Delaware
|
001-35373
|
90-0712224
|
||
(State or other jurisdiction
of incorporation)
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
||
|
|
|||
14800 Landmark Boulevard, Suite 500
|
|
|||
Dallas
|
Texas
|
75254
|
||
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
Common Stock, par value $0.01 per share
|
|
FRGI
|
|
NASDAQ Global Select Market
|
•
|
Total revenues decreased 4.9% to $159.5 million in the fourth quarter of 2019 from $167.6 million in the fourth quarter of 2018, primarily as a result of sales declines at Taco Cabana;
|
•
|
Comparable restaurant sales at Pollo Tropical increased 0.6%;
|
•
|
Comparable restaurant sales at Taco Cabana decreased 8.1%;
|
•
|
Net loss of $21.1 million, or $0.82 per diluted share, in the fourth quarter of 2019 compared to a net loss of $7.9 million, or $.30 per diluted share, in the fourth quarter of 2018;
|
•
|
Adjusted net loss (a non-GAAP financial measure) of $1.1 million, or $0.04 per diluted share, in the fourth quarter of 2019, which includes a $0.02 per diluted share negative impact from adoption of the new lease accounting standard, compared to adjusted net income of $2.2 million, or $0.08 per diluted share, in the fourth quarter of 2018 (see non-GAAP reconciliation table below);
|
•
|
Adjusted EBITDA for Pollo Tropical of $10.6 million in the fourth quarter of 2019 would have been $0.4 million higher absent accounting changes resulting from adoption of the new lease accounting standard, compared to $12.4 million in the fourth quarter of 2018;
|
•
|
Restaurant-level Adjusted EBITDA (a non-GAAP financial measure) for Pollo Tropical of $17.2 million, or 19.2% of restaurant sales, in the fourth quarter of 2019 would have been $0.4 million, or 0.4% of restaurant sales, higher absent accounting changes resulting from adoption of the new lease accounting standard, compared to $19.1 million, or 21.0% of restaurant sales, in the fourth quarter of 2018 (see non-GAAP reconciliation table below);
|
•
|
Adjusted EBITDA for Taco Cabana of $(0.3) million in the fourth quarter of 2019 would have been $0.5 million higher absent accounting changes resulting from adoption of the new lease accounting standard, compared to $3.4 million in the fourth quarter of 2018;
|
•
|
Restaurant-level Adjusted EBITDA (a non-GAAP financial measure) for Taco Cabana of $5.5 million, or 8.0% of restaurant sales, in the fourth quarter of 2019 would have been $0.5 million, or 0.7% of restaurant sales, higher absent accounting changes resulting from adoption of the new lease accounting standard, compared to $8.9 million, or 11.8% of restaurant sales, in the fourth quarter of 2018 (see non-GAAP reconciliation table below); and
|
•
|
Consolidated Adjusted EBITDA (a non-GAAP financial measure) of $10.3 million in the fourth quarter of 2019 would have been $0.8 million higher absent accounting changes resulting from adoption of the new lease accounting standard, compared to Consolidated Adjusted EBITDA of $15.8 million in the fourth quarter of 2018 (see non-GAAP reconciliation table below).
|
•
|
Our fiscal full year 2020 will have 53 weeks;
|
•
|
Driven in part by off premise sales growth, we expect to return Pollo Tropical to positive comparable restaurant sales in 2020, with sequential growth over the course of the year as we ramp up off premise sales through delivery, catering and online;
|
•
|
We are working to stabilize comparable restaurant sales at Taco Cabana, and expect to achieve sequential improvement over the course of the year, although trends during the first half of 2020 are likely to be negative;
|
•
|
Food costs are projected to remain stable vs. the prior year based on current supply commitments we already have in place across key commodities;
|
•
|
Restaurant-level Adjusted EBITDA margins at Pollo Tropical are expected to be stable vs. 2019 while we are targeting a 200 to 300 basis point improvement at Taco Cabana, driven by efficiency and operations simplification initiatives; and
|
•
|
Capital expenditures are expected to be at or below the 2019 level of approximately $41 million.
