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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Fiesta Restaurant Group Inc | NASDAQ:FRGI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.50 | 8.48 | 8.51 | 0 | 01:00:00 |
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
90-0712224
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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14800 Landmark Boulevard, Suite 500
Dallas, Texas
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75254
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(Address of principal executive office)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I FINANCIAL INFORMATION
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Item 1
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Item 2
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Item 3
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Item 4
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Item 1
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Item 1A
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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April 1, 2018
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|
December 31, 2017
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||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
3,791
|
|
|
$
|
3,599
|
|
Trade receivables
|
11,011
|
|
|
9,830
|
|
||
Inventories
|
2,688
|
|
|
2,880
|
|
||
Prepaid rent
|
—
|
|
|
3,300
|
|
||
Income tax receivable
|
11,023
|
|
|
11,334
|
|
||
Prepaid expenses and other current assets
|
8,601
|
|
|
10,105
|
|
||
Total current assets
|
37,114
|
|
|
41,048
|
|
||
Property and equipment, net
|
235,038
|
|
|
234,561
|
|
||
Goodwill
|
123,484
|
|
|
123,484
|
|
||
Deferred income taxes
|
15,884
|
|
|
17,232
|
|
||
Other assets
|
7,564
|
|
|
6,988
|
|
||
Total assets
|
$
|
419,084
|
|
|
$
|
423,313
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
104
|
|
|
$
|
98
|
|
Accounts payable
|
14,152
|
|
|
20,293
|
|
||
Accrued payroll, related taxes and benefits
|
11,904
|
|
|
11,776
|
|
||
Accrued real estate taxes
|
2,612
|
|
|
5,860
|
|
||
Other liabilities
|
19,619
|
|
|
21,817
|
|
||
Total current liabilities
|
48,391
|
|
|
59,844
|
|
||
Long-term debt, net of current portion
|
81,718
|
|
|
76,425
|
|
||
Deferred income—sale-leaseback of real estate
|
22,564
|
|
|
23,466
|
|
||
Other liabilities
|
30,114
|
|
|
32,062
|
|
||
Total liabilities
|
182,787
|
|
|
191,797
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, par value $.01; authorized 100,000,000 shares, issued 27,253,103 and 27,086,958 shares, respectively, and outstanding 26,905,630 and 26,847,458 shares, respectively.
|
269
|
|
|
268
|
|
||
Additional paid-in capital
|
167,711
|
|
|
166,823
|
|
||
Retained earnings
|
68,666
|
|
|
64,425
|
|
||
Treasury stock, at cost; 18,406 shares
|
(349
|
)
|
|
—
|
|
||
Total stockholders' equity
|
236,297
|
|
|
231,516
|
|
||
Total liabilities and stockholders' equity
|
$
|
419,084
|
|
|
$
|
423,313
|
|
|
Three Months Ended
|
||||||
Revenues:
|
April 1, 2018
|
|
April 2, 2017
|
||||
Restaurant sales
|
$
|
168,833
|
|
|
$
|
174,977
|
|
Franchise royalty revenues and fees
|
651
|
|
|
630
|
|
||
Total revenues
|
169,484
|
|
|
175,607
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of sales
|
53,565
|
|
|
50,948
|
|
||
Restaurant wages and related expenses (including stock-based compensation expense of $17 and $109, respectively)
|
46,483
|
|
|
48,132
|
|
||
Restaurant rent expense
|
8,892
|
|
|
9,862
|
|
||
Other restaurant operating expenses
|
23,450
|
|
|
24,068
|
|
||
Advertising expense
|
6,213
|
|
|
7,539
|
|
||
General and administrative (including stock-based compensation expense of $872 and $537, respectively)
|
14,919
|
|
|
15,698
|
|
||
Depreciation and amortization
|
8,999
|
|
|
9,186
|
|
||
Pre-opening costs
|
381
|
|
|
424
|
|
||
Impairment and other lease charges
|
(662
|
)
|
|
32,414
|
|
||
Other expense (income), net
|
366
|
|
|
454
|
|
||
Total operating expenses
|
162,606
|
|
|
198,725
|
|
||
Income (loss) from operations
|
6,878
|
|
|
(23,118
|
)
|
||
Interest expense
|
1,069
|
|
|
584
|
|
||
Income (loss) before income taxes
|
5,809
|
|
|
(23,702
|
)
|
||
Provision for (benefit from) income taxes
|
1,625
|
|
|
(8,642
|
)
|
||
Net income (loss)
|
$
|
4,184
|
|
|
$
|
(15,060
|
)
|
