ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 90-0712224 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
14800 Landmark Boulevard, Suite 500 Addison, Texas | 75254 |
(Address of principal executive office) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ý |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
(Do not check if smaller reporting company) |
Page | ||
PART I FINANCIAL INFORMATION | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 |
June 30, 2013 | December 30, 2012 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 7,268 | $ | 15,533 | |||
Trade receivables | 6,787 | 5,935 | |||||
Inventories | 2,315 | 2,750 | |||||
Prepaid rent | 2,321 | 2,094 | |||||
Prepaid expenses and other current assets | 3,583 | 2,596 | |||||
Deferred income taxes | 2,294 | 2,049 | |||||
Total current assets | 24,568 | 30,957 | |||||
Property and equipment, net | 143,256 | 126,516 | |||||
Goodwill | 123,484 | 123,484 | |||||
Intangible assets, net | 161 | 202 | |||||
Deferred income taxes | 13,004 | 13,101 | |||||
Deferred financing costs, net | 4,908 | 5,690 | |||||
Other assets | 3,087 | 3,779 | |||||
Total assets | $ | 312,468 | $ | 303,729 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 57 | $ | 60 | |||
Accounts payable | 12,284 | 10,411 | |||||
Accrued interest | 6,659 | 6,761 | |||||
Accrued payroll, related taxes and benefits | 11,953 | 14,719 | |||||
Accrued real estate taxes | 3,129 | 3,366 | |||||
Other liabilities | 5,379 | 5,961 | |||||
Total current liabilities | 39,461 | 41,278 | |||||
Long-term debt, net of current portion | 200,861 | 200,889 | |||||
Lease financing obligations (Note 5) | 3,033 | 3,029 | |||||
Deferred income—sale-leaseback of real estate | 34,901 | 36,096 | |||||
Other liabilities (Note 3) | 12,258 | 11,933 | |||||
Total liabilities | 290,514 | 293,225 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders' equity: | |||||||
Common stock, par value $.01; authorized 100,000,000 shares; issued 23,645,580 and 23,514,437 shares, respectively, and outstanding 22,950,773 and 22,748,241 shares, respectively | 229 | 227 | |||||
Additional paid-in capital | 11,934 | 10,254 | |||||
Retained earnings | 9,791 | 23 | |||||
Total stockholders' equity | 21,954 | 10,504 | |||||
Total liabilities and stockholders' equity | $ | 312,468 | $ | 303,729 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2013 | July 1, 2012 | June 30, 2013 | July 1, 2012 | ||||||||||||
Revenues: | |||||||||||||||
Restaurant sales | $ | 140,276 | $ | 128,208 | $ | 273,366 | $ | 253,774 | |||||||
Franchise royalty revenues and fees | 604 | 625 | 1,138 | 1,201 | |||||||||||
Total revenues | 140,880 | 128,833 | 274,504 | 254,975 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of sales | 45,318 | 41,301 | 87,729 | 82,085 | |||||||||||
Restaurant wages and related expenses (including stock-based compensation expense of $0, $4, $1 and $8, respectively) | 35,819 | 34,136 | 70,935 | 67,961 | |||||||||||
Restaurant rent expense | 6,411 | 5,282 | 12,846 | 9,197 | |||||||||||
Other restaurant operating expenses | 17,339 | 15,761 | 33,503 | 31,590 | |||||||||||
Advertising expense | 4,455 | 3,874 | 9,004 | 8,166 | |||||||||||
General and administrative (including stock-based compensation expense of $595, $169, $1,020 and $1,215, respectively) | 11,999 | 10,586 | 24,210 | 21,602 | |||||||||||
Depreciation and amortization | 5,178 | 4,377 | 9,988 | 9,217 | |||||||||||
Pre-opening costs | 958 | 705 | 1,789 | 824 | |||||||||||