|
|
Three Months Ended (a)
|
|
Twelve Months Ended (a)
|
||||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Restaurant sales
|
$
|
158,780
|
|
|
$
|
166,974
|
|
|
$
|
658,263
|
|
|
$
|
685,925
|
|
Franchise royalty revenues and fees
|
682
|
|
|
664
|
|
|
2,680
|
|
|
2,672
|
|
||||
Total revenues
|
159,462
|
|
|
167,638
|
|
|
660,943
|
|
|
688,597
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
51,129
|
|
|
52,671
|
|
|
207,453
|
|
|
218,946
|
|
||||
Restaurant wages and related expenses (b)
|
43,917
|
|
|
46,028
|
|
|
179,178
|
|
|
188,131
|
|
||||
Restaurant rent expense (c)
|
12,192
|
|
|
9,173
|
|
|
47,805
|
|
|
36,034
|
|
||||
Other restaurant operating expenses (c)
|
23,468
|
|
|
25,430
|
|
|
91,897
|
|
|
100,828
|
|
||||
Advertising expense
|
5,390
|
|
|
5,649
|
|
|
23,179
|
|
|
23,695
|
|
||||
General and administrative expenses (b)(d)
|
13,808
|
|
|
13,502
|
|
|
56,195
|
|
|
54,525
|
|
||||
Depreciation and amortization
|
9,675
|
|
|
9,696
|
|
|
39,195
|
|
|
37,604
|
|
||||
Pre-opening costs
|
109
|
|
|
235
|
|
|
972
|
|
|
1,716
|
|
||||
Impairment and other lease charges (e)
|
8,434
|
|
|
14,605
|
|
|
13,101
|
|
|
21,144
|
|
||||
Goodwill impairment (f)
|
—
|
|
|
—
|
|
|
67,909
|
|
|
—
|
|
||||
Closed restaurant rent, net of sublease income (g)
|
678
|
|
|
—
|
|
|
4,163
|
|
|
—
|
|
||||
Other expense (income), net (h)
|
121
|
|
|
125
|
|
|
1,041
|
|
|
(3,007
|
)
|
||||
Total operating expenses
|
168,921
|
|
|
177,114
|
|
|
732,088
|
|
|
679,616
|
|
||||
Income (loss) from operations
|
(9,459
|
)
|
|
(9,476
|
)
|
|
(71,145
|
)
|
|
8,981
|
|
||||
Interest expense
|
848
|
|
|
987
|
|
|
3,872
|
|
|
3,966
|
|
||||
Income (loss) before income taxes
|
(10,307
|
)
|
|
(10,463
|
)
|
|
(75,017
|
)
|
|
5,015
|
|
||||
Provision for (benefit from) income taxes (i)
|
10,746
|
|
|
(2,526
|
)
|
|
9,369
|
|
|
(2,772
|
)
|
||||
Net income (loss)
|
$
|
(21,053
|
)
|
|
$
|
(7,937
|
)
|
|
$
|
(84,386
|
)
|
|
$
|
7,787
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.82
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(3.18
|
)
|
|
$
|
0.29
|
|
Diluted
|
(0.82
|
)
|
|
(0.30
|
)
|
|
(3.18
|
)
|
|
0.29
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
25,794,321
|
|
|
26,860,157
|
|
|
26,500,356
|
|
|
26,890,577
|
|
||||
Diluted
|
25,794,321
|
|
|
26,860,157
|
|
|
26,500,356
|
|
|
26,894,083
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Cash
|
$
|
13,413
|
|
|
$
|
5,258
|
|
Other current assets
|
25,870
|
|
|
39,141
|
|
||
Property and equipment, net
|
211,944
|
|
|
231,328
|
|
||
Operating lease right-of-use assets
|
251,272
|
|
|
—
|
|
||
Goodwill
|
56,307
|
|
|
123,484
|
|
||
Deferred income taxes
|
—
|
|
|
10,383
|
|
||
Other assets
|
9,835
|
|
|
9,065
|
|
||
Total assets
|
$
|
568,641
|
|
|
$
|
418,659
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
$
|
63,620
|
|
|
$
|
46,561
|
|
Long-term debt, net of current portion
|
76,823
|
|
|
79,636
|
|
||
Deferred income sale-leaseback of real estate
|
—
|
|
|
19,899
|
|
||
Operating lease liabilities
|
256,798
|
|
|
—
|
|
||
Deferred tax liabilities
|
4,759
|
|
|
—
|
|
||
Other non-current liabilities
|
8,405
|
|
|
32,504
|
|
||
Total liabilities
|
410,405
|
|
|
178,600
|
|
||
Stockholders' equity
|
158,236
