Carrols Restaurant Group, Inc. Reports Financial Results for the Second Quarter of 2012
Financial results for the second quarter of 2012 treat Fiesta Restaurant
Group, Inc., which was spun-off from
Highlights for the second quarter of 2012 versus the second quarter of 2011 include:
-
Restaurant sales were
$122.1 million and increased 37.8% including$27.5 million of sales from the 278 acquired restaurants; - Comparable restaurant sales increased 8.8% including an increase in customer traffic of 4.9%;
-
Net loss from continuing operations was
$0.9 million in the second quarter of 2012, or$0.04 per diluted share, compared to net income from continuing operations of$0.3 million , or$0.01 per diluted share in the prior year period; -
Net loss from continuing operations in the second quarter of 2012
included certain non-recurring charges including a loss on
extinguishment of debt of
$1.5 million ($0.04 per diluted share after tax) and acquisition related expenses of$0.8 million ($0.02 per diluted share after tax). -
Adjusted EBITDA, a non-GAAP measure, was
$7.9 million in the second quarter of 2012 compared to$7.7 million in the prior year period. (Refer to the reconciliation of adjusted EBITDA to net income (loss) from continuing operations in the tables at the end of this release).
As of
Accordino continued, "On
Second Quarter 2012 Financial Results
Restaurant sales grew 37.8% to
Adjusted EBITDA was
The Company's legacy restaurants contributed positively to Adjusted EBITDA Margin as most restaurant expenses were favorably leveraged from the strong comparable restaurant sales increase. Cost of sales for the legacy restaurants, however, increased from 29.9% to 31.1% due to higher commodity costs and slightly higher discounting during the quarter.
General and administrative expenses were
Income from operations was
Interest expense increased to
Net loss from continuing operations for the second quarter of 2012 was
2012 Guidance
The following guidance is being provided for 2012:
- Comparable restaurant sales for the full year are expected to increase 4% to 6%;
- Commodity costs are expected to increase 3% to 4%;
-
General and administrative expenses for the second half of 2012 are
expected to be approximately
$14 million to $15 million excluding stock compensation and legal fees that may be incurred in conjunction with the EEOC litigation; - The annual effective income tax rate (before any discrete items) is expected to be 42% to 44%; and
-
Capital expenditures are expected to be approximately
$40 million to$45 million , including$28 million to $33 million for remodeling more than 80 restaurants.
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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
Consolidated Statements of Operations (in thousands except per share amounts) |
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(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended (a) | Six Months Ended (a) | |||||||||||||||||||
July 1, 2012 |
July 3, 2011 |
July 1, 2012 |
July 3, 2011 |
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Restaurant sales | $ | 122,104 | $ | 88,595 | $ | 207,554 | $ | 170,217 | ||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales | 38,877 | 26,497 | 64,999 | 50,468 | ||||||||||||||||
Restaurant wages and related expenses | 37,446 | 27,457 | 65,314 | 54,387 | ||||||||||||||||
Restaurant rent expense | 7,979 | 5,692 | 13,662 | 11,402 | ||||||||||||||||
Other restaurant operating expenses | 18,221 | 13,295 | 31,864 | 26,476 | ||||||||||||||||
Advertising expense | 4,604 | 3,698 | 7,300 | 7,082 | ||||||||||||||||
General and administrative expenses (b) (c) | 8,081 | 4,880 | 14,279 | 9,975 | ||||||||||||||||
