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

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

THE COLONY, Texas, May 8, 2013 (GLOBE NEWSWIRE) -- PIZZA INN HOLDINGS, INC.
(Nasdaq:PZZI)

Third Quarter Highlights:

  *EBITDA from continuing operations decreased $0.3 million to $0.1 million
    compared to the third quarter of fiscal 2012
  *Net income decreased to a loss of $0.4 million compared to net income of
    $0.1 million for the third quarter of fiscal 2012
  *The Company continues to grow the Pie Five concept:
    -- Company-owned restaurant sales increased 24.7% over the third quarter
    of fiscal 2012 to $2.1 million
    -- Two additional Pie Five Pizza Co. multi-unit franchise development
    agreements were awarded
    -- Company opened one additional Pie Five Pizza Co. restaurant
  *Pizza Inn total domestic franchise same store sales decreased 8.1%
    compared to third quarter of fiscal 2012
  *Company sold property in Little Elm, Texas for $0.2 million, contributing
    $0.1 million to the total net loss

Pizza Inn Holdings, Inc. (Nasdaq:PZZI) today announced results for the third
fiscal quarter ended March 24, 2013. Third quarter net income decreased to a
loss of $0.4 million, or $0.05 per share, compared to net income of $0.1
million, 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, lower food and supply sales at Pizza Inn, higher costs
related to the continued development of the Pie Five Pizza Co. concept and a
loss on the sale of property in Little Elm, Texas when compared to the third
quarter ended March 25, 2012.

Third quarter revenues decreased to $9.8 million in fiscal 2013 compared to
$10.6 million in the prior fiscal year. Third quarter food and supply sales
decreased by approximately $1.2 million, or 15.0%, in fiscal 2013 compared to
fiscal 2012 due primarily to a 14.7% decrease in total domestic franchise
retail sales as the result of a decrease in both the average number of
restaurants open and same store sales. Compared to the third quarter of fiscal
2012, Company-owned restaurant sales increased 24.7% to $2.1 million in the
most recent quarter due primarily to new Pie Five restaurant openings.

"Restaurant sales were heavily impacted by a weak start to the fiscal
quarter," said Chief Executive Officer Randy Gier. "January was particularly
challenging to the industry as consumers adjusted to the changes in their
take-home pay resulting from the expiration of the payroll tax cuts and delays
in federal income tax refunds."

"Pizza Inn sales performance has also been impacted by restaurant closings
primarily as a result of non-renewals of expiring franchise agreements," said
Gier. "We are moving forward with a stronger performing restaurant base
operated by committed franchisees. We have been working with our Pizza Inn
franchise leadership team to improve product quality and to develop marketing
programs to promote our unique product offerings."

"We continued to expand our Pie Five concept with the opening of another
Company-owned restaurant during the fiscal third quarter," said Randy Gier.
"We are pleased with the sales performance of those restaurants that are now
approaching the 18 month maturity window. On the franchise side, we awarded
two additional multi-unit franchise agreements during the quarter, bringing
the total to four awarded this fiscal year, providing for up to 38 Pie Five
restaurants to be developed under these agreements. In April, our first Pie
Five franchise location was opened in Holladay, Utah."

"We now have nine company-owned Pie Five restaurants operating in different
types of trade areas across the Dallas - Ft. Worth market and several more in
development. Our experience operating these restaurants has provided us with
valuable learning to drive the success of future company and franchise
restaurants as we accelerate into our next phase of development."

"We have identified the characteristics of our best performing sites and
continue to elevate our product offering.Additionally, we continue to
strengthen the team and solidify operating procedures to drive consistency,
efficiency, and profitability," concluded Gier.

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, 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 Pizza Inn Holdings, Inc. 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.


PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                                 
                                      Three Months Ended  Nine Months Ended
                                      March 24, March 25, March 24, March 25,
                                      2013      2012      2013      2012
                                                                 
REVENUES:                              $9,781  $10,646 $30,767 $32,129
                                                                 
COSTS AND EXPENSES:                                               
Cost of sales                          8,460    8,863    26,127   26,724
General and administrative expenses    840      946      2,995    2,740
Franchise expenses                     608      592      1,675    1,565
Pre-opening expenses                   82       70       249      246
Bad debt                               45       35       135      65
Interest expense                       58       38       197      71
                                      10,093   10,544   31,378   31,411
                                                                 
(LOSS) INCOME FROM CONTINUING          (312)    102      (611)    718
OPERATIONS BEFORE TAXES
Income tax (benefit) expense           (22)     35       (170)    252
(LOSS) INCOME FROM CONTINUING          (290)    67       (441)    466
OPERATIONS
                                                                 
Loss from discontinued operations, net (100)    (15)     (127)    (45)
of taxes
NET (LOSS) INCOME                      $(390)  $52     $(568)  $421
                                                                 
