Carrols Restaurant Group, Inc. Reports Financial Results for the First Quarter of 2016
For 2016, the Company has modified its groupings of restaurants for reporting and analysis purposes. "Acquired restaurants" refer to those restaurants acquired from 2014 through 2016. "Legacy restaurants" include all of the Company's other restaurants including restaurants acquired before 2014.
Highlights for first quarter of 2016 versus first quarter of 2015 include:
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Restaurant sales increased 15.2% to
$222.5 million from$193.2 million in the first quarter of 2015, including$53.4 million in sales from the 190 BURGER KING® restaurants acquired from 2014 to 2016; - Comparable restaurant sales increased 5.7% compared to an 8.4% increase in the prior year period;
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Adjusted EBITDA(1) more than doubled to
$18.5 million from$7.7 million in the prior year period; -
Net income was
$2.1 million , or$0.05 per diluted share, compared to a net loss of$9.3 million , or$0.27 per diluted share, in the prior year period; and -
Adjusted net income(1) was
$2.3 million , or$0.05 per diluted share, compared to an adjusted net loss of$7.4 million , or$0.21 per diluted share, in the prior year period.
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(1) |
Adjusted EBITDA, Restaurant-level EBITDA and Adjusted net income (loss) are non-GAAP financial measures. Refer to the definitions and reconciliation of these measures to net income (loss) or to income (loss) from operations in the tables at the end of this release. |
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At the end of the first quarter of 2016, Carrols owned and operated 717 BURGER KING® restaurants.
Accordino concluded, "In addition to our ongoing efforts to improve
operations and financial performance at recently acquired restaurants,
we continue to focus on our other strategic priorities; enhancement of
our asset base through our multi-year remodeling program and
opportunistically expanding our business through accretive acquisitions.
During the first quarter, we reimaged 10 restaurants to the 20/20 design
image and plan to have approximately 75% of our restaurants remodeled by
the end of the year. We also acquired 12 restaurants in central
First Quarter 2016 Financial Results
Restaurant sales increased 15.2% to
Restaurant-Level EBITDA was
General and administrative expenses were
Adjusted EBITDA was
Income from operations was
Interest expense decreased slightly to
Net income was
Adjusted net income was
Full Year 2016 Outlook
Carrols is providing the following updated guidance for the full year 2016 which is a 52-week period. While the Company intends to pursue opportunities to acquire additional BURGER KING® restaurants in 2016, this guidance does not include any impact from such potential transactions:
-
Total restaurant sales of
$935 million to$960 million (previously$930 million to$955 million ) including a comparable restaurant sales increase of 2% to 4% (unchanged from our previous estimate). Comparable restaurant sales are on a comparable 52 week basis; - Commodity cost decrease of 0% to 2% (previously a 1% decrease to 1% increase) including a 5% to 10% decrease in beef costs;
-
General and administrative expenses (excluding stock compensation
costs) of
$50 million to$52 million (unchanged from our previous estimate); -
Adjusted EBITDA of
$85 million to$90 million (previously$80 million to$90 million ); -
Capital expenditures of
$75 million to$85 million (unchanged from our previous estimate) which includes remodeling a total of 85 to 95 restaurants (including the scrape and rebuilding of 4 to 6 restaurants) and the construction of 6 to 8 new restaurants (including relocations of 4 to 5 existing restaurants); and -
The sale/leaseback of 12 properties acquired in 2015 for net proceeds
of
$17 million to$18 million (previously 13 properties for net proceeds of$18 million to$19 million ).
Conference Call Today
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replay will be available one hour after the call and can be accessed by
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until
About the Company
Carrols is the largest BURGER KING® franchisee in
Forward-Looking Statements
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 Carrols'
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 our
strategies, intentions, plans or guidance 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 our control.
