Exhibit 99.1

May 4, 2023

RAVE Restaurant Group, Inc. Reports Third Quarter Results

Third Quarter Highlights:

 

 

 

 

 

 

 

 

 

 

“Our third quarter results mark 12 consecutive quarters of profitability for RAVE driven by strong top line, strategic investing in the future of our business, and strong cost controls,” said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group, Inc. “Our third quarter showed continued strong same store sales growth at both Pizza Inn and Pie Five, EBITDA stability as well as strong operating cash performance.”

“We continue to make investment decisions with a goal of driving long-term performance and competitiveness,” Solano said.  “We continue to innovate and invest in key initiatives we believe will provide returns long after our initial investments.  While our Q3 same store and total sales were remarkably strong, Q3 pre-tax profit was below year ago as we invested in our new image prototype including preparation for our first reimages of existing franchise buffets, construction of new Pizza Inn Buffets, technology and the install of Revel point-of-sale, and in strategic positions and travel to support these initiatives.”

“In fiscal 2022 we delivered the first Pizza Inn buffet unit count growth in 24 years. In Q3 we did not open any buffets but closed zero buffets leaving us net positive in buffet store count year to date. We continue to focus on building our strong pipeline of new buffet stores, including our first new-image Pizza Inn currently under construction and slated to open in May in Asheboro, NC. We are also poised to begin scale reimage efforts at Pizza Inn buffets in the coming months, providing customers with an enhanced Pizza Inn experience across our footprint.”

Solano continued, “The restaurant industry continues to abandon dine-in, leaving us an opportunity to win with our differentiated strategy, focusing on the value and variety of Pizza Inn’s buffet while opportunistically capturing delivery and carry-out. We are also targeting geographies where successful Pizza Inn buffets once stood, opening stores to adoring fans who are excited to welcome back Pizza Inn, validating our belief in the strong “latent brand equity” of Pizza Inn.”

“The most significant Pie Five menu and operations changes in our history have been rolled out to all traditional stores and we are seeing strong consumer and franchisee acceptance and an improvement in same store sales consistent with our testing. These menu changes included the elimination of large pizzas, reinforcing our position as an individual pizza brand where everyone gets what they want with no compromises. In February we rolled out an initiative to capture the family or group occasion lost with the elimination of large pizzas, called the Pie Five “Free 4^th All” delivering a 4^th pizza free when consumers buy 3 pizzas. The Free 4^th All roll out results have been positive, driving significant ticket and value for consumers, consistent with our testing.”

“I’m proud of our results and the inspired efforts of our team members and franchisees. They are a gritty, resilient bunch and I feel great about our future.”

Clint Fendley, Chief Financial Officer of RAVE Restaurant Group, Inc. further elaborated, "We are pleased to report our 12^th consecutive quarter of profitability and another solid quarter of same store sales for both of our segments.  During fiscal 2023 and continuing throughout the third quarter, we have strategically invested in additional team members, critical technologies and an enhanced store experience as we prepare for new Pizza Inn buffet openings which are expected during our upcoming fourth quarter.

 

These investments have negatively impacted our third quarter net income, however, it should be noted that the primary driver of our third quarter net income decline was an increase in our income tax expense of $112 thousand.  This increase is the result of the full recognition of our deferred tax asset which occurred during the fourth quarter of 2022 as a result of Rave’s improved long-term growth and earnings prospects. The primary driver of the increase in income tax expense for the third quarter was for federal taxes, which represents a non-cash expense for the Company.

 

 As we look forward to the fourth quarter, we are excited to open our new Pizza Inn buffets and share an enhanced dining experience with our customers.”

 

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-based compensation expense, severance, gain/loss on sale of assets, costs related to impairment and other lease charges, franchise 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.

Dallas-based RAVE Restaurant Group [NASDAQ: RAVE] has inspired restaurant innovation and countless customer smiles with its trailblazing pizza concepts. The Company owns, franchises, licenses and supplies Pie Five and Pizza Inn restaurants operating domestically and internationally. The Pizza Inn experience is unlike your typical buffet. Since 1958, Pizza Inn's house-made dough, house-shredded 100% whole milk mozzarella cheese, fresh ingredients and house-made signature sauce combined with friendly service solidified the brand to become America's favorite hometown pizza place. This, in addition to its small-town vibe, are the hallmarks of Pizza Inn restaurants. In 2011, RAVE introduced Pie Five Pizza, pioneering a fast-casual pizza brand that transformed the classic pizzeria into a concept offering personalization, sophisticated ingredients and speed. Pie Five's craft pizzas are baked fresh daily and feature house-made ingredients, creative recipes and craveable crust creations. For more information, visit www.raverg.com, and follow on Instagram @pizzainn and @piefivepizza.

Contact:

Investor Relations

RAVE Restaurant Group, Inc.

469-384-5000

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share amounts)

(Unaudited)

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

RAVE RESTAURANT GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

RAVE RESTAURANT GROUP, INC.

ADJUSTED EBITDA

(In thousands)

(Unaudited)

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