What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-05-08 · 182 added, 323 removed, 457 unchanged (52% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

$ 2,966 $ 2,962 $ 8,885 $ 8,795

September 28,

September 29,

COSTS AND EXPENSES

General and administrative expenses

1,302 1,272 4,032 3,932

Franchise expenses

768 812 2,592 2,828

Provision (recovery) for credit losses

( 14 ) 11 ( 22 ) 46

Interest income

( 84 ) ( 45 ) ( 253 ) ( 93 )

Depreciation and amortization expense

44 58 140 170

Total costs and expenses

2,016 2,108 6,489 6,883

OPERATING INCOME

Interest income

INCOME BEFORE TAXES

950 854 2,396 1,912

Income tax expense

228 200 541 319

$ 722 $ 654 $ 1,855 $ 1,593

INCOME PER SHARE OF COMMON STOCK

$ 0.05 $ 0.04 $ 0.13 $ 0.11

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

14,508 14,587 14,595 14,395

14,532 14,737 14,618 14,546

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except share amounts)

September 28,

CURRENT ASSETS

Cash and cash equivalents

$ 734 $ 2,886

Short-term investments

12 unchanged sentences

Deferred contract charges, net of current portion

$ 15,711 $ 15,819

LIABILITIES AND SHAREHOLDERS’ EQUITY

9 unchanged sentences

Total liabilities

COMMITMENTS AND CONTINGENCIES (SEE NOTE D)

COMMITMENTS AND CONTINGENCIES (SEE NOTE C)

SHAREHOLDERS’ EQUITY

2 unchanged sentences

issued 25,647,171 and 25,647,171 shares, respectively;

outstanding 14,211,566 and

14,586,566 shares, respectively

outstanding 14,211,566 and 14,211,566 shares, respectively

Additional paid-in capital

37,558 37,563

Retained earnings

2 unchanged sentences

11,435,605 and 11,435,605 respectively

( 31,233 ) ( 30,028 )

Total shareholders' equity

13,348 12,702

Total liabilities and shareholders' equity

$ 15,711 $ 15,819

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Paid-in Retained

Treasury Stock

1 unchanged sentence

Stock-based compensation expense

— — 79 — — — 79

— — — 386 — — 386

Balance, September 29, 2024

Stock-based compensation expense

— — 3 — — — 3

RSU vested and taxes paid on RSUs

432 4 ( 315 ) — — — ( 311 )

— — — 553 — — 553

Balance, December 24, 2023

Stock-based compensation expense

— — 45 — — — 45

— — — 654 — — 654

Balance, March 24, 2024

Treasury Stock

2 unchanged sentences

Balance, September 28, 2025

Stock-based compensation expense

RSU vested and taxes paid on RSUs

Balance, December 29, 2024

Stock-based compensation expense

Purchase of treasury stock

Balance, March 30, 2025

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

September 28,

September 29,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ 1,855 $ 1,593

Adjustments to reconcile net income to cash provided by operating activities:

Amortization of discount on short-term investment

Impairment of long-lived assets and other lease charges

Stock-based compensation expense

8 unchanged sentences

Notes receivable

( 18 ) ( 30 )

Deferred contract charges

Prepaid expenses and other current assets

( 49 ) ( 227 )

Accounts payable - trade

Accrued expenses

( 315 ) ( 217 )

Operating lease liabilities

( 333 ) ( 356 )

Deferred revenues

( 215 ) ( 267 )

Cash provided by operating activities

2 unchanged sentences

Maturities of short-term investments

Payments received on notes receivable

Proceeds from sale of assets

Purchase of definite-lived intangible assets

Purchase of assets held for sale

Proceeds from sale of assets held for sale

Purchase of property and equipment

( 44 ) ( 68 )

Cash used in investing activities

( 2,933 ) ( 30 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Purchase of treasury stock

Taxes paid on issuance of restricted stock units

( 182 ) ( 311 )

Cash used in financing activities

( 1,387 ) ( 311 )

Net increase (decrease) in cash and cash equivalents

( 2,152 ) 990

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$ 734 $ 6,318

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:

NON-CASH ACTIVITIES:

Operating lease right of use assets at purchase

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

24 unchanged sentences

Treasury bills as short-term, regardless of their maturity dates, as these are readily available to fund current operations and can be liquidated at any time at the discretion of the Company.

As of March 30, 2025 and June 30, 2024, the Company held U.S.

As of September 28, 2025 and June 29, 2025, the Company held U.S.

Treasury bills valued at approximately $ 9.2 million and $ 7.0 million, respectively, which are included within short-term investments on the accompanying Condensed Consolidated Balance Sheets.

Interest income is reflected in the accompanying Condensed Consolidated Statements of Income and Cash Flows.

For the three months ended September 28, 2025 and September 29, 2024, interest income recognized on the treasury bills was $ 86 thousand and $ 76 thousand, respectively.

