☑ | 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 |
Missouri | 45-3189287 | |
(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 | ||
Common Stock, $0.01 par value | RAVE | Nasdaq Capital Market |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☑ | Smaller reporting company ☑ |
Emerging growth company ☐ |
PART I. FINANCIAL INFORMATION | |||
Item 1. | Financial Statements | Page | |
3 | |||
4 | |||
5 | |||
6 | |||
7 | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
PART II. OTHER INFORMATION | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. | |||
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
REVENUES: | $ | 2,970 | $ | 2,620 | $ | 8,841 | $ | 7,869 | ||||||||||||||||
REVENUES | $ | 3,089 | $ | 3,005 | ||||||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||
Cost of sales | — | 1 | — | 1 | ||||||||||||||||||||
General and administrative expenses | 1,486 | 1,357 | 4,282 | 3,940 | 1,319 | 1,343 | ||||||||||||||||||
Franchise expenses | 964 | 705 | 3,033 | 2,475 | 1,172 | 1,202 | ||||||||||||||||||
Impairment of long-lived assets and other lease charges | — | — | 5 | — | — | 5 | ||||||||||||||||||
Bad debt expense | 28 | 1 | 37 | 9 | 25 | 4 | ||||||||||||||||||
Interest expense | — | 14 | 1 | 61 | — | 1 | ||||||||||||||||||
Depreciation and amortization expense | 54 | 46 | 158 | 138 | 55 | 51 | ||||||||||||||||||
Total costs and expenses | 2,532 | 2,124 | 7,516 | 6,624 | 2,571 | 2,606 | ||||||||||||||||||
INCOME BEFORE TAXES | 438 | 496 | 1,325 | 1,245 | 518 | 399 | ||||||||||||||||||
Income tax expense | (115 | ) | (3 | ) | (347 | ) | (10 | ) | (132 | ) | (92 | ) | ||||||||||||
NET INCOME | $ | 323 | $ | 493 | $ | 978 | $ | 1,235 | 386 | 307 | ||||||||||||||
INCOME PER SHARE OF COMMON STOCK - BASIC: | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.07 | $ | 0.03 | $ | 0.02 | ||||||||||||
INCOME PER SHARE OF COMMON STOCK - DILUTED: | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.07 | $ | 0.03 | $ | 0.02 | ||||||||||||
Weighted average common shares outstanding - basic | 14,154 | 18,005 | 15,712 | 18,005 | 14,154 | 16,632 | ||||||||||||||||||
Weighted average common and potential dilutive common shares outstanding | 14,154 | 18,452 | 15,712 | 18,686 | ||||||||||||||||||||
Weighted average common shares outstanding - diluted | 14,762 | 16,632 |
March 26, 2023 | June 26, 2022 | September 24, 2023 | June 25, 2023 | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash and cash equivalents | $ | 3,867 | $ | 7,723 | $ | 5,944 | $ | 5,328 | ||||||||
Accounts receivable, less allowance for bad debts of $59 and $27, respectively | 1,492 | 1,981 | ||||||||||||||
Accounts receivable, less allowance for bad debts of $12 and $58, respectively | 1,072 | 1,145 | ||||||||||||||
Notes receivable, current | 165 | 172 | 122 | 105 | ||||||||||||
Property held for sale | 19 | — | ||||||||||||||
Assets held for sale | 34 | 19 | ||||||||||||||
Deferred contract charges, current | 32 | 36 | 31 | 33 | ||||||||||||
Prepaid expenses and other current assets | 181 | 146 | 388 | 204 | ||||||||||||
Total current assets | 5,756 | 10,058 | 7,591 | 6,834 | ||||||||||||
LONG-TERM ASSETS | ||||||||||||||||
Property, plant and equipment, net | 283 | 365 | ||||||||||||||
Operating lease right of use asset, net | 1,337 | 1,664 | ||||||||||||||
Property and equipment, net | 231 | 258 | ||||||||||||||
Operating lease right of use assets, net | 1,115 | 1,227 | ||||||||||||||
Intangible assets definite-lived, net | 302 | 232 | 312 | 328 | ||||||||||||
Notes receivable, net of current portion | 96 | 201 | 44 | 28 | ||||||||||||
Deferred tax asset, net | 5,500 | 5,772 | 5,234 | 5,342 | ||||||||||||
Deferred contract charges, net of current portion | 216 | 224 | 202 | 220 | ||||||||||||
Total assets | $ | 13,490 | $ | 18,516 | $ | 14,729 | $ | 14,237 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Accounts payable - trade | $ | 465 | $ | 669 | $ | 583 | $ | 502 | ||||||||
Accrued expenses | 747 | 1,082 | 1,172 | 891 | ||||||||||||
Other current liabilities | 1 | 81 | ||||||||||||||