Basic net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.56
|
)
|
Diluted net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.56
|
)
|
Basic weighted average common shares outstanding
|
26,874,016
|
|
|
26,774,103
|
|
||
Diluted weighted average common shares outstanding
|
26,879,831
|
|
|
26,774,103
|
|
|
Number of
Common Stock Shares |
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Treasury
Stock |
|
Total
Stockholders' Equity |
|||||||||||
Balance at January 1, 2017
|
26,755,640
|
|
|
$
|
267
|
|
|
$
|
163,204
|
|
|
$
|
100,704
|
|
|
$
|
—
|
|
|
$
|
264,175
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
646
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|||||
Vesting of restricted shares
|
31,565
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Cumulative effect of adopting a new accounting standard
|
—
|
|
|
—
|
|
|
73
|
|
|
(47
|
)
|
|
—
|
|
|
26
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,060
|
)
|
|
—
|
|
|
(15,060
|
)
|
|||||
Balance at April 2, 2017
|
26,787,205
|
|
|
$
|
268
|
|
|
$
|
163,923
|
|
|
$
|
85,597
|
|
|
$
|
—
|
|
|
$
|
249,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2017
|
26,847,458
|
|
|
$
|
268
|
|
|
$
|
166,823
|
|
|
$
|
64,425
|
|
|
$
|
—
|
|
|
$
|
231,516
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
889
|
|
|
—
|
|
|
—
|
|
|
889
|
|
|||||
Vesting of restricted shares
|
76,578
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cumulative effect of adopting a new accounting standard (Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
|||||
Purchase of treasury stock
|
(18,406
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(349
|
)
|
|
(349
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,184
|
|
|
—
|
|
|
4,184
|
|
|||||
Balance at April 1, 2018
|
26,905,630
|
|
|
$
|
269
|
|
|
$
|
167,711
|
|
|
$
|
68,666
|
|
|
$
|
(349
|
)
|
|
$
|
236,297
|
|
|
Three Months Ended
|
||||||
|
April 1, 2018
|
|
April 2, 2017
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
4,184
|
|
|
$
|
(15,060
|
)
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
|
||||
Loss on disposals of property and equipment
|
129
|
|
|
838
|
|
||
Stock-based compensation
|
889
|
|
|
646
|
|
||
Impairment and other lease charges
|
(662
|
)
|
|
32,414
|
|
||
Depreciation and amortization
|
8,999
|
|
|
9,186
|
|
||
Amortization of deferred financing costs
|
68
|
|
|
77
|
|
||
Amortization of deferred gains from sale-leaseback transactions
|
(899
|
)
|
|
(901
|
)
|
||
Deferred income taxes
|
1,348
|
|
|
(11,848
|
)
|
||
Changes in other operating assets and liabilities
|
(5,167
|
)
|
|
(3,140
|
)
|
||
Net cash provided from operating activities
|
8,889
|
|
|
12,212
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures:
|
|
|
|
||||
New restaurant development
|
(4,765
|
)
|
|
(8,571
|
)
|
||
Restaurant remodeling
|
(333
|
)
|
|
(217
|
)
|
||
Other restaurant capital expenditures
|
(5,895
|
)
|
|
(1,689
|
)
|
||
Corporate and restaurant information systems
|
(4,175
|
)
|
|
(1,197
|
)
|
||
Total capital expenditures
|
(15,168
|
)
|
|
(11,674
|
)
|
||
Proceeds from disposals of properties
|
1,813
|
|
|
—
|
|
||
Proceeds from insurance recoveries
|
180
|
|
|
—
|
|
||
Net cash used in investing activities
|
(13,175
|
)
|
|
(11,674
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on revolving credit facility
|
15,000
|
|
|
5,000
|
|
||
Repayments on revolving credit facility
|
(10,000
|
)
|
|
(2,000
|
)
|
||
Principal payments on capital leases
|
(23
|
)
|
|
(22
|
)
|
||
Financing costs associated with issuance of debt
|
(150
|
)
|
|
—
|
|
||
Payments to purchase treasury stock
|
(349
|
)
|
|
—
|
|
||
Net cash provided from financing activities
|
4,478
|
|
|
2,978
|
|
||
Net increase in cash
|
192
|
|
|
3,516
|
|
||
Cash, beginning of period
|
3,599
|
|
|
4,196
|
|
||
Cash, end of period
|
$
|
3,791
|
|
|
$
|
7,712
|
|
Supplemental disclosures:
|
|
|
|
||||
Interest paid on long-term debt
|
$
|
516
|
|
|
$
|
522
|
|
Interest paid on lease financing obligations
|
—
|
|
|
36
|
|
||
Accruals for capital expenditures
|
3,428
|
|
|
6,754
|
|
||
Income tax payments (refunds), net
|
(17
|
)
|
|
86
|
|
||
Capital lease obligations incurred
|
322
|
|
|
—
|
|
•
|
Current Assets and Liabilities.
The carrying values reported on the balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.
|
•
|
Revolving Credit Borrowings.
