Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
|
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Smaller reporting company
|
Emerging growth company
|
PART I. FINANCIAL INFORMATION
|
|||
Item 1.
|
Financial Statements
|
Page
|
|
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
Item 2.
|
14
|
||
Item 3.
|
22
|
||
Item 4.
|
22
|
||
PART II. OTHER INFORMATION
|
|||
Item 1.
|
23
|
||
Item 1A.
|
23
|
||
Item 2.
|
23
|
||
Item 3.
|
23
|
||
Item 4.
|
23
|
||
Item 5.
|
23
|
||
Item 6.
|
24
|
||
25
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
|||||||||||||
REVENUES:
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
COSTS AND EXPENSES:
|
||||||||||||||||
General and administrative expenses
|
|
|
|
|
||||||||||||
Franchise expenses
|
|
|
|
|
||||||||||||
Impairment of long-lived assets and other lease charges
|
|
|
|
|
||||||||||||
Bad debt expense
|
|
|
|
|
||||||||||||
Interest expense
|
|
|
|
|
||||||||||||
Depreciation and amortization expense
|
|
|
|
|
||||||||||||
Total costs and expenses
|
|
|
|
|
||||||||||||
INCOME BEFORE TAXES
|
|
|
|
|
||||||||||||
Income tax expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
NET INCOME
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
INCOME PER SHARE OF COMMON STOCK - BASIC:
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
INCOME PER SHARE OF COMMON STOCK - DILUTED:
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average common shares outstanding - basic
|
|
|
|
|
||||||||||||
Weighted average common and potential dilutive common shares outstanding
|
|
|
|
|
December 25,
2022
|
June 26,
2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable, less allowance for bad debts of $
|
|
|
||||||
Notes receivable, current
|
|
|
||||||
Property held for sale
|
||||||||
Deferred contract charges, current
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
LONG-TERM ASSETS
|
||||||||
Property, plant and equipment, net
|
|
|
||||||
Operating lease right of use asset, net
|
|
|
||||||
Intangible assets definite-lived, net
|
|
|
||||||
Notes receivable, net of current portion
|
|
|
||||||
Deferred tax asset, net
|
||||||||
Deferred contract charges, net of current portion
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable - trade
|
$
|
|
$
|
|
||||
Accrued expenses
|
||||||||
Other current liabilities
|
||||||||
Operating lease liability, current
|
|
|
||||||
Short term loan
|
|
|
||||||
Deferred revenues, current
|
|
|
||||||
Total current liabilities
|
|
|
||||||
LONG-TERM LIABILITIES
|
||||||||
Operating lease liability, net of current portion
|
|
|
||||||
Deferred revenues, net of current portion
|
|
|
||||||
Total liabilities
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES (SEE NOTE D)
|
||||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Treasury stock at cost
|
||||||||
Shares in treasury:
|
(
|
)
|
(
|
)
|
||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Common Stock
|
Treasury Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Shares
|
Amount
|
Total
|
||||||||||||||||||||||
Balance, June 27, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||
Stock-based compensation expense
|
—
|
—
|
||||||||||||||||||||||||||
Net income
|
—
|
|
|
|
—
|
|
|
|||||||||||||||||||||
Balance, September 26, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||
Stock-based compensation expense
|
— |
—
|
||||||||||||||||||||||||||
Net income
|
—
|
|
|
|
—
|
|
|
|||||||||||||||||||||
Balance, December 26, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Common Stock
|
Treasury Stock
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Retained Earnings
|
Shares
|
Amount
|
Total
|
||||||||||||||||||||||
Balance, June 26, 2022
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||
Stock-based compensation expense |
—
|
|
|
|
—
|
|
|
|||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Net income
|
—
|
|
|
|
—
|
|
|
|||||||||||||||||||||
Balance, September 25, 2022
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|||||||||||||||||||||||
