THE COLONY Texas Pizza Inn Inc. reported this week that its annual profit was less than half of what it totaled a year earlier, mostly because of tax expenses and legal settlements, as well as a double-digit decline in revenue.
The parent to the 310-unit chain reported profit of $1.2 million, or 14 cents a share, for the year ended June 28, compared with a profit of $2.8 million, or 29 cents a share, last year. Revenue fell down 11.5 percent to $43.8 million.
Because of a change in net loss carryforwards, which is an accounting technique that allows for the application of operating losses to future profits in order to reduce tax liabilities, the company reported a tax expense of $500,000 in its latest year, compared with a tax benefit of $100,000 in the year earlier. The company said it also had legal settlement expenses of $300,000 in 2009, compared with a settlement benefit of $300,000 in 2008. Excluding those items, Pizza Inn said per-share earnings would have totaled 23 cents in fiscal 2009 versus 25 cents in fiscal 2008.
While not releasing fourth-quarter profit figures independently, Pizza Inn said same-store sales at its buffet units fell 1.3 percent for the year and 3.8 percent for the fourth quarter. Total same-store sales, including non-buffet units, fell 2.0 percent for the year and 4.4 percent for the quarter.
During the latest quarter, Pizza Inn opened its second corporate store, a buffet-format unit, in Denton, Texas, which it credited for a 153-percent increase in corporate-unit income. Pizza Inn opened a third similar prototype in Fort Worth, Texas, in September.
More corporate-operated locations are planned. Charlie Morrison, president and chief executive of Pizza Inn, said, “Our successful new buffet prototype, combined with a great incentive program for franchise development, has delivered 13 new buffet franchise agreements for the coming fiscal year.”
Contact Ron Ruggless at [email protected].