Fiesta Restaurant Group, Inc. Reports Fourth Quarter 2020 Results
Fiesta Restaurant Group (NASDAQ: FRGI) reported its fourth quarter 2020 results, revealing a 6.6% revenue drop to $148.9 million. Despite challenges, both Pollo Tropical and Taco Cabana showed improved comparable sales, with Pollo Tropical's decline narrowing from -11.1% to -8.2%. Adjusted EBITDA reached $14.6 million, a 42% year-over-year increase. The company significantly reduced its debt from $148.4 million to $73.3 million since the pandemic began. Looking ahead, Fiesta anticipates positive sales trends in 2021, driven by digital enhancements and off-premise sales growth.
- Adjusted EBITDA increased 42% year-over-year to $14.6 million.
- Net income improved to $0.9 million, compared to a loss of $21.1 million in Q4 2019.
- Total debt reduced from $148.4 million to $73.3 million since the pandemic began.
- Drive-thru and delivery sales more than tripled compared to the same period last year.
- Total revenues decreased by 6.6% year-over-year in Q4 2020.
- Comparable restaurant sales decreased 8.2% for Pollo Tropical and 10.0% for Taco Cabana.
- Full year 2020 revenues decreased by 16.1% compared to 2019.
Fiesta Restaurant Group, Inc. ("Fiesta" or the "Company") (NASDAQ: FRGI), parent company of the Pollo Tropical® and Taco Cabana® restaurant brands, today reported results for the 14-week fourth quarter 2020, which ended on January 3, 2021 and provided a business update related to current operations. The Company uses a 52 or 53 week fiscal year ending on the Sunday nearest to December 31. The fourth quarter of 2019 included 13 weeks.
Fiesta President and Chief Executive Officer Richard Stockinger said, "Both of our brands showed improvement in comparable restaurant sales from the third quarter to the fourth quarter. Pollo Tropical comp sales accelerated from -
Stockinger added, "As we closed 2020, we were pleased with the progress we made against our priorities identified in March when the pandemic began: We continue to place the safety of our guests and employees first, we maximized liquidity through increased restaurant EBITDA margins, working capital efficiency and property sales, and we made important investments in our digital platform that we expect will contribute to strong sales growth in 2021. In addition, we made progress in aggressively growing all off-premise sales channels in an effort to offset our pre-COVID estimated dine-in sales mix of approximately
Stockinger continued, "In the fourth quarter of 2020, we improved Adjusted EBITDA margins at both brands compared to the fourth quarter of 2019. Net income was
Stockinger concluded, "In 2021 we will continue to concentrate on non-dine-in trade channels to match the evolving changes in customer behavior, and will focus on creating a great guest experience across all channels. We are planning to make further enhancements to our digital platform and improvements in the speed and ease of use for off-premise sales channels such as an enhanced digital drive-thru experience, geofencing technology designed to improve curbside speed and infrastructure changes designed to improve order cycle times for drive-thru and delivery orders. We also intend to continue to drive traffic and check through differentiated new menu introductions, effective LTO's and improved marketing. We are optimistic about 2021 and believe that our growth initiatives will build momentum and accelerate sales over the course of 2021."
| _____________________________ | ||
(1) |
See non-GAAP reconciliation table below. |
|
(2) |
We define net debt as long-term debt, including current portion of long-term debt, as reported in our balance sheet less unrestricted cash as reported in our balance sheet, which were |
|
Fourth Quarter 2020 Financial Summary
-
Total revenues decreased
6.6% to$148.9 million in the fourth quarter of 2020 from$159.5 million in the fourth quarter of 2019; -
Comparable restaurant sales at Pollo Tropical decreased
8.2% ; -
Comparable restaurant sales at Taco Cabana decreased
10.0% ; -
Net income of
$0.9 million , or$0.03 per diluted share, in the fourth quarter of 2020, which includes a pre-tax gain on the sale of properties of$2.2 million , compared to net loss of$21.1 million , or ($0.82) per diluted share, in the fourth quarter of 2019; -
Adjusted net income (a non-GAAP financial measure) of
$1.8 million , or$0.07 per diluted share, in the fourth quarter of 2020, compared to adjusted net loss of$1.1 million , or$0.04 per diluted share, in the fourth quarter of 2019 (see non-GAAP reconciliation table below); -
Adjusted EBITDA for Pollo Tropical of
$12.1 million in the fourth quarter of 2020 compared to$10.6 million in the fourth quarter of 2019; -
Restaurant-level Adjusted EBITDA (a non-GAAP financial measure) for Pollo Tropical of
$19.1 million , or21.8% of Pollo Tropical restaurant sales, in the fourth quarter of 2020 compared to$17.2 million , or19.2% of Pollo Tropical restaurant sales, in the fourth quarter of 2019 (see non-GAAP reconciliation table below); -
Adjusted EBITDA for Taco Cabana of
$2.5 million in the fourth quarter of 2020 compared to$(0.3) million in the fourth quarter of 2019; -
Restaurant-level Adjusted EBITDA (a non-GAAP financial measure) for Taco Cabana of
$8.3 million , or13.6% of Taco Cabana restaurant sales, in the fourth quarter of 2020 compared to$5.5 million , or8.0% of Taco Cabana restaurant sales, in the fourth quarter of 2019 (see non-GAAP reconciliation table below); and -
Consolidated Adjusted EBITDA (a non-GAAP financial measure) of
$14.6 million in the fourth quarter of 2020 compared to Consolidated Adjusted EBITDA of$10.3 million in the fourth quarter of 2019 (see non-GAAP reconciliation table below).
