Results of Operations
The domestic units were located in 18 states predominately situated in the southern half of
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Results of operations for the fiscal years 2022 and 2021 both included 52 weeks.
COVID-19 Pandemic
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Pie Five Brand Summary
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We closed our single remaining Company-owned Pie Five restaurant during the third quarter of fiscal 2020.
Non-GAAP Financial Measures and Other Terms
The following key performance indicators presented herein, some of which represent non-GAAP financial measures, have the meaning and are calculated as follows:
• “EBITDA” represents earnings before interest, taxes, depreciation and
amortization.
• “Adjusted EBITDA” represents earnings before interest, taxes, depreciation and
amortization, stock 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.
• “Comparable store retail sales” includes the retail sales for restaurants that
have been open for at least 18 months as of the end of the reporting period.
The sales results for a restaurant that was closed temporarily for remodeling
or relocation within the same trade area are included in the calculation only
for the days that the restaurant was open in both periods being compared.
• “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
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Financial Results
Fiscal Year Ended
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Pie Five Franchise and License Revenues
Restaurant Sales
We had no restaurant sales, which consist of revenue generated by Company-owned restaurants, in fiscal 2022 or fiscal 2021 because we closed our single remaining Company-owned restaurant during the third quarter of fiscal 2020.
Costs and Expenses:
Cost of Sales
General and Administrative Expenses
Franchise Expenses
Gain on Sale of Assets
Bad Debt Expense
Interest Expense
Interest expense decreased
Amortization and Depreciation Expense
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Other Income
Tax returns for fiscal 2013 and after will remain open to examination by federal and state tax authorities for three to four years following the tax year in which net operating losses or tax credits are utilized. The Company was not subject to income tax examinations by any tax authority as of
Sources and Uses of Funds
Our primary sources of liquidity are cash flows from operating activities, loan proceeds, and proceeds from the sale of securities.
PPP Loan Forgiveness and Employee Retention Credit
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ATM Offering
Convertible Notes
Liquidity
Critical Accounting Policies and Estimates
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Nature of Leases
The Company leases certain office space, restaurant space, and information technology equipment under non-cancelable leases to support its operations. A more detailed description of significant lease types is included below.
Office Agreements
Restaurant Space Agreements
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As of
Information Technology Equipment
The Company rents information technology equipment, primarily printers and copiers, from a third party for its corporate office location. Information technology equipment agreements are typically structured with non-cancelable terms of one to five years. The Company has concluded that its information technology equipment commitments are operating leases.
Discount Rate
Practical Expedients and Accounting Policy Elections
Supplemental cash flow information related to operating leases is included in the table below (in thousands):
Fiscal Year Ended
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Supplemental balance sheet information related to operating leases is included in the table below (in thousands):
Weighted average remaining lease term and weighted average discount rate for operating leases are as follows:
Operating lease liabilities with enforceable contract terms that are greater than one year mature as follows (in thousands):
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