Fiesta Restaurant Group, Inc. Reports Fourth Quarter 2022 Results
Fiesta Restaurant Group reported a 9.3% revenue increase to $97.6 million for Q4 2022, driven by an 11.0% rise in comparable restaurant sales at Pollo Tropical. The net loss narrowed to $4.1 million, from $4.7 million YoY, while Adjusted EBITDA rose to $6.9 million from $2.5 million. The company experienced positive momentum in early 2023 with transaction growth recovering, particularly in South Florida. Despite operational challenges, including rising commodity costs and impacts from Hurricanes Ian and Nicole, Fiesta aims for an 18% restaurant-level operating margin in 2023. Significant G&A reductions are also being pursued to enhance profitability.
- Fourth quarter 2022 revenue rose 9.3% to $97.6 million.
- Comparable restaurant sales growth of 11.0% for Q4 2022.
- Narrowed net loss of $4.1 million, improving from $4.7 million YoY.
- Adjusted EBITDA increased to $6.9 million from $2.5 million YoY.
- Early 2023 transaction growth turning positive, especially in South Florida.
- Restaurant-level operating profit margins improved to 16.2% from 14.3% YoY.
- Loss from operations increased to $4.4 million, though improved from $7.1 million YoY.
- Net loss from continuing operations of $4.9 million compared to $6.8 million YoY.
- Overall financial performance impacted by rising commodity costs and operational expenses.
Fourth Quarter 2022 Comparable Restaurant Sales Growth of
Fiesta Interim Chief Executive Officer
Montgomery added, "As discussed in prior quarters, we are intensely focused on transaction growth. We are pleased that the decline in year-over-year comparable transactions, which had slowed in previous quarters and reached -
Montgomery added, "Fourth quarter 2022 loss from operations was
Montgomery further commented, “Similar to the third quarter 2022, we generated continued year-over-year growth in Restaurant-level Operating Profit(1) a non-GAAP financial measure, driven by our comparable sales growth and targeted margin improvement actions. Restaurant-level Operating Profit Margins of
Montgomery added, "After transitioning to the interim CEO role in December, I moved quickly to ensure that we maintained momentum while sharpening our focus on operations excellence and the opportunities that we believe will have the biggest impact on transaction growth and margin expansion. We have developed four key themes to guide our revised strategic focus - all still aimed at growing traffic and improving margins but with a more focused and disciplined approach: 1) Building operations excellence; 2) Creating a great guest experience across all channels; 3) Enhancing the Pollo Tropical brand; and 4) Developing great teams."
Montgomery further commented, "We also continued our ongoing progress during the fourth quarter on two other key strategic initiatives. Our refresh/remodel program is generating a consistent sales lift(2) in comparison to Pollo Tropical local market unit restaurant sales trends, and we completed 32 refreshes and remodels through the end of the fourth quarter. In addition, we are realizing G&A efficiencies through the implementation of a number of initiatives including accounting outsourcing and downsizing of the
Montgomery concluded, "Our leadership team looks forward to building on the momentum we established in 2022. Going forward, we expect our more focused approach to accelerate ongoing traffic growth across all channels while we also take action to improve margins."
_____________________________ |
|
(1) |
Formerly Restaurant-Level Adjusted EBITDA. See non-GAAP reconciliation table below. |
(2) | Sales lift on refreshed units based on sales in the respective units for 4-weeks prior to the commencement of the project compared to the sales after reopening the unit for full operations, excluding units with non-recurring events impacting the comparability of the unit's respective results. |
Fourth Quarter 2022 Financial Summary
-
Total revenues from continuing operations increased
9.3% to in the fourth quarter of 2022 from$97.6 million in the fourth quarter of 2021;$89.3 million -
Comparable restaurant sales at Pollo Tropical increased
11.0% in the fourth quarter of 2022 compared to the fourth quarter of 2021; -
Net loss of
, or$(4.1) million per diluted share, in the fourth quarter of 2022, compared to net loss of$(0.16) , or$(4.7) million per diluted share, in the fourth quarter of 2021;$(0.19) -
Net loss from continuing operations of
, or$(4.9) million per diluted share, in the fourth quarter of 2022, compared to net loss from continuing operations of$(0.20) , or$(6.8) million per diluted share, in the fourth quarter of 2021;$(0.27) -
Adjusted net loss (a non-GAAP financial measure) of
, or$(1.9) million per diluted share, in the fourth quarter of 2022, compared to adjusted net loss of$(0.08) , or$(4.3) million per diluted share, in the fourth quarter of 2021 (see non-GAAP reconciliation table below);$(0.17) -
Consolidated Adjusted EBITDA (a non-GAAP financial measure) of
in the fourth quarter of 2022 compared to$6.9 million in the fourth quarter of 2021 (see non-GAAP reconciliation table below); and$2.5 million -
Loss from Operations of
, or (4.5)% of restaurant sales, in the fourth quarter of 2022 compared to a loss from operations of$(4.4) million , or (8.0)% of restaurant sales, in the fourth quarter of 2021.$(7.1) million -
Restaurant-level Operating Profit (formerly Restaurant-Level Adjusted EBITDA, a non-GAAP financial measure) of
, or$15.7 million 16.2% of Pollo Tropical restaurant sales, in the fourth quarter of 2022 compared to , or$12.7 million 14.3% of Pollo Tropical restaurant sales, in the fourth quarter of 2021 (see non-GAAP reconciliation table below).