|
|
|
240,059
|
|
||
Total liabilities and stockholders' equity
|
$
|
568,641
|
|
|
$
|
418,659
|
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||
Segment revenues:
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
$
|
90,193
|
|
|
$
|
91,373
|
|
|
$
|
363,473
|
|
|
$
|
376,196
|
|
Taco Cabana
|
69,269
|
|
|
76,265
|
|
|
297,470
|
|
|
312,401
|
|
||||
Total revenues
|
$
|
159,462
|
|
|
$
|
167,638
|
|
|
$
|
660,943
|
|
|
$
|
688,597
|
|
|
|
|
|
|
|
|
|
||||||||
Change in comparable restaurant sales (a):
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
0.6
|
%
|
|
(1.9
|
)%
|
|
(1.8
|
)%
|
|
2.2
|
%
|
||||
Taco Cabana
|
(8.1
|
)%
|
|
5.1
|
%
|
|
(4.1
|
)%
|
|
4.5
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Average sales per Company-owned restaurant:
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
|
|
|
|
|
|
|
||||||||
Comparable restaurants (b)
|
$
|
651
|
|
|
$
|
628
|
|
|
$
|
2,633
|
|
|
$
|
2,612
|
|
New restaurants (c)
|
416
|
|
|
393
|
|
|
1,783
|
|
|
1,709
|
|
||||
Total Company-owned (d)
|
634
|
|
|
605
|
|
|
2,576
|
|
|
2,521
|
|
||||
Taco Cabana
|
|
|
|
|
|
|
|
||||||||
Comparable restaurants (b)
|
$
|
419
|
|
|
$
|
455
|
|
|
$
|
1,811
|
|
|
$
|
1,871
|
|
New restaurants (c)
|
501
|
|
|
356
|
|
|
1,877
|
|
|
1,536
|
|
||||
Total Company-owned (d)
|
422
|
|
|
447
|
|
|
1,812
|
|
|
1,846
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
$
|
3,569
|
|
|
$
|
(4,262
|
)
|
|
$
|
20,300
|
|
|
$
|
17,639
|
|
Taco Cabana
|
(13,876
|
)
|
|
(6,201
|
)
|
|
(95,317
|
)
|
|
(12,624
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (e):
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
$
|
10,617
|
|
|
$
|
12,383
|
|
|
$
|
50,560
|
|
|
$
|
54,903
|
|
Taco Cabana
|
(300
|
)
|
|
3,407
|
|
|
7,889
|
|
|
13,059
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Restaurant-level Adjusted EBITDA (e)(f):
|
|
|
|
|
|
|
|
||||||||
Pollo Tropical
|
$
|
17,208
|
|
|
$
|
19,118
|
|
|
$
|
77,560
|
|
|
$
|
82,066
|
|
Taco Cabana
|
5,526
|
|
|
8,940
|
|
|
31,386
|
|
|
36,315
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||
|
December 29, 2019
|
|
December 30, 2018
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
|
|
|
|
|
|
|
||||
Company-owned restaurant openings:
|
|
|
|
|
|
|
|
||||
Pollo Tropical
|
1
|
|
|
3
|
|
|
3
|
|
|
7
|
|
Taco Cabana
|
—
|
|
|
—
|
|
|
3
|
|
|
7
|
|
Total new restaurant openings
|
1
|
|
|
3
|
|
|
6
|
|
|
14
|
|
|
|
|
|
|
|
|
|
||||
Company-owned restaurant closings:
|
|
|
|
|
|
|
|
||||
Pollo Tropical
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
Taco Cabana
|
(1
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(11
|
)
|
Net change in restaurants
|
—
|
|
|
(20
|
)
|
|
5
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
||||
Number of Company-owned restaurants:
|
|
|
|
|
|
|
|
||||
Pollo Tropical
|
142
|
|
|
139
|
|
|
142
|
|
|
139
|
|
Taco Cabana
|
164
|
|
|
162
|
|
|
164
|
|
|
162
|
|
Total Company-owned restaurants
|
306
|
|
|
301
|
|
|
306
|
|
|
301
|
|
|
|
|
|
|
|
|
|
||||
Number of franchised restaurants:
|
|
|
|
|
|
|
|
||||
Pollo Tropical
|
32
|
|
|
30
|
|
|
32
|
|
|
30
|
|
Taco Cabana
|
8
|
|
|
8
|
|
|
8
|
|
|
8
|
|
Total franchised restaurants
|
40
|
|
|
38
|
|
|
40
|
|
|
38
|
|
|
|
|
|
|
|
|
|