Fair Value Measurements

5 unchanged sentences

The fair value of the Company’s investments in U.S.

Treasury bills at March 30, 2025 and June 30, 2024, was determined using Level 1 observable inputs.

Management believes the carrying amounts of other financial instruments at March 30, 2025 and June 30, 2024, including accounts receivable, accounts payable, and accrued expenses are representative of their fair values due to their short-term maturities.

Treasury bills at September 28, 2025 and September 29, 2024, was determined using Level 1 observable inputs.

The following table summarizes the Company’s financial assets and financial liabilities measured at fair value (in thousands):

March 30, 2025

September 28, 2025

June 29, 2025

1 unchanged sentence

Treasury bills

$ 7,987 $ — $ — $ 7,987 $ 4,945 $ — $ — $ 4,945

The Company has no financial assets or liabilities classified within Level 3 of the valuation hierarchy.

8 unchanged sentences

The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable.

For the three month period ended March 30, 2025, recoveries for credit losses were $ 14 thousand compared to provision for credit losses of $ 10 thousand for the same period in the prior fiscal year.

For the nine month period ended March 30, 2025, recoveries for credit losses were $ 22 thousand compared to provision for credit losses of $ 46 thousand for the same period in the prior fiscal year.

Changes in the allowance for credit losses from continuing operations consisted of the following (in thousands):

For the three month period ended September 28, 2025, provision for credit losses were $ 4 thousand compared to recoveries for credit losses of $ 17 thousand for the same period in the prior fiscal year.

Changes in the allowance for credit losses consisted of the following (in thousands):

Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Balance at beginning of year

$ 42 $ 22 $ 57 $ 58

Provision (recovery) for credit losses

( 14 ) 10 ( 22 ) 46

Amounts recovered (written off)

2 1 ( 5 ) ( 71 )

Amounts written off

Ending balance

$ 30 $ 33 $ 30 $ 33

Fiscal Quarters

The three and nine month periods ended March 30, 2025 and March 24, 2024 each contained 13 weeks and 39 weeks, respectively.

The three month periods ended September 28, 2025 and September 29, 2024 each contained 13 weeks.

Use of Management Estimates

3 unchanged sentences

Actual results could differ materially from estimates.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “standard”) 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures (Topic 280).

The Company will adopt this standard, which requires companies to enhance disclosure of significant reportable segment expenses.

The new guidance is effective for the Company's fiscal year beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

Management believes that upon adoption, this standard will not have a material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard.

In December 2023, FASB issued ASU 2023-09, Income Taxes:

Recently Adopted Accounting Guidance

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “standard”) 2023-09, Income Taxes:

Improvements to Income Tax Disclosures (Topic 740), which requires companies to provide a more granular breakdown of the components that make up their effective tax rate and additional disclosures about the nature and effect of significant reconciling items.

The new guidance is effective for the Company's fiscal year beginning after December 15, 2024.

Management believes that adopting this standard will not have a material impact on the Company's consolidated financial statements and related disclosures as a result of adopting this standard.

The Company adopted this standard on June 30, 2025, and the adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires, for each relevant expense caption on the income statement, detailed disclosure amounts for purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

In addition, this ASU requires companies to include amounts already required by GAAP in the same disclosure, provide a qualitative description of remaining amounts not separately disaggregated, and disclose the amount of total selling expenses along with the companies’ definition of selling expenses.

The amendment is effective for fiscal years beginning after December 15, 2026, which would require us to adopt the provisions in our fiscal 2028 Form 10-K.

Early adoption is permitted.

The amendments should be applied prospectively;

however, retrospective application is permitted.

Management is currently evaluating this ASU to determine its impact on our disclosures.

Revenue Recognition

27 unchanged sentences

Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Franchise royalties

$ 1,156 $ 1,166 $ 3,420 $ 3,563

Supplier and distributor incentive revenues

1,230 1,191 3,578 3,341

Franchise license fees

52 93 116 245

Area development exclusivity fees and foreign master license fees

Advertising fund contributions

514 450 1,480 1,297

Supplier convention funds

Rental income

$ 2,966 $ 2,962 $ 8,885 $ 8,795

Other franchise revenue

The following table reflects the changes in deferred franchise and development fees for the three months ended on September 28, 2025 and September 29, 2024 (in thousands):

September 28,

September 29,

Beginning balance

Amount recognized to franchise revenues

Ending balance

The following table illustrates franchise and development fees expected to be recognized in the future related to performance obligations that were unsatisfied or partially satisfied as of September 28, 2025 (in thousands):

Franchise and

Development Fees

Revenue Recognition

Stock-Based Compensation

48 unchanged sentences

To the extent that there are variable lease payments, we recognize those payments in our income statements in the period in which the obligation for those payments is incurred.

