Carrols Restaurant Group, Inc. Reports Financial Results for the First Quarter of 2011
Highlights for the first quarter of 2011 versus the first quarter of 2010 include:
-
Total revenues increased 1.1% to
$197.2 million in the first quarter of 2011 compared to$195.1 million in the first quarter of 2010. - Comparable restaurant sales increased 13.5% at Pollo Tropical, 2.0% at Taco Cabana, but decreased 5.0% at Burger King;
-
Net income for the first quarter of 2011 was
$2.2 million , or$0.10 per diluted share, compared to net income of$2.3 million , or$0.11 per diluted share in the first quarter of 2010; and -
Earnings in the first quarter of 2011 were after impairment, other
lease charges and other income of
$1.0 million , or$0.03 per diluted share after tax. Earnings in the first quarter of 2011 also included approximately$0.3 million , or$0.01 per diluted share after tax, of costs incurred in connection with the Company's planned spin-off of its Hispanic Brands. Earnings in the first quarter of 2010 included impairment and other lease charges of$0.3 million , or$0.01 per diluted share.
As of
First Quarter 2011 Results
Total revenues increased 1.1% to
Pollo Tropical revenues increased 14.8% to
Taco Cabana revenues increased 2.2% to
Burger King revenues decreased 6.8% to
General and administrative expenses increased to
Income from operations decreased to
Interest expense decreased to
Impairment and other lease charges were
Net income for the first quarter of 2011 was
2011 Outlook
The Company is not providing specific earnings guidance for 2011. However, the Company is providing the following updated information which does not include any impact from the potential spin-off transaction or the planned refinancing:
- Comparable restaurant sales are now expected to increase approximately 6% to 8% for Pollo Tropical (compared to 3% to 5% announced previously) and to increase approximately 2% to 3% for Taco Cabana (compared to 1% to 2% announced previously). Burger King comparable restaurant sales are expected to be negative for the full year but improve from current trends in the second half of the year;
- Commodity costs are now expected to increase 3% to 4% for Pollo Tropical, 7% to 8% for Taco Cabana and 5% to 6% for Burger King;
- For 2011, the Company currently plans to open five to seven new Hispanic Brand restaurants and to relocate one Burger King restaurant. In 2011, the Company plans to close one Pollo Tropical and seven Burger King restaurants (excluding the relocated restaurant);
-
Total capital expenditures are still estimated to be in the
$45 million to $55 million range; and - The Company's annual effective tax rate is now estimated to be 32% to 33%.
Conference Call Today
The Company will host a conference call to discuss the first quarter
2011 financial results today at
The conference call can be accessed live over the phone by dialing
877-941-1427 or for international callers by dialing 480-629-9664. A
replay will be available one hour after the call and can be accessed by
dialing 800-406-7325 or for international callers by dialing
303-590-3030; the passcode is 4435782. The replay will be available
until
About the Company
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 the Company's
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 or plans, (including, without limitation, the
Company's consideration of a potential spin-off transaction) 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 the Company's and Carrols Corporation's
filings with the
Carrols Restaurant Group, Inc. Consolidated Statements of Operations (in thousands except per share amounts) |
||||||
(unaudited) | ||||||
Three Months Ended | ||||||
March 31, (a) | ||||||
2011 | 2010 | |||||
Revenues: | ||||||
Restaurant sales | $ | 196,873 | $ | 194,667 | ||
Franchise royalty revenues and fees | 365 | 477 | ||||
Total revenues |
197,238 | 195,144 | ||||
Costs and expenses: | ||||||
Cost of sales | 60,315 | 59,198 | ||||
Restaurant wages and related expenses (b) | 58,568 | 59,134 | ||||
Restaurant rent expense | 12,054 | 12,356 | ||||
Other restaurant operating expenses | 27,924 | 28,232 | ||||
Advertising expense | 7,503 | 6,846 | ||||
General and administrative expenses (b) | 13,856 | 12,497 | ||||
Depreciation and amortization | 8,108 | 8,122 | ||||
Impairment and other lease charges | 1,080 | 270 | ||||
Other income (c) | (106) | - | ||||
Total costs and expenses | 189,302 | 186,655 | ||||
Income from operations | 7,936 | 8,489 | ||||
Interest expense | 4,613 | 4,743 | ||||
Income before income taxes | 3,323 | 3,746 | ||||
Provision for income taxes | 1,077 | 1,432 | ||||
Net income (d) | $ | 2,246 | $ | 2,314 | ||
Basic and diluted net income per share | $ | 0.10 | $ | 0.11 | ||
Basic weighted average common shares outstanding |
21,643 |
21,614 |
||||
Diluted weighted average common shares outstanding |
22,068 |
21,838 |
||||
(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 expense of
(c) Other income in 2011 was due to a gain on an insurance recovery from a fire at a Burger King restaurant in 2010.