Depreciation and amortization | 6,346 | 3,959 | 11,039 | 7,788 | ||||||||||||||||
Impairment and other lease charges | 101 | 155 | 127 | 971 | ||||||||||||||||
Other income | - | (342 | ) | - | (448 | ) | ||||||||||||||
Total costs and expenses | 121,655 | 85,291 | 208,584 | 168,101 | ||||||||||||||||
Income (loss) from operations | 449 | 3,304 | (1,030 | ) | 2,116 | |||||||||||||||
Interest expense | 2,640 | 2,328 | 3,555 | 4,689 | ||||||||||||||||
Loss on extinguishment of debt | 1,509 | - | 1,509 | - | ||||||||||||||||
Income (loss) from continuing operations before income taxes | (3,700 | ) | 976 | (6,094 | ) | (2,573 | ) | |||||||||||||
Provision (benefit) for income taxes | (2,782 | ) | 676 | (2,273 | ) | (2,041 | ) | |||||||||||||
Net income (loss) from continuing operations | (918 | ) | 300 | (3,821 | ) | (532 | ) | |||||||||||||
Income from discontinued operations, net of tax | 668 | 5,208 | 44 | 8,286 | ||||||||||||||||
Net income (loss) | $ | (250 | ) | $ | 5,508 | $ | (3,777 | ) | $ | 7,754 | ||||||||||
Diluted net income (loss) per share: | ||||||||||||||||||||
Continuing operations | $ | (0.04 | ) | $ | 0.01 | $ | (0.17 | ) | $ | (0.02 | ) | |||||||||
Discontinued operations | 0.03 | 0.24 | 0.00 | 0.38 | ||||||||||||||||
Diluted weighted average common shares outstanding | 22,742 | 22,161 | 22,413 | 21,653 | ||||||||||||||||
(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 stock-based
compensation expense of |
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(c) |
General and administrative expenses for the three and six months
ended |
Supplemental Information |
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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 (a) | Six Months Ended (a) | |||||||||||||||||||
July 1, 2012 |
July 3, 2011 |
July 1, 2012 |
July 3, 2011 |
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Restaurant Sales: (a) | ||||||||||||||||||||
Legacy restaurants | $ | 94,634 | $ | 88,595 | $ | 180,084 | $ | 170,217 | ||||||||||||
Acquired restaurants | 27,470 | - | 27,470 | - | ||||||||||||||||
Total sales | $ | 122,104 | $ | 88,595 | $ | 207,554 | $ | 170,217 | ||||||||||||
Change in Comparable Restaurant Sales (b) | 8.8 | % | -3.6 | % | 7.4 | % | -4.3 | % | ||||||||||||
Adjusted EBITDA (c) | 7,909 | 7,684 | 11,662 | 11,397 | ||||||||||||||||
Adjusted EBITDA margin (c) | 6.5 | % | 8.7 | % | 5.6 | % | 6.7 | % | ||||||||||||
Average Weekly Sales per Restaurant: (d) | ||||||||||||||||||||
Legacy restaurants | 24,763 | 22,578 | 23,461 | 21,655 | ||||||||||||||||
Acquired restaurants | 21,798 | 21,798 | ||||||||||||||||||
Expenses - |
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Cost of sales | 31.1 | % | 29.9 | % | 30.8 | % | 29.6 | % | ||||||||||||
Restaurant wages and related expenses | 30.2 | % | 31.0 | % | 31.3 | % | 32.0 | % | ||||||||||||
Restaurant rent expense | 6.1 | % | 6.4 | % | 6.4 | % | 6.7 | % | ||||||||||||
Other restaurant operating expenses | 14.5 | % | 15.0 | % | 15.2 | % | 15.6 | % | ||||||||||||
Advertising expense | 3.7 | % | 4.2 | % | 3.5 | % | 4.2 | % | ||||||||||||
Expenses - |
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Cost of sales | 34.4 | % | 34.4 | % | ||||||||||||||||
Restaurant wages and related expenses | 32.4 | % | 32.4 | % | ||||||||||||||||
Restaurant rent expense | 8.0 | % | 8.0 | % | ||||||||||||||||
Other restaurant operating expenses | 16.5 | % | 16.5 | % | ||||||||||||||||
Advertising expense | 3.9 | % | 3.9 | % | ||||||||||||||||
Number of |
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Restaurants at beginning of period | 297 | 304 | 298 | 305 | ||||||||||||||||
New restaurants | - | - | - | 1 | ||||||||||||||||
Acquired restaurants | 278 | 1 | 278 | 1 | ||||||||||||||||
