Rave Restaurant (RAVE) - 2025 Q4 - Annual Results

Executive Summary & Financial Highlights This section provides a comprehensive overview of RAVE Restaurant Group's financial performance for Q4 and the full fiscal year 2025, highlighting key revenue, income, and same-store sales metrics Fourth Quarter Fiscal Year 2025 Highlights RAVE Restaurant Group reported Q4 FY2025 net income of $0.8 million, a 3.6% decrease, with total revenue down 6.0% to $3.2 million and adjusted EBITDA down 7.3% to $1.1 million Fourth Quarter Fiscal Year 2025 Financial Performance (vs. Prior Year): | Metric | Q4 FY2025 | Prior Year | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | | Net Income | $0.8 million | $0.83 million | -3.6% | | Pre-tax Income | $1.2 million | $1.16 million | +3.8% | | Total Revenue | $3.2 million | $3.4 million | -6.0% | | Adjusted EBITDA | $1.1 million | $1.19 million | -7.3% | | Diluted Net Income Per Share | $0.06 | $0.06 | 0.0% | Fourth Quarter Fiscal Year 2025 Same-Store Retail Sales (13 Weeks vs. 13 Weeks): | Brand | Change (%) | | :-------- | :--------- | | Pizza Inn Domestic | +6.3% | | Pie Five Domestic | -7.2% | - Cash and cash equivalents totaled $2.9 million, with short-term investments at $7.0 million as of June 29, 2025[2] - At quarter-end, Pizza Inn had 96 domestic and 22 international locations, while Pie Five had 17 domestic locations[2] Annual Fiscal Year 2025 Highlights For FY2025 (52 weeks), net income increased to $2.7 million, pre-tax income to $3.6 million, total revenue slightly decreased to $12.0 million, and adjusted EBITDA rose to $3.6 million Annual Fiscal Year 2025 Financial Performance (vs. Prior Year): | Metric | FY2025 | FY2024 | Change | | :-------------------------------- | :------- | :------- | :------- | | Net Income | $2.7 million | $2.5 million | +$0.2 million | | Pre-tax Income | $3.6 million | $3.1 million | +$0.5 million | | Total Revenue | $12.0 million | $12.1 million | -$0.1 million | | Adjusted EBITDA | $3.6 million | $3.2 million | +$0.4 million | | Diluted Net Income Per Share | $0.19 | $0.17 | +$0.02 | Annual Fiscal Year 2025 Same-Store Retail Sales (vs. Prior Year): | Brand | Change (%) | | :-------------------------------- | :--------- | | RAVE Domestic Total | +0.8% | | Pizza Inn Domestic | +1.9% | | Pie Five Domestic | -8.4% | - Pizza Inn buffet locations achieved net growth for the fourth consecutive year[3] - Cash flow from operations increased by $0.6 million to $3.4 million[3] - Cash and short-term investments increased by $2.1 million in FY2025, reaching $9.9 million as of June 29, 2025[3] Management Commentary This section presents insights from the CEO and CFO on the company's operational achievements, financial management, and strategic growth initiatives for the fiscal year CEO Remarks CEO Brandon Solano highlighted 21 consecutive profitable quarters, noting the success of the $8 'I'm Eating at Pizza Inn' promotion and accelerated Pizza Inn brand growth through new openings and remodels - The company has achieved 21 consecutive profitable quarters[4] - The '$8 I'm Eating at Pizza Inn' promotion drove 30.6% sales growth and 34.7% traffic growth during the last eight weeks of Q4[5] - Pizza Inn locations not participating in the $8 promotion still saw over 5% same-store sales growth with a summer salad bar promotion[5] - The Pizza Inn brand increased its buffet count for the fourth consecutive year and completed 11 remodels with positive results[5] - The domestic new store pipeline includes 31 signed locations, with 12 planned to open in the current fiscal year (ending June 28, 2026), alongside new international openings in Egypt and Saudi Arabia[5] CFO Remarks CFO Jay Rooney noted effective expense management and Pizza Inn's 6.3% Q4 same-store sales growth contributed to over 17% annual pre-tax income increase for FY2025 - Effective expense management was maintained throughout fiscal year 2025[5] - Pizza Inn's 6.3% same-store sales growth in Q4 contributed to an over 17% increase in annual pre-tax income compared to the prior 53-week fiscal year[5] Company Overview This section introduces RAVE Restaurant Group, Inc., detailing its business model, brand portfolio, and the distinct offerings of Pizza Inn and Pie Five About RAVE Restaurant Group, Inc. RAVE Restaurant Group, Inc., based in Dallas, operates Pizza Inn and Pie Five brands via franchising, licensing, and supply, with Pizza Inn known for its buffet and Pie Five for fast-casual personalized pizza - RAVE Restaurant Group operates Pie Five and Pizza Inn restaurants through franchising, licensing, and supply across domestic and international markets[11] - Founded in 1958, Pizza Inn is renowned for its buffet experience featuring house-made dough, 100% whole-milk mozzarella, fresh ingredients, and signature sauces[11] - Pie Five Pizza, launched in 2011, pioneered the fast-casual pizza concept, offering customizable, gourmet ingredients and rapid service[11] Non-GAAP Financial Measures This section defines non-GAAP financial metrics like EBITDA and Adjusted EBITDA, explaining their utility for performance assessment and providing a detailed reconciliation to GAAP net income Definition and Use of Non-GAAP Measures The company provides non-GAAP metrics like EBITDA and Adjusted EBITDA, which management deems useful for assessing operating performance and strategy, but emphasizes they are not GAAP substitutes - Non-GAAP financial