The fair value of outstanding revolving credit borrowings under the Company's senior credit facility, which is considered Level 2, is based on current LIBOR rates. The fair value of the Company's senior credit facility was approximately
$79.7 million
at
April 1, 2018
, and
$75.0 million
at
December 31, 2017
. The carrying value of the Company's senior credit facility was
$80.0 million
at
April 1, 2018
and $
75.0 million
at
December 31, 2017
.
|
|
April 1, 2018
|
|
December 31, 2017
|
||||
Prepaid contract expenses
|
$
|
3,851
|
|
|
$
|
3,681
|
|
Assets held for sale
(1)
|
1,005
|
|
|
2,705
|
|
||
Other
|
3,745
|
|
|
3,719
|
|
||
|
$
|
8,601
|
|
|
$
|
10,105
|
|
|
Three Months Ended
|
||||||
|
April 1, 2018
|
|
April 2, 2017
|
||||
Pollo Tropical
|
$
|
(541
|
)
|
|
$
|
32,071
|
|
Taco Cabana
|
(121
|
)
|
|
343
|
|
||
|
$
|
(662
|
)
|
|
$
|
32,414
|
|
|
April 1, 2018
|
|
December 31, 2017
|
||||
Accrued workers' compensation and general liability claims
|
$
|
5,425
|
|
|
$
|
5,083
|
|
Sales and property taxes
|
1,617
|
|
|
2,279
|
|
||
Accrued occupancy costs
|
6,896
|
|
|
7,813
|
|
||
Other
|
5,681
|
|
|
6,642
|
|
||
|
$
|
19,619
|
|
|
$
|
21,817
|
|
|
April 1, 2018
|
|
December 31, 2017
|
||||
Accrued occupancy costs
|
$
|
19,218
|
|
|
$
|
20,985
|
|
Deferred compensation
|
794
|
|
|
1,029
|
|
||
Accrued workers’ compensation and general liability claims
|
6,102
|
|
|
6,102
|
|
||
Other
|
4,000
|
|
|
3,946
|
|
||
|
$
|
30,114
|
|
|
$
|
32,062
|
|
|
Three Months Ended April 1, 2018
|
|
Year Ended December 31, 2017
|
||||
Balance, beginning of period
|
$
|
12,994
|
|
|
$
|
4,912
|
|
Provisions for restaurant closures
|
—
|
|
|
8,767
|
|
||
Additional lease charges (recoveries), net
|
(720
|
)
|
|
(1,301
|
)
|
||
Payments, net
|
(2,456
|
)
|
|
(5,528
|
)
|
||
Other adjustments
(1)
|
189
|
|
|
6,144
|
|
||
Balance, end of period
|
$
|
10,007
|
|
|
$
|
12,994
|
|
|
Non-Vested Shares
|
|
Restricted Stock Units
|
||||||||||
|
Shares
|
|
Weighted
Average Grant Date Fair Value |
|
Units
|
|
Weighted
Average Grant Date Fair Value |
||||||
Outstanding at December 31, 2017
|
239,500
|
|
|
$
|
24.81
|
|
|
143,946
|
|
|
$
|
23.11
|
|
Granted
|
153,769
|
|
|
18.70
|
|
|
112,169
|
|
|
6.96
|
|
||
Vested/Released
|
(67,057
|
)
|
|
27.83
|
|
|
(9,722
|
)
|
|
45.19
|
|
||
Forfeited
|
(5,167
|
)
|
|
33.87
|
|
|
(10,641
|
)
|
|
59.45
|
|
||
Outstanding at April 1, 2018
|
321,045
|
|
|
$
|
20.75
|
|
|
235,752
|
|
|
$
|
12.88
|
|
Three Months Ended
|
|
Pollo Tropical
|
|
Taco Cabana
|
|
Other
|
|
Consolidated
|
||||||||
April 1, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Restaurant sales
|
|
$
|
94,478
|
|
|
$
|
74,355
|
|
|
$
|
—
|
|
|
$
|
168,833
|
|
Franchise revenue
|
|
464
|
|
|
187
|
|
|
—
|
|
|
651
|
|
||||
Cost of sales
|
|
31,015
|
|
|
22,550
|
|
|
—
|
|
|
53,565
|
|
||||
Restaurant wages and related expenses
(1)
|
|
22,156
|
|
|
24,327
|
|
|
—
|
|
|
46,483
|
|
||||
Restaurant rent expense
|
|
4,297
|
|
|
4,595
|
|
|
—
|
|
|
8,892
|
|
||||
Other restaurant operating expenses
|
|
12,115
|
|
|
11,335
|
|
|
—
|
|
|
23,450
|
|
||||
Advertising expense
|
|
3,316
|
|
|
2,897
|
|
|
—
|
|
|
6,213
|
|
||||
General and administrative expense
(2)
|
|
8,042
|
|
|
6,877
|
|
|
—
|
|
|
14,919
|
|
||||
Adjusted EBITDA
|
|
14,447
|
|
|
2,511
|
|
|
—
|
|
|
16,958
|
|
||||
Depreciation and amortization
|
|
5,316
|
|
|
3,683
|
|
|
—
|
|
|
8,999
|
|
||||
Capital expenditures
|
|
8,173
|
|
|