Operating lease liability, current | 481 | 490 | ||||||||||||||
Short term loan | — | 30 | ||||||||||||||
Operating lease liabilities, current | 446 | 463 | ||||||||||||||
Deferred revenues, current | 342 | 538 | 222 | 342 | ||||||||||||
Total current liabilities | 2,036 | 2,890 | 2,423 | 2,198 | ||||||||||||
LONG-TERM LIABILITIES | ||||||||||||||||
Operating lease liability, net of current portion | 1,066 | 1,421 | ||||||||||||||
Operating lease liabilities, net of current portion | 848 | 958 | ||||||||||||||
Deferred revenues, net of current portion | 718 | 793 | 602 | 690 | ||||||||||||
Total liabilities | 3,820 | 5,104 | 3,873 | 3,846 | ||||||||||||
COMMITMENTS AND CONTINGENCIES (SEE NOTE D) | ||||||||||||||||
COMMITMENTS AND CONTINGENCIES (SEE NOTE C) | ||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||
Common stock, $0.01 par value; authorized 26,000,000 shares; issued 25,090,058 and 25,090,058 shares, respectively; outstanding 14,154,453 and 17,511,430 shares, respectively | 251 | 251 | ||||||||||||||
Common stock, $0.01 par value; authorized 26,000,000 shares; issued 25,090,058 and 25,090,058 shares, respectively; outstanding 14,154,453 and 14,154,453 shares, respectively | 251 | 251 | ||||||||||||||
Additional paid-in capital | 37,643 | 37,384 | 37,808 | 37,729 | ||||||||||||
Retained earnings | 1,804 | 826 | 2,825 | 2,439 | ||||||||||||
Treasury stock at cost | ||||||||||||||||
Shares in treasury: 10,935,605 and 7,578,628 respectively | (30,028 | ) | (25,049 | ) | ||||||||||||
Treasury stock, at cost | ||||||||||||||||
Shares in treasury: 10,935,605 and 10,935,605 respectively | (30,028 | ) | (30,028 | ) | ||||||||||||
Total shareholders’ equity | 9,670 | 13,412 | 10,856 | 10,391 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 13,490 | $ | 18,516 | $ | 14,729 | $ | 14,237 |
Common Stock | Treasury Stock | Common Stock | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Shares | Amount | Total | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance, June 27, 2021 | 25,090 | $ | 251 | $ | 37,215 | $ | (7,196 | ) | (7,085 | ) | $ | (24,537 | ) | $ | 5,733 | |||||||||||||||||||||||||||||||||||||||||
Balance, June 26, 2022 | 25,090 | $ | 251 | $ | 37,384 | $ | 826 | (7,579 | ) | $ | (25,049 | ) | $ | 13,412 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 42 | — | — | — | 42 | — | — | 86 | — | — | — | 86 | ||||||||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | (1,111 | ) | (1,384 | ) | (1,384 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 285 | — | — | 285 | — | — | — | 307 | — | — | 307 | ||||||||||||||||||||||||||||||||||||||||||
Balance, September 26, 2021 | 25,090 | $ | 251 | $ | 37,257 | $ | (6,911 | ) | (7,085 | ) | $ | (24,537 | ) | $ | 6,060 | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 43 | — | — | — | 43 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 457 | — | — | 457 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 26, 2021 | 25,090 | 251 | 37,300 | (6,454 | ) | (7,085 | ) | (24,537 | ) | 6,560 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 42 | — | — | — | 42 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 493 | — | — | 493 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 27, 2022 | 25,090 | | 251 | $ | 37,342 | $ | (5,961 | ) | | (7,085 | ) | $ | (24,537 | ) | $ | 7,095 | ||||||||||||||||||||||||||||||||||||||||
Balance, September 25, 2022 | 25,090 | $ | 251 | $ | 37,470 | $ | 1,133 | (8,690 | ) | $ | (26,433 | ) | $ | 12,421 |
Common Stock | Treasury Stock | |||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Retained Earnings | Shares | Amount | Total | ||||||||||||||||||||||
Balance, June 26, 2022 | 25,090 | $ | 251 | $ | 37,384 | $ | 826 | (7,579 | ) | $ | (25,049 | ) | $ | 13,412 | ||||||||||||||
Stock-based compensation expense | — | — | 86 | — | — | — | 86 | |||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | (1,111 | ) | (1,384 | ) | (1,384 | ) | ||||||||||||||||||
Net income | — | — | — | 307 | — | — | 307 | |||||||||||||||||||||