measures, such as EBITDA and Adjusted EBITDA, are considered important supplemental metrics for evaluating operating performance and are useful for investors and management in assessing business strategy, planning, and budgeting[6][7] - These non-GAAP measures should not be considered as a substitute for or superior to financial statements prepared in accordance with generally accepted accounting principles (GAAP)[6] - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization[8] - Adjusted EBITDA further excludes stock-based compensation, severance, gain/loss on asset disposals, impairment and other lease charges, franchise defaults and store closing income/expense, and store closing and non-operating store costs from EBITDA[8] Adjusted EBITDA Reconciliation This section provides a reconciliation of net income to EBITDA and Adjusted EBITDA for fiscal years 2025 and 2024, detailing adjustments made to derive non-GAAP figures Adjusted EBITDA Reconciliation (in thousands): | Metric | FY2025 (June 29) | FY2024 (June 30) | | :-------------------------------- | :--------------- | :--------------- | | Net Income | $2,702 | $2,473 | | Interest Income | (354) | (153) | | Income Tax Expense | 918 | 619 | | Depreciation and Amortization | 182 | 219 | | EBITDA | $3,448 | $3,158 | | Stock-based Compensation Expense | 136 | 149 | | Severance | 12 | 5 | | Franchise Defaults and Store Closing Income | (13) | (156) | | Adjusted EBITDA | $3,583 | $3,156 | Consolidated Financial Statements This section presents the company's complete financial position and performance through consolidated statements of income, balance sheets, and cash flows for recent fiscal periods Consolidated Statements of Income The consolidated statements of income show RAVE Restaurant Group's net income increased from $1,613 thousand in FY2023 to $2,702 thousand in FY2025, despite a slight decrease in total revenue Consolidated Statements of Income (in thousands, except per share amounts): | Metric | FY2025 (June 29) | FY2024 (June 30) | FY2023 (June 25) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Revenue | $12,039 | $12,150 | $11,889 | | Cost of Sales and Expenses | 8,419 | 9,058 | 9,739 | | Pre-tax Income | 3,620 | 3,092 | 2,150 | | Income Tax Expense | 918 | 619 | 537 | | Net Income | $2,702 | $2,473 | $1,613 | | Diluted Net Income Per Share | $0.19 | $0.17 | $0.10 | Consolidated Balance Sheets The consolidated balance sheets indicate total assets increased from $15,819 thousand in FY2024 to $16,557 thousand in FY2025, driven by higher short-term investments, while total liabilities decreased Consolidated Balance Sheets (in thousands, except share amounts): | Metric | June 29, 2025 | June 30, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Assets | | | | Cash and Cash Equivalents | $2,859 | $2,886 | | Short-term Investments | 7,024 | 4,945 | | Total Current Assets | 11,493 | 9,536 | | Total Assets | $16,557 | $15,819 | | Liabilities and Stockholders' Equity | | | | Total Current Liabilities | 1,740 | 2,019 | | Total Liabilities | 2,403 | 3,117 | | Total Stockholders' Equity | 14,154 | 12,702 | | Total Liabilities and Stockholders' Equity | $16,557 | $15,819 | Consolidated Statements of Cash Flows Operating cash flow increased to $3,395 thousand in FY2025, with net cash used in investing activities significantly improving to $2,036 thousand, and financing activities using $1,386 thousand for stock repurchases Consolidated Statements of Cash Flows (in thousands): | Metric | FY2025 (June 29) | FY2024 (June 30) | FY2023 (June 25) | | :-------------------------------- | :--------------- | :--------------- | :--------------- | | Cash Flow from Operating Activities | $3,395 | $2,845 | $2,841 | | Cash Flow Used in Investing Activities | (2,036) | (4,976) | (227) | | Cash Flow Used in Financing Activities | (1,386) | (311) | (5,009) | | Net Decrease in Cash and Cash Equivalents | (27) | (2,442) | (2,395) | | Cash and Cash Equivalents, End of Period | $2,859 | $2,886 | $5,328 | Forward-Looking Statements This section includes a cautionary note regarding forward-looking statements, emphasizing inherent risks, uncertainties, and the speculative nature of future projections Note Regarding Forward-Looking Statements This section serves as a cautionary statement, indicating that non-historical information in the press release may constitute forward-looking statements subject to risks, uncertainties, and assumptions - Certain statements in this press release, excluding historical information, may be considered forward-looking statements protected by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[9] - These forward-looking statements are based on current expectations and involve numerous risks, uncertainties, and assumptions, many of which are difficult to predict accurately and are beyond the company's control[9] - While assumptions underlying forward-looking statements are believed to be reasonable, any assumption could prove inaccurate, thus no assurance can be given regarding the accuracy of any forward-looking statement or the achievement of company goals and plans[9] Other Information This section provides essential supplementary details, including contact information for investor relations Contact Information This section provides contact information for RAVE Restaurant Group, Inc. investor relations - Investor Relations Contact: RAVE Restaurant Group, Inc., Phone: 469-384-5000[12]