Fourth Quarter 2020 Comparable Restaurant Sales Summary
|
Third Quarter 2020 |
Fiscal October |
Fiscal November |
Fiscal December |
Fourth Quarter 2020 |
|
Pollo Tropical |
- |
- |
- |
- |
- |
|
Taco Cabana |
- |
- |
- |
- |
- |
- As a reminder, third quarter 2020 comparable restaurant sales at Pollo Tropical benefited from the estimated negative impact of Hurricane Dorian in 2019 of approximately 140 basis points.
- Fiscal November 2020 comparable restaurant sales at Pollo Tropical were negatively impacted by Tropical Storm Eta in 2020. After adjusting for the estimated impact of that named storm, fiscal November 2020 comparable restaurant sales would have been approximately 130 basis points higher, and fourth quarter 2020 comparable restaurant sales would have been approximately 40 basis points higher.
- The fiscal year and fourth quarter ended January 3, 2021 contained 53 weeks and 14 weeks, respectively. Fourth quarter 2020 comparable restaurant sales exclude the extra week in fiscal fourth quarter 2020 and are reported on a 13-week basis.
Cash and Liquidity
-
On November 23, 2020, we entered into a new senior credit facility consisting of a
$75 million term loan and$10 million revolver, which replaced our prior senior credit agreement with a more flexible and longer-term loan maturing in 2025 that provides greater liquidity during the remainder of this challenging period and beyond. -
At the end of the fourth quarter of 2020, we had
$50.0 million in cash,$3.6 million in restricted cash and$73.3 million in debt, which includes$71.5 million of term loan borrowings under our new senior credit facility and$1.9 million in finance lease obligations. Our outstanding term loan borrowings under our new senior credit facility are net of unamortized debt issuance costs and original issue discount totaling$3.5 million . -
Total debt and net debt decreased significantly from the beginning of the pandemic to January 3, 2021. Total debt decreased from
$148.4 million as of March 18, 2020 at the start of the pandemic to$73.3 million on January 3, 2021 and net revolver debt at March 18, 2020 compared to net debt at January 3, 2021, both, non-GAAP financial measures(2), decreased from net revolver debt of$74.4 million as of March 18, 2020 to net debt of$23.3 million on January 3, 2021. -
We sold nine properties in sale or sale-leaseback transactions for total proceeds of
$17.6 million and net gains of$2.2 million in the fourth quarter of 2020.
Fourth Quarter 2020 Brand Results
Total Pollo Tropical restaurant sales decreased
|
|
Comparable Restaurant Sales Mix by Channel - Pollo Tropical |
||||||||||||
Channel |
|
Fourth Quarter 2020(1) |
|
% of Total |
|
Fourth Quarter 2019 |
|
% of Total |
||||||
($, thousands) |
|
|
|
|
|
|
|
|
||||||
Counter(2) |
|
$ |
20,090 |
|
|
25 |
% |
|
$ |
42,112 |
|
|
49 |
% |
Drive Thru |
|
49,340 |
|
|
62 |
% |
|
39,923 |
|
|
46 |
% |
||
Delivery |
|
7,104 |
|
|
9 |
% |
|
2,178 |
|
|
2 |
% |
||
Online |
|
2,396 |
|
|
3 |
% |
|
1,553 |
|
|
2 |
% |
||
Catering |
|
751 |
|
|
1 |
% |
|
1,049 |
|
|
1 |
% |
||
Total |
|
$ |
79,681 |
|
|
100 |
% |
|
$ |
86,815 |
|
|
100 |
% |
(1) Fourth quarter 2020 comparable restaurant sales exclude the extra week in fiscal fourth quarter 2020 and are reported on a 13-week basis. |
||||||||||||||
(2) Counter sales include dine-in and counter take out sales. |
||||||||||||||
Adjusted EBITDA for Pollo Tropical increased to
Taco Cabana restaurant sales decreased
|
|
Comparable Restaurant Sales Mix by Channel - Taco Cabana |
||||||||||||
Channel |
|
Fourth Quarter 2020(1) |
|
% of Total |
|
Fourth Quarter 2019 |
|
% of Total |
||||||
($, thousands) |
|
|
|
|
|
|
|
|
||||||
Counter(2) |
|
$ |
7,041 |
|
|
12 |
% |
|
$ |
24,833 |
|
|
40 |
% |
Drive Thru |
|
43,437 |
|
|
78 |
% |
|
34,566 |
|
|
56 |
% |
||
Delivery |
|
3,199 |
|
|
6 |
% |
|
828 |
|
|
1 |
% |
||
Online |
|
1,438 |
|
|
3 |
% |
|
1,248 |
|
|
2 |
% |
||
Catering |
|
697 |
|
|
1 |
% |
|
523 |
|
|
1 |
% |
||
Total |
|
$ |
55,812 |
|
|
100 |
% |
|
$ |
61,998 |
|
|
100 |
% |
(1) Fourth quarter 2020 comparable restaurant sales exclude the extra week in fiscal fourth quarter 2020 and are reported on a 13-week basis. |
||||||||||||||
(2) Counter sales include dine-in and counter take out sales. |
||||||||||||||