Closed restaurants | (1 | ) | (2 | ) | (2 | ) | (4 | ) | ||||||||||||
Restaurants at end of period | 574 | 303 | 574 | 303 | ||||||||||||||||
At |
At |
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Long-term Debt (f) | $ | 162,122 | $ | 68,705 | ||||||||||||||||
Cash (g) | 78,048 | 10,991 | ||||||||||||||||||
(a) |
Acquired restaurants represent the 278 Burger King restaurants
acquired from |
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(b) | Restaurants are included in comparable restaurant sales after they have been open or owned for 12 months. | |||||||||||||||||||
(c) | EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin 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 EBITDA and Adjusted EBITDA to net income (loss) from continuing operations for further detail. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of restaurant sales. | |||||||||||||||||||
(d) | Average restaurant sales are derived by dividing restaurant sales for such period by the average number of restaurants operating during the period. | |||||||||||||||||||
(e) | Restaurant expenses as a percentage of sales for the respective group of restaurants. | |||||||||||||||||||
(f) |
Long-term debt (including current portion) at |
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(g) |
Cash balance includes |
EBITDA and Adjusted EBITDA GAAP Reconciliation |
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(unaudited) | (unaudited) | |||||||||||||||||||
Three Months Ended (a) | Six Months Ended (a) | |||||||||||||||||||
EBITDA and Adjusted EBITDA: (a) |
July 1, 2012 |
July 3, 2011 |
July 1, 2012 |
July 3, 2011 |
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Net income (loss) from continuing operations | $ | (918 | ) | $ |
300 |
|
$ | (3,821 | ) | $ | (532 | ) | ||||||||
Provision (benefit) for income taxes | (2,782 | ) | 676 | (2,273 | ) | (2,041 | ) | |||||||||||||
Interest expense | 2,640 | 2,328 | 3,555 | 4,689 | ||||||||||||||||
Depreciation and amortization | 6,346 | 3,959 | 11,039 | 7,788 | ||||||||||||||||
EBITDA | 5,286 | 7,263 | 8,500 | 9,904 | ||||||||||||||||
Impairment and other lease charges | 101 | 155 | 127 | 971 | ||||||||||||||||
Acquisition expenses | 836 | - | 1,247 | - | ||||||||||||||||
Stock compensation expense | 177 | 266 | 279 | 522 | ||||||||||||||||
Loss on extinguishment of debt | 1,509 | - | 1,509 | - | ||||||||||||||||
Adjusted EBITDA | $ | 7,909 | $ | 7,684 | $ | 11,662 | $ | 11,397 | ||||||||||||
(a) | EBITDA represents net income (loss) from continuing operations, before provision (benefit) for income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and other lease charges, acquisition related expenses, stock compensation expense and loss on extinguishment of debt. Management excludes these items from EBITDA when evaluating the Company's operating performance and believes that Adjusted EBITDA provides a more meaningful comparison than EBITDA of the Company's core business operating results, as well as with those of other similar companies. Management believes that EBITDA and Adjusted EBITDA, when viewed with the Company's results of operations calculated in accordance with GAAP and the accompanying reconciliation, 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 EBITDA and Adjusted 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 and Adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss) or cash flow from operating activitites as indicators of operating performance or liquidity. Also, these measures may not be comparable to similarly titled captions of other companies. The table above provides a reconciliation between net income (loss) from continuing operations and EBITDA and Adjusted EBITDA. |
