RAVE's Earnings, Revenues Rise in Fiscal 2024, Drive Its Stock Up

Core Insights - Rave Restaurant Group, Inc. reported a 50% year-over-year increase in earnings per share (EPS) for Q4 fiscal 2024, reaching 6 cents, with a full-year EPS of 17 cents, up 70% from the previous fiscal year [1][2] Revenue Analysis - Rave Restaurant's revenues for Q4 were $3.4 million, an increase of $0.3 million year-over-year, although lower revenues from the Pie Five Franchising segment negatively impacted the topline [2] - Full-year revenues totaled $12.2 million, reflecting a 2.2% improvement compared to fiscal 2023 [2] Segment Performance - Rave Restaurant operates through two segments: Pizza Inn Franchising and Pie Five Franchising. For Q4, Pizza Inn's domestic comparable store retail sales decreased by 1.5%, while Pie Five's comparable store retail sales fell by 10.6% year-over-year [3] - For the full fiscal year, Pizza Inn Franchising revenues were $10.3 million, up 4.9% from fiscal 2023, driven by increased supplier and distributor incentives [4] - Pie Five Franchising revenues for fiscal 2024 were $1.7 million, down 8.9% from fiscal 2023, primarily due to declines in domestic royalties and advertising fund revenues [5] Operating Expenses - General and administrative expenses decreased by 4.1% year-over-year to $5.3 million, attributed to lower salary and stock-based compensation expenses [7] - Franchise expenses decreased by 7.6% to $3.7 million, with Pizza Inn franchise expenses down 2.4% to $2.9 million and Pie Five franchise expenses down 25.2% to $0.7 million [8] Profitability Metrics - Operating income for fiscal 2024 was $3.1 million, a 43.8% increase from fiscal 2023, while net income rose by 53.3% to $2.5 million [9] - Adjusted EBITDA for fiscal 2024 was $3.2 million, up 16.8% from fiscal 2023, with Q4 adjusted EBITDA increasing from $0.2 million to $1.2 million year-over-year [10] Liquidity and Cash Flow - At the end of fiscal 2024, Rave Restaurant had cash and cash equivalents of $7.8 million, up from $5.3 million at the end of fiscal 2023 [11] - Cumulative net cash provided by operating activities was $2.7 million, slightly up from $2.6 million a year ago [11] Strategic Outlook - Management plans to reimage over 25% of the company's buffet restaurants by the end of fiscal 2025, which is expected to enhance stock performance [12] - The rollout of a new online ordering platform aims to boost digital business and improve order integration, which is seen as a positive development for the stock [13]