Fourth Quarter 2022 and January Comparable Restaurant Statistics to Fourth Quarter 2021 and January
|
Fiscal
|
Fiscal
|
Fiscal
|
Fourth
|
Fiscal
|
Sales |
|
|
|
|
|
Transactions |
- |
- |
- |
- |
|
Net impact of product channel mix and pricing |
|
|
|
|
|
-
Fourth quarter 2022 comparable restaurant sales were negatively impacted by the effects of Hurricanes Ian and
Nicole . After adjusting for the impact of the Hurricanes, we estimate that fourth quarter 2022 comparable restaurant sales would have been higher by approximately 60 basis points. -
December 2022 comparable restaurant sales were negatively impacted by the effects of delaying a planned menu price increase, compared toDecember 2021 when we increased menu prices by5.2% .
Cash and Liquidity
Excluding
Fourth Quarter Pollo Tropical Results
Total Pollo Tropical restaurant sales increased
|
|
Comparable Restaurant Sales Mix by Channel - Pollo Tropical |
||||||||||
Channel |
|
Fourth Quarter
|
|
% of Total |
|
Fourth Quarter
|
|
% of Total |
||||
($ in thousands) |
|
|
|
|
|
|
|
|
||||
Counter |
|
$ |
31,328 |
|
33 |
% |
|
$ |
25,582 |
|
30 |
% |
Drive-thru |
|
|
49,673 |
|
52 |
% |
|
|
47,304 |
|
55 |
% |
Delivery |
|
|
10,515 |
|
11 |
% |
|
|
9,054 |
|
10 |
% |
Online |
|
|
3,018 |
|
3 |
% |
|
|
3,110 |
|
4 |
% |
Catering |
|
|
1,370 |
|
1 |
% |
|
|
1,370 |
|
1 |
% |
Total |
|
$ |
95,904 |
|
100 |
% |
|
$ |
86,420 |
|
100 |
% |
Net loss decreased to
Pricing action has been taken to offset labor, food and operating cost increases. In order to minimize sales traffic risk, we have taken a phased approach to menu price increases and are also targeting lower pricing increases on menu items purchased by value-conscious customers including our "
Loss from Operations of
General and Administrative expenses were
Refresh and Remodel Status and Results
Our refresh/remodel program continues to exceed initial sales growth expectations, generating consistent sales growth in comparison to Pollo Tropical local market restaurant trends. Refreshes completed to date have generated a sales lift of approximately
Through the 2022 fiscal year, 32 refreshes and remodels have been completed.
Full Year 2022 Financial Summary
Total revenues increased
We recognized net loss of
We recognized a loss from continuing operations of
Consolidated Adjusted EBITDA decreased
Loss from Operations of
Restaurant Portfolio
As of
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About
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, including our efforts to reduce general and administrative expenses, our investments in strategic and sales building initiatives, including those relating to operations improvements, marketing and brand building, unit remodels and refreshes, and planned price increases on future sales, transaction growth, 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
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|||||||||||||||
|
Three Months Ended (a) |
|
Year Ended (a) |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Restaurant sales |
$ |
97,412 |
|
|
$ |
88,874 |
|
|
$ |
385,944 |
|
|
$ |
355,492 |
|
Franchise royalty revenues and fees |
|
212 |
|
|
|
441 |
|
|
|
1,407 |
|
|
|
1,785 |
|
Total revenues |
|
97,624 |
|
|
|
89,315 |
|
|
|
387,351 |
|
|
|
357,277 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
30,353 |
|
|
|
26,750 |
|
|
|
124,555 |
|
|
|
108,593 |
|
Restaurant wages and related expenses (b) |
|
24,339 |
|
|
|
24,781 |
|
|
|
97,473 |
|
|
|
91,669 |
|
Restaurant rent expense |
|
6,041 |
|
|
|
5,967 |
|
|
|
24,077 |