Balance, September 25, 2022 | 25,090 | $ | 251 | $ | 37,470 | $ | 1,133 | (8,690 | ) | $ | (26,433 | ) | $ | 12,421 | ||||||||||||||
Stock-based compensation expense | — | — | 87 | — | — | — | 87 | |||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | (2,246 | ) | (3,595 | ) | (3,595 | ) | ||||||||||||||||||
Net income | — | — | — | 348 | — | — | 348 | |||||||||||||||||||||
Balance, December 25, 2022 | 25,090 | $ | 251 | $ | 37,557 | $ | 1,481 | (10,936 | ) | $ | (30,028 | ) | $ | 9,261 | ||||||||||||||
Stock-based compensation expense | — | — | 86 | — | — | — | 86 | |||||||||||||||||||||
Net income | — | — | — | 323 | — | — | 323 | |||||||||||||||||||||
Balance, March 26, 2023 | 25,090 | $ | 251 | $ | 37,643 | $ | 1,804 | | (10,936 | ) | $ | (30,028 | ) | $ | 9,670 |
Common Stock | Treasury Stock | |||||||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Retained Earnings | Shares | Amount | Total | ||||||||||||||||||||||
Balance, June 25, 2023 | 25,090 | $ | 251 | $ | 37,729 | $ | 2,439 | (10,936 | ) | $ | (30,028 | ) | $ | 10,391 | ||||||||||||||
Stock-based compensation expense | — | — | 79 | — | — | — | 79 | |||||||||||||||||||||
Net income | — | — | — | 386 | — | — | 386 | |||||||||||||||||||||
Balance, September 24, 2023 | 25,090 | $ | 251 | $ | 37,808 | $ | 2,825 | (10,936 | ) | $ | (30,028 | ) | $ | 10,856 |
Nine Months Ended | Three Months Ended | |||||||||||||||
March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 978 | $ | 1,235 | $ | 386 | $ | 307 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||
Impairment of long-lived assets and other lease charges | 5 | — | — | 5 | ||||||||||||
Stock-based compensation expense | 259 | 127 | 79 | 86 | ||||||||||||
Depreciation and amortization | 105 | 105 | 34 | 35 | ||||||||||||
Amortization of operating right of use assets | 327 | 314 | 112 | 108 | ||||||||||||
Amortization of intangible assets definite-lived | 53 | 33 | 21 | 16 | ||||||||||||
Amortization of debt issue costs | — | 21 | ||||||||||||||
Allowance for bad debts | 37 | 9 | 25 | 4 | ||||||||||||
Deferred income tax | 272 | — | 108 | — | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 452 | (273 | ) | 48 | 491 | |||||||||||
Notes receivable | 22 | 28 | (48 | ) | 5 | |||||||||||
Deferred contract charges | 12 | (17 | ) | 20 | 9 | |||||||||||
Prepaid expenses and other | (35 | ) | 65 | |||||||||||||
Prepaid expenses and other assets | (184 | ) | 38 | |||||||||||||
Accounts payable - trade | (204 | ) | (29 | ) | 81 | 20 | ||||||||||
Accrued expenses | (415 | ) | (175 | ) | 281 | 284 | ||||||||||
Operating lease liability | (364 | ) | (347 | ) | ||||||||||||
Operating lease liabilities | (127 | ) | (120 | ) | ||||||||||||
Deferred revenues | (271 | ) | (571 | ) | (208 | ) | (153 | ) | ||||||||
Cash provided by operating activities | 1,233 | 525 | 628 | 1,135 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Payments received on notes receivable | 90 | 240 | 15 | 30 | ||||||||||||
Proceeds from sale of assets | 5 | — | ||||||||||||||
Purchase of intangible assets definite-lived | (123 | ) | (46 | ) | (5 | ) | (39 | ) | ||||||||
Purchase of property, plant and equipment | (52 | ) | (25 | ) | ||||||||||||
Cash (used in)/provided by investing activities | (80 | ) | 169 | |||||||||||||
Purchase of property and equipment | (22 | ) | (14 | ) | ||||||||||||
Cash used in investing activities | (12 | ) | (23 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Purchase of treasury stock | (4,979 | ) | — | — | (1,384 | ) | ||||||||||
Payment of convertible notes | — | (1,597 | ) | |||||||||||||
Payments on short term loan | (30 | ) | (190 | ) | — | (30 | ) | |||||||||
Cash used in financing activities | (5,009 | ) | (1,787 | ) | — | (1,414 | ) | |||||||||
Net decrease in cash and cash equivalents | (3,856 | ) | (1,093 | ) | ||||||||||||
Net increase/(decrease) in cash and cash equivalents | 616 | (302 | ) | |||||||||||||
Cash and cash equivalents, beginning of period | 7,723 | 8,330 | 5,328 | 7,723 | ||||||||||||
Cash and cash equivalents, end of period | $ | 3,867 | $ | 7,237 | $ | 5,944 | $ | 7,421 | ||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||||||||