The components of total lease expense for the three and nine months ended March 30, 2025 and March 24, 2024, where operating lease cost is included in general and administrative expense and sublease income is included in revenues in the accompanying Condensed Consolidated Statements of Income, are as follows (in thousands):

The components of total lease expense for the three months ended September 28, 2025 and September 29, 2024, where operating lease cost is included in general and administrative expense and sublease income is included in revenues in the accompanying Condensed Consolidated Statements of Income, are as follows (in thousands):

Three Months Ended

Nine Months Ended

March 30, 2025

March 24, 2024

March 30, 2025

March 24, 2024

September 28, 2025

September 29, 2024

Operating lease cost

$ 88 $ 104 $ 295 $ 344

Sublease income

( 7 ) ( 23 ) ( 53 ) ( 108 )

Total lease expense, net of sublease income

$ 81 $ 81 $ 242 $ 236

Weighted average remaining lease term and weighted average discount rate for operating leases are as follows:

March 30, 2025

June 30, 2024

September 28, 2025 September 29, 2024

Weighted average remaining lease term

1.9 Years 1.5 Years

Weighted average discount rate

5 unchanged sentences

Fiscal Year 2029

Total operating lease payments

1 unchanged sentence

Total operating lease liability

Note C - Stock Purchase Plan

On May 23, 2007, the Company’s board of directors approved a stock purchase plan (the “2007 Stock Purchase Plan”) authorizing the purchase on our behalf of up to 1,016,000 shares of our common stock in the open market or in privately negotiated transactions.

On June 2, 2008, the Company’s board of directors amended the 2007 Stock Purchase Plan to increase the number of shares of common stock the Company may repurchase by 1,000,000 shares to a total of 2,016,000 shares.

On April 22, 2009, the Company’s board of directors amended the 2007 Stock Purchase Plan again to increase the number of shares of common stock the Company may repurchase by 1,000,000 shares to a total of 3,016,000 shares.

On June 28, 2022, the Company’s board of directors amended the 2007 Stock Purchase Plan again to increase the number of shares of common stock the Company may repurchase by 5,000,000 shares to a total of 8,016,000 shares.

The 2007 Stock Purchase Plan does not have an expiration date.

The following table furnishes information for purchases made pursuant to the 2007 Stock Purchase Plan during fiscal 2025:

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

February 3, 2025 - March 2, 2025

500,000 $ 2.40 6,518,026 1,497,974

500,000 $ 2.40

The Company’s ability to purchase shares of our common stock is subject to various laws, regulations, and policies as well as the rules and regulations of the Securities and Exchange Commission (the “SEC”).

The Company may also purchase shares of our common stock other than pursuant to the 2007 Stock Purchase Plan or other publicly announced plans or programs.

On February 24, 2025, the Company repurchased 500,000 shares at $ 2.40 per share in a negotiated transaction.

Note D - Commitments and Contingencies

Note C - Commitments and Contingencies

The Company is subject to various claims and contingencies related to employment agreements, franchise disputes, lawsuits, taxes, food product purchase contracts and other matters arising out of the normal course of business.

Management believes that any such claims and actions currently pending are either covered by insurance or would not have a material adverse effect on the Company’s results of operations or financial condition if decided in a manner that is unfavorable to the Company.

Note E - Stock-Based Compensation

Note D - Stock-Based Compensation

Stock Options:

For the three and nine months ended March 30, 2025 and March 24, 2024, the Company recognized stock-based compensation expense related to stock options of zero .

As of March 30, 2025, there was no unamortized stock-based compensation expense related to stock options.

For the three months ended September 28, 2025 and September 29, 2024, the Company recognized stock-based compensation expense related to stock options of zero .

As of September 28, 2025, there was no unamortized stock-based compensation expense related to stock options.

The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options:

Nine Months Ended

March 30, 2025

March 24, 2024

Three Months Ended

September 28,

September 29,

Outstanding at beginning of year

114,286 151,750

Forfeited/Canceled/Expired

Outstanding at end of period

114,286 143,086

Exercisable at end of period

114,286 143,086

Restricted Stock Units:

For the three and nine months ended March 30, 2025, the Company had stock-based compensation expense related to RSUs of $ 52 thousand and $ 178 thousand, respectively.

For the three and nine months ended March 24, 2024, the Company had stock-based compensation expense related to RSUs of $ 45 thousand and $ 127 thousand, respectively.

As of March 30, 2025, there was $ 440 thousand unamortized stock-based compensation expense related to RSUs.

As of March 30, 2025 the RSUs will be amortized during the next 31 months.

A summary of the status of restricted stock units as of March 30, 2025 and March 24, 2024, and changes during the nine months then ended is presented below:

Nine Months Ended

March 30, 2025

March 24, 2024

For the three months ended September 28, 2025 and September 29, 2024, the Company had stock-based compensation expense related to RSUs of $ 38 thousand and $ 73 thousand, respectively.