|
|
|
23,592 |
|
Other restaurant operating expenses |
|
17,607 |
|
|
|
15,170 |
|
|
|
67,714 |
|
|
|
57,430 |
|
Advertising expense |
|
3,340 |
|
|
|
3,478 |
|
|
|
12,760 |
|
|
|
11,508 |
|
General and administrative expenses (b)(c) |
|
15,052 |
|
|
|
12,641 |
|
|
|
52,325 |
|
|
|
45,524 |
|
Depreciation and amortization |
|
4,655 |
|
|
|
5,283 |
|
|
|
20,053 |
|
|
|
20,574 |
|
Impairment and other lease charges (recoveries) (d) |
|
(28 |
) |
|
|
1,762 |
|
|
|
1,414 |
|
|
|
1,538 |
|
Closed restaurant rent, net of sublease income (e) |
|
612 |
|
|
|
573 |
|
|
|
1,928 |
|
|
|
2,999 |
|
Other expense (income), net (f) |
|
62 |
|
|
|
47 |
|
|
|
(591 |
) |
|
|
478 |
|
Total operating expenses |
|
102,033 |
|
|
|
96,452 |
|
|
|
401,708 |
|
|
|
363,905 |
|
Income (loss) from operations |
|
(4,409 |
) |
|
|
(7,137 |
) |
|
|
(14,357 |
) |
|
|
(6,628 |
) |
Interest expense |
|
83 |
|
|
|
92 |
|
|
|
336 |
|
|
|
374 |
|
Income (loss) from continuing operations before income taxes |
|
(4,492 |
) |
|
|
(7,229 |
) |
|
|
(14,693 |
) |
|
|
(7,002 |
) |
Provision for (benefit from) income taxes (g) |
|
447 |
|
|
|
(390 |
) |
|
|
968 |
|
|
|
1,083 |
|
Income (loss) from continuing operations |
|
(4,939 |
) |
|
|
(6,839 |
) |
|
|
(15,661 |
) |
|
|
(8,085 |
) |
Income (loss) from discontinued operations, net of tax |
|
873 |
|
|
|
2,119 |
|
|
|
1,102 |
|
|
|
18,455 |
|
Net loss |
$ |
(4,066 |
) |
|
$ |
(4,720 |
) |
|
$ |
(14,559 |
) |
|
$ |
10,370 |
|
Earnings (loss) per common share: |
|
|
|
|
|
|
|
||||||||
Continuing operations – basic |
$ |
(0.20 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.31 |
) |
Discontinued operations – basic |
|
0.04 |
|
|
|
0.08 |
|
|
|
0.04 |
|
|
|
0.71 |
|
Basic |
$ |
(0.16 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.58 |
) |
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations – diluted |
$ |
(0.20 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.31 |
) |
Discontinued operations – diluted |
|
0.04 |
|
|
|
0.08 |
|
|
|
0.04 |
|
|
|
0.71 |
|
Diluted |
$ |
(0.16 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.58 |
) |
|
$ |
0.40 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
25,110,630 |
|
|
|
25,095,699 |
|
|
|
24,965,505 |
|
|
|
25,356,339 |
|
Diluted |
|
25,110,630 |
|
|
|
25,095,699 |
|
|
|
24,965,505 |
|
|
|
25,356,339 |
|
(a) |
The Company uses a 52- or 53-week fiscal year that ends on the Sunday closest to |
(b) | Restaurant wages and related expenses include stock-based compensation of |
(c) | See notes (f), (g), (h) and (i) to the reconciliation of net income (loss) to adjusted net income (loss) in the tables titled "Supplemental Non-GAAP Information." |
(d) | See note (c) to the reconciliation of net income (loss) to adjusted net income (loss) in the tables titled "Supplemental Non-GAAP Information." |
(e) | See note (d) to the reconciliation of net income (loss) to adjusted net income (loss) in the tables titled "Supplemental Non-GAAP Information." |
(f) | See note (e) to the reconciliation of net income (loss) to adjusted net income (loss) in the tables titled "Supplemental Non-GAAP Information." |
(g) | See notes (a) and (b) to the reconciliation of net income (loss) to adjusted net income (loss) in the tables titled "Supplemental Non-GAAP Information." |
|
|||||
|
|
|
|
||
Assets |
|
|
|
||
Cash |
$ |
32,167 |
|
$ |
36,797 |
Other current assets |
|
20,524 |
|
|
22,245 |
Property and equipment, net |
|
87,106 |
|
|
89,884 |
Operating lease right-of-use assets |
|
146,681 |
|
|
154,127 |
|
|
56,307 |
|
|
56,307 |
