Carrols Restaurant Group, Inc. Reports Financial Results for the Third Quarter 2019
Highlights for the Third Quarter of 2019 versus the Third Quarter of 2018 Include:
-
Total restaurant sales increased 34.2% to
$398.4 million (including$71.6 million in restaurant sales from theCambridge acquisition completed in the second quarter) from$296.9 million in the prior year quarter; - Comparable restaurant sales for the Company’s Burger King restaurants increased 4.5% compared to a 1.6% increase in the prior year quarter;
-
As described below, the Company realized it had been combining the sales discounts with respect to separate Whopper® value meal promotions
between June 3 and August 26, 2019 , which resulted in significant additional sales discounts relative to the advertised promotions that reduced restaurant sales by approximately$8.3 million . Excluding the impact of the excess sales discounts, comparable restaurant sales for the third quarter would have increased approximately 7.4%; -
Adjusted EBITDA(1) was
$25.6 million compared to$26.5 million in the prior year quarter. The impact of the excess sales discounts above reduced Adjusted EBITDA in the third quarter by approximately$7.3 million . Excluding the impact of the excess sales discounts Adjusted EBITDA in the third quarter of 2019 would have been approximately$32.9 million ; -
Net loss was
$6.8 million , or$0.15 per diluted share, compared to net income of$3.6 million , or$0.08 per diluted share, in the prior year quarter; and -
Adjusted net loss(1) was
$3.9 million , or$0.09 per diluted share, compared to adjusted net income of$4.2 million , or$0.09 per diluted share, in the prior year quarter.
(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.
Accordino continued, “Restaurant-level profitability and Adjusted EBITDA during the third quarter were also challenged by higher commodity costs, including a 10.7% increase in beef costs, continued labor rate increases, as well the lower restaurant-level EBITDA margins at the
Accordino concluded, “Longer-term, Carrols’ foundation of two world-class brands with significant scale advantages and a supportive franchisor partner bode well for realizing growth opportunities across multiple attractive markets. We believe we are well positioned to capture growth from two of our recent impactful product innovations, the Impossible Whopper at Burger King and the Popeye’s chicken sandwich.
Third Quarter 2019 Financial Results
Restaurant sales increased 34.2% to
The Company’s results in both the second and third quarter were significantly impacted by combining the sales discounts with respect to separate Whopper value meal promotions
The excess discounts described above resulted in reduced restaurant sales on all Whopper value meals of approximately
Restaurant-level EBITDA(1) was
General and administrative expenses were
Adjusted EBITDA(1) was
Loss from operations was
Interest expense increased to
Net loss was
Adjusted net loss(1) was
Carrols repurchased 283,069 shares of its outstanding common stock in open market transactions during the third quarter of 2019 under the
With regard to liquidity, we ended the third quarter with
Full Year 2019 Outlook
Carrols is revising its annual guidance for certain items to reflect the following. These estimates exclude any other potential acquisitions that the Company may complete in 2019:
-
Total restaurant sales are still expected to be
$1.44 billion to $1.47 billion , including approximately$200 million of total sales fromCambridge for approximately eight months in 2019; - Comparable restaurant sales are still expected to grow 2.0% to 3.0%;
- Commodity costs are still expected to increase 3% to 4% with beef costs increasing 7% to 9%;
-
General and administrative expenses are still expected to be
$68 million to $72 million , excluding stock compensation expense and acquisition and integration costs. The Company expects to fully integrate theCambridge corporate functions by the end of the year; -
Our previous guidance of Adjusted EBITDA of
$100 million to $105 million remains unchanged other than for the negative impact on Adjusted EBITDA of approximately$10.9 million in the second and third quarters due to the excess sales discounts discussed above; -
Capital expenditures are now expected to be
$145 million to $155 million (previously$120 million to $130 million ), including$55 million to $65 million for construction of 22 to 24 new Burger King restaurants and 9 to 11 newPopeyes restaurants and remodeling approximately 92 Burger King restaurants and 4Popeyes restaurants. The Company will be receiving$8 million of landlord contributions for certain of the 2019 Burger King remodels in 2020; -
Proceeds from sale/leasebacks are now expected to be approximately
$44 million to $48 million (previously$15 million to $25 million ); - The Company expects to close up to 15 Burger King® restaurants, including two restaurant relocations within their trade areas, which 13 have been closed through the end of third quarter of 2019.
