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

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

Company Continues to Grow Pie Five Pizza Co. Concept

THE COLONY, Texas, Feb. 6, 2013 (GLOBE NEWSWIRE) -- PIZZA INN HOLDINGS, INC.
(Nasdaq:PZZI)

Second Quarter Highlights:

  *The Company opened an additional Pie Five Pizza Co. restaurant
  *Company awarded first two Pie Five Pizza Co. franchise development
    agreements
  *Company-owned restaurant sales increased 55.8% over the second quarter of
    fiscal 2012 to $2.0 million
  *Net income decreased $0.2 million from the second quarter of fiscal 2012
    to a loss of $120,000
  *Compared to second quarter of fiscal 2012, total domestic Pizza Inn
    franchised same store sales decreased 4.5%
  *EBITDA decreased $0.2 million to $0.1 million compared to the second
    quarter of fiscal 2012

Pizza Inn Holdings, Inc. (Nasdaq:PZZI) today announced results for the second
fiscal quarter ended December 23, 2012. Second quarter net income decreased
$0.2 million to a loss of $120,000, or $0.01 per share, compared to net income
of $56,000, or $0.01 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 second quarter ended December 25, 2011.

Second quarter revenues increased to $10.5 million in fiscal 2013 compared to
$10.3 million in the prior fiscal year. Food and supply sales decreased by
approximately $0.4 million, or 5.4%, due to the combined impact of a decrease
in the average number of restaurants open and an 8.7% decrease in total
domestic franchisee retail sales. Compared to the second quarter of fiscal
2012, Company-owned restaurant sales increased 55.8% to $2.0 million due
primarily to new store openings.

"We continued to expand our Pie Five concept with the opening of another
corporate-owned location during the second fiscal quarter," said Randy Gier,
President and Chief Executive Officer. "We also welcomed 2013 with the opening
of our ninth corporate-owned Pie Five in January.In the second fiscal quarter
we awarded our first two multi-unit franchise agreements to develop up to 18
locations in Utah and North Carolina. At the same time, we have invested in
the people and infrastructure for further development of our brands with the
addition of Flynn Dekker as Chief Marketing Officer for Pizza Inn Holdings and
Chris Smith as Vice President of Operations for Pie Five. We have plans to
continue opening new Pie Five locations throughout 2013.The pace of store
openings is contingent upon the availability of quality real estate and the
completion of new retail centers in which we have leased space.

"The retail sales trend in the Pizza Inn system was negative when compared to
the prior year period primarily as a result of significant pricing competition
in the pizza market," Gier added. "However, new initiatives are underway to
improve product quality and to communicate with loyal customers as well as new
audiences about the value of Pizza Inn's legendary menu. We have a very unique
product offering that is not matched by larger pizza competitors. We will
continue to develop a strategy to leverage this to the benefit of the Pizza
Inn system."

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.

About Pizza Inn Holdings, Inc.:

Headquartered in the Dallas suburb of The Colony, TX, 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 Co." Pizza Inn is an international pizza chain featuring
traditional and specialty pizzas, as well as freshly made pastas, sandwiches,
and desserts. Pie Five Pizza Co. is a fast-casual concept offering individual
pizzas made to order and cooked in less than five minutes. Founded in 1958,
Pizza Inn Holdings Inc. owns and franchises approximately 300 restaurants. The
Company's common stock is listed on the Nasdaq Capital Market under the symbol
"PZZI". For more information, please visit www.pizzainn.com.

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        Six Months Ended
                          December 23, December 25, December 23, December 25,
                          2012         2011         2012         2011
REVENUES:                                                      
Food and supply sales      $7,701     $8,137     $15,411    $17,044
Franchise revenue          890         943         1,792       1,892
Restaurant sales           1,957       1,256       3,783       2,547
                          10,548      10,336      20,986      21,483
                                                              
COSTS AND EXPENSES:                                            
Cost of sales              8,875       8,611       17,667      17,861
General and administrative 1,153       898         2,158       1,793
expenses
Franchise expenses         566         521         1,067       973
Pre-opening expenses       85          164         164         176
Bad debt                   45          15          90          30
Interest expense           35          17          139         33
                          10,759      10,226      21,285      20,866
                                                              
(LOSS) INCOME FROM
CONTINUING OPERATIONS      (211)       110         (299)       617
BEFORE TAXES
Income tax (benefit)       (103)       39          (148)       217
expense
(LOSS) INCOME FROM         (108)       71          (151)       400
CONTINUING OPERATIONS
                                                              
Loss from discontinued     (12)        (15)        (27)        (31)
operations, net of taxes
NET (LOSS) INCOME          $(120)     $56        $(178)     $369
                                                              