As of September 28, 2025, there was $ 276 thousand unamortized stock-based compensation expense related to RSUs.

As of September 28, 2025, the RSUs will be amortized during the next 25 months.

A summary of the status of RSUs as of September 28, 2025 and September 29, 2024, and changes during the three months then ended is presented below:

Three Months Ended

September 28,

September 29,

Unvested at beginning of year

1 unchanged sentence

Unvested at end of period

Note F - Earnings per Share (EPS)

Note E - Earnings per Share (EPS)

The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts):

Three Months Ended

Nine Months Ended

March 30, 2025

March 24, 2024

March 30, 2025

March 24, 2024

September 28, 2025

September 29, 2024

Net income available to common shareholders

$ 722 $ 654 $ 1,855 $ 1,593

Weighted average common shares

14,508 14,587 14,595 14,395

Net income per common share

$ 0.05 $ 0.04 $ 0.13 $ 0.11

Weighted average common shares

14,508 14,587 14,595 14,395

Dilutive stock options and restricted stock units

24 150 23 151

Weighted average common shares outstanding

14,532 14,737 14,618 14,546

Net income per common share

$ 0.05 $ 0.04 $ 0.13 $ 0.11

For the three and nine months ended March 30, 2025, exercisable options to purchase 74,286 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and nine months ended March 30, 2025, 247,328 and 247,328 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

For the three and nine months ended March 24, 2024, exercisable options to purchase 103,086 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three and nine months ended March 24, 2024, 65,625 and 156,250 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end, respectively.

Note G - Income Taxes

For the three months ended September 28, 2025, exercisable options to purchase 50,000 shares of common stock at exercise price $ 3.95 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three months ended September 28, 2025, 142,328 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end.

For the three months ended September 29, 2024, exercisable options to purchase 71,886 shares of common stock at exercise prices from $ 3.95 to $ 13.11 were excluded from the computation of diluted EPS because they had an intrinsic value of zero .

For the three months ended September 29, 2024, 105,000 RSUs were excluded from the computation of diluted EPS because performance criteria is not probable at period end.

Note F - Income Taxes

Total income tax expense consists of the following (in thousands):

Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Federal tax expense

3 unchanged sentences

In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets.

Note H - Segment Reporting

Note G - Segment Reporting

The Company has three reportable operating segments as determined by management using the “management approach” as defined by ASC 280 Disclosures about Segments of an Enterprise and Related Information:

2 unchanged sentences

Corporate administration costs, which include, but are not limited to, general accounting, human resources, legal and credit and collections, are partially allocated to the three operating segments.

The Company's chief operating decision maker (“CODM”) is the chief executive officer, who assesses segment performance primarily based on operating revenues and income before taxes to inform decisions regarding resource allocation.

In addition, the CODM uses segment income to evaluate investment opportunities and strategic priorities across the Company's brands.

The Pizza Inn and Pie Five Franchising segments establish franchisees, licensees and territorial rights.

3 unchanged sentences

All assets are located within the United States.

Summarized in the following tables are net operating revenues, depreciation and amortization expense, and income before taxes for the Company’s reportable segments as of the three and nine months ended March 30, 2025 and March 24, 2024 (in thousands):

Three Months Ended

Nine Months Ended

March 30, 2025

March 24, 2024

March 30, 2025

March 24, 2024

Net sales and operating revenues:

Pizza Inn Franchising

Pie Five Franchising

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

Corporate administration and other

Income before taxes

Geographic information (revenues):

United States

Foreign countries

Consolidated revenues

Summarized in the following tables are revenues, expenses, operating income, and income before taxes for the Company’s reportable segments as of the three months ended September 28, 2025 and September 29, 2024 (in thousands):

Fiscal Quarter Ended

September 28,

September 29,

September 28,

September 29,

September 28,

September 29,

September 28,

September 29,

Franchise royalties

Supplier and distributor incentive revenues

Franchise license fees

Area development exclusivity fees and foreign master license fees

Advertising fund contributions

Supplier convention funds

Rental income

Other franchise revenue

Total revenues

COSTS AND EXPENSES:

General and administrative expenses

Franchise expenses

Provision (recovery) for credit losses

Depreciation and amortization expense

Total costs and expenses

OPERATING INCOME

Interest income

Total other income

INCOME/(LOSS) BEFORE TAXES

Income tax expense

NET INCOME/(LOSS)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended June 30, 2024, together with our Quarterly Reports on Form 10-Q for the periods ended September 29, and December 29, 2024, may contain certain forward-looking statements that are based on current management expectations.

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended June 29, 2025 and may contain certain forward-looking statements that are based on current management expectations.

Generally, verbs in the future tense and the words “believe,” “expect,” “anticipate,” “estimate,” “intends,” “opinion,” “potential” and similar expressions identify forward-looking statements.

1 unchanged sentence

Our actual results could differ materially from our expectations.