EARNINGS PER SHARE OF COMMON STOCK -                              
BASIC:
(Loss) Income from continuing          $(0.04) $0.01   $(0.05) $0.06
operations
Loss from discontinued operations      (0.01)   --      (0.02)   (0.01)
Net (loss) income                      $(0.05) $0.01   $(0.07) $0.05
                                                                 
EARNINGS PER SHARE OF COMMON STOCK -                              
DILUTED:
(Loss) Income from continuing          $(0.04) $0.01   $(0.05) $0.06
operations
Loss from discontinued operations      (0.01)   --      (0.02)   (0.01)
Net (loss) income                      $(0.05) $0.01   $(0.07) $0.05
                                                                 
Weighted average common shares         8,021     8,021     8,021     8,015
outstanding - basic
                                                                 
Weighted average common and potential  8,267     8,385     8,198     8,322
dilutive common shares outstanding



PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
                                                                   
                                                   March 24,        June 24,
                                                   2013 (unaudited) 2012
ASSETS                                                              
CURRENT ASSETS                                                      
Cash and cash equivalents                           $815           $590
Accounts receivable, less allowance for bad debts   3,314           3,098
of $297 and $253, respectively
Inventories                                         1,522           1,852
Income tax receivable                               343             431
Deferred income tax assets                          1,005           1,078
Prepaid expenses and other                          484             256
Total current assets                                7,483           7,305
                                                                   
LONG-TERM ASSETS                                                    
Property, plant and equipment, net                  5,116           4,794
Long-term notes receivable                          115             27
Deposits and other                                  112             372
                                                   $12,826        $12,498
LIABILITIES AND SHAREHOLDERS' EQUITY                                
CURRENT LIABILITIES                                                 
Accounts payable - trade                            $1,541         $1,562
Accrued expenses                                    1,885           1,756
Deferred revenues                                   306             200
Bank debt                                           556             765
Total current liabilities                           4,288           4,283
                                                                   
LONG-TERM LIABILITIES                                               
Bank debt, net of current portion                   2,094           977
Deferred tax liability                              383             699
Deferred revenues, net of current portion           99              125
Deferred gain on sale of property                   65              84
Other long-term liabilities                         22              22
Total liabilities                                   6,951           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                          9,289           9,154
Retained earnings                                   21,071          21,639
Treasury stock at cost                                              
Shares in treasury: 7,119,400                      (24,636)        (24,636)
Total shareholders' equity                         5,875           6,308
                                                   $12,826        $12,498



PIZZA INN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                   
                                                          Nine Months Ended
                                                          March 24, March 25,
                                                          2013      2012
                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:                               
                                                                   
Net (loss) income                                          $(568)  $421
Adjustments to reconcile net (loss) income tocash                  
provided by operating activities:
Depreciation and amortization                              958      663
Loss on the sale of assets                                 129      --
Stock compensation expense                                 135      104
Deferred tax                                               (243)    46
Provision for litigation costs                                      
Provision for bad debts                                    44       65
Changes in operating assets and liabilities:                        
Notes and accounts receivable                              (172)    (394)
Inventories                                                330      140
Accounts payable - trade                                   (21)     (2)
Accrued expenses                                           129      76
Deferred revenue                                           61       (60)
Prepaid expenses and other                                 (102)    (175)
Cash provided by operating activities                      680      884
                                                                   
CASH FLOWS FROM INVESTING ACTIVITIES:                               
Proceeds from sale of assets                               184      --
Capital expenditures                                       (1,547)  (2,208)
Cash used by investing activities                          (1,363)  (2,208)
                                                                   
CASH FLOWS FROM FINANCING ACTIVITIES:                               
Proceeds from exercise of stock options                    --       23
Borrowings of bank debt                                    3,160    1,795
Repayments of bank debt                                    (2,252)  (749)
Cash provided by financing activities                     908      1,069
                                                                   
Net increase (decrease) in cash and cash equivalents       225      (255)
Cash and cash equivalents, beginning of period             590      949
Cash and cash equivalents, end of period                   $815    $694
                                                                   

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
                                                                   
CASH PAYMENTS (RECEIPTS) FOR:                                       
                                                                   
Interest                                                   $248    $55
Income taxes - net                                         (84)     37



PIZZA INN HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands)
(Unaudited)
                                                          
                                                 Three Months Ended
                                                 March 24, March 25,
                                                 2013      2012
Net (loss) income                               $(390)  $52
Interest expense                                58       38
Taxes                                           (22)     35
Depreciation and amortization                   340      269
Loss from discontinued operations, net of taxes 100      15
EBITDA from continuing operations               $86     $409
                                                          
                                                          
                                                 Nine Months Ended
                                                 March 24, March 25,
                                                 2013      2012
Net (loss) income                               $(568)  $421
Interest expense                                197      71
Taxes                                           (170)    252
Depreciation and amortization                   958      663
Loss from discontinued operations, net of taxes 127      45
EBITDA from continuing operations               $544    $1,452

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

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