||||
Total number of restaurants:
|
|
|
|
|
|
|
|
||||
Pollo Tropical
|
174
|
|
|
169
|
|
|
174
|
|
|
169
|
|
Taco Cabana
|
172
|
|
|
170
|
|
|
172
|
|
|
170
|
|
Total restaurants
|
346
|
|
|
339
|
|
|
346
|
|
|
339
|
|
|
Three Months Ended
|
||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
||||||||
Pollo Tropical:
|
|
(a)
|
|
|
(a)
|
||||||
Restaurant sales
|
$
|
89,738
|
|
|
|
$
|
90,934
|
|
|
||
Cost of sales
|
29,264
|
|
32.6
|
%
|
|
29,326
|
|
32.2
|
%
|
||
Restaurant wages and related expenses
|
21,522
|
|
24.0
|
%
|
|
21,373
|
|
23.5
|
%
|
||
Restaurant rent expense
|
5,657
|
|
6.3
|
%
|
|
4,433
|
|
4.9
|
%
|
||
Other restaurant operating expenses
|
13,103
|
|
14.6
|
%
|
|
13,487
|
|
14.8
|
%
|
||
Advertising expense
|
3,007
|
|
3.4
|
%
|
|
3,209
|
|
3.5
|
%
|
||
Depreciation and amortization
|
5,358
|
|
6.0
|
%
|
|
5,255
|
|
5.8
|
%
|
||
Pre-opening costs
|
73
|
|
0.1
|
%
|
|
234
|
|
0.3
|
%
|
||
Impairment and other lease charges
|
177
|
|
0.2
|
%
|
|
10,148
|
|
11.2
|
%
|
||
Closed restaurant rent expense, net of sublease income
|
476
|
|
0.5
|
%
|
|
—
|
|
—
|
%
|
||
|
|
|
|
|
|
||||||
Taco Cabana:
|
|
|
|
|
|
||||||
Restaurant sales
|
$
|
69,042
|
|
|
|
$
|
76,040
|
|
|
||
Cost of sales
|
21,865
|
|
31.7
|
%
|
|
23,345
|
|
30.7
|
%
|
||
Restaurant wages and related expenses
|
22,395
|
|
32.4
|
%
|
|
24,655
|
|
32.4
|
%
|
||
Restaurant rent expense
|
6,535
|
|
9.5
|
%
|
|
4,740
|
|
6.2
|
%
|
||
Other restaurant operating expenses
|
10,365
|
|
15.0
|
%
|
|
11,943
|
|
15.7
|
%
|
||
Advertising expense
|
2,383
|
|
3.5
|
%
|
|
2,440
|
|
3.2
|
%
|
||
Depreciation and amortization
|
4,317
|
|
6.3
|
%
|
|
4,441
|
|
5.8
|
%
|
||
Pre-opening costs
|
36
|
|
0.1
|
%
|
|
1
|
|
—
|
%
|
||
Impairment and other lease charges
|
8,257
|
|
12.0
|
%
|
|
4,457
|
|
5.9
|
%
|
||
Goodwill impairment
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
||
Closed restaurant rent expense, net of sublease income
|
202
|
|
0.3
|
%
|
|
—
|
|
—
|
%
|
||
|
|
|
|
|
|
||||||
|
Twelve Months Ended
|
||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
||||||||
Pollo Tropical:
|
|
(a)
|
|
|
(a)
|
||||||
Restaurant sales
|
$
|
361,693
|
|
|
|
$
|
374,381
|
|
|
||
Cost of sales
|
115,119
|
|
31.8
|
%
|
|
123,042
|
|
32.9
|
%
|
||
Restaurant wages and related expenses
|
84,909
|
|
23.5
|
%
|
|
87,025
|
|
23.2
|
%
|
||
Restaurant rent expense
|
22,050
|
|
6.1
|
%
|
|
17,457
|
|
4.7
|
%
|
||
Other restaurant operating expenses
|
49,768
|
|
13.8
|
%
|
|
51,757
|
|
13.8
|
%
|
||
Advertising expense
|
12,358
|
|
3.4
|
%
|
|
13,068
|
|
3.5
|
%
|
||
Depreciation and amortization
|
21,476
|
|
5.9
|
%
|
|
21,372
|
|
5.7
|
%
|
||
Pre-opening costs
|
380
|
|
0.1
|
%
|
|
933
|
|
0.2
|
%
|
||
Impairment and other lease charges
|
15
|
|
—
|
%
|
|
13,587
|
|
3.6
|
%
|
||
Closed restaurant rent expense, net of sublease income
|
3,260
|
|
0.9
|
%
|
|
—
|
|
—
|
%
|
||
|
|
|
|
|
|
||||||
Taco Cabana:
|
|
|
|
|
|
||||||
Restaurant sales
|
$
|
296,570
|
|
|
|
$
|
311,544
|
|
|
||
Cost of sales
|
92,334
|
|
31.1
|
%
|
|
95,904
|
|
30.8
|
%
|
||
Restaurant wages and related expenses
|
94,269
|
|
31.8
|
%
|
|
101,106
|
|
32.5
|
%
|
||
Restaurant rent expense
|
25,755
|
|
8.7
|
%
|
|
18,577
|
|
6.0
|
%
|
||