Investors are referred to the full discussion of risks and uncertainties
as included in Carrols' filings with the
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| (unaudited) | |||||||||||
| Three Months Ended (a) | |||||||||||
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| Restaurant sales | $ | 222,519 | $ | 193,170 | |||||||
| Costs and expenses: | |||||||||||
| Cost of sales | 59,020 | 56,850 | |||||||||
| Restaurant wages and related expenses | 72,083 | 63,312 | |||||||||
| Restaurant rent expense | 15,878 | 14,424 | |||||||||
| Other restaurant operating expenses | 35,689 | 32,492 | |||||||||
| Advertising expense | 9,128 | 7,283 | |||||||||
| General and administrative expenses (b) (c) | 13,206 | 11,596 | |||||||||
| Depreciation and amortization | 11,057 | 10,005 | |||||||||
| Impairment and other lease charges | 222 | 1,630 | |||||||||
| Other expense (income) | (444 | ) | 40 | ||||||||
| Total costs and expenses | 215,839 | 197,632 | |||||||||
| Income (loss) from operations | 6,680 | (4,462 | ) | ||||||||
| Interest expense | 4,535 | 4,814 | |||||||||
| Income (loss) before income taxes | 2,145 | (9,276 | ) | ||||||||
| Provision (benefit) for income taxes | — | — | |||||||||
| Net income (loss) | $ | 2,145 | $ | (9,276 | ) | ||||||
| Basic and diluted net income (loss) per share (d)(e) | $ | 0.05 | $ | (0.27 | ) | ||||||
| Basic weighted average common shares outstanding | 35,102 | 34,882 | |||||||||
| Diluted weighted average common shares outstanding | 44,881 | 34,882 | |||||||||
| (a) |
The Company uses a 52 or 53 week fiscal year that ends on the Sunday
closest to |
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| (b) |
General and administrative expenses include acquisition costs of
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| (c) |
General and administrative expenses include stock-based compensation
expense of |
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| (d) | Basic net income (loss) per share was computed excluding income attributable to preferred stock and non-vested restricted shares. | |
| (e) | Diluted net income (loss) per share was computed including shares issuable for convertible preferred stock and non-vested restricted stock unless their effect would have been anti-dilutive for the periods presented. | |
Supplemental Information
The following table sets forth certain unaudited supplemental financial and other data for the periods indicated (in thousands, except number of restaurants, percentages and average weekly sales per restaurant):
| (unaudited) | ||||||||||
| Three Months Ended (a) | ||||||||||
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| Restaurant Sales: (a) | ||||||||||
| Legacy restaurants | $ | 169,076 | $ | 160,630 | ||||||
| Acquired restaurants | 53,443 | 32,540 | ||||||||
| Total restaurant sales | $ | 222,519 | $ | 193,170 | ||||||
| Change in Comparable Restaurant Sales (b) | 5.7% | 8.4% | ||||||||
| Average Weekly Sales per Restaurant: (c) | ||||||||||
| Legacy restaurants | $ | 24,841 | $ | 23,294 | ||||||
| Acquired restaurants | 22,775 | 20,899 | ||||||||
| Restaurant-Level EBITDA: (d) | ||||||||||
| Legacy restaurants | $ | 24,816 | $ | 16,941 | ||||||
| Acquired restaurants | 5,905 | 1,868 | ||||||||
| Total Restaurant-Level EBITDA | $ | 30,721 | $ | 18,809 | ||||||
| Restaurant-Level EBITDA margin: (d) | ||||||||||
| Legacy restaurants | 14.7% | 10.5% | ||||||||
| Acquired restaurants | 11.0% | 5.7% | ||||||||
| All restaurants | 13.8% | 9.7% | ||||||||
| Adjusted EBITDA (d) | $ | 18,482 | $ | 7,725 | ||||||
| Adjusted EBITDA margin (d) | 8.3% | 4.0% | ||||||||
| Adjusted net income (loss) (d) | $ | 2,325 | $ | (7,435) | ||||||
| Adjusted diluted net earnings (loss) per share (d) | $ | 0.05 | $ | (0.21) | ||||||
| Number of Restaurants: | ||||||||||
| Restaurants at beginning of period | 705 | 674 | ||||||||
| Restaurants acquired | 12 | — | ||||||||
| Restaurants closed | — | (15) | ||||||||
| Restaurants at end of period | 717 | 659 | ||||||||
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At |
At |
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| Long-term debt (e) | $ | 209,106 | $ | 209,209 | ||||||
| Cash | 12,330 | 22,274 | ||||||||
| (a) | Acquired restaurants represent the 190 restaurants acquired in 14 acquisitions from 2014 through 2016. Legacy restaurants represent all other restaurants including restaurants acquired before 2014. | |
| (b) | Restaurants are generally included in comparable restaurant sales after they have been open or owned for 12 months. The calculation of changes in comparable restaurant sales is based on the comparable 13 week period. | |
| (c) | Average weekly sales per restaurant are derived by dividing restaurant sales for the comparable 13-week period by the average number of restaurants operating during such period. | |