6,911
|
|
|
84
|
|
|
15,168
|
|
||||
April 2, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Restaurant sales
|
|
$
|
99,310
|
|
|
$
|
75,667
|
|
|
$
|
—
|
|
|
$
|
174,977
|
|
Franchise revenue
|
|
449
|
|
|
181
|
|
|
—
|
|
|
630
|
|
||||
Cost of sales
|
|
29,947
|
|
|
21,001
|
|
|
—
|
|
|
50,948
|
|
||||
Restaurant wages and related expenses
(1)
|
|
24,046
|
|
|
24,086
|
|
|
—
|
|
|
48,132
|
|
||||
Restaurant rent expense
|
|
5,375
|
|
|
4,487
|
|
|
—
|
|
|
9,862
|
|
||||
Other restaurant operating expenses
|
|
13,389
|
|
|
10,679
|
|
|
—
|
|
|
24,068
|
|
||||
Advertising expense
|
|
4,325
|
|
|
3,214
|
|
|
—
|
|
|
7,539
|
|
||||
General and administrative expense
(2)
|
|
8,841
|
|
|
6,857
|
|
|
—
|
|
|
15,698
|
|
||||
Adjusted EBITDA
|
|
14,722
|
|
|
6,494
|
|
|
—
|
|
|
21,216
|
|
||||
Depreciation and amortization
|
|
6,083
|
|
|
3,103
|
|
|
—
|
|
|
9,186
|
|
||||
Capital expenditures
|
|
8,663
|
|
|
2,696
|
|
|
315
|
|
|
11,674
|
|
||||
Identifiable Assets:
|
|
|
|
|
|
|
|
|
||||||||
April 1, 2018
|
|
$
|
223,114
|
|
|
$
|
169,560
|
|
|
$
|
26,410
|
|
|
$
|
419,084
|
|
December 31, 2017
|
|
227,194
|
|
|
167,237
|
|
|
28,882
|
|
|
423,313
|
|
Three Months Ended
|
|
Pollo Tropical
|
|
Taco Cabana
|
|
Consolidated
|
||||||
April 1, 2018:
|
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
|
$
|
4,184
|
|
||||
Provision for income taxes
|
|
|
|
|
|
1,625
|
|
|||||
Income (loss) before taxes
|
|
$
|
8,128
|
|
|
$
|
(2,319
|
)
|
|
$
|
5,809
|
|
Add
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
5,316
|
|
|
3,683
|
|
|
8,999
|
|
|||
Impairment and other lease charges
|
|
(541
|
)
|
|
(121
|
)
|
|
(662
|
)
|
|||
Interest expense
|
|
528
|
|
|
541
|
|
|
1,069
|
|
|||
Other expense (income), net
|
|
346
|
|
|
20
|
|
|
366
|
|
|||
Stock-based compensation expense in restaurant wages
|
|
5
|
|
|
12
|
|
|
17
|
|
|||
Total Non-general and administrative expense adjustments
|
|
5,654
|
|
|
4,135
|
|
|
9,789
|
|
|||
General and administrative expense adjustments
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
467
|
|
|
405
|
|
|
872
|
|
|||
Plan restructuring costs and retention bonuses
|
|
198
|
|
|
290
|
|
|
488
|
|
|||
Total General and administrative expense adjustments
|
|
665
|
|
|
695
|
|
|
1,360
|
|
|||
Adjusted EBITDA
|
|
$
|
14,447
|
|
|
$
|
2,511
|
|
|
$
|
16,958
|
|
|
|
|
|
|
|
|
||||||
April 2, 2017:
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
|
|
|
$
|
(15,060
|
)
|
||||
Benefit from income taxes
|
|
|
|
|
|
(8,642
|
)
|
|||||
Income (loss) before taxes
|
|
$
|
(25,096
|
)
|
|
$
|
1,394
|
|
|
$
|
(23,702
|
)
|
Add
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
6,083
|
|
|
3,103
|
|
|
9,186
|
|
|||
Impairment and other lease charges
|
|
32,071
|
|
|
343
|
|
|
32,414
|
|
|||
Interest expense
|
|
249
|
|
|
335
|
|
|
584
|
|
|||
Other expense (income), net
|
|
197
|
|
|
257
|
|
|
454
|
|
|||
Stock-based compensation expense in restaurant wages
|
|
45
|
|
|
64
|
|
|
109
|
|
|||
Unused pre-production costs in advertising expense
|
|
322
|
|
|
—
|
|
|
322
|
|
|||
Total Non-general and administrative expense adjustments
|
|
38,967
|
|
|
4,102
|
|
|
43,069
|
|
|||
General and administrative expense adjustments
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
315
|
|
|
222
|
|
|
537
|
|
|||
Terminated capital project
|
|
477
|
|
|
359
|
|
|
836
|
|
|||
Board and shareholder matter costs
|
|
458
|
|
|
346
|
|
|
804
|
|
|||