Purchase of treasury stock | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Net income
|
—
|
|
|
|
—
|
|
|
|||||||||||||||||||||
Balance, December 25, 2022
|
|
$
|
|
$
|
|
$
|
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Six Months Ended
|
||||||||
December 25,
2022
|
December 26,
2021
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
Impairment of long-lived assets and other lease charges
|
|
|
||||||
Stock-based compensation expense
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Amortization of operating right of use assets
|
|
|
||||||
Amortization of intangible assets definite-lived
|
||||||||
Amortization of debt issue costs
|
|
|
||||||
Allowance for bad debts
|
|
|
||||||
Deferred income tax
|
||||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
|
(
|
)
|
|||||
Notes receivable
|
|
|
||||||
Deferred contract charges
|
|
(
|
)
|
|||||
Prepaid expenses and other
|
|
|
||||||
Accounts payable - trade
|
(
|
)
|
(
|
)
|
||||
Accrued expenses
|
(
|
)
|
(
|
)
|
||||
Operating lease liability
|
(
|
)
|
(
|
)
|
||||
Deferred revenues
|
( |
) | ( |
) | ||||
Cash provided by operating activities
|
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Payments received on notes receivable
|
|
|
||||||
Purchase of intangible assets definite-lived
|
( |
) | ( |
) | ||||
Purchase of property, plant and equipment
|
(
|
)
|
(
|
)
|
||||
Cash (used in)/provided by investing activities
|
(
|
)
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Purchase of treasury stock
|
( |
) | ||||||
Payments on short term loan
|
(
|
)
|
(
|
)
|
||||
Cash (used in) financing activities
|
(
|
)
|
(
|
)
|
||||
Net (decrease) in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
CASH PAID FOR:
|
||||||||
Income taxes
|
$
|
|
$
|
|
Three Months Ended
|
||||||||
December 25,
2022
|
December 26,
2021
|
|||||||
Franchise royalties
|
$
|
|
$
|
|
||||
Supplier and distributor incentive revenues
|
|
|
||||||
Franchise license fees
|
|
|
||||||
Area development exclusivity fees and foreign master license fees
|
|
|
||||||
Advertising funds contributions
|
||||||||
Rental income
|
|
|
||||||
Other
|
||||||||
$
|
|
$
|
|
Six Months Ended
|
||||||||
December 25,
2022
|
December 26,
2021
|
|||||||
Franchise royalties
|
$
|
|
$
|
|
||||
Supplier and distributor incentive revenues
|
|
|
||||||
Franchise license fees
|
|
|
||||||
Area development exclusivity fees and foreign master license fees
|
|
|
||||||
Advertising funds contributions
|
||||||||
Supplier convention funds
|
|
|
||||||
Rental income
|
|
|
||||||
Other
|
||||||||
$
|
|
$
|
|
Six Months Ended
|
||||
December 25, 2022
|
||||
Operating lease cost
|
$
|
|
||
Rental income
|
(
|
)
|
||
Total lease expense, net of sublease income
|
$
|
|
Six Months Ended
|
||||
December 25, 2022
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
December 25, 2022
|
||||
Weighted average remaining lease term | |
|||
Weighted average discount rate
|
|
%
|
Operating Leases
|
||||
2023 |
$ | |||
2024
|
||||
2025
|
||||
2026
|
||||
Thereafter
|
||||
Total operating lease payments
|
$ | |||
Less: imputed interest
|
( |
) |
||
Total operating lease liability
|
$ |
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid Per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plan
|
||||||||||||
June 27, 2022 - July 31, 2022
|
|
$
|
|
|
|
|||||||||||
August 1, 2022 - August 28, 2022
|
|
|
|
|
||||||||||||
August 29, 2022 - September 25, 2022
|
|
|
||||||||||||||
September 26, 2022 - October 30, 2022 | ||||||||||||||||
October 31, 2022 - November 27, 2022 | ||||||||||||||||
November 28, 2022 - December 25, 2022 | ||||||||||||||||
Total
|
|
$
|
|
Six Months Ended
|
||||||||
December 25,
2022
|
December 26,
2021
|
|||||||
Shares
|
Shares
|
|||||||
Outstanding at beginning of year
|
|
|
||||||
Granted
|
|
|
||||||
Exercised
|
|
|
||||||
Forfeited/Canceled/Expired
|
|
|
||||||
Outstanding at end of period
|
|
|
||||||
Exercisable at end of period
|
|
|
Unvested at June 26, 2022
|
|
|||
Granted
|
|
|||
Issued
|
|
|||
Forfeited
|
|
|||
Unvested at December 25,
2022