Other assets |
|
5,906 |
|
|
7,753 |
Total assets |
$ |
348,691 |
|
$ |
367,113 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
Current portion of long-term debt |
$ |
62 |
|
$ |
63 |
Other current liabilities |
|
40,240 |
|
|
40,479 |
Long-term debt, net of current portion |
|
367 |
|
|
438 |
Operating lease liabilities |
|
155,355 |
|
|
163,270 |
Deferred tax liabilities |
|
202 |
|
|
229 |
Other non-current liabilities |
|
7,208 |
|
|
7,763 |
Total liabilities |
|
203,434 |
|
|
212,242 |
Stockholders' equity |
|
145,257 |
|
|
154,871 |
Total liabilities and stockholders' equity |
$ |
348,691 |
|
$ |
367,113 |
|
|||||||||||||||
|
(Unaudited) |
|
(Unaudited) |
||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Pollo Tropical |
$ |
97,624 |
|
|
$ |
89,315 |
|
|
$ |
387,351 |
|
|
$ |
357,277 |
|
|
|
|
|
|
|
|
|
||||||||
Change in comparable restaurant sales (a): |
|
|
|
|
|
|
|
||||||||
Pollo Tropical |
|
11.0 |
% |
|
|
9.0 |
% |
|
|
9.1 |
% |
|
|
16 |
% |
|
|
|
|
|
|
|
|
||||||||
Average sales per Company-owned restaurant: |
|
|
|
|
|
|
|
||||||||
Pollo Tropical |
|
|
|
|
|
|
|
||||||||
Comparable restaurants (b) |
$ |
717 |
|
|
$ |
648 |
|
|
$ |
2,834 |
|
|
$ |
2,598 |
|
Non-comparable restaurants (c) |
|
480 |
|
|
|
347 |
|
|
|
1,564 |
|
|
|
1,328 |
|
|
|
711 |
|
|
|
644 |
|
|
|
2,801 |
|
|
|
2,576 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income taxes |
$ |
(4,492 |
) |
|
$ |
(7,229 |
) |
|
$ |
(14,693 |
) |
|
$ |
(7,002 |
) |
|
|
|
|
|
|
|
|
||||||||
Consolidated Adjusted EBITDA (e) |
$ |
6,920 |
|
|
$ |
2,540 |
|
|
$ |
21,812 |
|
|
$ |
25,016 |
|
|
|
|
|
|
|
|
|
||||||||
Restaurant-level Operating Profit (e): |
$ |
15,736 |
|
|
$ |
12,737 |
|
|
$ |
59,387 |
|
|
$ |
62,753 |
(a) | Restaurants are included in comparable restaurant sales after they have been open for 18 months or longer. Restaurants are excluded from comparable restaurant sales for any fiscal month in which the restaurant was closed for more than five days. Comparable restaurant sales are compared to the same period in the prior year. |
(b) | Comparable restaurants are restaurants that have been open for 18 months or longer. Average sales for comparable Company-owned restaurants are derived by dividing comparable restaurant sales for such period by the average number of comparable restaurants for such period. |
(c) | Non-comparable restaurants are restaurants that have been open for less than 18 months, or that were temporarily closed during the period. Average sales for new Company-owned restaurants are derived by dividing new restaurant sales for such period by the average number of new restaurants for such period. |
(d) | Average sales for total Company-owned restaurants are derived by dividing restaurant sales for such period by the average number of open restaurants for such period. |
(e) | Consolidated Adjusted EBITDA and Restaurant-level Operating Profit (formerly Restaurant-Level Adjusted EBITDA), are non-GAAP financial measures. Please see the reconciliation from net income (loss) to Consolidated Adjusted EBITDA and Restaurant-level Operating Profit in the table titled "Supplemental Non-GAAP Information." |
|
||||||||
|
Three Months Ended |
|
Year Ended |
|||||
|
|
|
|
|
|
|
|
|
Company-owned restaurant openings: |
|
|
|
|
|
|
|
|
Pollo Tropical |
— |
|
— |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
Company-owned restaurant closings: |
|
|
|
|
|
|
|
|
Pollo Tropical |
— |
|
— |
|
(1 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Number of Company-owned restaurants: |
|
|
|