Plan restructuring costs and retention bonuses
|
|
74
|
|
|
71
|
|
|
145
|
|
|||
Legal settlements and related costs
|
|
(473
|
)
|
|
—
|
|
|
(473
|
)
|
|||
Total General and administrative expense adjustments
|
|
851
|
|
|
998
|
|
|
1,849
|
|
|||
Adjusted EBITDA
|
|
$
|
14,722
|
|
|
$
|
6,494
|
|
|
$
|
21,216
|
|
|
Three Months Ended
|
||||||
|
April 1, 2018
|
|
April 2, 2017
|
||||
Basic and diluted net income (loss) per share:
|
|
|
|
||||
Net income (loss)
|
$
|
4,184
|
|
|
$
|
(15,060
|
)
|
Less: income allocated to participating securities
|
40
|
|
|
—
|
|
||
Net income (loss) available to common shareholders
|
$
|
4,144
|
|
|
$
|
(15,060
|
)
|
Weighted average common shares, basic
|
26,874,016
|
|
|
26,774,103
|
|
||
Restricted stock units
|
5,815
|
|
|
—
|
|
||
Weighted average common shares, diluted
|
26,879,831
|
|
|
26,774,103
|
|
||
|
|
|
|
||||
Basic net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.56
|
)
|
Diluted net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(0.56
|
)
|
•
|
We recognized net income of
$4.2 million
in the
first
quarter of
2018
, or
$0.15
per diluted share, compared to a net
loss
of
$(15.1) million
, or
$(0.56)
per diluted share in the
first
quarter of
2017
, due primarily to a net benefit of $(0.7) million in impairment and other lease charges in the first quarter of 2018 compared to impairment and other lease charges of $32.4 million in the first quarter of 2017. In addition, lower advertising expenses at both brands, higher comparable restaurant sales at Pollo Tropical and the impact of closing underperforming Pollo Tropical restaurants in 2017 positively contributed to the increase in net income in the first quarter of 2018. These positive contributions were partially offset by the negative impact of lower comparable restaurant sales at Taco Cabana and higher cost of sales and repairs and maintenance costs at both brands in part attributable to the initiatives under the Plan to improve the guest experience.
|
•
|
Total revenues
decreased
3.5%
in the
first
quarter of
2018
to
$169.5 million
compared to
$175.6 million
in the
first
quarter of
2017
, driven primarily by the impact of closing 46 underperforming restaurants during the last three quarters of 2017. Comparable restaurant sales
increased
1.1%
for our Pollo Tropical restaurants resulting primarily from an
increase
in average check of
3.4%
partially offset by a
decrease
in comparable restaurant transactions of
2.3%
. Comparable restaurant sales
decreased
1.7%
for our Taco Cabana restaurants resulting primarily from a
decrease
in comparable restaurant transactions of
11.3%
partially offset by an
increase
in average check of
9.6%
.
|
•
|
Consolidated Adjusted EBITDA
decreased
$4.3 million
in the
first
quarter of
2018
to
$17.0 million
compared to
$21.2 million
in the
first
quarter of
2017
, driven primarily by higher costs associated with the Plan to improve the guest experience, and lower comparable restaurant sales at Taco Cabana, partially offset by higher comparable restaurant sales at Pollo Tropical combined with the impact of closing underperforming restaurants in 2017 and lower advertising expenses. Consolidated Adjusted EBITDA is a non-GAAP financial measure of performance. For a discussion of our use of Consolidated Adjusted EBITDA and a reconciliation from net income (loss) to Consolidated Adjusted EBITDA, see "Management's Use of Non-GAAP Financial Measures".