CASH PAID FOR: | ||||||||||||||||
CASH (REFUNDED)/PAID FOR: | ||||||||||||||||
Income taxes | $ | 90 | $ | 8 | $ | (5 | ) | $ | 9 |
Three Months Ended | Three Months Ended | |||||||||||||||
March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||
Franchise royalties | $ | 1,295 | $ | 1,137 | $ | 1,225 | $ | 1,214 | ||||||||
Supplier and distributor incentive revenues | 1,045 | 1,056 | 1,100 | 1,070 | ||||||||||||
Franchise license fees | 39 | 36 | 101 | 30 | ||||||||||||
Area development exclusivity fees and foreign master license fees | 5 | 5 | 4 | 4 | ||||||||||||
Advertising funds contributions | 528 | 339 | 422 | 466 | ||||||||||||
Supplier convention funds | 187 | 172 | ||||||||||||||
Rental income | 47 | 47 | 46 | 47 | ||||||||||||
Other | 11 | — | 4 | 2 | ||||||||||||
$ | 2,970 | $ | 2,620 | $ | 3,089 | $ | 3,005 |
Nine Months Ended | ||||||||
March 26, 2023 | March 27, 2022 | |||||||
Franchise royalties | $ | 3,680 | $ | 3,315 | ||||
Supplier and distributor incentive revenues | 3,260 | 3,051 | ||||||
Franchise license fees | 109 | 106 | ||||||
Area development exclusivity fees and foreign master license fees | 13 | 14 | ||||||
Advertising funds contributions | 1,448 | 1,083 | ||||||
Supplier convention funds | 172 | 143 | ||||||
Rental income | 140 | 140 | ||||||
Other | 19 | 17 | ||||||
$ | 8,841 | $ | 7,869 |
Nine Months Ended | ||||
March 26, 2023 | ||||
Operating lease cost | $ | 371 | ||
Rental income | (140 | ) | ||
Total lease expense, net of sublease income | $ | 231 |
Three Months Ended | Three Months Ended | |||||||
September 24, 2023 | September 25, 2022 | |||||||
Operating lease cost | $ | 123 | $ | 124 | ||||
Sublease income | (47 | ) | (47 | ) | ||||
Total lease expense, net of sublease income | $ | 76 | $ | 77 |
September 24, 2023 | September 25, 2022 | |||||||
Weighted average remaining lease term | 1.8 Years | 2.8 Years | ||||||
Weighted average discount rate | 4.0 | % | 4.0 | % |
Operating Leases | Operating Leases | |||||||
2023 | $ | 141 | ||||||
2024 | 511 | $ | 370 | |||||
2025 | 433 | 433 | ||||||
2026 | 382 | 382 | ||||||
Thereafter | 191 | |||||||
2027 | 191 | |||||||
Total operating lease payments | $ | 1,658 | $ | 1,376 | ||||
Less: imputed interest | (111 | ) | (82 | ) | ||||
Total operating lease liability | $ | 1,547 | $ | 1,294 |
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 | 891,350 | $ | 1.20 | 3,552,399 | 4,463,601 | |||||||||||
August 1, 2022 - August 28, 2022 | 219,541 | 1.35 | 3,771,940 | 4,244,060 | ||||||||||||
August 29, 2022 - September 25, 2022 | 0 | 0 | 3,771,940 | 4,244,060 | ||||||||||||
September 26, 2022 - October 30, 2022 | 0 | 0 | 3,771,940 | 4,244,060 | ||||||||||||
October 31, 2022 - November 27, 2022 | 0 | 0 | 3,771,940 | 4,244,060 | ||||||||||||
November 28, 2022 - December 25, 2022 | 2,246,086 | 1.60 | 6,018,026 | 1,997,974 | ||||||||||||
December 26, 2022 - January 29, 2023 | 0 | 0 | 6,018,026 | 1,997,974 | ||||||||||||
January 30, 2023 - February 26, 2023 | 0 | 0 | 6,018,026 | 1,997,974 | ||||||||||||
February 27, 2023 - March 26, 2023 | 0 | 0 | 6,018,026 | 1,997,974 | ||||||||||||
Total | 3,356,977 | $ | 1.48 |
Nine Months Ended | Three Months Ended | |||||||||||||||
March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
Outstanding at beginning of year | 111,750 | 166,750 | 151,750 | 111,750 | ||||||||||||
Granted | 40,000 | — | — | 40,000 | ||||||||||||
Exercised | — | — | — | — | ||||||||||||
Forfeited/Canceled/Expired | — | — | (8,664 | ) | — | |||||||||||
Outstanding at end of period | 151,750 | 166,750 | 143,086 | 151,750 | ||||||||||||
Exercisable at end of period | 111,750 | 166,750 | 143,086 | 111,750 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
Net income available to common stockholders | $ | 323 | $ | 493 | $ | 978 | $ | 1,235 | ||||||||||||||||
Net income available to common shareholders | $ | 386 | $ | 307 | ||||||||||||||||||||
BASIC: | ||||||||||||||||||||||||
Weighted average common shares | 14,154 | 18,005 | 15,712 | 18,005 | 14,154 | 16,632 | ||||||||||||||||||