|
|
|
|
|
Pollo Tropical |
137 |
|
138 |
|
137 |
|
|
138 |
|
|
|
|
|
|
|
|
|
Number of franchised restaurants: |
|
|
|
|
|
|
|
|
Pollo Tropical |
32 |
|
31 |
|
32 |
|
|
31 |
|
|
|
|
|
|
|
|
|
Total number of restaurants: |
|
|
|
|
|
|
|
|
Pollo Tropical |
169 |
|
169 |
|
169 |
|
|
169 |
|
||||||||||
|
Three Months Ended |
|||||||||
|
|
|
|
|||||||
|
|
(a) |
|
|
(a) |
|||||
Restaurant sales |
$ |
97,412 |
|
|
|
$ |
88,874 |
|
||
Cost of sales |
|
30,353 |
|
31.2 |
% |
|
|
26,750 |
30.1 |
% |
Restaurant wages and related expenses |
|
24,339 |
|
25.0 |
% |
|
|
24,781 |
27.9 |
% |
Restaurant rent expense |
|
6,041 |
|
6.2 |
% |
|
|
5,967 |
6.7 |
% |
Other restaurant operating expenses |
|
17,607 |
|
18.1 |
% |
|
|
15,170 |
17.1 |
% |
Advertising expense |
|
3,340 |
|
3.4 |
% |
|
|
3,478 |
3.9 |
% |
Depreciation and amortization |
|
4,655 |
|
4.8 |
% |
|
|
5,283 |
5.9 |
% |
Impairment and other lease charges (recoveries) |
|
(28 |
) |
— |
% |
|
|
1,762 |
2.0 |
% |
Closed restaurant rent expense, net of sublease income |
|
612 |
|
0.6 |
% |
|
|
573 |
0.6 |
% |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
|
Year Ended |
|||||||||
|
|
|
|
|||||||
|
|
(a) |
|
|
(a) |
|||||
Restaurant sales |
$ |
385,944 |
|
|
|
$ |
355,492 |
|
||
Cost of sales |
|
124,555 |
|
32.3 |
% |
|
|
108,593 |
30.5 |
% |
Restaurant wages and related expenses |
|
97,473 |
|
25.3 |
% |
|
|
91,669 |
25.8 |
% |
Restaurant rent expense |
|
24,077 |
|
6.2 |
% |
|
|
23,592 |
6.6 |
% |
Other restaurant operating expenses |
|
67,714 |
|
17.5 |
% |
|
|
57,430 |
16.2 |
% |
Advertising expense |
|
12,760 |
|
3.3 |
% |
|
|
11,508 |
3.2 |
% |
Depreciation and amortization |
|
20,053 |
|
5.2 |
% |
|
|
20,574 |
5.8 |
% |
Impairment and other lease charges |
|
1,414 |
|
0.4 |
% |
|
|
1,538 |
0.4 |
% |
Closed restaurant rent expense, net of sublease income |
|
1,928 |
|
0.5 |
% |
|
|
2,999 |
0.8 |
% |
(a) | Percent of restaurant sales. |
Supplemental Non-GAAP Information
The following table sets forth certain unaudited supplemental financial data for the periods indicated
(In thousands):
Consolidated Adjusted EBITDA and margin and Restaurant-level Operating Profit (formerly Restaurant-Level Adjusted EBITDA), and margin are non-GAAP financial measures. Consolidated Adjusted EBITDA is defined as earnings (loss) before interest expense, income taxes, depreciation and amortization, impairment and other lease charges (recoveries), goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items that are related to strategic changes and/or are not related to the ongoing operation of our restaurants as set forth in the reconciliation table below. Restaurant-level Operating Profit is defined as Consolidated Adjusted EBITDA excluding franchise royalty revenues and fees, pre-opening costs and general and administrative expenses (including corporate-level general and administrative expenses).
Consolidated Adjusted EBITDA is the primary measure of profit or loss used by our chief operating decision maker for purposes of assessing performance. In addition, management believes that Consolidated Adjusted EBITDA and Restaurant-level Operating Profit, when viewed with our results of operations calculated in accordance with GAAP and our reconciliation of net income (loss) to Consolidated Adjusted EBITDA and Restaurant-level Operating Profit (i) provide useful information about our operating performance and period-over-period changes, (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 measures 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.