Carrols has not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because the Company does not provide guidance for net income or for the various reconciling items. The Company is unable to provide guidance for these reconciling items since certain items that impact net income are outside of Carrols’ control or cannot be reasonably predicted.
Conference Call Today
The conference call can be accessed live over the phone by dialing 201-493-6725. A replay will be available one hour after the call and can be accessed by dialing 412-317-6671; the passcode is 13695332. The replay will be available until
Investor Conference Participation
As a reminder, Carrols will host a fireside chat at the Stephens 2019
About the Company
Carrols is one of largest restaurant franchisees 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
Carrols Restaurant Group, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) |
|||||||||||||||
|
(unaudited) |
|
(unaudited) |
||||||||||||
|
Three Months Ended (a) |
|
Nine Months Ended (a) |
||||||||||||
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Restaurant sales |
$ |
398,414 |
|
|
$ |
296,917 |
|
|
$ |
1,054,877 |
|
|
$ |
871,553 |
|
Other revenue |
3,931 |
|
|
— |
|
|
6,816 |
|
|
— |
|
||||
Total revenue |
402,345 |
|
|
296,917 |
|
|
1,061,693 |
|
|
871,553 |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales |
121,283 |
|
|
82,082 |
|
|
313,015 |
|
|
237,004 |
|
||||
Restaurant wages and related expenses |
131,070 |
|
|
95,391 |
|
|
352,402 |
|
|
283,489 |
|
||||
Restaurant rent expense |
29,300 |
|
|
20,259 |
|
|
77,906 |
|
|
60,112 |
|
||||
Other restaurant operating expenses |
62,710 |
|
|
45,510 |
|
|
164,623 |
|
|
132,938 |
|
||||
Advertising expense |
16,052 |
|
|
12,120 |
|
|
42,601 |
|
|
35,741 |
|
||||
General and administrative expenses (b) (c) |
21,365 |
|
|
17,602 |
|
|
61,709 |
|
|
49,758 |
|
||||
Depreciation and amortization |
21,200 |
|
|
14,555 |
|
|
53,613 |
|
|
43,426 |
|
||||
Impairment and other lease charges |
500 |
|
|
164 |
|
|
1,777 |
|
|
3,354 |
|
||||
Other income, net (d) |
(20 |
) |
|
(434 |
) |
|
(1,773 |
) |
|
(434 |
) |
||||
Total costs and expenses |
403,460 |
|
|
287,249 |
|
|
1,065,873 |
|
|
845,388 |
|
||||
Income (loss) from operations |
(1,115 |
) |
|
9,668 |
|
|
(4,180 |
) |
|
26,165 |
|
||||
Interest expense |
7,578 |
|
|
5,909 |
|
|
20,425 |
|
|
17,752 |
|
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
7,443 |
|
|
— |
|
||||
Gain on bargain purchase |
— |
|
|
— |
|
|
— |
|
|
(230 |
) |
||||
Income (loss) before income taxes |
(8,693 |
) |
|
3,759 |
|
|
(32,048 |
) |
|
8,643 |
|
||||
Provision (benefit) for income taxes |
(1,881 |
) |
|
148 |
|
|
(10,035 |
) |
|
346 |
|
||||
Net income (loss) |
$ |
(6,812 |
) |
|
$ |
3,611 |
|
|
$ |
(22,013 |
) |
|
$ |
8,297 |
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net income (loss) per share (e)(f) |
$ |
(0.15 |
) |
|
$ |
0.08 |
|
|
$ |
(0.54 |
) |
|
$ |
0.18 |
|
Basic weighted average common shares outstanding |
45,947 |
|
|
35,736 |
|
|
41,015 |
|
|
35,707 |
|
||||
Diluted weighted average common shares outstanding |
45,947 |
|
|
45,411 |
|
|
41,015 |
|
|
45,293 |
|
(a) |
The Company uses a 52 or 53 week fiscal year that ends on the Sunday closest to December 31. The three and nine months ended September 29, 2019 and September 30, 2018 each included thirteen and thirty-nine weeks, respectively. | |
(b) |
General and administrative expenses include acquisition and integration costs of $2.2 million and $0.8 million for the three months ended September 29, 2019 and September 30, 2018, respectively and $7.0 million and $1.0 million for the nine months ended September 29, 2019 and September 30, 2018, respectively. | |
(c) |
General and administrative expenses include stock-based compensation expense of $1.7 million and $1.5 million for the three months ended September 29, 2019 and September 30, 2018 respectively and $4.5 million for both the nine months ended September 29, 2019 and September 30, 2018, respectively. | |
(d) |
Other income, net, for the nine months ended September 29, 2019, included, among other things, a $1.9 million gain related to a settlement with Burger King Corporation for the approval of new restaurant development by other franchisees which unfavorably impacted our restaurants. Other income, net, for the three and nine months ended September 30, 2018 included a $0.4 million gain related to an insurance recovery from a restaurant fire. | |
(e) |
Basic net income (loss) per share was computed excluding loss attributable to preferred stock and non-vested restricted shares unless the effect would have been anti-dilutive for the periods presented. | |
(f) |
Diluted net income (loss) per share was computed including shares issuable for convertible preferred stock and non-vested restricted shares unless their effect would have been anti-dilutive for the periods presented. |
Carrols Restaurant Group, Inc.