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
|||||||||||||
Net income available to common stockholders
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
BASIC:
|
||||||||||||||||
Weighted average common shares
|
|
|
|
|
||||||||||||
Net income per common share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
DILUTED:
|
||||||||||||||||
Weighted average common shares
|
|
|
|
|
||||||||||||
Convertible notes
|
|
|
|
|
||||||||||||
Dilutive stock options
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding
|
|
|
|
|
||||||||||||
Net income per common share
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
|||||||||||||
Net sales and operating revenues:
|
||||||||||||||||
Pizza Inn Franchising
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Pie Five Franchising
|
|
|
|
|
||||||||||||
Company-Owned Restaurants
|
||||||||||||||||
Corporate administration and other
|
|
|
|
|
||||||||||||
Consolidated revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Depreciation and amortization:
|
||||||||||||||||
Corporate administration and other
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Depreciation and amortization
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Income before taxes:
|
||||||||||||||||
Pizza Inn Franchising | $ | $ | $ | $ | ||||||||||||
Pie Five Franchising
|
|
|
|
|
||||||||||||
Company-Owned Restaurants
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Combined
|
|
|
|
|
||||||||||||
Corporate administration and other
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Income before taxes
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Geographic information (revenues):
|
||||||||||||||||
United States
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Foreign countries
|
|
|
|
|
||||||||||||
Consolidated revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
Pizza Inn
|
Pie Five
|
All Concepts
|
||||||||||||||||||||||
Ending
Units
|
Retail
Sales
|
Ending
Units
|
Retail
Sales
|
Ending
Units
|
Retail
Sales
|
|||||||||||||||||||
Domestic Franchised/Licensed
|
125
|
$
|
23,633
|
31
|
$
|
4,853
|
156
|
$
|
28,486
|
|||||||||||||||
International Franchised
|
33
|
—
|
33
|
Pizza Inn
|
Pie Five
|
All Concepts
|
||||||||||||||||||||||
Ending
Units
|
Retail
Sales
|
Ending
Units
|
Retail
Sales
|
Ending
Units
|
Retail
Sales
|
|||||||||||||||||||
Domestic Franchised/Licensed
|
125
|
$
|
47,612
|
31
|
$
|
10,100
|
156
|
$
|
57,712
|
|||||||||||||||
International Franchised
|
33
|
—
|
33
|
● |
“EBITDA” represents earnings before interest, taxes, depreciation and amortization.
|
● |
“Adjusted EBITDA” represents earnings before interest, taxes, depreciation and amortization, stock-based 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.
|
● |
“Retail sales” represents the restaurant sales reported by our franchisees and Company-owned restaurants, which may be segmented by brand or domestic/international
locations.
|
● |
“System-wide retail sales” represents combined retail sales for franchisee and Company-owned restaurants for a specified brand.
|
● |
“Comparable store retail sales” includes the retail sales for restaurants that have been open for at least 18 months as of the end of the reporting period. The sales
results for a restaurant that was closed temporarily for remodeling or relocation within the same trade area are included in the calculation only for the days that the restaurant was open in both periods being compared.
|
● |
“Store weeks” represent the total number of full weeks that specified restaurants were open during the period.
|
● |
“Average units open” reflects the number of restaurants open during a reporting period weighted by the percentage of the weeks in a reporting period that each
restaurant was open.
|
● |
“Average weekly sales” for a specified period is calculated as total retail sales (excluding partial weeks) divided by store weeks in the period.
|
● |
“Non-operating store costs” represent gain or loss on asset disposal, store closure expenses, lease termination expenses and expenses related to abandoned store
sites.