Other restaurant operating expenses
|
42,129
|
|
14.2
|
%
|
|
49,071
|
|
15.8
|
%
|
||
Advertising expense
|
10,821
|
|
3.6
|
%
|
|
10,627
|
|
3.4
|
%
|
||
Depreciation and amortization
|
17,719
|
|
6.0
|
%
|
|
16,232
|
|
5.2
|
%
|
||
Pre-opening costs
|
592
|
|
0.2
|
%
|
|
783
|
|
0.3
|
%
|
||
Impairment and other lease charges
|
13,086
|
|
4.4
|
%
|
|
7,557
|
|
2.4
|
%
|
||
Goodwill impairment
|
67,909
|
|
22.9
|
%
|
|
—
|
|
—
|
%
|
||
Closed restaurant rent expense, net of sublease income
|
903
|
|
0.3
|
%
|
|
—
|
|
—
|
%
|
Three Months Ended
|
|
Pollo Tropical
|
|
Taco Cabana
|
|
Consolidated
|
||||||
December 29, 2019:
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
|
|
|
$
|
(21,053
|
)
|
||||
Provision for income taxes
|
|
|
|
|
|
10,746
|
|
|||||
Income (loss) before taxes
|
|
$
|
3,569
|
|
|
$
|
(13,876
|
)
|
|
$
|
(10,307
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
5,358
|
|
|
4,317
|
|
|
9,675
|
|
|||
Impairment and other lease charges
|
|
177
|
|
|
8,257
|
|
|
8,434
|
|
|||
Interest expense
|
|
419
|
|
|
429
|
|
|
848
|
|
|||
Closed restaurant rent expense, net of sublease income
|
|
476
|
|
|
202
|
|
|
678
|
|
|||
Other expense, net
|
|
113
|
|
|
8
|
|
|
121
|
|
|||
Stock-based compensation expense in restaurant wages
|
|
22
|
|
|
28
|
|
|
50
|
|
|||
Total non-general and administrative expense adjustments
|
|
6,565
|
|
|
13,241
|
|
|
19,806
|
|
|||
General and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
394
|
|
|
262
|
|
|
656
|
|
|||
Digital and brand repositioning costs
|
|
89
|
|
|
73
|
|
|
162
|
|
|||
Total general and administrative expense adjustments
|
|
483
|
|
|
335
|
|
|
818
|
|
|||
Adjusted EBITDA
|
|
$
|
10,617
|
|
|
$
|
(300
|
)
|
|
$
|
10,317
|
|
Restaurant-level adjustments:
|
|
|
|
|
|
|
||||||
Add: Pre-opening costs
|
|
73
|
|
|
36
|
|
|
109
|
|
|||
Add: Other general and administrative expense(1)
|
|
6,973
|
|
|
6,017
|
|
|
12,990
|
|
|||
Less: Franchise royalty revenue and fees
|
|
455
|
|
|
227
|
|
|
682
|
|
|||
Restaurant-level Adjusted EBITDA
|
|
$
|
17,208
|
|
|
$
|
5,526
|
|
|
$
|
22,734
|
|
|
|
|
|
|
|
|
||||||
December 30, 2018:
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
|
|
|
$
|
(7,937
|
)
|
||||
Benefit from income taxes
|
|
|
|
|
|
(2,526
|
)
|
|||||
Loss before taxes
|
|
$
|
(4,262
|
)
|
|
$
|
(6,201
|
)
|
|
$
|
(10,463
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
5,255
|
|
|
4,441
|
|
|
9,696
|
|
|||
Impairment and other lease charges
|
|
10,148
|
|
|
4,457
|
|
|
14,605
|
|
|||
Interest expense
|
|
453
|
|
|
534
|
|
|
987
|
|
|||
Other expense (income), net
|
|
352
|
|
|
(227
|
)
|
|
125
|
|
|||
Stock-based compensation expense in restaurant wages
|
|
11
|
|
|
23
|
|
|
34
|
|
|||
Total non-general and administrative expense adjustments
|
|
16,219
|
|
|
9,228
|
|
|
25,447
|
|
|||
General and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
427
|
|
|
364
|
|
|
791
|
|
|||
Restructuring costs and retention bonuses
|
|
9
|
|
|
16
|
|
|
25
|
|
|||
Legal settlements and related costs
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||
Total general and administrative expense adjustments
|
|
426
|
|
|
380
|
|
|
806
|
|
|||
Adjusted EBITDA
|
|
$
|
12,383
|
|
|
$
|
3,407
|
|
|
$
|
15,790
|
|