Impairment and other lease charges (Note 2) | 456 | (39 | ) | 551 | 6,861 | ||||||||||
Other income | — | — | (497 | ) | — | ||||||||||
Total operating expenses | 127,933 | 115,983 | 250,058 | 237,503 | |||||||||||
Income from operations | 12,947 | 12,850 | 24,446 | 17,472 | |||||||||||
Interest expense | 5,011 | 6,329 | 10,018 | 14,298 | |||||||||||
Income before income taxes | 7,936 | 6,521 | 14,428 | 3,174 | |||||||||||
Provision for income taxes (Note 6) | 2,967 | 2,600 | 4,660 | 1,118 | |||||||||||
Net income | $ | 4,969 | $ | 3,921 | $ | 9,768 | $ | 2,056 | |||||||
Basic and diluted net income per share | $ | 0.21 | $ | 0.17 | $ | 0.41 | $ | 0.09 | |||||||
Basic and diluted weighted average common shares outstanding (Note 9) | 22,908,191 | 22,902,944 | 22,888,542 | 23,032,383 |
Number of | Additional | Retained | Total | ||||||||||||||||
Common | Common | Paid-In | Earnings | Stockholders' | |||||||||||||||
Stock Shares | Stock | Capital | (Deficit) | Equity | |||||||||||||||
Balance at January 1, 2012 | 23,161,822 | $ | 227 | $ | 3,345 | $ | (8,244 | ) | $ | (4,672 | ) | ||||||||
Capital contributions | — | — | 4,154 | — | 4,154 | ||||||||||||||
Stock-based compensation | — | — | 1,021 | — | 1,021 | ||||||||||||||
Issuance of non-vested shares at spin-off | (434,397 | ) | — | — | — | — | |||||||||||||
Vesting of restricted shares | 14,589 | — | — | — | — | ||||||||||||||
Net income | — | — | — | 2,056 | 2,056 | ||||||||||||||
Balance at July 1, 2012 | 22,742,014 | $ | 227 | $ | 8,520 | $ | (6,188 | ) | $ | 2,559 | |||||||||
Balance at December 30, 2012 | 22,748,241 | $ | 227 | $ | 10,254 | $ | 23 | $ | 10,504 | ||||||||||
Capital contributions | 185 | 185 | |||||||||||||||||
Stock-based compensation | — | — | 1,021 | — | 1,021 | ||||||||||||||
Vesting of restricted shares and related tax benefit | 202,532 | 2 | 474 | — | 476 | ||||||||||||||
Net income | — | — | — | 9,768 | 9,768 | ||||||||||||||
Balance at June 30, 2013 | 22,950,773 | $ | 229 | $ | 11,934 | $ | 9,791 | $ | 21,954 |
Six Months Ended | |||||||
June 30, 2013 | July 1, 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 9,768 | $ | 2,056 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss (gain) on disposals of property and equipment | (316 | ) | 132 | ||||
Stock-based compensation | 1,021 | 1,021 | |||||
Impairment and other lease charges | 551 | 6,861 | |||||
Loss on settlement of lease financing obligations | — | 120 | |||||
Depreciation and amortization | 9,988 | 9,217 | |||||
Amortization of deferred financing costs | 796 | 841 | |||||
Amortization of deferred gains from sale-leaseback transactions | (1,728 | ) | (661 | ) | |||
Accretion of interest on lease financing obligations | 4 | 218 | |||||
Deferred income taxes | (23 | ) | (2,764 | ) | |||
Changes in other operating assets and liabilities | (5,133 | ) | (5,188 | ) | |||
Net cash provided by operating activities | 14,928 | 11,853 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures: | |||||||
New restaurant development | (21,384 | ) | (10,426 | ) | |||
Restaurant remodeling | (1,492 | ) | (2,977 | ) | |||
Other restaurant capital expenditures | (2,679 | ) | (3,491 | ) | |||
Corporate and restaurant information systems | (2,214 | ) | (530 | ) | |||
Total capital expenditures | (27,769 | ) | (17,424 | ) | |||
Properties purchased for sale-leaseback | (2,982 | ) | (2,082 | ) | |||
Proceeds from sale-leaseback transactions | 5,394 | — | |||||
Proceeds from sales of other properties | 1,734 | — | |||||
