Improvement in Comparable Restaurant Sales
Trend Extended Through the Third Quarter
Pollo Tropical and Taco Cabana Adjusted EBITDA
Margins for Third Quarter Expected to be Above Same Period Last
Year
Total Debt Reduced from $56 Million on July 31
to $42 million on September 27
Fiesta Restaurant Group, Inc. ("Fiesta" or the "Company")
(NASDAQ: FRGI), parent company of the Pollo Tropical® and Taco
Cabana® restaurant brands, today reported comparable restaurant
sales for the 13-week third quarter 2020, which ended on September
27, 2020. The Company also provided a liquidity update.
Fiesta President and Chief Executive Officer Richard Stockinger
said, “We are very encouraged by the continued improvement in
comparable restaurant sales at both brands during the third
quarter. Pollo Tropical’s comp sales acceleration was the most
significant, improving from -31.6% in the second quarter to -11.1%
in the third quarter, including sequential monthly comp momentum
within the third quarter to -8.7% in September. Taco Cabana’s comp
sales increased 500 basis points from the second quarter to -14.2%
in the third quarter. The sales acceleration at both brands was
realized despite our dining rooms being closed across most units
for the majority of the quarter along with continued challenges in
terms of COVID and economic conditions in Florida and Texas. In
addition, we expect Pollo Tropical and Taco Cabana Adjusted EBITDA
margins(1) for the third quarter will be above the second quarter
and year-ago period.”
Mr. Stockinger continued, “We have been taking ongoing steps to
ensure a safe operating environment throughout this crisis.
Effective July 12, we made the decision to close all of our dining
rooms to ensure team member and guest safety, and recently began to
evaluate re-opening dining rooms in select markets and locations.
We continue to operate all of our restaurants for drive-thru,
delivery and pickup, and we are accelerating efforts to better
enable our customers to enjoy our brands safely and conveniently
across all channels. We made very good progress during the third
quarter on off-premise initiatives including the launch of curbside
pickup capability at all units, the release of a greatly-enhanced
online experience for each brand including easier to use apps, and
expanded delivery options.”
Mr. Stockinger concluded, “Regarding liquidity, since July 31,
2020 we reduced our total debt by $14 million to $42 million and
our net revolver debt(2) by $21 million to $27 million as of
September 27, 2020. The net revolver debt reduction was funded by
cash flow from operations and the sale or sale-leaseback of four
Company owned properties. We currently have offers or contracts in
place for the sale or sale-leaseback of all 12 remaining Company
owned properties being marketed, with additional transactions
expected to close in the fourth quarter to enable further debt
paydown, although there can be no assurance that such transactions
will be completed during the fourth quarter or at all. We are also
exploring the potential refinancing of our current credit
agreement, although we cannot make any assurance of the timing or
certainty of completing any refinancing transactions at this
time.”
________ (1)
Adjusted EBITDA as a percentage of total revenue for each brand.
Adjusted EBITDA for each of our segments is the primary measure of
segment profit or loss used by our chief operating decision maker
for purposes of allocating resources to our segments and assessing
their performance.
(2)
Total debt is comprised of finance lease obligations of $2.0
million and $1.9 million as of July 31, 2020 and September 27,
2020, respectively, and outstanding revolving credit facility
borrowings. We define net revolver debt as outstanding revolving
credit facility borrowings plus outstanding letters of credit less
unrestricted cash balance as defined in our credit agreement
(generally cash in bank less outstanding payments), which were
$54.0 million, $3.5 million and $9.1 million, respectively, as of
July 31, 2020 and $39.9 million, $3.5 million and $16.0 million,
respectively, as of September 27, 2020. Net revolver debt is a
non-GAAP measure which we believe assists investors in
understanding of our management of our overall liquidity and
financial flexibility.
Comparable Restaurant Sales Summary
The Company indicated that it is releasing comparable sales and
liquidity status commentary on a more frequent basis as a result of
the rapidly changing economic environment and conditions related to
the COVID-19 pandemic, consistent with many other peer companies in
the restaurant segment. The Company will continue to evaluate the
benefits of this temporary change in disclosure practices as the
economic and COVID-19 pandemic conditions evolve.
Fiscal July
Fiscal August
Fiscal September
Third Quarter 2020
Pollo Tropical
-13.8%
-10.8%
-8.7%
-11.1%
Taco Cabana
-14.4%
-14.1%
-14.2%
-14.2%
Third quarter comparable restaurant sales at Pollo Tropical
benefited from the negative impact of Hurricane Dorian in 2019.
After adjusting for the impact of that named storm, 2020 third
quarter comparable sales would have been approximately 140 basis
points lower.
Third Quarter Earnings Call
Fiesta also announced that it will host a conference call to
review third quarter 2020 results on Wednesday, November 4, 2020 at
4:30 P.M. ET. A press release containing third quarter 2020 results
will be issued after market close that same day.
The conference call can be accessed live over the phone by
dialing 1-631-891-4304. A replay will be available after the call
until Wednesday, November 11, 2020 and can be accessed by dialing
1-412-317-6671. The passcode is 10011317. The conference call will
also be webcast live and archived on the corporate website at
www.frgi.com, under the “Investor Relations” section.
About Fiesta Restaurant Group, Inc.
Fiesta Restaurant Group, Inc., owns, operates and franchises the
Pollo Tropical® and Taco Cabana® restaurant brands. The brands
specialize in the operation of fast casual/quick service
restaurants that offer distinct and unique flavors with broad
appeal at a compelling value. The brands feature fresh-made
cooking, drive-thru service and catering. For more information
about Fiesta Restaurant Group, Inc., visit the corporate website at
www.frgi.com.
Forward Looking Statements
Certain statements contained in this news release and in our
public disclosures, whether written, oral or otherwise made,
relating to future events, including the potential or planned sale
or sale-leaseback of Company owned properties and potential
refinancing of our current credit facility, or future performance,
including any discussion, express or implied regarding the impact
of the COVID-19 pandemic and our initiatives on future sales,
margins, operating profit, cash liquidity and earnings
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements
are often identified by the words "may," "might," "believes,"
"thinks," "anticipates," "plans," "positioned," "target,"
"continue," "expects," "look to," "intends" and other similar
expressions, whether in the negative or the affirmative, that are
not statements of historical fact. These forward-looking statements
are not guarantees of future performance and involve certain risks,
uncertainties, and assumptions that are difficult to predict, and
you should not place undue reliance on our forward-looking
statements. Our actual results and timing of certain events could
differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not
limited to, those discussed from time to time in our reports filed
with the Securities and Exchange Commission, including our Annual
Report on Form 10-K for the fiscal year ended December 29, 2019 and
our quarterly reports on Form 10-Q. All forward-looking statements
and the internal projections and beliefs upon which we base our
expectations included in this release are made only as of the date
of this release and may change. While we may elect to update
forward-looking statements at some point in the future, we
expressly disclaim any obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201005005978/en/
Investor Relations Contact: Raphael Gross 203-682-8253
investors@frgi.com
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