Restaurant-level adjustments:
|
|
|
|
|
|
|
||||||
Add: Pre-opening costs
|
|
234
|
|
|
1
|
|
|
235
|
|
|||
Add: Other general and administrative expense(1)
|
|
6,940
|
|
|
5,757
|
|
|
12,697
|
|
|||
Less: Franchise royalty revenue and fees
|
|
439
|
|
|
225
|
|
|
664
|
|
|||
Restaurant-level Adjusted EBITDA
|
|
$
|
19,118
|
|
|
$
|
8,940
|
|
|
$
|
28,058
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Twelve Months Ended
|
|
Pollo Tropical
|
|
Taco Cabana
|
|
Consolidated
|
||||||
December 29, 2019:
|
|
|
|
|
|
|
||||||
Net loss
|
|
|
|
|
|
$
|
(84,386
|
)
|
||||
Provision for income taxes
|
|
|
|
|
|
9,369
|
|
|||||
Income (loss) before taxes
|
|
$
|
20,300
|
|
|
$
|
(95,317
|
)
|
|
$
|
(75,017
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
21,476
|
|
|
17,719
|
|
|
39,195
|
|
|||
Impairment and other lease charges
|
|
15
|
|
|
13,086
|
|
|
13,101
|
|
|||
Goodwill impairment
|
|
—
|
|
|
67,909
|
|
|
67,909
|
|
|||
Interest expense
|
|
1,953
|
|
|
1,919
|
|
|
3,872
|
|
|||
Closed restaurant rent expense, net of sublease income
|
|
3,260
|
|
|
903
|
|
|
4,163
|
|
|||
Other expense (income), net
|
|
862
|
|
|
179
|
|
|
1,041
|
|
|||
Stock-based compensation expense in restaurant wages
|
|
70
|
|
|
125
|
|
|
195
|
|
|||
Total non-general and administrative expense adjustments
|
|
27,636
|
|
|
101,840
|
|
|
129,476
|
|
|||
General and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
1,590
|
|
|
1,059
|
|
|
2,649
|
|
|||
Restructuring costs and retention bonuses
|
|
827
|
|
|
137
|
|
|
964
|
|
|||
Digital and brand repositioning costs
|
|
207
|
|
|
170
|
|
|
377
|
|
|||
Total general and administrative expense adjustments
|
|
2,624
|
|
|
1,366
|
|
|
3,990
|
|
|||
Adjusted EBITDA
|
|
$
|
50,560
|
|
|
$
|
7,889
|
|
|
$
|
58,449
|
|
Restaurant-level adjustments:
|
|
|
|
|
|
|
||||||
Add: Pre-opening costs
|
|
380
|
|
|
592
|
|
|
972
|
|
|||
Add: Other general and administrative expense(1)
|
|
28,400
|
|
|
23,805
|
|
|
52,205
|
|
|||
Less: Franchise royalty revenue and fees
|
|
1,780
|
|
|
900
|
|
|
2,680
|
|
|||
Restaurant-level Adjusted EBITDA
|
|
$
|
77,560
|
|
|
$
|
31,386
|
|
|
$
|
108,946
|
|
|
|
|
|
|
|
|
||||||
December 30, 2018:
|
|
|
|
|
|
|
||||||
Net income
|
|
|
|
|
|
$
|
7,787
|
|
||||
Benefit from income taxes
|
|
|
|
|
|
(2,772
|
)
|
|||||
Income (loss) before taxes
|
|
$
|
17,639
|
|
|
$
|
(12,624
|
)
|
|
$
|
5,015
|
|
Add:
|
|
|
|
|
|
|
||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
21,372
|
|
|
16,232
|
|
|
37,604
|
|
|||
Impairment and other lease charges
|
|
13,587
|
|
|
7,557
|
|
|
21,144
|
|
|||
Interest expense
|
|
1,920
|
|
|
2,046
|
|
|
3,966
|
|
|||
Other expense (income), net
|
|
(1,225
|
)
|
|
(1,782
|
)
|
|
(3,007
|
)
|
|||
Stock-based compensation expense in restaurant wages
|
|
34
|
|
|
56
|
|
|
90
|
|
|||
Total non-general and administrative expense adjustments
|
|
35,688
|
|
|
24,109
|
|
|
59,797
|
|
|||
General and administrative expense adjustments:
|
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
1,885
|
|
|
1,494
|
|
|
3,379
|
|
|||
Board and shareholder matter costs
|
|
(328
|
)
|
|
(269
|
)
|
|
(597
|
)
|
|||
Restructuring costs and retention bonuses
|
|
196
|
|
|
349
|
|
|
545
|
|
|||
Legal settlements and related costs
|
|
(177
