  *The Company opened an additional Pie Five Pizza Co. restaurant
  *Company-owned restaurant sales increased 41.4% over the first quarter of
    fiscal 2012 to $1.8 million
  *Net income decreased $0.4 million from the first quarter of fiscal 2012 to
    a loss of $58,000
  *Compared to first quarter of fiscal 2012, total domestic franchised same
    store sales declined 6.8%
  *EBITDA decreased $0.4 million to $0.3 million compared to first quarter of
    fiscal 2012

Pizza Inn Holdings, Inc. (Nasdaq:PZZI) today announced results for the first
fiscal quarter ended September 23, 2012.First quarter net income decreased
$0.4 million to a loss of $58,000, or $0.01 per share, compared to net income
of $0.3 million, or $0.04 per share, for the same quarter of the prior fiscal
year.The decline in net income was primarily attributable to lower revenue
earned from franchising and food and supply sales and higher costs related to
the continued development of the Pie Five Pizza Co. concept when compared to
the first quarter ended September 25, 2011.

First quarter revenues decreased to $10.4 million in fiscal 2013 compared to
$11.1 million in the prior fiscal year. Food and supply sales decreased by
approximately $1.2 million, or 13.4%, due to the combined impact of a decrease
in the average number of restaurants open, a 9.4% decrease in total domestic
franchisee retail sales and a decrease in non-proprietary items purchased from
the Company by franchisees. Compared to the first quarter of fiscal 2012,
Company-owned restaurant sales increased 41.4% to $1.8 million due primarily
to new store openings.

"We continue to develop and expand our Pie Five concept with the addition of
one new store opened in the fiscal first quarter and our eighth store in
October," commented Clinton Coleman, Interim President and Chief Executive
Officer."We are pleased with the performance of the last several new stores
and are planning to accelerate the opening of Pie Five stores in the second
half of fiscal 2013. Our franchise development activities are ramping up, as
experienced multi-unit operators in many markets are indicating a high degree
of interest in the Pie Five concept. Meanwhile our Pie Five brand has drawn
national attention as a result of being named a Hot Concept for 2012 by
Nation's Restaurant News. We continue to invest in people and infrastructure
in anticipation of further development of Company-owned and franchised units
of our Pie Five concept."

"The retail sales trend in the Pizza Inn system continued to be impacted
during the first quarter by the high level of pricing competition in the pizza
market. While food and supply sales relative to total domestic franchisee
sales remained below our historical norms during the first quarter, the trend
improved from the pace of the third and fourth quarters of fiscal 2012. We
continue to evaluate new initiatives for providing high-quality,
non-proprietary food products to our franchisees," Mr. Coleman concluded.

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 Pizza Inn Holdings.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 Pizza Inn Holdings will be
achieved.

Pizza Inn Holdings, Inc. is an owner, franchisor and supplier of a system of
restaurants operating domestically and internationally under the trademarks
"Pizza Inn" and "Pie Five Pizza Company."The Company and its distribution
division, Norco Restaurant Services Company, are headquartered in The Colony,
Texas.The Company's common stock is listed on the Nasdaq Capital Market under
the symbol "PZZI."

The Pizza Inn logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4933


PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                               
                                                               
                                                  Three Months Ended
                                                  September 23, September 25,
                                                  2012          2011
                                                               
                                                               
REVENUES:                                          $10,438     $11,147
                                                               
COSTS AND EXPENSES:                                             
Cost of sales                                      8,792        9,250
General and administrative expenses                1,005        895
Franchise expenses                                 501          452
Pre-opening expenses                               79           12
Bad debt                                           45           15
Interest expense                                   104          16
                                                  10,526       10,640
                                                               
(LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE    (88)         507
TAXES
Income taxes                                       (45)         178
(LOSS) INCOME FROM CONTINUING OPERATIONS           (43)         329
                                                               
Loss from discontinued operations, net of taxes    (15)         (16)
NET (LOSS) INCOME                                  $(58)       $313
                                                               
EARNINGS PER SHARE OF COMMON STOCK - BASIC:                     
(Loss) Income from continuing operations           $(0.01)     $0.04
Loss from discontinued operations                  --          --
Net (loss) income                                  $(0.01)     $0.04
                                                               