Further information concerning our business, including additional factors that could cause actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q, are set forth in our Annual Report on Form 10-K for the year ended June 30, 2024, as well as our Quarterly Reports on Form 10-Q for the periods ended September 29, and December 29, 2024.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

4 unchanged sentences

We facilitate food, equipment and supply distribution to our domestic and international system of restaurants through agreements with third-party distributors.

At March 30, 2025, franchised and licensed units consisted of the following:

Three Months Ended March 30, 2025

(in thousands, except unit data)

Domestic Franchised/Licensed

International Franchised

Nine Months Ended March 30, 2025

At September 28, 2025, franchised and licensed units consisted of the following:

Three Months Ended September 28, 2025

(in thousands, except unit data)

2 unchanged sentences

The domestic units were located in 15 states predominantly situated in the southern half of the United States.

The international units were located in seven foreign countries.

The international units were located in six foreign countries.

Non-GAAP Financial Measures and Other Terms

17 unchanged sentences

EBITDA and Adjusted EBITDA

Adjusted EBITDA for the fiscal quarter ended March 30, 2025 increased $0.1 million compared to the same period of the prior fiscal year.

Year-to-date Adjusted EBITDA increased $0.5 million compared to the same period of the prior fiscal year.

Adjusted EBITDA for the fiscal quarter ended September 28, 2025 increased $0.1 million compared to the same period of the prior fiscal year.

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown (in thousands):

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Interest income

6 unchanged sentences

Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Pizza Inn Retail Sales - Total Domestic Units

(in thousands, except unit data)

Buffet Units - Franchised

10 unchanged sentences

Total Domestic Units

Pizza Inn total domestic retail sales increased by $0.6 million, or 2.3%, for the three months ended March 30, 2025 when compared to the same period of the prior year.

Compared to the same fiscal quarter of the prior year, average Buffet Units open in the period remained stable.

Comparable store retail sales increased by $0.6 million, or 2.5%, for the three month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

Pizza Inn total domestic retail sales increased by $0.2 million, or 0.3%, for the nine months ended March 30, 2025 when compared to the same period of the prior year.

Compared to the same fiscal period of the prior year, average Buffet Units open in the period increased from 77 to 78.

Comparable store retail sales increased by $0.3 million, or 0.4%, for the nine month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

For the nine months ended March 30, 2025, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet Units, supplemented by an increase in comparable domestic store retail sales.

The following chart summarizes Pizza Inn restaurant activity for the three and nine months ended March 30, 2025:

Three Months Ended March 30, 2025

Buffet Units - Franchised

Delco/Express Units - Franchised

PIE Units - Licensed

Pizza Inn Ghost Kitchen Units - Franchised

Total Domestic Units

International Units (all types)

Nine Months Ended March 30, 2025

Pizza Inn total domestic retail sales increased by $2.6 million, or 10.2%, for the three months ended September 28, 2025 when compared to the same period of the prior fiscal year.

Compared to the same fiscal quarter of the prior year, average Buffet Units open in the period increased from 78 to 79.

Comparable store retail sales increased by $2.0 million, or 8.1%, for the three month period ended September 28, 2025 as compared to the same period of the prior fiscal year.

For the three months ended September 28, 2025, the increase in domestic retail sales were primarily the result of the increase in the average number of Buffet Units, supplemented by an increase in comparable domestic store retail sales.

The following chart summarizes Pizza Inn restaurant activity for the three months ended September 28, 2025:

Three Months Ended September 28, 2025

Buffet Units - Franchised

4 unchanged sentences

International Units (all types)

There was a net decrease of four and seven units in the total domestic Pizza Inn unit count during the three and nine months ended March 30, 2025, respectively.

There were two and five units transferred between franchisees in the total domestic Pizza Inn unit count during the three and nine months ended March 30, 2025, respectively.

For the three and nine months ended March 30, 2025, the number of international Pizza Inn units decreased by seven and four net units, respectively.

There were zero transfers in the total international Pizza Inn unit count during the three and nine months ended March 30, 2025.

The total domestic Pizza Inn units remained stable during the three months ended September 28, 2025.

There were two units transferred between franchisees in the total domestic Pizza Inn unit count during the three months ended September 28, 2025.

For the three months ended September 28, 2025, the number of international Pizza Inn units decreased by two units.

There were zero transfers in the total international Pizza Inn unit count during the three months ended September 28, 2025.

The Company believes the number of both domestic and international Pizza Inn units will increase modestly in future periods.

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 28,

September 29,

Pie Five Retail Sales - Total Units

(in thousands, except unit data)

Pie Five Units - Franchised

6 unchanged sentences

Total Domestic Units

Pie Five total domestic retail sales decreased by $1.1 million, or 28.2%, for the three months ended March 30, 2025 when compared to the same period of the prior year.

Pie Five total domestic retail sales decreased by $0.6 million, or 18.7%, for the three months ended September 28, 2025 when compared to the same period of the prior fiscal year.