|
● |
“Franchisee default and closed store revenue/expense” represents the net of accelerated revenues and costs attributable to defaulted area development agreements and
closed franchised stores.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25, 2022
|
December 26, 2021
|
December 25, 2022
|
December 26, 2021
|
|||||||||||||
Net income
|
$
|
348
|
$
|
457
|
$
|
655
|
$
|
742
|
||||||||
Interest expense
|
—
|
23
|
1
|
47
|
||||||||||||
Income taxes
|
140
|
4
|
232
|
7
|
||||||||||||
Depreciation and amortization
|
53
|
48
|
104
|
92
|
||||||||||||
EBITDA
|
$
|
541
|
$
|
532
|
$
|
992
|
$
|
888
|
||||||||
Stock-based compensation expense
|
87
|
43
|
173
|
85
|
||||||||||||
Severance
|
—
|
—
|
—
|
33
|
||||||||||||
Impairment of long-lived assets and other lease charges
|
—
|
—
|
5
|
—
|
||||||||||||
Franchisee default and closed store revenue
|
(13
|
)
|
(11
|
)
|
(13
|
)
|
(12
|
)
|
||||||||
Closed and non-operating store costs
|
—
|
1
|
—
|
2
|
||||||||||||
Adjusted EBITDA
|
$
|
615
|
$
|
565
|
$
|
1,157
|
$
|
996
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25, 2022
|
December 26, 2021
|
December 25, 2022
|
December 26, 2021
|
|||||||||||||
Pizza Inn Retail Sales - Total Domestic Units
|
(in thousands, except unit data)
|
(in thousands, except unit data)
|
||||||||||||||
Domestic Units
|
||||||||||||||||
Buffet Units - Franchised
|
$
|
22,223
|
$
|
19,433
|
$
|
44,664
|
$
|
38,078
|
||||||||
Delco/Express Units - Franchised
|
1,342
|
1,524
|
2,824
|
3,166
|
||||||||||||
PIE Units - Licensed
|
68
|
58
|
124
|
118
|
||||||||||||
Total Domestic Retail Sales
|
$
|
23,633
|
$
|
21,015
|
$
|
47,612
|
$
|
41,362
|
||||||||
Pizza Inn Comparable Store Retail Sales - Total Domestic
|
$
|
22,531
|
$
|
$ 20,783
|
$
|
45,042
|
$
|
40,799
|
||||||||
Pizza Inn Average Units Open in Period
|
||||||||||||||||
Domestic Units
|
||||||||||||||||
Buffet Units - Franchised
|
72
|
70
|
73
|
71
|
||||||||||||
Delco/Express Units - Franchised
|
46
|
49
|
46
|
51
|
||||||||||||
PIE Units - Licensed
|
8
|
9
|
9
|
10
|
||||||||||||
Total Domestic Units
|
126
|
128
|
128
|
132
|
Three Months Ended December 25, 2022
|
||||||||||||||||||||
Beginning
Units
|
Opened
|
Concept
Change
|
Closed
|
Ending
Units
|
||||||||||||||||
Domestic Units
|
||||||||||||||||||||
Buffet Units - Franchised
|
72
|
1
|
—
|
—
|
73
|
|||||||||||||||
Delco/Express Units - Franchised
|
47
|
—
|
—
|
3
|
44
|
|||||||||||||||
PIE Units - Licensed
|
9
|
—
|
—
|
1
|
8
|
|||||||||||||||
Total Domestic Units
|
128
|
1
|
—
|
4
|
125
|
|||||||||||||||
International Units (all types)
|
33
|
—
|
—
|
—
|
33
|
|||||||||||||||
Total Units
|
161
|
1
|
—
|
4
|
158
|
Six Months Ended December 25, 2022
|
||||||||||||||||||||
Beginning
Units
|
Opened
|
Concept
Change
|
Closed
|
Ending
Units
|
||||||||||||||||
Domestic Units
|
||||||||||||||||||||
Buffet Units - Franchised
|
72
|
1
|
—
|
—
|
73
|
|||||||||||||||
Delco/Express Units - Franchised
|
47
|
—
|
—
|
3
|
44
|
|||||||||||||||
PIE Units - Licensed
|
9
|
—
|
—
|
1
|
8
|
|||||||||||||||
Total Domestic Units
|
128
|
1
|
—
|
4
|
125
|
|||||||||||||||
International Units (all types)
|
31
|
2
|
—
|
—
|
33
|
|||||||||||||||
Total Units
|
159
|
3
|
—
|
4
|
158
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 25, 2022
|
December 26, 2021
|
December 25, 2022
|
December 26, 2021
|
|||||||||||||
(in thousands, except unit data)
|
(in thousands, except unit data)
|
|||||||||||||||
Pie Five Retail Sales - Total Units
|
||||||||||||||||
Domestic Units - Franchised
|
$
|
$ 4,857
|
$
|
$ 4,977
|
$
|
$ 10,100
|
$
|
$ 10,037
|