Net income per common share | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.07 | $ | 0.03 | $ | 0.02 | ||||||||||||
DILUTED: | ||||||||||||||||||||||||
Weighted average common shares | 14,154 | 18,005 | 15,712 | 18,005 | 14,154 | 16,632 | ||||||||||||||||||
Convertible notes | — | 447 | — | 681 | ||||||||||||||||||||
Dilutive RSU | 589 | — | ||||||||||||||||||||||
Dilutive stock options | — | — | — | — | 19 | — | ||||||||||||||||||
Weighted average common shares outstanding | 14,154 | 18,452 | 15,712 | 18,686 | 14,762 | 16,632 | ||||||||||||||||||
Net income per common share | $ | 0.02 | $ | 0.03 | $ | 0.06 | $ | 0.07 | $ | 0.03 | $ | 0.02 |
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
Net sales and operating revenues: | ||||||||||||||||||||||||
Pizza Inn Franchising | $ | 2,450 | $ | 2,091 | $ | 7,270 | $ | 6,279 | $ | 2,604 | $ | 2,469 | ||||||||||||
Pie Five Franchising | 473 | 482 | 1,431 | 1,450 | 438 | 488 | ||||||||||||||||||
Company-Owned Restaurants | — | — | — | — | ||||||||||||||||||||
Corporate administration and other | 47 | 47 | 140 | 140 | 47 | 48 | ||||||||||||||||||
Consolidated revenues | $ | 2,970 | $ | 2,620 | $ | 8,841 | $ | 7,869 | $ | 3,089 | $ | 3,005 | ||||||||||||
Depreciation and amortization: | ||||||||||||||||||||||||
Corporate administration and other | $ | 54 | $ | 46 | $ | 158 | $ | 138 | $ | 55 | $ | 51 | ||||||||||||
Depreciation and amortization | $ | 54 | $ | 46 | $ | 158 | $ | 138 | $ | 55 | $ | 51 | ||||||||||||
Income before taxes: | ||||||||||||||||||||||||
Pizza Inn Franchising | $ | 1,701 | $ | 1,648 | $ | 4,907 | $ | 4,506 | $ | 1,661 | $ | 1,511 | ||||||||||||
Pie Five Franchising | 258 | 220 | 761 | 748 | 209 | 244 | ||||||||||||||||||
Company-Owned Restaurants | — | (1 | ) | — | (3 | ) | ||||||||||||||||||
Combined | 1,959 | 1,867 | 5,668 | 5,251 | 1,870 | 1,755 | ||||||||||||||||||
Corporate administration and other | (1,521 | ) | (1,371 | ) | (4,343 | ) | (4,006 | ) | (1,352 | ) | (1,356 | ) | ||||||||||||
Income before taxes | $ | 438 | $ | 496 | $ | 1,325 | $ | 1,245 | $ | 518 | $ | 399 | ||||||||||||
Geographic information (revenues): | ||||||||||||||||||||||||
United States | $ | 2,910 | $ | 2,547 | $ | 8,638 | $ | 7,643 | $ | 3,036 | $ | 2,929 | ||||||||||||
Foreign countries | 60 | 73 | 203 | 226 | 53 | 76 | ||||||||||||||||||
Consolidated revenues | $ | 2,970 | $ | 2,620 | $ | 8,841 | $ | 7,869 | $ | 3,089 | $ | 3,005 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Pizza Inn | Pie Five | All Concepts | ||||||||||||||||||||||
Ending Units | Retail Sales | Ending Units | Retail Sales | Ending Units | Retail Sales | |||||||||||||||||||
Domestic Franchised/Licensed | 122 | $ | 25,689 | 30 | $ | 4,998 | 152 | $ | 30,687 | |||||||||||||||
International Franchised | 33 | — | 33 |
Pizza Inn | Pie Five | All Concepts | Pizza Inn | Pie Five | All Concepts | |||||||||||||||||||||||||||||||||||||||||||
Ending Units | Retail Sales | Ending Units | Retail Sales | Ending Units | Retail Sales | Ending Units | Retail Sales | Ending Units | Retail Sales | Ending Units | Retail Sales | |||||||||||||||||||||||||||||||||||||
Domestic Franchised/Licensed | 122 | $ | 73,301 | 30 | $ | 15,098 | 152 | $ | 88,399 | 111 | $ | 26,030 | 26 | $ | 4,767 | 137 | $ | 30,797 | ||||||||||||||||||||||||||||||
International Franchised | 33 | — | 33 | 22 | — | 22 |
● | “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. |
● | “ |
● | “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. |
● | “Restaurant operating cash flow” represents the pre-tax income earned by Company-owned restaurants before (1) allocated marketing and advertising expenses, (2) depreciation and amortization, (3) impairment and other lease charges, and (4) non-operating store costs. |
● | “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 | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
Net income | $ | 323 | $ | 493 | $ | 978 | $ | 1,235 | $ | 386 | $ | 307 | ||||||||||||
Interest expense | — | 14 | 1 | 61 | — | 1 | ||||||||||||||||||