(d) The consolidated financial results for
Carrols Restaurant Group, Inc. |
||||||||
The following table sets forth certain unaudited supplemental financial and other restaurant data for the periods indicated (in thousands, except number of restaurants): |
||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Segment revenues: | ||||||||
Burger King | $ | 81,622 | $ | 87,619 | ||||
Pollo Tropical | 52,235 | 45,493 | ||||||
Taco Cabana | 63,381 | 62,032 | ||||||
Total revenues | $ | 197,238 | $ | 195,144 | ||||
Change in comparable restaurant sales: (a) | ||||||||
Burger King | (5.0 | )% | (6.4 | )% | ||||
Pollo Tropical | 13.5 | % | 3.7 | % | ||||
Taco Cabana | 2.0 | % | (2.0 | )% | ||||
Adjusted Segment EBITDA: (b) | ||||||||
Burger King | $ | 1,141 | $ | 3,786 | ||||
Pollo Tropical | 10,059 | 6,727 | ||||||
Taco Cabana | 6,493 | 6,761 | ||||||
Average sales per restaurant: (c) | ||||||||
Burger King | $ | 270 | $ | 282 | ||||
Pollo Tropical | 577 | 497 | ||||||
Taco Cabana | 408 | 397 | ||||||
New restaurant openings: | ||||||||
Burger King | 1 | - | ||||||
Pollo Tropical | - | - | ||||||
Taco Cabana | 1 | - | ||||||
Total new restaurant openings | 2 | - | ||||||
Restaurant closings: | ||||||||
Burger King | (2 | ) | (1 | ) | ||||
Pollo Tropical | (1 | ) | - | |||||
Taco Cabana | - | - | ||||||
Net new restaurants | (1 | ) | (1 | ) | ||||
Number of company owned restaurants: | ||||||||
Burger King | 304 | 311 | ||||||
Pollo Tropical | 90 | 91 | ||||||
Taco Cabana | 156 | 156 | ||||||
Total company owned restaurants | 550 | 558 | ||||||
At 4/3/11 | At 1/2/11 | |||||||
Long-term debt (d) | $ | 266,979 | $ | 263,513 | ||||
(a) Restaurants are included in comparable restaurant sales after they have been open for 12 months for Burger King restaurants and 18 months for Pollo Tropical and Taco Cabana restaurants.
(b) Adjusted Segment EBITDA is defined as earnings attributable to the applicable segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense, other loss (income) and gains or losses on extinguishment of debt. Adjusted Segment EBITDA is used because it is the measure of segment profit or loss reported to our chief operating decision maker for purposes of allocating resources to the segments and assessing each segment's performance. This may not be necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. Adjusted Segment EBITDA for Burger King restaurants includes general and administrative expenses related directly to the Burger King segment as well as the expenses associated with administrative support to all three of the Company's segments including executive management, information systems and certain accounting, legal and other administrative functions.
(c) Average sales for company-owned or operated restaurants are derived by dividing restaurant sales for such period for the applicable segment by the average number of restaurants for the applicable segment for such period.
(d) Long-term debt (including current portion) at
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