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income |
|
$ |
(4,066 |
) |
|
$ |
(4,720 |
) |
|
$ |
(14,559 |
) |
|
$ |
10,370 |
|
Loss (income) from discontinued operations, net of tax |
|
|
(873 |
) |
|
|
(2,119 |
) |
|
|
(1,102 |
) |
|
|
(18,455 |
) |
Provision for (benefit from) income taxes |
|
|
447 |
|
|
|
(390 |
) |
|
|
968 |
|
|
|
1,083 |
|
Loss from continuing operations before taxes |
|
|
(4,492 |
) |
|
|
(7,229 |
) |
|
|
(14,693 |
) |
|
|
(7,002 |
) |
Add: |
|
|
|
|
|
|
|
|
||||||||
Non-general and administrative adjustments: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
4,655 |
|
|
|
5,283 |
|
|
|
20,053 |
|
|
|
20,574 |
|
Impairment and other lease charges (recoveries) |
|
|
(28 |
) |
|
|
1,762 |
|
|
|
1,414 |
|
|
|
1,538 |
|
Interest expense |
|
|
83 |
|
|
|
92 |
|
|
|
336 |
|
|
|
374 |
|
Closed restaurant rent expense, net of sublease income |
|
|
612 |
|
|
|
573 |
|
|
|
1,928 |
|
|
|
2,999 |
|
Other expense (income), net |
|
|
62 |
|
|
|
47 |
|
|
|
(591 |
) |
|
|
478 |
|
Stock-based compensation expense |
|
|
4 |
|
|
|
9 |
|
|
|
22 |
|
|
|
53 |
|
Total non-general and administrative adjustments |
|
|
5,388 |
|
|
|
7,766 |
|
|
|
23,162 |
|
|
|
26,016 |
|
General and administrative adjustments: |
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
|
2,605 |
|
|
|
1,026 |
|
|
|
6,089 |
|
|
|
4,163 |
|
Non-recurring professional fees(a) |
|
|
99 |
|
|
|
— |
|
|
|
2,001 |
|
|
|
— |
|
G&A efficiency initiatives(b) |
|
|
1,586 |
|
|
|
— |
|
|
|
2,690 |
|
|
|
— |
|
Restructuring costs and retention bonuses |
|
|
1,410 |
|
|
|
— |
|
|
|
1,410 |
|
|
|
18 |
|
Digital costs(c) |
|
|
324 |
|
|
|
977 |
|
|
|
1,153 |
|
|
|
1,821 |
|
Total general and administrative adjustments |
|
|
6,024 |
|
|
|
2,003 |
|
|
|
13,343 |
|
|
|
6,002 |
|
Consolidated Adjusted EBITDA |
|
$ |
6,920 |
|
|
$ |
2,540 |
|
|
$ |
21,812 |
|
|
$ |
25,016 |
|
Total revenues |
|
$ |
97,624 |
|
|
$ |
89,315 |
|
|
$ |
387,351 |
|
|
$ |
357,277 |
|
Net income (loss) as a percentage of total revenues |
|
|
(4.2 |
)% |
|
|
(5.3 |
)% |
|
|
(3.8 |
)% |
|
|
2.9 |
% |
Consolidated Adjusted EBITDA as a percentage of total revenues |
|
|
7.1 |
% |
|
|
2.8 |
% |
|
|
5.6 |
% |
|
|
7.0 |
% |
(a) | Non-recurring professional fees consist of costs related to growth initiatives. |
(b) | G&A efficiency initiatives consist of non-recurring retention bonus costs and costs related to the acceleration and write-off of costs related to accounting system implementation. |
(c) |
Digital costs for the three and twelve months ended |
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
|
$ |
(4,409 |
) |
|
$ |
(7,137 |
) |
|
$ |
(14,357 |
) |
|
$ |
(6,628 |
) |
Add: |
|
|
|
|
|
|
|
|
||||||||
Non-general and administrative adjustments: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
4,655 |
|
|
|
5,283 |
|
|
|
20,053 |
|
|
|
20,574 |
|
Impairment and other lease charges (recoveries) |
|
|
(28 |
) |
|
|
1,762 |
|
|
|
1,414 |
|
|
|
1,538 |
|
Closed restaurant rent expense, net of sublease income |
|
|
612 |
|
|
|
573 |
|
|
|
1,928 |
|
|
|
2,999 |
|
Other expense (income), net |
|
|
62 |
|
|
|
47 |
|
|
|
(591 |
) |
|
|
478 |
|
Stock-based compensation expense |
|
|
4 |
|
|
|
9 |
|
|
|
22 |
|
|
|
53 |
|
Total non-general and administrative adjustments |
|
|
5,305 |
|
|
|
7,674 |
|
|
|
22,826 |
|
|
|
25,642 |
|
General and administrative adjustments: |
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
|
2,605 |
|
|
|
1,026 |
|
|
|
6,089 |
|
|
|
4,163 |
|
Non-recurring professional fees |
|
|
99 |
|
|
|
— |
|
|
|
2,001 |
|
|
|
— |
|
G&A efficiency initiatives |
|
|
1,586 |
|
|
|
— |
|
|
|
2,690 |
|
|
|
— |
|
Restructuring costs and retention bonuses |
|
|
1,410 |
|
|
|
— |
|
|
|
1,410 |
|
|
|
18 |
|
Digital costs |
|
|
324 |
|
|
|
977 |
|
|
|
1,153 |
|
|
|
1,821 |
|
Total general and administrative adjustments |
|
|
6,024 |