Compared to the same fiscal quarter of the prior year, average units open in the period decreased from 20 to 17.

Comparable store retail sales decreased by $0.2 million, or 5.6%, for the three month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

For the three months ended March 30, 2025, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

Pie Five total domestic retail sales decreased by $4.5 million, or 34.6%, for the nine months ended March 30, 2025 when compared to the same period of the prior year.

Compared to the same fiscal period of the prior year, average units open in the period decreased from 26 to 20.

Comparable store retail sales decreased by $0.8 million, or 8.6%, for the nine month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

For the nine months ended March 30, 2025, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

The following chart summarizes Pie Five restaurant activity for the three and nine months ended March 30, 2025:

Three Months Ended March 30, 2025

Pie Five Units - Franchised

Pie Five Ghost Kitchen Units - Franchised

Total Domestic Units

Nine Months Ended March 30, 2025

Comparable store retail sales decreased by $0.2 million, or 9.1%, for the three month period ended September 28, 2025 as compared to the same period of the prior fiscal year.

For the three months ended September 28, 2025, the decrease in domestic retail sales were primarily the result of the decrease in average store count, supplemented by a decrease in comparable store retail sales.

The following chart summarizes Pie Five restaurant activity for the three months ended September 28, 2025:

Three Months Ended September 28, 2025

Pie Five Units - Franchised

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Total Domestic Units

There was a net decrease of one unit in the total domestic Pie Five unit count during the three and nine months ended March 30, 2025.

There was one unit transferred in the total domestic Pie Five unit count during the three and nine months ended March 30, 2025.

The total domestic Pie Five units remained stable during the three months ended September 28, 2025.

We believe that Pie Five units will decrease modestly in future periods.

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In addition to Corporate overhead support, the Company defines its operating segments as Pizza Inn Franchising and Pie Five Franchising.

The following is additional business segment information for the three and nine months ended March 30, 2025 and March 24, 2024 (in thousands):

Three Months Ended March 30, 2025 and March 24, 2024

The following is additional business segment information for the three months ended September 28, 2025 and September 29, 2024 (in thousands):

Fiscal Quarter Ended

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Fiscal Quarter Ended

September 28,

September 29,

September 28,

September 29,

September 28,

September 29,

September 28,

September 29,

Franchise and license revenues

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Provision (recovery) for credit losses

Interest income

Depreciation and amortization expense

Total costs and expenses

INCOME/(LOSS) BEFORE TAXES

Nine Months Ended March 30, 2025 and March 24, 2024

Fiscal Year-to-Date

Franchise and license revenues

Rental income

Total revenues

COSTS AND EXPENSES:

General and administrative expenses

Franchise expenses

Provision (recovery) for credit losses

OPERATING INCOME

Interest income

Depreciation and amortization expense

Total costs and expenses

Total other income

INCOME/(LOSS) BEFORE TAXES

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The volume of supplier and distributor incentive revenues is dependent on the level of total retail sales, which are impacted by changes in comparable store sales and restaurant count, as well as the products sold to franchisees through third-party food distributors.

Total revenues for the three month period ended March 30, 2025 and for the same period in the prior fiscal year were $3.0 million and $3.0 million, respectively.

Total revenues for the nine month period ended March 30, 2025 and for the same period in the prior fiscal year were $8.9 million and $8.8 million, respectively.

Total revenues for the three month period ended September 28, 2025 and for the same period in the prior fiscal year were $3.2 million and $3.1 million, respectively.

Pizza Inn Franchise and License

Pizza Inn franchise revenues increased by $0.2 million to $2.7 million for the three month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

The 6.5% increase was driven by increases in supplier and distributor incentives.

Pizza Inn franchise revenues increased by $0.5 million to $7.9 million for the nine month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

The 7.4% increase was driven by increases in supplier and distributor incentives.

Pizza Inn franchise revenues increased by $0.3 million to $3.0 million for the three month period ended September 28, 2025 as compared to the same period in the prior fiscal year.

The 9.4% increase was driven by increases in supplier and distributor incentives and domestic royalties mainly due to an increase in system-wide sales.

Pie Five Franchise and License

Pie Five franchise revenues decreased by $0.1 million to $0.3 million for the three month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

The 32.6% decrease was driven by decreases in domestic royalties as a result of lower retail sales primarily driven by net decreases in domestic units.

Pie Five franchise revenues decreased by $0.4 million to $0.9 million for the nine month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

The 30.8% decrease was driven by decreases in domestic royalties.

Pie Five franchise revenues decreased by $0.1 million to $0.2 million for the three month period ended September 28, 2025 as compared to the same period in the prior fiscal year.

The 22.2% decrease was driven by decreases in domestic royalties and supplier and distributor incentives from lower system-wide sales mainly due to unit closures.