|
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) |
|
(unaudited) |
|||||||||||||
|
Three Months Ended |
|
Nine Months Ended (a) |
||||||||||||
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Burger King restaurant sales |
$ |
379,212 |
|
|
$ |
296,917 |
|
|
$ |
1,023,715 |
|
|
$ |
871,553 |
|
Popeyes restaurant sales |
19,202 |
|
|
— |
|
|
31,162 |
|
|
— |
|
||||
Total restaurant sales |
398,414 |
|
|
296,917 |
|
|
1,054,877 |
|
|
871,553 |
|
||||
Other revenue |
3,931 |
|
|
— |
|
|
6,816 |
|
|
— |
|
||||
Total revenue |
$ |
402,345 |
|
|
$ |
296,917 |
|
|
$ |
1,061,693 |
|
|
$ |
871,553 |
|
Change in Comparable Burger King Restaurant Sales (a) |
4.5 |
% |
|
1.6 |
% |
|
2.3 |
% |
|
4.2 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Average Weekly Sales per Burger King Restaurant (b) |
$ |
28,766 |
|
|
$ |
28,217 |
|
|
$ |
28,006 |
|
|
$ |
27,733 |
|
Average Weekly Sales per Popeyes Restaurant (b) |
$ |
24,711 |
|
|
$ |
— |
|
|
$ |
24,623 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
||||||||
Restaurant-Level EBITDA (c) |
$ |
43,004 |
|
|
$ |
41,616 |
|
|
$ |
113,211 |
|
|
$ |
122,613 |
|
Restaurant-Level EBITDA margin (c) |
10.7 |
% |
|
14.0 |
% |
|
10.7 |
% |
|
14.1 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (c) |
$ |
25,648 |
|
|
$ |
26,483 |
|
|
$ |
63,414 |
|
|
$ |
78,529 |
|
Adjusted EBITDA margin (c) |
6.4 |
% |
|
8.9 |
% |
|
6.0 |
% |
|
9.0 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted net income (loss) (c) |
$ |
(3,920 |
) |
|
$ |
4,158 |
|
|
$ |
(9,331 |
) |
|
$ |
11,660 |
|
Adjusted diluted net income (loss) per share (c) |
$ |
(0.09 |
) |
|
$ |
0.09 |
|
|
$ |
(0.23 |
) |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
||||||||
Number of Burger King restaurants: |
|
|
|
|
|
|
|
||||||||
Restaurants at beginning of period |
1,023 |
|
|
807 |
|
|
849 |
|
|
807 |
|
||||
New restaurants (including offsets) |
7 |
|
|
2 |
|
|
13 |
|
|
6 |
|
||||
Restaurants acquired |
1 |
|
|
33 |
|
|
179 |
|
|
34 |
|
||||
Restaurants closed (including offsets) |
(3 |
) |
|
(4 |
) |
|
(13 |
) |
|
(9 |
) |
||||
Restaurants at end of period |
1,028 |
|
|
838 |
|
|
1,028 |
|
|
838 |
|
||||
Average Number of Restaurants: |
1,014.1 |
|
|
809.4 |
|
|
937.3 |
|
|
805.8 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Number of Popeyes restaurants: |
|
|
|
|
|
|
|
||||||||
Restaurants at beginning of period |
58 |
|
|
— |
|
|
— |
|
|
— |
|
||||
Restaurants acquired |
— |
|
|
— |
|
|
55 |
|
|
— |
|
||||
New restaurants |
2 |
|
|
— |
|
|
5 |
|
|
— |
|
||||
Restaurants at end of period |
60 |
|
|
— |
|
|
60 |
|
|
— |
|
||||
Average Number of Restaurants: |
59.6 |
|
|
— |
|
|
57.4 |
|
|
— |
|
|
At 9/29/19 |
|
At 12/30/2018 |
|||||
Long-term debt and finance lease liabilities (d) |
$ |
486,517 |
|
|
$ |
278,941 |
|
|
Cash and cash equivalents |
2,615 |
|
|
4,014 |
|
(a) |
Restaurants we acquire are included in comparable restaurant sales after they have been operated by us for 12 months. Sales from restaurants we develop are included in comparable sales after they have been open for 15 months. The calculation of changes in comparable restaurant sales is based on the comparable 13-week or 39-week period. | |
(b) |
Average weekly sales per restaurant are derived by dividing restaurant sales for the comparable 13-week or 39-week period by the average number of restaurants operating during such period. | |
(c) |
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. Adjusted diluted net income (loss) per share is calculated based on Adjusted net income (loss) and reflects the dilutive impact of shares, where applicable, based on Adjusted net income (loss). | |
(d) |
