Fiesta Restaurant Group, Inc. Closes 10 Pollo Tropical Restaurants; Will Rebrand up to Three Restaurants as Taco Cabana Resta...
October 24 2016 - 4:05PM
Business Wire
Fiesta Restaurant Group, Inc. (“Fiesta” or the “Company”)
(NASDAQ:FRGI), parent company of the Pollo Tropical® and Taco
Cabana® fast casual restaurant brands, today announced that it has
closed 10 Pollo Tropical restaurants and will rebrand up to three
of these restaurants in Texas as Taco Cabana restaurants. The
Company also announced expected impairment, lease and other charges
for the third and fourth quarters 2016 and third quarter 2016
comparable restaurant sales results.
The decision to close restaurants was based on a restaurant
portfolio examination as part of the Company’s strategic review
process to enhance long-term shareholder value. Affected
restaurants include eight in Texas, one in Nashville, Tennessee and
one in Atlanta, Georgia. Nearly all employees impacted by closures
will be offered positions at nearby restaurants.
Interim Fiesta President and Chief Executive Officer Danny
Meisenheimer said, “After a period of aggressively growing Pollo
Tropical in Texas we have hit the pause button to focus on building
brand affinity, frequency and awareness, while continuing balanced
system development over time. We believe closing or rebranding
these underperforming stores provides the opportunity to further
strengthen our operational and financial performance across the
remaining restaurants in Texas and across our Pollo Tropical brand
as a whole.”
Mr. Meisenheimer added, “We remain optimistic about the future
growth opportunities for both our Pollo Tropical and Taco Cabana
brands and believe that the steps we are taking now provide
opportunity for success in 2017 and beyond.”
The Company currently estimates it will recognize impairment
charges of approximately $18 million to $21 million in the third
quarter 2016, and related lease and other charges of $2 million to
$4 million in the fourth quarter 2016 based upon the actual timing
of restaurant closures. The closed restaurants contributed
approximately $4.8 million of pre-tax operating losses to results
in 2016 through the end of the third quarter 2016.
Preliminary Third Quarter 2016 Comparable Restaurant Sales
Results
The Company also announced the following comparable restaurant
sales results for the third quarter 2016, which ended October 2,
2016:
- Comparable restaurant sales at Pollo
Tropical decreased 1.0%; and
- Comparable restaurant sales at Taco
Cabana decreased 4.1%.
Mr. Meisenheimer concluded, “As always, we are focused on
delivering the best products and experience to our guests. Although
the industry backdrop remains soft and comparable sales at Pollo
Tropical continue to be negatively impacted by sales
cannibalization, traffic trends improved at the end of the third
quarter at both brands driven, in part, by compelling product
and value promotions.”
The Company will release full third quarter 2016 financial
results on Monday, November 7, 2016 after market close and will
hold a conference call at 4:45 PM ET. The conference call can be
accessed live over the phone by dialing 201-689-8562. A replay will
be available after the call until Monday, November 14, 2016, and
can be accessed by dialing 858-384-5517. The passcode is 13646683.
The conference call will also be webcast live from the corporate
website at www.frgi.com, under the investor relations section. A
replay of the webcast will be available through the corporate
website shortly after the call has concluded.
About Fiesta Restaurant Group, Inc.
Fiesta Restaurant Group, Inc. is the parent company of the Pollo
Tropical and Taco Cabana restaurant brands. The brands specialize
in the operation of fast-casual, ethnic restaurants that offer
distinct and unique Caribbean and Mexican inspired flavors with
broad appeal at a compelling value. The brands feature
made-from-scratch cooking, fresh salsa bars, drive-thru service and
catering. For more information about Fiesta Restaurant Group, Inc.,
visit the corporate website at www.frgi.com.
Forward-Looking Statements
Except for the historical information contained in this news
release, the matters addressed are forward-looking statements.
Forward-looking statements, written, oral or otherwise made,
represent Fiesta's expectation or belief concerning future events.
Without limiting the foregoing, these statements are often
identified by the words "may," "might," "believes," "thinks,"
"anticipates," "plans," "expects," "intends" or similar
expressions. In addition, expressions of Fiesta's strategies,
intentions or plans are also forward-looking statements. Such
statements reflect management's current views with respect to
future events and are subject to risks and uncertainties, both
known and unknown. You are cautioned not to place undue reliance on
these forward-looking statements as there are important factors
that could cause actual results to differ materially from those in
forward-looking statements, many of which are beyond Fiesta's
control. Investors are referred to the full discussion of risks and
uncertainties as included in Fiesta's filings with the Securities
and Exchange Commission.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161024006207/en/
Investor Relations:Raphael Gross,
203-682-8253investors@frgi.com
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