Income taxes | 115 | 3 | 347 | 10 | 132 | 92 | ||||||||||||||||||
Depreciation and amortization | 54 | 46 | 158 | 138 | 55 | 51 | ||||||||||||||||||
EBITDA | $ | 492 | $ | 556 | $ | 1,484 | $ | 1,444 | $ | 573 | $ | 451 | ||||||||||||
Stock-based compensation expense | 86 | 42 | 259 | 127 | 79 | 86 | ||||||||||||||||||
Severance | — | — | — | 33 | ||||||||||||||||||||
Impairment of long-lived assets and other lease charges | — | — | 5 | — | — | 5 | ||||||||||||||||||
Franchisee default and closed store revenue | (10 | ) | (9 | ) | (23 | ) | (21 | ) | (64 | ) | — | |||||||||||||
Closed and non-operating store costs | — | 1 | — | 3 | ||||||||||||||||||||
Adjusted EBITDA | $ | 568 | $ | 590 | $ | 1,725 | $ | 1,586 | $ | 588 | $ | 542 |
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
Pizza Inn Retail Sales - Total Domestic Units | (in thousands, except unit data) | (in thousands, except unit data) | (in thousands, except unit data) | |||||||||||||||||||||
Domestic Units | ||||||||||||||||||||||||
Buffet Units - Franchised | $ | 24,303 | $ | 20,676 | $ | 68,967 | $ | 58,754 | $ | 25,011 | $ | 22,441 | ||||||||||||
Delco/Express Units - Franchised | 1,356 | 1,494 | 4,180 | 4,660 | 999 | 1,482 | ||||||||||||||||||
PIE Units - Licensed | 30 | 58 | 154 | 176 | 20 | 56 | ||||||||||||||||||
Total Domestic Retail Sales | $ | 25,689 | $ | 22,228 | $ | 73,301 | $ | 63,590 | $ | 26,030 | $ | 23,979 | ||||||||||||
Pizza Inn Comparable Store Retail Sales - Total Domestic | $ | 25,321 | $ | $ 21,906 | $ | 70,366 | $ | 62,705 | 24,596 | 23,028 | ||||||||||||||
Pizza Inn Average Units Open in Period | ||||||||||||||||||||||||
Domestic Units | ||||||||||||||||||||||||
Buffet Units - Franchised | 73 | 70 | 73 | 71 | 75 | 72 | ||||||||||||||||||
Delco/Express Units - Franchised | 43 | 49 | 44 | 51 | 37 | 47 | ||||||||||||||||||
PIE Units - Licensed | 8 | 9 | 9 | 10 | 4 | 9 | ||||||||||||||||||
Total Domestic Units | 124 | 128 | 126 | 132 | 116 | 128 |
Three Months Ended March 26, 2023 | ||||||||||||||||||||
Beginning Units | Opened | Concept Change | Closed | Ending Units | ||||||||||||||||
Domestic Units | ||||||||||||||||||||
Buffet Units - Franchised | 73 | — | — | — | 73 | |||||||||||||||
Delco/Express Units - Franchised | 44 | — | — | 3 | 41 | |||||||||||||||
PIE Units - Licensed | 8 | — | — | — | 8 | |||||||||||||||
Total Domestic Units | 125 | — | — | 3 | 122 | |||||||||||||||
International Units (all types) | 33 | — | — | — | 33 | |||||||||||||||
Total Units | 158 | — | — | 3 | 155 |
Nine Months Ended March 26, 2023 | Three Months Ended September 24, 2023 | |||||||||||||||||||||||||||||||||||||||
Beginning Units | Opened | Concept Change | Closed | Ending Units | Beginning Units | Opened | Concept Change | Closed | Ending Units | |||||||||||||||||||||||||||||||
Domestic Units | ||||||||||||||||||||||||||||||||||||||||
Domestic Units: | ||||||||||||||||||||||||||||||||||||||||
Buffet Units - Franchised | 72 | 1 | — | — | 73 | 77 | — | — | 3 | 74 | ||||||||||||||||||||||||||||||
Delco/Express Units - Franchised | 47 | — | — | 6 | 41 | 41 | — | — | 8 | 33 | ||||||||||||||||||||||||||||||
PIE Units - Licensed | 9 | — | — | 1 | 8 | 5 | — | — | 1 | 4 | ||||||||||||||||||||||||||||||
Total Domestic Units | 128 | 1 | — | 7 | 122 | 123 | — | — | 12 | 111 | ||||||||||||||||||||||||||||||
International Units (all types) | 31 | 2 | — | — | 33 | 34 | — | — | 12 | 22 | ||||||||||||||||||||||||||||||
Total Units | 159 | 3 | — | 7 | 155 | 157 | — | — | 24 | 133 |
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||
(in thousands, except unit data) | (in thousands, except unit data) | (in thousands, except unit data) | ||||||||||||||||||||||
Pie Five Retail Sales - Total Units | ||||||||||||||||||||||||
Domestic Units - Franchised | $ | $ 4,998 | $ | $ 4,870 | $ | $ 15,098 | $ | $ 14,907 | ||||||||||||||||
Domestic Units - Company-owned | — | — | — | — | ||||||||||||||||||||
Total Domestic Retail Sales | $ | $ 4,998 | $ | $ 4,870 | $ | $ 15,098 | $ | $ 14,907 | $ | 4,767 | $ | 5,243 | ||||||||||||