|
|
Pollo Tropical
|
|
Taco Cabana
|
||||||||||||||
|
Owned
|
|
Franchised
|
|
Total
|
|
Owned
|
|
Franchised
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
146
|
|
|
31
|
|
|
177
|
|
|
166
|
|
|
7
|
|
|
173
|
|
New
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Closed
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
April 1, 2018
|
146
|
|
|
31
|
|
|
177
|
|
|
166
|
|
|
7
|
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
January 1, 2017
|
177
|
|
|
35
|
|
|
212
|
|
|
166
|
|
|
7
|
|
|
173
|
|
New
|
3
|
|
|
2
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Closed
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
April 2, 2017
|
180
|
|
|
34
|
|
|
214
|
|
|
167
|
|
|
7
|
|
|
174
|
|
|
Three Months Ended
|
||||||||||||||||
|
April 1, 2018
|
|
April 2, 2017
|
|
April 1, 2018
|
|
April 2, 2017
|
|
April 1, 2018
|
|
April 2, 2017
|
||||||
|
Pollo Tropical
|
|
Taco Cabana
|
|
Consolidated
|
||||||||||||
Restaurant sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pollo Tropical
|
|
|
|
|
|
|
|
|
56.0
|
%
|
|
56.8
|
%
|
||||
Taco Cabana
|
|
|
|
|
|
|
|
|
44.0
|
%
|
|
43.2
|
%
|
||||
Consolidated restaurant sales
|
|
|
|
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
32.8
|
%
|
|
30.2
|
%
|
|
30.3
|
%
|
|
27.8
|
%
|
|
31.7
|
%
|
|
29.1
|
%
|
Restaurant wages and related expenses
|
23.5
|
%
|
|
24.2
|
%
|
|
32.7
|
%
|
|
31.8
|
%
|
|
27.5
|
%
|
|
27.5
|
%
|
Restaurant rent expense
|
4.5
|
%
|
|
5.4
|
%
|
|
6.2
|
%
|
|
5.9
|
%
|
|
5.3
|
%
|
|
5.6
|
%
|
Other restaurant operating expenses
|
12.8
|
%
|
|
13.5
|
%
|
|
15.2
|
%
|
|
14.1
|
%
|
|
13.9
|
%
|
|
13.8
|
%
|
Advertising expense
|
3.5
|
%
|
|
4.4
|
%
|
|
3.9
|
%
|
|
4.2
|
%
|
|
3.7
|
%
|
|
4.3
|
%
|
Pre-opening costs
|
0.2
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
0.2
|
%
|
|
0.2
|
%
|
Pollo Tropical:
|
|
||
Increase in comparable restaurant sales
|
$
|
0.9
|
|
Decrease in sales related to closed restaurants, net of new restaurants
|
(5.7
|
)
|
|
Total decrease
|
$
|
(4.8
|
)
|
|
|
||
Taco Cabana:
|
|
||
Decrease in comparable restaurant sales
|
$
|
(1.2
|
)
|
Decrease in sales related to closed restaurants, net of new restaurants
|
(0.1
|
)
|
|
Total decrease
|
$
|
(1.3
|
)
|
Pollo Tropical:
|
|
|
Cost of sales:
|
|
|
Menu offering improvement costs related to the Plan
|
2.4
|
%
|
Operating inefficiency
|
0.5
|
%
|
Higher commodity costs
|
0.1
|
%
|
Sales mix
|
0.4
|
%
|
Menu price increases
|
(1.0
|
)%
|
Other
|
0.2
|
%
|
Net increase in cost of sales as a percentage of restaurant sales
|
2.6
|
%
|
|
|
|
Restaurant wages and related expenses:
|
|
|
Lower labor costs due to restaurant closures, net of new restaurants
|
(2.0
|
)%
|
Lower incentives bonus costs
(1)
|
(0.3
|
)%
|
Higher labor costs for comparable restaurants
(2)(3)
|
1.6
|
%
|
Net decrease in restaurant wages and related costs as a percentage of restaurant sales
|
(0.7
|
)%
|
|
|
|
Other operating expenses:
|
|
|
Lower real estate taxes
(4)
|
(0.5
|
)%
|
Lower utilities expenses
(4)
|
(0.2
|
)%
|
Higher repairs and maintenance costs
(2)
|
0.3
|
%
|
Other
(4)
|
(0.3
|
)%
|
Net decrease in other restaurant operating expenses as a percentage of restaurant sales
|
(0.7
|
)%
|
|
|
|
Advertising expense:
|
|
|
Reduced advertising
(4)(5)
|
(0.9
|
)%
|
Net decrease in advertising expense as a percentage of restaurant sales
|
(0.9
|
)%
|
|
|
|
Pre-opening costs:
|
|
|
Decrease in the number of restaurant openings
|
(0.1
|
)%
|
Net decrease in pre-opening costs as a percentage of restaurant sales
|
(0.1
|
)%
|
Taco Cabana:
|
|
|
Cost of sales:
|
|
|
Menu offering improvement costs related to the Plan
|
3.3
|
%
|
Higher commodity costs
|
1.0
|
%
|
Operating inefficiency
|
0.7
|
%
|
Sales mix
|
0.5
|
%
|
Menu price increases
|
(2.1
|
)%
|
Lower promotions and discounts
|
(1.3
|
)%
|
Other
|
0.4
|
%
|
Net increase in cost of sales as a percentage of restaurant sales
|
2.5
|
%
|
|
|
|
Restaurant wages and related expenses:
|
|
|
Higher medical benefit costs
|
0.8
|
%
|
Higher labor costs
(1)(3)
|
0.3
|
%
|
Lower incentive bonus costs
(2)
|
(0.2
|
)%
|
Net increase in restaurant wages and related costs as a percentage of restaurant sales
|
0.9
|
%
|
|
|
|
Other operating expenses:
|
|
|
Higher repairs and maintenance costs
(3)
|
0.6
|
%
|
Higher operating supplies
|
0.2
|
%
|
Other
|
0.3
|
%
|
Net increase in other restaurant operating expenses as a percentage of restaurant sales
|
1.1
|
%
|
|
|
|
Advertising expense:
|
|
|
Reduced advertising
|
(0.3
|
)%
|
Net decrease in advertising expense as a percentage of restaurant sales
|
(0.3
|
)%
|
|
|
|
Pre-opening costs:
|
|
|
Timing of restaurant openings
|
0.1
|
%
|
Net increase in pre-opening costs as a percentage of restaurant sales
|
0.1
|
%
|
•
|
restaurant operations are primarily conducted on a cash basis;
|
•
|
rapid turnover results in a limited investment in inventories; and
|
•
|
cash from sales is usually received before related liabilities for food, supplies and payroll become due.