| (d) | EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Restaurant-Level EBITDA, Restaurant-Level EBITDA margin and Adjusted net income (loss) are non-GAAP financial measures and may not necessarily be comparable to other similarly titled captions of other companies due to differences in methods of calculation. Refer to the Company's reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted net income (loss), and to the Company's reconciliation of income (loss) from operations to Restaurant-Level EBITDA for further detail. Both Adjusted EBITDA margin and Restaurant-Level EBITDA margin are calculated as a percentage of restaurant sales for the respective group of restaurants. Adjusted diluted net earnings (loss) per share is calculated based on Adjusted net income (loss). | |
| (e) |
Long-term debt (including current portion and excluding deferred
financing costs) at |
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| (unaudited) | |||||||||||
| Three Months Ended (a) | |||||||||||
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| Reconciliation of EBITDA and Adjusted EBITDA: (a) | |||||||||||
| Net income (loss) | $ | 2,145 | $ | (9,276 | ) | ||||||
| Provision (benefit) for income taxes | — | — | |||||||||
| Interest expense | 4,535 | 4,814 | |||||||||
| Depreciation and amortization | 11,057 | 10,005 | |||||||||
| EBITDA | 17,737 | 5,543 | |||||||||
| Impairment and other lease charges | 222 | 1,630 | |||||||||
| Acquisition costs | 408 | 211 | |||||||||
| Gain from partial condemnation | (450 | ) | — | ||||||||
| Stock compensation expense | 565 | 341 | |||||||||
| Adjusted EBITDA | $ | 18,482 | $ | 7,725 | |||||||
| Reconciliation of Restaurant-Level EBITDA: (a) | |||||||||||
| Income (loss) from operations | $ | 6,680 | $ | (4,462 | ) | ||||||
| Add: | |||||||||||
| General and administrative expenses | 13,206 | 11,596 | |||||||||
| Depreciation and amortization | 11,057 | 10,005 | |||||||||
| Impairment and other lease charges | 222 | 1,630 | |||||||||
| Other expense (income) | (444 | ) | 40 | ||||||||
| Restaurant-Level EBITDA | $ | 30,721 | $ | 18,809 | |||||||
| Reconciliation of Adjusted net income (loss): (a) | |||||||||||
| Net income (loss) | $ | 2,145 | $ | (9,276 | ) | ||||||
| Add: | |||||||||||
| Impairment and other lease charges | 222 | 1,630 | |||||||||
| Gain from partial condemnation | (450 | ) | — | ||||||||
| Acquisition costs | 408 | 211 | |||||||||
| Adjusted net income (loss) | $ | 2,325 | $ | (7,435 | ) | ||||||
| Adjusted diluted net earnings (loss) per share | $ | 0.05 | $ | (0.21 | ) | ||||||
| (a) | Within our press release, we make reference to EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss) which are non-GAAP financial measures. EBITDA represents net income (loss) before provision for income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and other lease charges, acquisition costs, stock compensation expense and non-recurring income or expense. Restaurant-Level EBITDA represents income (loss) from operations as adjusted to exclude general and administrative expenses, depreciation and amortization, impairment and other lease charges and other expense (income). Adjusted net income (loss) represents net income (loss) as adjusted to exclude impairment and other lease charges, acquisition costs and non-recurring income or expense. | |
| We are presenting Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss) because we believe that they provide a more meaningful comparison than EBITDA and Net income (loss) of the Company's core business operating results, as well as with those of other similar companies. Additionally, we present Restaurant-Level EBITDA because it excludes the impact of general and administrative expenses and other expense (income), all of which are non-recurring at the restaurant level. Management believes that Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss), when viewed with the Company's results of operations in accordance with GAAP and the accompanying reconciliations in the table above, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of the Company's core business without regard to potential distortions. Additionally, management believes that Adjusted EBITDA and Restaurant-Level EBITDA permit investors to gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. | ||
| However, EBITDA, Adjusted EBITDA, Restaurant-Level EBITDA and Adjusted net income (loss) are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss), income (loss) from operations 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. The tables above provide reconciliations between net income (loss) and EBITDA, Adjusted EBITDA and Adjusted net income (loss) and between income (loss) from operations and Restaurant-Level EBITDA. | ||
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