Pie Five Comparable Store Retail Sales - Total | $ | $ 4,756 | $ | $ 4,399 | $ | $ 14,399 | $ | $ 13,381 | $ | 4,717 | $ | 4,660 | ||||||||||||
Pie Five Average Units Open in Period | ||||||||||||||||||||||||
Domestic Units - Franchised | 31 | 34 | 31 | 33 | ||||||||||||||||||||
Domestic Units - Company-owned | — | — | — | — | ||||||||||||||||||||
Total Domestic Units | 31 | 34 | 31 | 33 | 27 | 31 |
Three Months Ended March 26, 2023 | ||||||||||||||||||||
Beginning Units | Opened | Transfer | Closed | Ending Units | ||||||||||||||||
Domestic - Franchised | 31 | — | — | 1 | 30 | |||||||||||||||
Domestic - Company-owned | — | — | — | — | — | |||||||||||||||
Total Domestic Units | 31 | — | — | 1 | 30 |
Nine Months Ended March 26, 2023 | ||||||||||||||||||||
Beginning Units | Opened | Transfer | Closed | Ending Units | ||||||||||||||||
Domestic - Franchised | 31 | — | — | 1 | 30 | |||||||||||||||
Domestic - Company-owned | — | — | — | — | — | |||||||||||||||
Total Domestic Units | 31 | — | — | 1 | 30 |
Three Months Ended September 24, 2023 | ||||||||||||||||||||
Beginning Units | Opened | Transfer | Closed | Ending Units | ||||||||||||||||
Total Domestic Units | 27 | — | — | 1 | 26 |
Pizza Inn Franchising | Pie Five Franchising | Company-Owned Restaurants | Corporate | Total | 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 | Fiscal Quarter Ended | Fiscal Quarter Ended | Fiscal Quarter Ended | Fiscal Quarter Ended | Fiscal Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | September 24, 2023 | September 25, 2022 | September 24, 2023 | September 25, 2022 | September 24, 2023 | September 25, 2022 | September 24, 2023 | September 25, 2022 | September 24, 2023 | September 25, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franchise and license revenues | $ | 2,450 | $ | 2,091 | $ | 462 | $ | 482 | $ | — | $ | — | $ | — | $ | — | $ | 2,912 | $ | 2,573 | $ | 2,604 | $ | 2,469 | $ | 435 | $ | 488 | $ | — | $ | — | $ | — | $ | — | $ | 3,039 | $ | 2,957 | ||||||||||||||||||||||||||||||||||||||||
Rental income | — | — | — | — | — | — | 47 | 47 | 47 | 47 | — | — | — | — | — | — | 47 | 47 | 47 | 47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income and other | — | — | 11 | — | — | — | — | — | 11 | — | — | — | 3 | — | — | — | — | 1 | 3 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 2,450 | 2,091 | 473 | 482 | — | — | 47 | 47 | 2,970 | 2,620 | 2,604 | 2,469 | 438 | 488 | — | — | 47 | 48 | 3,089 | 3,005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | — | — | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | — | — | — | — | — | — | 1,486 | 1,357 | 1,486 | 1,357 | — | — | — | — | — | — | 1,319 | 1,343 | 1,319 | 1,343 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Franchise expenses | 749 | 443 | 215 | 262 | — | — | — | — | 964 | 705 | 943 | 958 | 229 | 244 | — | — | — | — | 1,172 | 1,202 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of long-lived assets and other lease charges | — | — | — | — | — | — | — | 5 | — | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bad debt expense | — | — | — | — | — | — | 28 | 1 | 28 | 1 | — | — | — | — | — | — | 25 | 4 | 25 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | — | — | — | — | — | — | — | 14 | — | 14 | — | — | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization expense | — | — | — | — | — | — | 54 | 46 | 54 | 46 | — | — | — | — | — | — | 55 | 51 | 55 | 51 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 749 | 443 | 215 | 262 | — | 1 | 1,568 | 1,418 | 2,532 | 2,124 | 943 | 958 | 229 | 244 | — | — | 1,399 | 1,404 | 2,571 | 2,606 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME/(LOSS) BEFORE TAXES | $ | 1,701 | $ | 1,648 | $ | 258 | $ | 220 | $ | — | $ | (1 | ) | $ | (1,521 | ) | $ | (1,371 | ) | $ | 438 | $ | 496 | $ | 1,661 | $ | 1,511 | $ | 209 | $ | 244 | $ | — | $ | — | $ | (1,352 | ) | $ | (1,356 | ) | $ | 518 | $ | 399 |
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 | ||||||||||||||||||||||||||||||||||||
March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | March 26, 2023 | March 27, 2022 | |||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||||||||||||