|
|
|
2,003 |
|
|
|
13,343 |
|
|
|
6,002 |
|
Consolidated Adjusted EBITDA |
|
$ |
6,920 |
|
|
$ |
2,540 |
|
|
$ |
21,812 |
|
|
$ |
25,016 |
|
Restaurant-level adjustments: |
|
|
|
|
|
|
|
|
||||||||
Add: Other general and administrative expense(a) |
|
|
9,028 |
|
|
|
10,638 |
|
|
|
38,982 |
|
|
|
39,522 |
|
Less: Franchise royalty revenue and fees |
|
|
212 |
|
|
|
441 |
|
|
|
1,407 |
|
|
|
1,785 |
|
Restaurant-level Operating Profit |
|
$ |
15,736 |
|
|
$ |
12,737 |
|
|
$ |
59,387 |
|
|
$ |
62,753 |
|
Restaurant sales |
|
$ |
97,412 |
|
|
$ |
88,874 |
|
|
$ |
385,944 |
|
|
$ |
355,492 |
|
Income (loss) from operations as a percentage of restaurant sales |
|
|
(4.5 |
)% |
|
|
(8.0 |
)% |
|
|
(3.7 |
)% |
|
|
(1.9 |
)% |
Restaurant-level Operating Profit as a percentage of restaurant sales |
|
|
16.2 |
% |
|
|
14.3 |
% |
|
|
15.4 |
% |
|
|
17.7 |
% |
(a) | Excludes general and administrative adjustments above. |
Supplemental Non-GAAP Information
The following table sets forth certain unaudited supplemental financial data for the periods indicated
(In thousands of dollars, except per share amounts):
Adjusted net income (loss) and related adjusted diluted earnings (loss) per share are non-GAAP financial measures. Adjusted net income (loss) is defined as net income (loss) before discontinued operations, impairment and other lease charges (recoveries), goodwill impairment, closed restaurant rent expense, net of sublease income, other expense (income), net, and other significant items that are related to strategic changes and/or are not related to the ongoing operation of our restaurants. Management believes that adjusted net income (loss) and related adjusted earnings (loss) per diluted share, when viewed with our results of operations calculated in accordance with GAAP (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 measures of financial performance or liquidity under GAAP and, accordingly should not be considered as alternatives to net income or net income per share as indicators of operating performance or liquidity. Also, these measures may not be comparable to similarly titled captions of other companies.
|
|
(Unaudited) |
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Loss
|
|
Provision
|
|
Net
|
|
Diluted
|
|
Income
|
|
Benefit
|
|
Net
|
|
Diluted
|
||||||||||||||||
Reported - GAAP Net income (loss) |
|
|
|
|
|
$ |
(4,066 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
|
$ |
(4,720 |
) |
|
$ |
(0.19 |
) |
||||||||
Loss (income) from discontinued operations, net of tax |
|
|
|
|
|
|
(873 |
) |
|
|
(0.04 |
) |
|
|
|
|
|
|
(2,119 |
) |
|
|
(0.08 |
) |
||||||||
Income (loss) from continuing operations |
|
$ |
(4,492 |
) |
|
$ |
447 |
|
|
$ |
(4,939 |
) |
|
$ |
(0.20 |
) |
|
$ |
(7,229 |
) |
|
$ |
(390 |
) |
|
$ |
(6,839 |
) |
|
$ |
(0.27 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-general and administrative expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impairment and other lease charges (recoveries) (b) |
|
|
(28 |
) |
|
|
(7 |
) |
|
|
(21 |
) |
|
|
— |
|
|
|
1,762 |
|
|
|
440 |
|
|
|
1,322 |
|
|
|
0.05 |
|
Closed restaurant rent expense, net of sublease income (c) |
|
|
612 |
|
|
|
153 |
|
|
|
459 |
|
|
|
0.02 |
|
|
|
573 |
|
|
|
143 |
|
|
|
430 |
|
|
|
0.02 |
|
Other expense (income), net (d) |
|
|
62 |
|
|
|
15 |
|
|
|
47 |
|
|
|
— |
|
|
|
47 |
|
|
|
12 |
|
|
|
35 |
|
|
|
— |
|
Total non-general and administrative expense |
|
|
646 |
|
|
|
161 |
|
|
|
485 |
|
|
|
0.02 |
|
|
|
2,382 |
|
|
|
595 |
|
|
|
1,787 |
|
|
|
0.07 |
|
General and administrative expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-recurring professional fees (e) |
|
|
99 |
|
|
|
25 |
|
|
|
74 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
G&A efficiency initiatives (f) |
|
|
1,586 |
|
|
|
395 |
|
|
|
1,191 |
|
|
|