|
|
Pollo
Tropical
|
|
Taco
Cabana
|
|
Other
|
|
Consolidated
|
||||||||
Three Months Ended April 1, 2018:
|
|
|
|
|
|
|
|
||||||||
New restaurant development
|
$
|
3,171
|
|
|
$
|
1,594
|
|
|
$
|
—
|
|
|
$
|
4,765
|
|
Restaurant remodeling
|
150
|
|
|
183
|
|
|
—
|
|
|
333
|
|
||||
Other restaurant capital expenditures
(1)
|
3,289
|
|
|
2,606
|
|
|
—
|
|
|
5,895
|
|
||||
Corporate and restaurant information systems
|
1,563
|
|
|
2,528
|
|
|
84
|
|
|
4,175
|
|
||||
Total capital expenditures
|
$
|
8,173
|
|
|
$
|
6,911
|
|
|
$
|
84
|
|
|
$
|
15,168
|
|
Number of new restaurant openings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Three Months Ended April 2, 2017:
|
|
|
|
|
|
|
|
||||||||
New restaurant development
|
$
|
6,719
|
|
|
$
|
1,852
|
|
|
$
|
—
|
|
|
$
|
8,571
|
|
Restaurant remodeling
|
212
|
|
|
5
|
|
|
—
|
|
|
217
|
|
||||
Other restaurant capital expenditures
(1)
|
896
|
|
|
793
|
|
|
—
|
|
|
1,689
|
|
||||
Corporate and restaurant information systems
|
836
|
|
|
46
|
|
|
315
|
|
|
1,197
|
|
||||
Total capital expenditures
|
$
|
8,663
|
|
|
$
|
2,696
|
|
|
$
|
315
|
|
|
$
|
11,674
|
|
Number of new restaurant openings
|
3
|
|
|
1
|
|
|
|
|
4
|
|
•
|
such financial information does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment;
|
•
|
such financial information does not reflect interest expense or the cash requirements necessary to service payments on our debt;
|
•
|
although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and such financial information does not reflect the cash required to fund such replacements; and
|
•
|
such financial information does not reflect the effect of earnings or charges resulting from matters that our management does not consider to be indicative of our ongoing operations. However, some of these charges and gains (such as impairment and other lease charges, other income and expense and stock-based compensation expense) have recurred and may recur.