EARNINGS PER SHARE OF                                          
COMMON STOCK - BASIC:
(Loss) Income from         $(0.01)    $0.01      $(0.02)    $0.05
continuing operations
Loss from discontinued     --         --         --         --
operations
Net (loss) income          $(0.01)    $0.01      $(0.02)    $0.05
                                                              
EARNINGS PER SHARE OF                                          
COMMON STOCK - DILUTED:
                                                              
(Loss) Income from         $(0.01)    $0.01      $(0.02)    $0.05
continuing operations
Loss from discontinued     --         --         --         --
operations
Net (loss) income          $(0.01)    $0.01      $(0.02)    $0.05
                                                              
Weighted average common    8,021        8,013        8,021        8,012
shares outstanding - basic
                                                              
Weighted average common
and potential dilutive     8,184        8,362        8,172        8,292
common shares outstanding


PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
                                                                   
                                                   December 23,     June 24,
ASSETS                                              2012 (unaudited) 2012
                                                                   
CURRENT ASSETS                                                      
Cash and cash equivalents                           $534            $590
Accounts receivable, less allowance for bad debts   3,303           3,098
of $252 and $253, respectively
Inventories                                         1,531           1,852
Income tax receivable                               429             431
Deferred income tax assets                          1,070           1,078
Prepaid expenses and other                          436             256
Total current assets                                7,303           7,305
                                                                   
LONG-TERM ASSETS                                                    
Property, plant and equipment, net                  5,520           4,794
Long-term notes receivable                          115             27
Deposits and other                                  216             372
                                                   $13,154         $12,498
LIABILITIES AND SHAREHOLDERS' EQUITY                                
CURRENT LIABILITIES                                                 
Accounts payable - trade                            $1,422          $1,562
Accrued expenses                                    1,856           1,756
Deferred revenues                                   128             200
Bank debt                                           556             765
Total current liabilities                           3,962           4,283
                                                                   
LONG-TERM LIABILITIES                                               
Bank debt, net of current portion                   2,219           977
Deferred tax liability                              553             699
Deferred revenues, net of current portion           107             125
Deferred gain on sale of property                   71              84
Other long-term liabilities                         22              22
Total liabilities                                   6,934           6,190
COMMITMENTS AND CONTINGENCIES                                      
SHAREHOLDERS' EQUITY                                                
Common stock, $.01 par value; authorized 26,000,000 151             151
shares; issued 15,140,319; outstanding 8,020,919
Additional paid-in capital                          9,244           9,154
Retained earnings                                   21,461          21,639
Treasury stock at cost                                              
Shares in treasury: 7,119,400                      (24,636)        (24,636)
Total shareholders' equity                         6,220           6,308
                                                   $13,154         $12,498

PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                
                                                    Six Months Ended
                                                    December 23, December 25,
                                                    2012         2011
                                                                
CASH FLOWS FROM OPERATING ACTIVITIES:                            
                                                                
Net (loss) income                                    $(178)     $369
Adjustments to reconcile net (loss) income to cash               
provided by operating activities:
Depreciation and amortization                        627         389
Stock compensation expense                           90          73
Deferred tax                                         (138)       39
Provision for litigation costs                                   
Provision for bad debts                              1           30
Changes in operating assets and liabilities:                     
Notes and accounts receivable                        (319)       (282)
Inventories                                          321         105
Accounts payable - trade                             (140)       (8)
Accrued expenses                                     100         (169)
Deferred revenue                                     (103)       (78)
Prepaid expenses and other                           (26)        (283)
Cash provided by operating activities                235         185
                                                                
CASH FLOWS FROM INVESTING ACTIVITIES:                            
                                                                
Capital expenditures                                 (1,324)     (1,222)
Cash used by investing activities                    (1,324)     (1,222)
                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:                            
Proceeds from exercise of stock options              --          23
Borrowings of bank debt                              3,160       741
Repayments of bank debt                              (2,127)     (167)
Repayments of bank debt - F&M                        --          --
Cash provided by financing activities               1,033       597
                                                                
Net decrease in cash and cash equivalents            (56)        (440)
Cash and cash equivalents, beginning of period       590         949
Cash and cash equivalents, end of period             $534       $509
                                                                
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                                                
CASH PAYMENTS FOR:                                               
                                                                
Interest                                            $141       $32
Income taxes - net                                  --          57


PIZZA INN HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
(Unaudited)
                                                       
                               Three Months Ended        
                               December 23, December 25, 
                               2012         2011         
Net (loss) income             $(120)     $56        
Interest expense              35          17          
Taxes                         (103)       39          
Depreciation and amortization 326         206         
EBITDA                        $138       $318       
                                                       
                                                       
                               Six Months Ended          
                               December 23, December 25, 
                               2012         2011         
Net (loss) income             $(178)     $369       
Interest expense              139         33          
Taxes                         (148)       217         
Depreciation and amortization 627         389         
EBITDA                        $440       $1,008     

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

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