Adjusted EBITDA for Taco Cabana increased to
Full Year 2020 Financial Summary
Total revenues decreased
We recognized a net loss of
Consolidated Adjusted EBITDA decreased to
Consolidated Restaurant-Level Adjusted EBITDA decreased to
Restaurant Portfolio
As of January 3, 2021, there were 138 Company-owned Pollo Tropical restaurants, 143 Company-owned Taco Cabana restaurants, 29 franchised Pollo Tropical restaurants in the U.S., Puerto Rico, Panama, Guyana, Ecuador and the Bahamas, and six franchised Taco Cabana restaurants in the U.S.
Texas Winter Storm
Due to the severe winter storm that impacted Texas from February 14, 2021 through February 21, 2021, Taco Cabana February revenue and profit is expected to be negatively impacted compared to 2020 results. All units were closed for a number of days during that period, with significant reductions in traffic due to poor road conditions. We estimate the lost restaurant sales over the weather-impacted period to be in the range of
2021 Outlook
Comparable restaurant sales are expected to be positive for the year, driven by the Company's 2021 growth initiatives and expected increases in overall segment dine-in traffic as the pandemic impact abates.
Food costs are projected to remain stable in 2021 compared to 2020 based on current supply commitments we have in place for calendar 2021 across key commodities.
Capital expenditures in 2021 are expected to be in the range of
Investor Conference Call Today
We will host a conference call at 4:30 p.m. ET today. 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 Thursday, March 11, 2021 and can be accessed by dialing 1-412-317-6671. The passcode is 10012670. The conference call will also be webcast live and archived on 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., 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 or future performance, including any discussion, express or implied regarding our anticipated growth, plans, objectives and the impact of our initiatives designed to strengthen our liquidity and cash position, including those related to working capital efficiency initiatives and sales of real property, our investments in strategic and sales building initiatives, including those relating to advertising and marketing, operations improvements, menu development and simplification, digital ordering and online sales, catering and third-party delivery and the impact of the recent COVID-19 outbreak and our initiatives designed to respond to the COVID-19 outbreak on future sales, margins, earnings and liquidity, 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 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.
FIESTA RESTAURANT GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS TWELVE MONTHS ENDED JANUARY 3, 2021 AND DECEMBER 29, 2019 (In thousands, except share and per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended (a) |
|
Twelve Months Ended (a) |
||||||||||||
|
January 3, 2021 |
|
December 29, 2019 |
|
January 3, 2021 |
|
December 29, 2019 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Restaurant sales |
$ |
148,345 |
|
|
$ |
158,780 |
|
|
$ |
552,797 |
|
|
$ |
658,263 |
|
Franchise royalty revenues and fees |
|
559 |
|
|
|
682 |
|
|
|
2,006 |
|
|
|
2,680 |
|
Total revenues |
|
148,904 |
|
|
|
159,462 |
|
|
|
554,803 |
|
|
|
660,943 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
44,678 |
|
|
|
51,129 |
|
|
|
170,513 |
|
|
|
207,453 |
|
Restaurant wages and related expenses (b) |
|
39,358 |
|
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FAQ
What were Fiesta Restaurant Group's Q4 2020 financial results?
Fiesta reported total revenues of $148.9 million, a 6.6% decrease year-over-year, with adjusted EBITDA at $14.6 million.
How did comparable sales perform for Fiesta's brands in Q4 2020?
Pollo Tropical's comparable sales decreased by 8.2%, while Taco Cabana's decreased by 10.0%.
What is the current debt level of Fiesta Restaurant Group?
As of January 3, 2021, Fiesta reduced its total debt to $73.3 million from $148.4 million.
What are Fiesta Restaurant Group's growth expectations for 2021?
Fiesta anticipates positive comparable restaurant sales trends in 2021 driven by digital enhancements and off-premise sales growth.
Fiesta Restaurant Group, Inc.
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