|
)
|
|
—
|
|
|
(177
|
)
|
|||
Total general and administrative expense adjustments
|
|
1,576
|
|
|
1,574
|
|
|
3,150
|
|
|||
Adjusted EBITDA
|
|
$
|
54,903
|
|
|
$
|
13,059
|
|
|
$
|
67,962
|
|
Restaurant-level adjustments:
|
|
|
|
|
|
|
||||||
Add: Pre-opening costs
|
|
933
|
|
|
783
|
|
|
1,716
|
|
|||
Add: Other general and administrative expense(1)
|
|
28,045
|
|
|
23,330
|
|
|
51,375
|
|
|||
Less: Franchise royalty revenue and fees
|
|
1,815
|
|
|
857
|
|
|
2,672
|
|
|||
Restaurant-level Adjusted EBITDA
|
|
$
|
82,066
|
|
|
$
|
36,315
|
|
|
$
|
118,381
|
|
|
|
(Unaudited)
|
||||||||||||||||||||||||||||||
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||||||||||||||||||||||
|
|
Loss Before Income Taxes
|
|
Provision For Income Taxes (a)
|
|
Net Loss
|
|
Diluted EPS
|
|
Income (Loss) Before Income Taxes
|
|
Benefit From Income Taxes (a)
|
|
Net Income (Loss)
|
|
Diluted EPS
|
||||||||||||||||
Reported - GAAP
|
|
$
|
(10,307
|
)
|
|
$
|
10,746
|
|
|
$
|
(21,053
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(10,463
|
)
|
|
$
|
(2,526
|
)
|
|
$
|
(7,937
|
)
|
|
$
|
(0.30
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Income tax due to federal rate change (a)
|
|
—
|
|
|
716
|
|
|
(716
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Deferred tax asset valuation allowance (b)
|
|
—
|
|
|
(13,513
|
)
|
|
13,513
|
|
|
0.52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Impairment and other lease charges (c)
|
|
8,434
|
|
|
2,016
|
|
|
6,418
|
|
|
0.25
|
|
|
14,605
|
|
|
4,549
|
|
|
10,056
|
|
|
0.37
|
|
||||||||
Closed restaurant rent expense, net of sublease income (e)
|
|
678
|
|
|
162
|
|
|
516
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expense (income), net (f)
|
|
121
|
|
|
29
|
|
|
92
|
|
|
—
|
|
|
125
|
|
|
39
|
|
|
86
|
|
|
—
|
|
||||||||
Total non-general and administrative expense
|
|
9,233
|
|
|
(10,590
|
)
|
|
19,823
|
|
|
0.77
|
|
|
14,730
|
|
|
4,588
|
|
|
10,142
|
|
|
0.38
|
|
||||||||
General and administrative expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring costs and retention bonuses (h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
8
|
|
|
17
|
|
|
—
|
|
||||||||
Legal settlements and related costs (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
—
|
|
||||||||
Digital and brand repositioning costs (j)
|
|
162
|
|
|
39
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total general and administrative expense
|
|
162
|
|
|
39
|
|
|
123
|
|
|
—
|
|
|
15
|
|
|
5
|
|
|
10
|
|
|
—
|
|
||||||||
Adjusted - Non-GAAP
|
|
$
|
(912
|
)
|
|
$
|
195
|
|
|
$
|
(1,107
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
4,282
|
|
|
$
|
2,067
|
|
|
$
|
2,215
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(Unaudited)
|
||||||||||||||||||||||||||||||
|
|
Twelve Months Ended
|
||||||||||||||||||||||||||||||
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||||||||||||||||||||||
|
|
Income (Loss) Before Income Taxes
|
|
Provision For Income Taxes (a)
|
|
Net Income (Loss)
|
|
Diluted EPS
|
|
Income Before Income Taxes
|
|
Benefit From Income Taxes (a)
|
|
Net Income
|
|
Diluted EPS
|
||||||||||||||||
Reported - GAAP
|
|
$
|
(75,017
|
)
|
|
$
|
9,369
|
|
|
$
|
(84,386
|
)
|
|
$
|
(3.18
|
)
|
|
$
|
5,015
|