Costs and Expenses:

General and Administrative Expenses

Total general and administrative expenses remained relatively stable at $1.3 million for the three month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

The 2.4% increase was driven by increases in salaries, offset by decreases in legal fees.

Total general and administrative expenses increased by $0.1 million to $4.0 million for the nine month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

The 2.5% increase was driven by increases in salaries, offset by decreases in legal fees.

Total general and administrative expenses remained relatively stable at $1.4 million for the three month period ended September 28, 2025 as compared to the same period of the prior fiscal year.

The 3.0% decrease was driven by decreases in legal fees, offset by increases in salaries.

Franchise Expenses

Franchise expenses include general and administrative expenses directly related to the sale and continuing service of domestic and international franchises.

Total franchise expenses remained relatively stable at $0.8 million for the three month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

The 5.4% decrease was driven by decreases in salaries directly related to franchise operations, offset by increases in advertising fees.

Total franchise expenses decreased by $0.2 million to $2.6 million for the nine month period ended March 30, 2025 as compared to the same period of the prior fiscal year.

The 8.3% decrease was driven by decreases in salaries directly related to franchise operations and advertising fees.

Total franchise expenses remained relatively stable at $1.0 million for the three month period ended September 28, 2025 as compared to the same period of the prior fiscal year.

The 4.2% increase was driven by increases in advertising fees.

Provision (Recovery) for Credit Losses

The Company monitors franchisee receivable balances and adjusts credit terms when necessary to minimize the Company’s exposure to high-risk accounts receivable.

For the three month period ended March 30, 2025, recoveries for credit losses were $14 thousand compared to provision for credit losses of $11 thousand for the same period in the prior fiscal year.

During the three month period ended March 30, 2025, the Company recorded a loss in provision for credit losses due to the write off of receivables, offset by a gain in provision for credit losses due to the recoveries of receivables that had been previously reserved.

For the nine month period ended March 30, 2025, recoveries for credit losses were $22 thousand compared to provision for credit losses of $46 thousand for the same period in the prior fiscal year.

During the nine month period ended March 30, 2025, the Company recorded a loss in provision for credit losses due to the write off of receivables, offset by a gain in provision for credit losses due to the recoveries of receivables that had been previously reserved.

For the three month period ended September 28, 2025, provision for credit losses were $4 thousand compared to recoveries for credit losses of $17 thousand for the same period in the prior fiscal year.

Interest Income

Interest income increased by $39 thousand to $84 thousand for the three month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

The increase was primarily driven by interest received on U.S.

Treasury bills.

Interest income increased by $160 thousand to $253 thousand for the nine month period ended March 30, 2025 as compared to the same period in the prior fiscal year.

Interest income increased by $9 thousand to $91 thousand for the three month period ended September 28, 2025 as compared to the same period in the prior fiscal year.

The increase was primarily driven by interest received on U.S.

Treasury bills.

Treasury bills, which had a larger average balance during the period compared to the prior fiscal year.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by $14 thousand to $44 thousand for the three month period ended March 30, 2025 as compared to the same period in the prior year.

The decrease was primarily the result of lower depreciation of equipment.

Depreciation and amortization expense decreased by $30 thousand to $140 thousand for the nine month period ended March 30, 2025 as compared to the same period in the prior year.

Depreciation and amortization expense decreased by $1 thousand to $42 thousand for the three month period ended September 28, 2025 as compared to the same period in the prior fiscal year.

The decrease was primarily the result of lower depreciation of equipment.

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Three Months Ended

Nine Months Ended

September 28, 2025

September 29, 2024

Federal tax expense

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Total income tax expense

For the three and nine months ended March 30, 2025, the Company recorded an income tax expense of $228 thousand and $541 thousand, respectively.

For the three and nine months ended March 24, 2024, the Company recorded an income tax expense of $200 thousand and $319 thousand, respectively.

The increase for the three months ended as of March 30, 2025 was driven by increases in federal taxes, primarily due to higher taxable income.

The increase for the nine months ended as of March 30, 2025 was primarily driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting than in the prior year.

For the three months ended September 28, 2025 and September 29, 2024, the Company recorded an income tax expense of $206 thousand and $169 thousand, respectively.

The increase was driven by increases in federal taxes, primarily due to higher taxable income and fewer discrete tax items related to restricted stock units vesting in the prior fiscal year.

The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies.

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Earnings per Share

Basic net income per share increased $0.01 per share to $0.05 per share for the three months ended March 30, 2025, compared to the comparable period in the prior fiscal year.

The Company had net income of $0.7 million for the three months ended March 30, 2025 compared to net income of $0.7 million in the comparable period in the prior fiscal year, on revenues of $3.0 million for the three months ended March 30, 2025 compared to $3.0 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.02 per share to $0.13 per share for the nine months ended March 30, 2025, compared to the comparable period in the prior fiscal year.