Long-term debt and finance lease liabilities (including current portion and excluding deferred financing costs and original issue discount) at September 29, 2019 included $423,937 of the Company's Term Loan B under our senior credit facility, $59,500 of outstanding revolving borrowings under the Company's senior credit facility and $3,086 of finance lease liabilities. Long-term debt and finance lease liabilities (including current portion and excluding deferred financing costs) at December 30, 2018 included $275,000 of the Company's 8% Senior Secured Second Lien Notes and $3,941 of finance lease liabilities. |
Carrols Restaurant Group, Inc. Reconciliation of Non-GAAP Measures (In thousands, except per share amounts) |
|||||||||||||||
(unaudited) |
|
(unaudited) |
|||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
Reconciliation of EBITDA and Adjusted EBITDA: (a) |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(6,812 |
) |
|
$ |
3,611 |
|
|
$ |
(22,013 |
) |
|
$ |
8,297 |
|
Provision (benefit) for income taxes |
(1,881 |
) |
|
148 |
|
|
(10,035 |
) |
|
346 |
|
||||
Interest expense |
7,578 |
|
|
5,909 |
|
|
20,425 |
|
|
17,752 |
|
||||
Depreciation and amortization |
21,200 |
|
|
14,555 |
|
|
53,613 |
|
|
43,426 |
|
||||
EBITDA |
20,085 |
|
|
24,223 |
|
|
41,990 |
|
|
69,821 |
|
||||
Impairment and other lease charges |
500 |
|
|
164 |
|
|
1,777 |
|
|
3,354 |
|
||||
Acquisition and integration costs (b) |
2,754 |
|
|
842 |
|
|
7,983 |
|
|
1,036 |
|
||||
Pre-opening costs (c) |
478 |
|
|
61 |
|
|
1,063 |
|
|
344 |
|
||||
Litigation costs (d) |
144 |
|
|
96 |
|
|
416 |
|
|
137 |
|
||||
Other income, net (e) |
(20 |
) |
|
(434 |
) |
|
(1,773 |
) |
|
(434 |
) |
||||
Gain on bargain purchase |
— |
|
|
— |
|
|
— |
|
|
(230 |
) |
||||
Stock-based compensation expense |
1,707 |
|
|
1,531 |
|
|
4,515 |
|
|
4,501 |
|
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
7,443 |
|
|
— |
|
||||
Adjusted EBITDA |
$ |
25,648 |
|
|
$ |
26,483 |
|
|
$ |
63,414 |
|
|
$ |
78,529 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Restaurant-Level EBITDA: (a) |
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
$ |
(1,115 |
) |
|
$ |
9,668 |
|
|
$ |
(4,180 |
) |
|
$ |
26,165 |
|
Add: |
|
|
|
|
|
|
|
||||||||
General and administrative expenses |
21,365 |
|
|
17,602 |
|
|
61,709 |
|
|
49,758 |
|
||||
Integration costs (b) |
596 |
|
|
— |
|
|
1,002 |
|
|
— |
|
||||
Pre-opening costs (c) |
478 |
|
|
61 |
|
|
1,063 |
|
|
344 |
|
||||
Depreciation and amortization |
21,200 |
|
|
14,555 |
|
|
53,613 |
|
|
43,426 |
|
||||
Impairment and other lease charges |
500 |
|
|
164 |
|
|
1,777 |
|
|
3,354 |
|
||||
Other income, net (e) |
(20 |
) |
|
(434 |
) |
|
(1,773 |
) |
|
(434 |
) |
||||
Restaurant-Level EBITDA |
$ |
43,004 |
|
|
$ |
41,616 |
|
|
$ |
113,211 |
|
|
$ |
122,613 |
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Adjusted net income (loss): (a) |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(6,812 |
) |
|
$ |
3,611 |
|
|
$ |
(22,013 |
) |
|
$ |
8,297 |
|
Add: |
|
|
|
|
|
|
|
||||||||
Impairment and other lease charges |
500 |
|
|
164 |
|
|
1,777 |
|
|
3,354 |
|
||||
Acquisition and integration costs (b) |
2,754 |
|
|
842 |
|
|
7,983 |
|
|
1,036 |
|
||||
Pre-opening costs (c) |
478 |
|
|
61 |
|
|
1,063 |
|
|
344 |
|
||||
Litigation costs (d) |
144 |
|
|
96 |
|
|
416 |
|
|
137 |
|
||||
Other income, net (e) |
(20 |
) |
|
(434 |
) |
|
(1,773 |
) |
|
(434 |
) |
||||
Gain on bargain purchase |
— |
|
|
— |
|
|
— |
|
|
(230 |
) |
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
7,443 |
|
|
— |
|
||||
Income tax effect on above adjustments (f) |
(964 |
) |
|
(182 |
) |
|
(4,227 |
) |
|
(844 |
) |
||||