|
|
|
Three Months Ended
|
||||||
|
|
April 1, 2018
|
|
April 2, 2017
|
||||
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
4,184
|
|
|
$
|
(15,060
|
)
|
Provision for (benefit from) income taxes
|
|
1,625
|
|
|
(8,642
|
)
|
||
Income (loss) before taxes
|
|
5,809
|
|
|
(23,702
|
)
|
||
Add:
|
|
|
|
|
||||
Non-general and administrative expense adjustments:
|
|
|
|
|
||||
Depreciation and amortization
|
|
8,999
|
|
|
9,186
|
|
||
Impairment and other lease charges
|
|
(662
|
)
|
|
32,414
|
|
||
Interest expense
|
|
1,069
|
|
|
584
|
|
||
Other expense (income), net
|
|
366
|
|
|
454
|
|
||
Stock-based compensation expense in restaurant wages
|
|
17
|
|
|
109
|
|
||
Unused pre-production costs in advertising expense
(1)
|
|
—
|
|
|
322
|
|
||
Total Non-general and administrative expense adjustments
|
|
9,789
|
|
|
43,069
|
|
||
General and administrative expense adjustments:
|
|
|
|
|
||||
Stock-based compensation expense
|
|
872
|
|
|
537
|
|
||
Terminated capital project
(2)
|
|
—
|
|
|
836
|
|
||
Board and shareholder matter costs
(3)
|
|
—
|
|
|
804
|
|
||
Plan restructuring costs and retention bonuses
(4)
|
|
488
|
|
|
145
|
|
||
Legal settlements and related costs
(5)
|
|
—
|
|
|
(473
|
)
|
||
Total General and administrative expense adjustments
|
|
1,360
|
|
|
1,849
|
|
||
Consolidated Adjusted EBITDA:
|
|
$
|
16,958
|
|
|
$
|
21,216
|
|
Three Months Ended
|
|
Pollo Tropical
|
|
Taco Cabana
|
||||
April 1, 2018:
|
|
|
|
|
||||
Adjusted EBITDA
|
|
$
|
14,447
|
|
|
$
|
2,511
|
|
Restaurant-Level Adjustments:
|
|
|
|
|
||||
Add: Pre-opening costs
|
|
224
|
|
|
157
|
|
||
Add: Other general and administrative expense
(1)
|
|
7,377
|
|
|
6,182
|
|
||
Less: Franchise royalty revenue and fees
|
|
464
|
|
|
187
|
|
||
Restaurant-Level Adjusted EBITDA:
|
|
$
|
21,584
|
|
|
$
|
8,663
|
|
|
|
|
|
|
||||
April 2, 2017:
|
|
|
|
|
||||
Adjusted EBITDA
|
|
$
|
14,722
|
|
|
$
|
6,494
|
|
Restaurant-Level Adjustments:
|
|
|
|
|
||||
Add: Pre-opening costs
|
|
332
|
|
|
92
|
|
||
Add: Other general and administrative expense
(1)
|
|
7,990
|
|
|
5,859
|
|
||
Less: Franchise royalty revenue and fees
|
|
449
|
|
|
181
|
|
||
Restaurant-Level Adjusted EBITDA:
|
|
$
|
22,595
|
|
|
$
|
12,264
|
|
•
|
Increases in food and other commodity costs;
|
•
|
Risks associated with the expansion of our business, including increasing construction costs;
|
•
|
Risks associated with food borne illness or other food safety issues, including negative publicity through traditional
|
•
|
Our ability to manage our growth and successfully implement our business strategy;
|
•
|
A decrease in the labor supply to us or our key suppliers due to changes in immigration policy including barriers to immigrants entering, working in, or remaining in the United States;
|
•
|
Labor and employment benefit costs, including the impact of increases in federal and state minimum wages, increases in exempt status salary levels and healthcare costs;
|
•
|
Cyber security breaches;
|
•
|
General economic conditions, particularly in the retail sector;
|
•
|
Competitive conditions;
|
•
|
Weather conditions including hurricanes, windstorms and flooding, and other natural disasters;
|
•
|
Significant disruptions in service or supply by any of our suppliers or distributors;
|
•
|
Increases in employee injury and general liability claims;
|
•
|
Changes in consumer perception of dietary health and food safety;
|
•
|
Regulatory factors;
|
•
|
Fuel prices;
|
•
|
The outcome of pending or future legal claims or proceedings;
|
•
|
Environmental conditions and regulations;
|
•
|
Our borrowing costs;
|
•
|
The availability and terms of necessary or desirable financing or refinancing and other related risks and uncertainties;
|
•
|
The risk of an act of terrorism or escalation of any insurrection or armed conflict involving the United States or any other national or international calamity; and
|
•
|
Factors that affect the restaurant industry generally, including product recalls, liability if our products cause injury, ingredient disclosure and labeling laws and regulations.
|
Period
|
|
Total Number of
Shares Purchased (1) |
|
Average Price
Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number of Shares that
May Yet Be Purchased Under the Plans or Programs |
|||||
February 26, 2018 to
March 4, 2018 |
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,500,000
|
|
March 5, 2018 to
April 1, 2018 |
|
18,406
|
|
|
18.93
|
|
|
18,406
|
|
|
1,481,594
|
|
|
Total
|
|
18,406
|
|
|
|
|
18,406
|
|
|
|
|
|
|
Exhibit
No.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
FIESTA RESTAURANT GROUP, INC.
|
|
|
Date: May 7, 2018
|
/
S
/ RICHARD C. STOCKINGER
|
|
(Signature)
|
|
Richard C. Stockinger
Chief Executive Officer
|
|
|
Date: May 7, 2018
|
/
S
/ LYNN S. SCHWEINFURTH
|
|
(Signature)
|
|
Lynn S. Schweinfurth
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
Date: May 7, 2018
|
/
S
/ CHERI L. KINDER
|
|
(Signature)
|
|
Cheri L. Kinder
Vice President, Corporate Controller
|
1 Year Fiesta Restaurant Chart |
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