Franchise and license revenues | $ | 7,270 | $ | 6,279 | $ | 1,412 | $ | 1,433 | $ | — | $ | — | $ | — | $ | — | $ | 8,682 | $ | 7,712 | ||||||||||||||||||||
Rental Income | — | — | — | — | — | — | 140 | 140 | 140 | 140 | ||||||||||||||||||||||||||||||
Interest income and other | — | — | 19 | 17 | — | — | — | — | 19 | 17 | ||||||||||||||||||||||||||||||
Total revenues | 7,270 | 6,279 | 1,431 | 1,450 | — | — | 140 | 140 | 8,841 | 7,869 | ||||||||||||||||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||||||||||||||||
Cost of sales | — | — | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||
General and administrative expenses | — | — | — | — | — | 2 | 4,282 | 3,938 | 4,282 | 3,940 | ||||||||||||||||||||||||||||||
Franchise expenses | 2,363 | 1,773 | 670 | 702 | — | — | — | — | 3,033 | 2,475 | ||||||||||||||||||||||||||||||
Impairment of long-lived assets and other lease charges | — | — | — | — | — | — | 5 | — | 5 | — | ||||||||||||||||||||||||||||||
Bad debt expense | — | — | — | — | — | — | 37 | 9 | 37 | 9 | ||||||||||||||||||||||||||||||
Interest expense | — | — | — | — | — | — | 1 | 61 | 1 | 61 | ||||||||||||||||||||||||||||||
Depreciation and amortization expense | — | — | — | — | — | — | 158 | 138 | 158 | 138 | ||||||||||||||||||||||||||||||
Total costs and expenses | 2,363 | 1,773 | 670 | 702 | — | 3 | 4,483 | 4,146 | 7,516 | 6,624 | ||||||||||||||||||||||||||||||
INCOME/(LOSS) BEFORE TAXES | $ | 4,907 | $ | 4,506 | $ | 761 | $ | 748 | $ | — | $ | (3 | ) | $ | (4,343 | ) | $ | (4,006 | ) | $ | 1,325 | $ | 1,245 |
1. | The financial statements filed as part of this report are listed in the Index to Consolidated Financial Statements and Supplementary Data appearing on page F-1 of this report on Form 10-K. |
2. | Any financial statement schedule filed as part of this report is listed in the Index to Consolidated Financial Statements and Supplementary Data appearing on page F-1 of this report on Form 10-K. |
3. | Exhibits: |
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). | |
Description of Registrant’s Securities. (filed as Exhibit 4.4 to Form 10-K for the fiscal year ended June 27, 2021 and incorporated herein by reference). | |
2015 Long Term Incentive Plan of the Company (filed as Exhibit 10.1 to Form 8-K filed November 20, 2014 and incorporated herein by reference).* | |
Form of Stock Option Grant Agreement under the Company’s 2015 Long Term Incentive Plan (filed as Exhibit 10.2 to Form 8-K filed November 20, 2014 and incorporated herein by reference).* | |
Form of Restricted Stock Unit Award Agreement under the Company’s 2015 Long-Term Incentive Plan (filed as Exhibit 10.1 to Form 10-Q for the fiscal quarter ended December 27, 2015 and incorporated herein by reference).* | |
Lease Agreement dated November 1, 2016, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.4 to Form 10-K for the year ended June 30, 2019 and incorporated herein by reference).* | |
First Amendment to Lease and Expansion dated July 1, 2017, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.5 to Form 10-K for the year ended June 30, 2019 and incorporated herein by reference).* | |
Second Amendment to Lease Agreement effective June 1, 2020, between A&H Properties Partnership and Rave Restaurant Group, Inc. (filed as Exhibit 10.6 to Form 10-K for the fiscal year ended June 27, 2021 and incorporated herein by reference). | |
Letter agreement dated October 18, 2019, between Rave Restaurant Group, Inc. and Brandon Solano (filed as Exhibit 10.1 to Form 8-K filed October 21, 2019 and incorporated herein by reference).* | |
Letter agreement dated November 4, 2019, between Rave Restaurant Group, Inc. and Mike Burns (filed as Exhibit 10.1 to Form 8-K filed November 15, 2019 and incorporated herein by reference).* | |
Letter agreement dated June 16, 2021, between Rave Restaurant Group, Inc. and Clinton Fendley (filed as Exhibit 10.1 to Form 8-K filed June 17, 2021 and incorporated herein by reference).* | |
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: |