The Company had net income of $1.9 million for the nine months ended March 30, 2025 compared to net income of $1.6 million in the comparable period in the prior fiscal year, on revenues of $8.9 million for the nine months ended March 30, 2025 compared to $8.8 million in the comparable period in the prior fiscal year.

Basic net income per share increased $0.01 per share to $0.05 per share for the three months ended September 28, 2025, compared to the comparable period in the prior fiscal year.

The Company had net income of $0.6 million for the three months ended September 28, 2025 compared to net income of $0.5 million in the comparable period in the prior fiscal year, on revenues of $3.2 million for the three months ended September 28, 2025 compared to $3.1 million in the comparable period in the prior fiscal year.

Liquidity and Capital Resources

During the nine month period ended March 30, 2025, the Company's primary source of liquidity was proceeds from operating activities.

Cash flows from operating activities generally reflect net income adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, stock-based compensation, and changes in working capital.

Cash provided by operating activities was $2.2 million for the nine month period ended March 30, 2025 compared to cash provided by operating activities of $1.3 million for the nine month period ended March 24, 2024.

The primary driver of increased operating cash flow during the nine month period ended March 30, 2025 was increased collections of accounts receivable related to the payment of franchise receivables.

During the three month period ended September 28, 2025, the Company's primary source of liquidity was proceeds from operating activities.

Cash provided by operating activities was $0.6 million for the three month period ended September 28, 2025 compared to cash provided by operating activities of $0.5 million for the three month period ended September 29, 2024.

The primary driver of increased operating cash flow during the three month period ended September 28, 2025 was increased net income, which resulted primarily from increased revenue.

Cash flows from investing activities reflect purchases and maturities of short-term investments as well as net proceeds from the sale of assets and capital expenditures for the purchase of Company assets.

Cash used in investing activities during the nine month period ended March 30, 2025 was $2.9 million compared to cash used in investing activities of $30 thousand for the nine months ended March 24, 2024.

Net cash used in investing activities during the nine month period ended March 30, 2025 was primarily attributable to increased purchases of U.S.

Treasury bills.

Cash used in investing activities during the three month period ended September 28, 2025 was $2.1 million compared to cash used in investing activities of $2.0 million for the three months ended September 29, 2024.

The increase in net cash used in investing activities during the three month period ended September 28, 2025 was primarily attributable to increased activity related to the purchase and redemption of short-term investments.

Cash flows used in financing activities generally reflect changes in the Company's stock and debt activity during the period.

Net cash used in financing activities was $1.4 million for the nine month period ended March 30, 2025 compared to net cash used in financing activities of $0.3 million for the nine month period ended March 24, 2024.

Net cash used by financing activities for the nine months ended March 30, 2025 was primarily attributable to repurchases of the Company's stock.

On February 24, 2025, the Company repurchased 500,000 shares at $2.40 per share in a negotiated transaction.

Net cash used by financing activities for the nine months ended March 24, 2024 was primarily attributable to taxes paid on vested RSUs.

Management believes the cash and short-term investments on hand combined with net cash provided by operations will be sufficient to fund operations for the next 12 months and beyond.

Employee Retention Credit

On December 27, 2020, the Consolidated Appropriations Act of 2021 (the “CAA”) was signed into law.

The CAA expanded eligibility for an employee retention credit for companies impacted by the COVID-19 pandemic with fewer than five hundred employees and at least a twenty percent decline in gross receipts compared to the same quarter in 2019, to encourage retention of employees.

This payroll tax credit was a refundable tax credit against certain federal employment taxes.

For the fiscal year ended June 26, 2022, the Company recorded $0.7 million of other income for the employee retention credit.

As of March 30, 2025, $0.6 million has been received and $0.1 million is still outstanding and included within accounts receivable on the accompanying Condensed Consolidated Balance Sheets.

Net cash used in financing activities was zero for the three month periods ended September 28, 2025 and September 29, 2024.

Management believes the cash on hand combined with net cash provided by operations will be sufficient to fund operations for the next 12 months and beyond.

Critical Accounting Policies and Estimates

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Franchise fees, area development and foreign master license agreement fees are amortized into revenue on a straight-line basis over the term of the related contract agreement.

In event of a closed franchise or defaulted development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or default.

In the event of a closed franchise or defaulted development agreement, the remaining balance of unamortized license fees will be recognized in entirety as of the date of the closure or default.

Royalties and advertising fund revenues, which are based on a percentage of franchise retail sales, are recognized as income as retail sales occur.

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The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

As of March 30, 2025 and June 30, 2024, the Company had no uncertain tax positions.

As of September 28, 2025 and June 29, 2025, the Company had no uncertain tax positions.

The Company assesses its exposures to loss contingencies from legal matters based upon factors such as the current status of the cases and consultations with external counsel and provides for the exposure by accruing an amount if it is judged to be probable and can be reasonably estimated.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements