Pizza Inn, Inc. Reports Results for the Third Quarter Fiscal Year 2007

PIZZA INN INC. (NASDAQ:PZZI) today reported net income per share for its third fiscal quarter ended March 25, 2007 of $0.05 versus a net loss of ($0.05) per share for the same quarter in the prior fiscal year. The quarter resulted in net income of $457,000 versus a net loss of ($477,000) for the same quarter in the prior fiscal year on revenues of $11.8 million and $12.8 million, respectively.

* Comparable buffet restaurant sales decreased 0.9% for the quarter. Domestic chain-wide comparable restaurant sales decreased 2.0% for the quarter.

* Total domestic chain-wide restaurant sales decreased 7% for the quarter due to the decrease in comparable restaurant sales and a net reduction in franchised restaurants.

* Lower legal expenses combined with the successful outsourcing of the Company's warehouse management and delivery services have improved the Company's operating income.

* During the quarter, general and administrative expenses decreased 30%, or $391,000 due primarily to lower payroll costs as well as a reduction in property taxes and insurance expenses resulting from the outsourcing of certain distribution services.

* Interest expense decreased 99%, or $209,000 for the quarter compared to the same quarter in the prior fiscal year due to the company paying off all of its outstanding debt in December 2006.

The Company's President and CEO, Tim Taft, commented, "Building a better Pizza Inn requires the right combination of brand leadership and franchisee participation. By improving franchise unit-level economics we are seeing positive results in the areas of same-store sales and franchisee reinvestment, both of which are keys to the operating performance of the Company and the continued revitalization of the brand." Also during the quarter:

* Comparable buffet restaurant sales were positive in the month of March.

* Savings generated from the outsourcing of certain distribution services have been passed on to franchisees in the form of lower food and supply costs.

* The Company received commitments from an unprecedented number of franchisees to remodel their restaurants.

* The Company further solidified its management and leadership team with the addition of a Director of Operations and a Controller.

Operating results for the third fiscal quarter mark the second consecutive profitable quarter for Pizza Inn, further strengthening the Company's financial position.

"By eliminating the Company's debt and building a positive cash position, we can now focus our resources on the development and implementation of a long-term growth plan," said Charlie Morrison, Pizza Inn Chief Financial Officer.

Logos, product and company names mentioned are the property of their respective owners.

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