Adjusted net income (loss) |
$ |
(3,920 |
) |
|
$ |
4,158 |
|
|
$ |
(9,331 |
) |
|
$ |
11,660 |
|
Adjusted diluted net income (loss) per share |
$ |
(0.09 |
) |
|
$ |
0.09 |
|
|
$ |
(0.23 |
) |
|
$ |
0.26 |
|
Adjusted diluted weighted average common shares outstanding |
45,947 |
|
|
45,411 |
|
|
41,015 |
|
|
45,293 |
|
(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 income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and other lease charges, acquisition and integration costs, stock-based compensation expense, loss on extinguishment of debt, restaurant pre-opening costs, non-recurring litigation costs and other 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, integration costs, pre-opening costs, loss on extinguishment of debt, and other non-recurring income or expense. Adjusted net income (loss) represents net income (loss) as adjusted to exclude impairment and other lease charges, acquisition costs and integration costs, gain on bargain purchase, non-recurring litigation costs and other 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 such as salaries and expenses associated with corporate and administrative functions that support the development and operations of our restaurants, legal, auditing and other professional fees, acquisition costs, pre-opening costs and stock-based compensation expense. Although these costs are not directly related to restaurant-level operations, these expenses are necessary for the profitability of our restaurants. Additionally, this financial measure may not be comparable to a similarly titled caption for other companies. 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) 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. | |
(b) |
Acquisition and integration costs for the three and nine months ended September 29, 2019 of $2.8 million and $8.0 million, respectively, include certain legal and professional fees; corporate payroll, and other costs related to the integration of the Cambridge merger and one-time repair costs which are included in Restaurant-Level EBITDA. | |
(c) |
Pre-opening costs for the three and nine months ended September 29, 2019 and September 30, 2018 include training, labor and occupancy costs incurred during the construction of new restaurants. | |
(d) |
Legal costs for the three and nine months ended September 29, 2019 include litigation expenses pertaining to an ongoing lawsuit with one of the Company's former vendors. | |
(e) |
Other income, net for the three months ended September 29, 2019 included a loss on disposal of assets of $0.1 million and a gain on a sale-leaseback transaction of $0.1 million. Other income, net for the nine months ended September 29, 2019 included a $1.9 million gain related to a settlement with Burger King Corporation for the approval of new restaurant development by other franchisees which unfavorably impacted our restaurants, a loss on disposal of assets of $0.6 million, a gain on three sale-leaseback transactions of $0.3 million, and a gain related to an insurance recovery from a fire at one of our restaurants in the prior year of $0.1 million. | |
(f) |
The income tax effect related to the adjustments for impairment and other lease charges, gain on bargain purchase, acquisition costs, and other non-recurring expense (income) during the periods presented was calculated using an incremental income tax rate of 25% for the three and nine months ended September 29, 2019 and 25% and 21.6% for the three and nine months ended September 30, 2018, respectively. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191107005309/en/
Source:
Investor Relations:
800-348-1074, ext. 3333
investorrelations@carrols.com