0.05 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restructuring costs and retention bonuses (g) |
|
|
1,410 |
|
|
|
351 |
|
|
|
1,059 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Digital costs (h) |
|
|
324 |
|
|
|
81 |
|
|
|
243 |
|
|
|
0.01 |
|
|
|
977 |
|
|
|
244 |
|
|
|
733 |
|
|
|
0.03 |
|
Total general and administrative expense |
|
|
3,419 |
|
|
|
852 |
|
|
|
2,567 |
|
|
|
0.10 |
|
|
|
977 |
|
|
|
244 |
|
|
|
733 |
|
|
|
0.03 |
|
Adjusted - Non-GAAP |
|
$ |
(427 |
) |
|
$ |
1,460 |
|
|
$ |
(1,887 |
) |
|
$ |
(0.08 |
) |
|
$ |
(3,870 |
) |
|
$ |
449 |
|
|
$ |
(4,319 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
(Unaudited) |
||||||||||||||||||||||||||||||
|
|
Year Ended |
||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Loss
|
|
Provision
|
|
Net
|
|
Diluted
|
|
Income
|
|
Provision
|
|
Net
|
|
Diluted
|
||||||||||||||||
Reported - GAAP Net income (loss) |
|
|
|
|
|
$ |
(14,559 |
) |
|
$ |
(0.58 |
) |
|
|
|
|
|
$ |
10,370 |
|
|
$ |
0.40 |
|
||||||||
Loss (income) from discontinued operations, net of tax |
|
|
|
|
|
|
(1,102 |
) |
|
|
(0.04 |
) |
|
|
|
|
|
|
(18,455 |
) |
|
|
(0.71 |
) |
||||||||
Income (loss) from continuing operations |
|
$ |
(14,693 |
) |
|
$ |
968 |
|
|
$ |
(15,661 |
) |
|
$ |
(0.62 |
) |
|
$ |
(7,002 |
) |
|
$ |
1,083 |
|
|
$ |
(8,085 |
) |
|
$ |
(0.31 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-general and administrative expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impairment and other lease charges (b) |
|
|
1,414 |
|
|
|
352 |
|
|
|
1,062 |
|
|
|
0.04 |
|
|
|
1,538 |
|
|
|
384 |
|
|
|
1,154 |
|
|
|
0.05 |
|
Closed restaurant rent expense, net of sublease income (c) |
|
|
1,928 |
|
|
|
481 |
|
|
|
1,447 |
|
|
|
0.06 |
|
|
|
2,999 |
|
|
|
748 |
|
|
|
2,251 |
|
|
|
0.09 |
|
Other expense (income), net (d) |
|
|
(591 |
) |
|
|
(147 |
) |
|
|
(444 |
) |
|
|
(0.02 |
) |
|
|
478 |
|
|
|
119 |
|
|
|
359 |
|
|
|
0.01 |
|
Total non-general and administrative expense |
|
|
2,751 |
|
|
|
686 |
|
|
|
2,065 |
|
|
|
0.08 |
|
|
|
5,015 |
|
|
|
1,251 |
|
|
|
3,764 |
|
|
|
0.15 |
|
General and administrative expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-recurring professional fees (e) |
|
|
2,001 |
|
|
|
499 |
|
|
|
1,502 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
G&A efficiency initiatives (f) |
|
|
2,690 |
|
|
|
670 |
|
|
|
2,020 |
|
|
|
0.08 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Restructuring costs and retention bonuses (g) |
|
|
1,410 |
|
|
|
351 |
|
|
|
1,059 |
|
|
|
0.04 |
|
|
|
18 |
|
|
|
4 |
|
|
|
14 |
|
|
|
— |
|
Digital costs (h) |
|
|
1,153 |
|
|
|
287 |
|
|
|
866 |
|
|
|
0.03 |
|
|
|
1,821 |
|
|
|
454 |
|
|
|
1,367 |
|
|
|
0.05 |
|
Total general and administrative expense |
|
|
7,254 |
|
|
|
1,807 |
|
|
|
5,447 |
|
|
|
0.21 |
|
|
|
1,839 |
|
|
|
458 |
|
|
|
1,381 |
|
|
|
0.05 |
|
Adjusted - Non-GAAP |
|
$ |
(4,688 |
) |
|
$ |
3,461 |
|
|
$ |
(8,149 |
) |
|
$ |
(0.33 |
) |
|
$ |
(148 |
) |
|
$ |
2,792 |
|
|
$ |
(2,940 |
) |
|
$ |
(0.11 |
) |
(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 |
(b) |
Impairment and other lease charges (recoveries) for the twelve months ended |
(c) |
Closed restaurant rent expense, net of sublease income, for the three and twelve months ended |
(d) |
Other expense (income), net, for the twelve months ended |
(e) | Non-recurring professional fees consist of costs related to growth initiatives. |
(f) | G&A efficiency initiatives consist of non-recurring retention bonus costs and costs related to the acceleration and write-off of costs related to accounting system implementation. |
(g) |
Restructuring costs and retention bonuses for the three and twelve months ended |
(h) |
Digital costs for the twelve months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230302005781/en/
Investor Relations:
203-682-8253
investors@frgi.com
Source:
FAQ
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