EARNINGS PER SHARE OF COMMON STOCK - DILUTED:                   
                                                               
(Loss) Income from continuing operations           $(0.01)     $0.04
Loss from discontinued operations                  --          --
Net (loss) income                                  $(0.01)     $0.04
                                                               
Weighted average common shares outstanding - basic 8,021         8,011
                                                               
Weighted average common and potential dilutive     8,113         8,128
common shares outstanding


PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
                                                                   
                                                   September 23,    June 24,
ASSETS                                              2012 (unaudited) 2012
                                                                   
CURRENT ASSETS                                                      
Cash and cash equivalents                           $1,157         $590
Accounts receivable, less allowance for bad debts   2,878           3,098
of $297 and $253, respectively
Inventories                                         1,780           1,852
Income tax receivable                               431             431
Deferred income tax assets                          1,295           1,078
Prepaid expenses and other                          394             256
Total current assets                                7,935           7,305
                                                                   
LONG-TERM ASSETS                                                    
Property, plant and equipment, net                  4,907           4,794
Long-term notes receivable                          53              27
Deposits and other                                  218             372
                                                   $13,113        $12,498
LIABILITIES AND SHAREHOLDERS' EQUITY                                
CURRENT LIABILITIES                                                 
Accounts payable - trade                            $1,447         $1,562
Accrued expenses                                    1,833           1,756
Deferred revenues                                   143             200
Bank debt                                           465             765
Total current liabilities                           3,888           4,283
                                                                   
LONG-TERM LIABILITIES                                               
Bank debt, net of current portion                   1,835           977
Deferred tax liability                              873             699
Deferred revenues, net of current portion           116             125
Deferred gain on sale of property                   78              84
Other long-term liabilities                         28              22
Total liabilities                                   6,818           6,190
                                                                   
COMMITMENTS AND CONTINGENCIES                                       
                                                                   
SHAREHOLDERS' EQUITY                                                
Common stock, $.01 par value; authorized 26,000,000
shares; issued 15,140,319 and 15,140,319 shares,    151             151
respectively; outstanding 8,020,919 and 8,020,919
shares, respectively
Additional paid-in capital                          9,199           9,154
Retained earnings                                   21,581          21,639
Treasury stock at cost                                              
Shares in treasury: 7,119,400                       (24,636)        (24,636)
Total shareholders' equity                          6,295           6,308
                                                   $13,113        $12,498

PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                               
                                                  Three Months Ended
                                                  September 23, September 25,
                                                  2012          2011
                                                               
CASH FLOWS FROM OPERATING ACTIVITIES:                           
                                                               
Net (loss) income                                  $(58)       $313
Adjustments to reconcile net (loss) income to cash              
provided by operating activities:
Depreciation and amortization                      291          176
Stock compensation expense                         45           42
Deferred tax                                       (43)         18
Provision for bad debts                            44           15
Changes in operating assets and liabilities:                    
Notes and accounts receivable                      176          (17)
Inventories                                        72           (55)
Accounts payable - trade                           (115)        (244)
Accrued expenses                                   77           (20)
Deferred revenue                                   (72)         --
Prepaid expenses and other                         (14)         (109)
Cash provided by operating activities              403          119
                                                               
CASH FLOWS FROM INVESTING ACTIVITIES:                           
Capital expenditures                               (394)        (115)
Cash used by investing activities                  (394)        (115)
                                                               
CASH FLOWS FROM FINANCING ACTIVITIES:                           
Borrowings of bank debt                            2,560        --
Repayments of bank debt                            (2,002)      (83)
Cash provided (used) by financing activities      558          (83)
                                                               
Net increase (decrease) in cash and cash           567          (79)
equivalents
Cash and cash equivalents, beginning of period     590          949
Cash and cash equivalents, end of period           $1,157      $870

                                            
PIZZA INN HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
(Unaudited)
                                            
                               Three Months Ended
                               September 23, September 25,
                               2012          2011
Net (loss) income             $(58)       $313
Interest expense              104          16
Taxes                         (45)         178
Depreciation and amortization 291          176
EBITDA                        $292        $683
                                            

CONTACT: Jerry L. Trojan
         Chief Financial Officer
         Pizza Inn Holdings, Inc.
         469-384-5000

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