|
|
$
|
(2,772
|
)
|
|
$
|
7,787
|
|
|
$
|
0.29
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-general and administrative expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Income tax due to federal rate change (a)
|
|
—
|
|
|
716
|
|
|
(716
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
3,861
|
|
|
(3,861
|
)
|
|
(0.14
|
)
|
||||||||
Deferred tax asset valuation allowance (b)
|
|
—
|
|
|
(13,513
|
)
|
|
13,513
|
|
|
0.51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Impairment and other lease charges (c)
|
|
13,101
|
|
|
3,131
|
|
|
9,970
|
|
|
0.38
|
|
|
21,144
|
|
|
6,586
|
|
|
14,558
|
|
|
0.54
|
|
||||||||
Goodwill impairment (d)
|
|
67,909
|
|
|
2,111
|
|
|
65,798
|
|
|
2.48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Closed restaurant rent expense, net of sublease income (e)
|
|
4,163
|
|
|
995
|
|
|
3,168
|
|
|
0.12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other expense (income), net (f)
|
|
1,041
|
|
|
249
|
|
|
792
|
|
|
0.03
|
|
|
(3,007
|
)
|
|
(937
|
)
|
|
(2,070
|
)
|
|
(0.08
|
)
|
||||||||
Total non-general and administrative expense
|
|
86,214
|
|
|
(6,311
|
)
|
|
92,525
|
|
|
3.49
|
|
|
18,137
|
|
|
9,510
|
|
|
8,627
|
|
|
0.32
|
|
||||||||
General and administrative expense adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Board and shareholder matter costs (g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(597
|
)
|
|
(186
|
)
|
|
(411
|
)
|
|
(0.02
|
)
|
||||||||
Restructuring costs and retention bonuses (h)
|
|
964
|
|
|
230
|
|
|
734
|
|
|
0.03
|
|
|
545
|
|
|
170
|
|
|
375
|
|
|
0.01
|
|
||||||||
Legal settlements and related costs (i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(177
|
)
|
|
(55
|
)
|
|
(122
|
)
|
|
—
|
|
||||||||
Digital and brand repositioning costs (j)
|
|
377
|
|
|
90
|
|
|
287
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total general and administrative expense
|
|
1,341
|
|
|
320
|
|
|
1,021
|
|
|
0.04
|
|
|
(229
|
)
|
|
(71
|
)
|
|
(158
|
)
|
|
(0.01
|
)
|
||||||||
Adjusted - Non-GAAP
|
|
$
|
12,538
|
|
|
$
|
3,378
|
|
|
$
|
9,160
|
|
|
$
|
0.35
|
|
|
$
|
22,923
|
|
|
$
|
6,667
|
|
|
$
|
16,256
|
|
|
$
|
0.60
|
|
(a)
|
The provision for (benefit from) income taxes related to the adjustments was calculated using the Company's combined federal statutory and estimated state rate of 23.9% and 31.2% for the periods ending December 29, 2019, and December 30, 2018, respectively. For fiscal years beginning January 1, 2018, our federal statutory tax rate is 21% as a result of the enactment of the Tax Cuts and Jobs Act (the "Act") in December 2017. In 2018, in conjunction with a cost segregation study conducted prior to filing our 2017 federal income tax return, we changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in our 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed us to record an incremental benefit of $3.9 million for the third quarter of 2018.
|
(b)
|
We recorded a $13.5 million valuation allowance for the three and twelve months ended December 29, 2019, against deferred income tax assets where it was determined to be more likely than not that the deferred income tax assets will not be realized through the reversal of existing deferred tax liabilities.
|