ADDISON, Texas - April 30, 2015 - (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 reported results for the first quarter 2015, which ended on March 29, 2015.
Highlights of the first quarter 2015 results as compared to the first quarter 2014 include:
Fiesta President and Chief Executive Officer Tim Taft commented, “By generating increases of 12.7% in revenues and 18.2% in diluted EPS during the first quarter, our team has once again done a great job delivering strong financial results for shareholders. The Pollo Tropical brand continues to build upon its strong track record by growing comparable transactions and opening successful restaurants in both new and existing markets, while the Taco Cabana brand continues to demonstrate the positive impact of improved operational execution, remodels and value-oriented promotions.”
Total revenues increased 12.7% to $163.9 million from $145.4 million compared to the prior year period due primarily to 23 net Company-owned restaurant openings as well as comparable restaurant sales growth of 6.4% at Pollo Tropical and 3.8% at Taco Cabana. Pollo Tropical has generated comparable restaurant sales growth for the 22nd consecutive quarter while Taco has generated comparable restaurant sales growth for 18 out of the past 19 quarters and for the fifth consecutive quarter.
Cost of sales as a percentage of restaurant sales was approximately the same as the prior year period as price increases, favorable sales mix related to the implementation of new menu boards at Taco Cabana in the first quarter 2015, and supply chain management initiatives offset commodity cost increases.
Restaurant wages and related expenses as a percentage of restaurant sales improved 30 basis points compared to the prior year period due to the positive impact of sales increases, partially offset by labor costs at new Company-owned restaurants.
General and administrative expenses increased $1.6 million to $13.8 million compared to the prior year period due primarily to investments in human capital and training to support the ongoing Pollo Tropical expansion effort in new markets. As a percentage of revenues, general and administrative expenses held steady compared to the prior year period.
Impairment and other lease charges of $0.1 million consisted primarily of asset impairment charges of non-transferable assets at restaurants to be closed in 2015.
Other income of $0.4 million included the impact of a previously deferred gain from a sale-leaseback transaction that was recognized upon termination of a lease as a result of an eminent domain proceeding.
Interest expense decreased $0.2 million to $0.4 million compared to the prior year period due primarily to lower borrowing rates as well as higher capitalized interest in 2015.
The effective tax rate of 38.3% held steady compared to the prior year period.
Net income increased to $10.5 million, or $0.39 per diluted share (on a base of 26.4 million diluted shares), compared to a net income of $8.7 million, or $0.33 per diluted share (on a base of 26.2 million diluted shares) in the prior year period.
Pollo Tropical restaurant sales increased 21.8% to $86.9 million compared to the prior year period due to 24 net Company-owned restaurant openings and a comparable restaurant sales increase of 6.4%. The growth in comparable restaurant sales resulted from a 5.5% increase in average check along with a 0.9% increase in comparable guest traffic. Average check was primarily driven by menu price increases that positively impacted restaurant sales by 5.4%. This is the 22nd consecutive quarter the brand has delivered comparable restaurant sales growth and, on a two-year basis, quarterly comparable restaurant sales grew 12.7%. Adjusted EBITDA for Pollo Tropical, a non-GAAP financial measure, increased 17.1% to $16.0 million compared to the prior year period (see non-GAAP reconciliation table below).
Taco Cabana restaurant sales increased 3.7% to $76.2 million compared to the prior year period due to a 3.8% increase in comparable restaurant sales, net of restaurant closures. The increase in comparable restaurant sales resulted from a 3.1% increase in average check along with a 0.7% increase in comparable guest traffic. Average check was driven by menu price increases that positively impacted restaurant sales by 1.9% and a positive change in sales mix due to the implementation of new menu boards in the first quarter of 2015. This is the fifth consecutive quarter and 18 out of the past 19 quarters the brand has delivered comparable restaurant sales growth. On a two-year basis, quarterly comparable restaurant sales grew 4.6%. Adjusted EBITDA for Taco Cabana, a non-GAAP financial measure, increased 26.1% to $9.0 million compared to the prior year period (see non-GAAP reconciliation table below).
During the first quarter 2015, Fiesta opened six Company-owned and operated Pollo Tropical restaurants in Florida, Georgia and Texas, and closed three Company-owned and operated Taco Cabana restaurants in Texas.
As of March 29, 2015, the Company owned and operated 130 Pollo Tropical restaurants and 164 Taco Cabana restaurants (including two Cabana Grill restaurants) and franchised 37 Pollo Tropical restaurants in the U.S., Puerto Rico, the Bahamas, Ecuador, Guatemala, Honduras, Panama, Trinidad & Tobago, Venezuela and the Dominican Republic, and seven Taco Cabana restaurants in the U.S.
Fiesta will host a conference call to review first quarter 2015 results today at 4:30 PM ET. Hosting the call will be Tim Taft, President and Chief Executive Officer, and Lynn Schweinfurth, Senior Vice President and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing 877-407-0789 or for international callers by dialing 201-689-8562. A replay will be available after the call and can be accessed by dialing 877-870-5176 or for international callers by dialing 858-384-5517; the passcode is 13606348. The replay will be available until Thursday, May 7, 2015.
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.
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, and drive-thru service and catering. For more information about Fiesta Restaurant Group, Inc., visit the corporate website at www.frgi.com.
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.
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Fiesta Restaurant Group, Inc.
Supplemental Non-GAAP Information
The following table sets forth certain unaudited supplemental financial data for the periods indicated
(in thousands):
Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are non-GAAP financial measures. Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense and other income and expense. Adjusted EBITDA for each of our segments includes an allocation of general and administrative expenses associated with administrative support for executive management, information systems and certain accounting, legal, supply chain, development and other administrative functions. Restaurant-Level Adjusted EBITDA is defined as Adjusted EBITDA excluding franchise royalty revenues and fees, pre-opening costs and general and administrative expenses (including corporate-level general and administrative expenses).
Adjusted EBITDA for each of our segments is a 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. In addition, management believes that Adjusted EBITDA and Restaurant-Level Adjusted EBITDA, when viewed with our results of operations calculated in accordance with GAAP and our reconciliation of Restaurant-Level Adjusted EBITDA and Adjusted EBITDA to net income (i) provide useful information about our operating performance and period-over-period growth, (ii) provide additional information that is useful for evaluating the operating performance of our business, and (iii) permit investors to gain an understanding of the factors and trends affecting our ongoing earnings, from which capital investments are made and debt is serviced. However, such measures are not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity. Also these measures may not be comparable to similarly titled captions of other companies.
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SOURCE Fiesta Restaurant Group, Inc.
Raphael Gross
Investor Relations:
Fiesta Restaurant Group, Inc.
203-682-8253
investors@frgi.com
Fiesta Restaurant Group, Inc. owns, operates and franchises the Pollo Tropical® and Taco Cabana® restaurant brands