Consolidated Quarterly Statements of Operations (in thousands except per share amounts) |
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The following table sets forth certain unaudited supplemental
quarterly financial data for the periods indicated. The historical
quarterly data has been reclassified to reflect the spin-off of
Fiesta Restaurant Group, Inc., which occurred on |
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Quarter Ended | |||||||||||||||||||||||||||
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Restaurant sales | $ | 81,622 | $ | 88,595 | $ | 90,599 | $ | 86,702 | $ | 85,450 | $ | 122,104 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||||||
Cost of sales | 23,971 | 26,497 | 26,868 | 26,524 | 26,122 | 38,877 | |||||||||||||||||||||
Restaurant wages and related expenses | 26,930 | 27,457 | 27,616 | 27,152 | 27,868 | 37,446 | |||||||||||||||||||||
Restaurant rent expense | 5,710 | 5,692 | 5,749 | 5,514 | 5,683 | 7,979 | |||||||||||||||||||||
Other restaurant operating expenses | 13,181 | 13,295 | 13,686 | 13,227 | 13,643 | 18,221 | |||||||||||||||||||||
Advertising expense | 3,384 | 3,698 | 3,802 | 3,540 | 2,696 | 4,604 | |||||||||||||||||||||
General and administrative expenses | 5,095 | 4,880 | 4,778 | 6,229 | 6,199 | 8,081 | |||||||||||||||||||||
Depreciation and amortization | 3,829 | 3,959 | 3,924 | 4,346 | 4,693 | 6,346 | |||||||||||||||||||||
Impairment and other lease charges | 816 | 155 | 57 | 265 | 26 | 101 | |||||||||||||||||||||
Other income | (106 | ) | (342 | ) | (2 | ) | (270 | ) | - | - | |||||||||||||||||
Total costs and expenses | 82,810 | 85,291 | 86,478 | 86,527 | 86,930 | 121,655 | |||||||||||||||||||||
Income (loss) from operations | (1,188 | ) | 3,304 | 4,121 | 175 | (1,480 | ) | 449 | |||||||||||||||||||
Interest expense | 2,361 | 2,328 | 1,696 | 968 | 915 | 2,640 | |||||||||||||||||||||
Loss on extinguishment of debt | - | - | 1,233 | 11 | - | 1,509 | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (3,549 | ) | 976 | 1,192 | (804 | ) | (2,395 | ) | (3,700 | ) | |||||||||||||||||
Provision (benefit) for income taxes | (2,717 | ) | 676 | 835 | (455 | ) | 508 | (2,782 | ) | ||||||||||||||||||
Net income (loss) from continuing operations | (832 | ) | 300 | 357 | (349 | ) | (2,903 | ) | (918 | ) | |||||||||||||||||
Income (loss) from discontinued operations, net of tax | 3,078 | 5,208 | 3,049 | 408 | (624 | ) | 668 | ||||||||||||||||||||
Net income (loss) | $ | 2,246 | $ | 5,508 | $ | 3,406 | $ | 59 | $ | (3,527 | ) | $ | (250 | ) | |||||||||||||
Supplemental Data: | |||||||||||||||||||||||||||
Stock compensation expense (a) | $ | 256 | $ | 266 | $ | 273 | $ | 242 | $ | 102 | $ | 177 | |||||||||||||||
Acquisition expenses (b) | - | - | - | 458 | 411 | 836 | |||||||||||||||||||||
EBITDA (c) | 2,641 | 7,263 | 6,812 | 4,510 | 3,213 | 5,286 | |||||||||||||||||||||
Adjusted EBITDA (c) | 3,713 | 7,684 | 8,375 | 5,486 | 3,752 | 7,909 | |||||||||||||||||||||
Adjusted EBITDA margin (c) | 4.55 | % | 8.67 | % | 9.24 | % | 6.33 | % | 4.39 | % | 6.48 | % | |||||||||||||||
(a) | Stock compensation expense is included in general and administrative expenses. | ||||||||||||||||||||||||||
(b) |
Represents expenses incurred in connection with the acquisition of
278 Burger King restaurants from |
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(c) | EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin 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 EBITDA and Adjusted EBITDA to net income (loss) from continuing operations for further detail. |
Investor Relations:
800-348-1074,
ext. 3333
investorrelations@carrols.com
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