Significant Sequential Improvement in
Comparable Restaurant Sales Trend Extended Through the First Two
Weeks of July
Cash Balance Increases $26.5 Million during the
Second Quarter 2020 to $101.6 Million
Completes Amendment to Revolving Credit
Facility
Fiesta Restaurant Group, Inc. ("Fiesta" or the "Company")
(NASDAQ: FRGI), parent company of the Pollo Tropical® and Taco
Cabana® restaurant brands, today reported comparable restaurant
sales for the 13-week second quarter 2020, which ended on June 28,
2020, and for the subsequent two-week period, which ended on July
12, 2020. The Company also provided a liquidity update and
announced the completion of an amendment to its revolving credit
facility.
Fiesta President and Chief Executive Officer Richard Stockinger
said, “We are very encouraged by the significant sequential
improvement in comparable restaurant sales at both brands in the
second quarter, which has continued into the third quarter. These
improving trends have come despite the fact that we are operating
in two of the most challenged states in terms of COVID and economic
conditions, Florida and Texas. Pollo Tropical comp sales
acceleration was the most significant, improving from ‑49.2% in
April to ‑12.2% in the first half of July. As we continue to
prioritize the well-being of our team members and guests during
this pandemic, we are also creating a better business model that is
easier and safer for our consumers including expanded delivery
options, new curbside and pick-up capabilities, and a much-enhanced
online ordering experience.”
Mr. Stockinger continued, “We have been taking ongoing steps to
ensure a safe operating environment throughout this crisis.
Effective July 12, we made the decision to close all of our dining
rooms until further notice to ensure team member and guest safety.
We will continue to operate our restaurants for drive thru,
delivery and pick up, and we are accelerating efforts to better
enable our customers to enjoy our brands safely and conveniently
across all channels - wherever and whenever they choose.”
Mr. Stockinger concluded, “We have also finalized an amendment
to our credit agreement that includes adjustments to our covenants
that are more reflective of current sales and profit trends. We
believe the amendment allows us adequate covenant and liquidity
cushion to comfortably operate the business in this challenging
environment. For the remainder of 2020, the only applicable
financial covenant that requires compliance will be a minimum
liquidity target. As a result of our rising sales trends and
improved cash flow management, our cash balance increased $26.5
million over the second quarter from $75.1 million as of April 3 to
$101.6 million on June 28(1). Our outstanding revolver balance was
$150.0 million and our net revolver debt at the end of Q2 was $48.4
million(2). At current sales trends we believe we will continue to
improve liquidity, despite the challenging environment.”
The Company executed an amendment to its credit agreement on
July 10, 2020 as summarized in and included as an exhibit to the
Company's Form 8-K filed with the Securities and Exchange
Commission today. Pursuant to the amendment, the available
borrowings under the revolving credit facility will be reduced from
$150 million to $95 million in a phased reduction beginning with a
$30 million permanent reduction at the closing of the amendment on
July 10, 2020, a $15 million reduction in the fourth quarter of
2020 and a $10 million reduction in the first quarter of 2021.
After giving effect to the Company's $30 million repayment of
revolving credit borrowings in accordance with the amendment, the
Company had a cash balance of $69.8 million(3) and net revolver
debt of $50.2 million as of July 10, 2020(4). Please reference such
Form 8-K filing for additional details regarding the amendment to
the Company’s credit agreement.
Comparable Restaurant Sales Summary
Second Quarter 2020
Fiscal April
Fiscal May
Fiscal June
Two Weeks Ended July
12
Pollo Tropical
-31.6%
-49.2%
-27.9%
-17.8%
-12.2%
Taco Cabana
-19.2%
-26.2%
-14.5%
-18.0%
-13.4%
Second Quarter 2020 Conference Call
Fiesta also announced that it will host a conference call to
review second quarter 2020 results on Wednesday, August 5, 2020 at
4:30 P.M. ET. A press release containing second quarter 2020
results will be issued after market close that same day.
The conference call can be accessed live over the phone by
dialing 631-891-4304. A replay will be available after the call
until Wednesday, August 12, 2020 and can be accessed by dialing
412-317-6671. The passcode is 10010440. The conference call will
also be webcast live and archived on the corporate website at
www.frgi.com, under the “Investor Relations” section.
About Fiesta Restaurant Group, Inc.
Fiesta Restaurant Group, Inc., owns, operates and franchises the
Pollo Tropical® and Taco Cabana® restaurant brands. The brands
specialize in the operation of fast casual/quick service
restaurants that offer distinct and unique flavors with broad
appeal at a compelling value. The brands feature fresh-made
cooking, drive-thru service and catering. For more information
about Fiesta Restaurant Group, Inc., visit the corporate website at
www.frgi.com.
(1)
Cash balance defined as operating bank
account balances. This amount does not include outstanding checks
and other items that are not expected to be material and are
included in our balance sheet cash balance.
(2)
Net revolver debt defined as revolving
credit facility balance of $150.0 million (including letters of
credit) less cash balance of $101.6 million.
(3)
Cash balance defined as operating bank account balances. This
amount does not include outstanding checks and other items that are
not expected to be material and are included in our balance sheet
cash balance.
(4)
Net revolver debt defined as revolving credit facility balance
of $120.0 million (including letters of credit) less cash balance
of $69.8 million.
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 the impact of the COVID-19
pandemic and our initiatives on future sales, operating profit,
cash liquidity and earnings 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 Securities and Exchange Commission,
including our Annual Report on Form 10-K for the fiscal year ended
December 29, 2019 and our quarterly reports on Form 10-Q. All
forward-looking statements and the internal projections and beliefs
upon which we base our expectations included in this release are
made only as of the date of this release and may change. While we
may elect to update forward-looking statements at some point in the
future, we expressly disclaim any obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200716006019/en/
Investor Relations Contact: Raphael Gross 203-682-8253
investors@frgi.com
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