||||||||
Domestic Units - Company-owned
|
—
|
—
|
—
|
—
|
||||||||||||
Total Domestic Retail Sales
|
$
|
$ 4,857
|
$
|
$ 4,977
|
$
|
$ 10,100
|
$
|
$ 10,037
|
||||||||
Pie Five Comparable Store Retail Sales - Total
|
$
|
$ 4,622
|
$
|
$ 4,347
|
$
|
$ 9,615
|
$
|
$ 8,982
|
||||||||
Pie Five Average Units Open in Period
|
||||||||||||||||
Domestic Units - Franchised
|
31
|
34
|
31
|
34
|
||||||||||||
Domestic Units - Company-owned
|
—
|
—
|
—
|
—
|
||||||||||||
Total Domestic Units
|
31
|
34
|
31
|
34
|
Three Months Ended December 25, 2022
|
||||||||||||||||||||
Beginning
Units
|
Opened
|
Transfer
|
Closed
|
Ending
Units
|
||||||||||||||||
Domestic - Franchised
|
31
|
—
|
—
|
—
|
31
|
|||||||||||||||
Domestic - Company-owned
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total Domestic Units
|
31
|
—
|
—
|
—
|
31
|
Six Months Ended December 25, 2022
|
||||||||||||||||||||
Beginning
Units
|
Opened
|
Transfer
|
Closed
|
Ending
Units
|
||||||||||||||||
Domestic - Franchised
|
31
|
—
|
—
|
—
|
31
|
|||||||||||||||
Domestic - Company-owned
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total Domestic Units
|
31
|
—
|
—
|
—
|
31
|
Pizza Inn
Franchising
|
Pie Five
Franchising
|
Company-Owned
Restaurants
|
Corporate
|
Total
|
||||||||||||||||||||||||||||||||||||
Fiscal Quarter Ended
|
Fiscal Quarter Ended
|
Fiscal Quarter Ended
|
Fiscal Quarter Ended
|
Fiscal Quarter Ended
|
||||||||||||||||||||||||||||||||||||
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
|||||||||||||||||||||||||||||||
REVENUES:
|
||||||||||||||||||||||||||||||||||||||||
Franchise and license revenues
|
$
|
2,351
|
$
|
2,154
|
$
|
462
|
$
|
483
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
2,813
|
$
|
2,637
|
||||||||||||||||||||
Rental income
|
—
|
—
|
—
|
—
|
—
|
—
|
46
|
46
|
46
|
46
|
||||||||||||||||||||||||||||||
Interest income and other
|
—
|
—
|
8
|
13
|
—
|
—
|
(1
|
)
|
—
|
7
|
13
|
|||||||||||||||||||||||||||||
Total revenues
|
2,351
|
2,154
|
470
|
496
|
—
|
—
|
45
|
46
|
2,866
|
2,696
|
||||||||||||||||||||||||||||||
COSTS AND EXPENSES:
|
||||||||||||||||||||||||||||||||||||||||
General and administrative expenses
|
—
|
—
|
—
|
—
|
—
|
1
|
1,453
|
1,376
|
1,453
|
1,377
|
||||||||||||||||||||||||||||||
Franchise expenses
|
656
|
571
|
211
|
213
|
—
|
—
|
—
|
—
|
867
|
784
|
||||||||||||||||||||||||||||||
Bad debt expense
|
—
|
—
|
—
|
—
|
—
|
—
|
5
|
3
|
5
|
3
|
||||||||||||||||||||||||||||||
Interest expense
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
23
|
—
|
23
|
||||||||||||||||||||||||||||||
Depreciation and amortization expense
|
—
|
—
|
—
|
—
|
—
|
—
|
53
|
48
|
53
|
48
|
||||||||||||||||||||||||||||||
Total costs and expenses
|
656
|
571
|
211
|
213
|
—
|
1
|
1,511
|
1,450
|
2,378
|
2,235
|
||||||||||||||||||||||||||||||
INCOME/(LOSS) BEFORE TAXES
|
$
|
1,695
|
$
|
1,583
|
$
|
259
|
$
|
283
|
$
|
—
|
$
|
(1
|
)
|
$
|
(1,466
|
)
|
$
|
(1,404
|
)
|
$
|
488
|
$
|
461
|
Pizza Inn
Franchising
|
Pie Five
Franchising
|
Company-Owned
Stores
|
Corporate
|
Total
|
||||||||||||||||||||||||||||||||||||
Fiscal Year-to-Date
|
Fiscal Year-to-Date
|
Fiscal Year-to-Date
|
Fiscal Year-to-Date
|
Fiscal Year-to-Date
|
||||||||||||||||||||||||||||||||||||
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
December 25,
2022
|
December 26,
2021
|
|||||||||||||||||||||||||||||||
REVENUES:
|
||||||||||||||||||||||||||||||||||||||||
Franchise and license revenues
|
$
|
4,820
|
$
|
4,188
|
$
|
950
|
$
|
951
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
5,770
|
$
|
5,139
|
||||||||||||||||||||
Rental Income
|
—
|
—
|
—
|
—
|
—
|
—
|
93
|
93
|
93
|
93
|
||||||||||||||||||||||||||||||
Interest income and other
|
—
|
—
|
8
|
17
|
—
|
—
|
—
|
—
|
8
|
17
|
||||||||||||||||||||||||||||||
Total revenues
|
4,820
|
4,188
|
958
|
968
|
—
|
—
|
93
|
93
|
5,871
|
5,249
|
||||||||||||||||||||||||||||||
COSTS AND EXPENSES:
|
||||||||||||||||||||||||||||||||||||||||
General and administrative expenses
|
—
|
—
|
—
|
—
|
—
|
2
|
2,796
|
2,581
|
2,796
|
2,583
|
||||||||||||||||||||||||||||||
Franchise expenses
|
1,614
|
1,330
|
455
|
440
|
—
|
—
|
—
|
—
|
2,069
|
1,770
|
||||||||||||||||||||||||||||||
Impairment of long-lived assets and other lease charges
|
—
|
—
|
—
|
—
|
—
|
—
|
5
|
—
|
5
|
—
|
||||||||||||||||||||||||||||||
Bad debt expense
|
—
|
—
|
—
|
—
|
—
|
—
|
9
|
8
|
9
|
8
|
||||||||||||||||||||||||||||||
Interest expense
|
—
|
—
|
—
|
—
|
—
|
—
|
1
|
47
|
1
|
47
|
||||||||||||||||||||||||||||||
Depreciation and amortization expense
|
—
|
—
|
—
|
—
|
—
|
—
|
104
|
92
|
104
|
92
|
||||||||||||||||||||||||||||||
Total costs and expenses
|
1,614
|
1,330
|
455
|
440
|
—
|
2
|
2,915
|
2,728
|
4,984
|
4,500
|
||||||||||||||||||||||||||||||
INCOME/(LOSS) BEFORE TAXES
|
$
|
3,206
|
$
|
2,858
|
$
|
503
|
$
|
528
|
$
|
—
|
$
|
(2
|
)
|
$
|
(2,822
|
)
|
$
|
(2,635
|
)
|
$
|
887
|
$
|
749
|
Amended and Restated Articles of Incorporation of Rave Restaurant Group, Inc. (incorporated by reference to Exhibit 3.1 to the registrant’s
Current Report on Form 8-K filed January 8, 2015).
|
|
Amended and Restated Bylaws of Rave Restaurant Group, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form
8-K filed January 8, 2015).
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
|
|
Section 1350 Certification of Principal Executive Officer.
|
|
Section 1350 Certification of Principal Financial Officer.
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T.
|
RAVE RESTAURANT GROUP, INC.
|
|||
(Registrant)
|
|||
By:
|
/s/ Brandon L. Solano
|
||
Brandon L. Solano
|
|||
Chief Executive Officer
|
|||
(principal executive officer)
|
|||
By:
|
/s/ Clinton D. Fendley
|
||
Clinton D. Fendley
|
|||
Chief Financial Officer
|
|||
(principal financial officer)
|
|||
Dated: February 2, 2023
|
1. |
I have reviewed this quarterly report on Form 10-Q of Rave Restaurant Group, Inc. (“the Registrant”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4. |
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter
(the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5. |
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s
auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial
reporting.
|
Date: February 2, 2023
|
By:
|
/s/ Brandon L. Solano
|
|
Brandon L. Solano
|
|||
Chief Executive Officer
|
|||
(principal executive officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q of Rave Restaurant Group, Inc. (“the Registrant”);
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4. |
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter
(the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5. |
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s
auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial
reporting.
|
Date: February 2, 2023
|
By:
|
/s/ Clinton D. Fendley
|
|
Clinton D. Fendley
|
|||
Chief Financial Officer
|
|||
(principal financial officer)
|
Date: February 2, 2023
|
By:
|
/s/ Brandon L. Solano
|
|
Brandon L. Solano
|
|||
Chief Executive Officer
|
|||
(principal executive officer)
|
Date: February 2, 2023
|
By:
|
/s/ Clinton D. Fendley
|
|
Clinton D. Fendley
|
|||
Chief Financial Officer
|
|||
(principal financial officer)
|