Net cash used in investing activities | (23,623 | ) | (19,506 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings from Carrols Restaurant Group, Inc., net | — | 500 | |||||
Capital contribution from Carrols Restaurant Group, Inc. | — | 2,500 | |||||
Excess tax benefit from vesting of restricted shares | 476 | — | |||||
Principal payments on capital leases | (31 | ) | (29 | ) | |||
Deferred financing costs | — | (208 | ) | ||||
Settlement of lease financing obligations | — | (6,047 | ) | ||||
Other | (15 | ) | — | ||||
Net cash provided by (used in) financing activities | 430 | (3,284 | ) | ||||
Net decrease in cash | (8,265 | ) | (10,937 | ) | |||
Cash, beginning of period | 15,533 | 13,670 | |||||
Cash, end of period | $ | 7,268 | $ | 2,733 | |||
Supplemental disclosures: | |||||||
Interest paid on long-term debt | $ | 9,265 | $ | 9,654 | |||
Interest paid on lease financing obligations | $ | 128 | $ | 4,025 | |||
Accruals for capital expenditures | $ | 3,547 | $ | 732 | |||
Income tax payments, net | $ | 5,097 | $ | 2,171 | |||
Non-cash reduction of lease financing obligations | $ | — | $ | 114,165 | |||
Non-cash reduction of assets subject to lease financing obligations | $ | — | $ | 80,419 | |||
Non-cash capital contribution from former parent | $ | 185 | $ | 1,654 |
• | Current Assets and Liabilities. The carrying values reported on the balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments. |
• | Senior Secured Second Lien Notes. The fair value of outstanding senior secured second lien notes, which was approximately $214.0 million at June 30, 2013, is based on recent trading values, which are considered Level 1. The senior secured second lien notes are recorded in Long-term debt, net of current portion and had a carrying value of $200.0 million at June 30, 2013. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2013 | July 1, 2012 | June 30, 2013 | July 1, 2012 | ||||||||||||
Pollo Tropical | $ | (101 | ) | $ | (42 | ) | $ | (62 | ) | $ | 5,837 | ||||
Taco Cabana | 557 | 3 | 613 | 1,024 | |||||||||||
$ | 456 | $ | (39 | ) | $ | 551 | $ | 6,861 |
June 30, 2013 | December 30, 2012 | ||||||
Accrued occupancy costs | $ | 9,048 | $ | 8,493 | |||
Accrued workers’ compensation and general liability claims | 1,180 | 1,270 | |||||
Deferred compensation | 732 | 812 | |||||
Other | 1,298 | 1,358 | |||||
$ | 12,258 | $ | 11,933 |
Six Months Ended June 30, 2013 | Year Ended December 30, 2012 | ||||||
Balance, beginning of period | $ | 2,432 | $ | 2,246 | |||
Provisions for restaurant closures | — | 1,796 | |||||
Accruals (recoveries) for additional lease charges | 155 | (377 | ) | ||||
Payments, net | (762 | ) | (1,496 | ) | |||
Other adjustments | 58 | 263 | |||||
Balance, end of period | $ | 1,883 | $ | 2,432 |
• | Tax Matters Agreement. The tax matters agreement dated April 24, 2012, (the "Tax Matters Agreement"), (1) governs the allocation of the tax assets and liabilities between Fiesta and Carrols and Carrols Corporation, a subsidiary of Carrols ("Carrols Corp."), (2) provides for certain restrictions and indemnities in connection with the tax treatment of the Spin-off and (3) addresses certain other tax related matters, including, without limitation, those relating to (a) the obligations of Carrols, Carrols Corp. and the Company with respect to the preparation or filing of tax returns for all periods, and (b) the control of any income tax audits and any indemnities with respect thereto. The Tax Matters Agreement provides that if the Company takes any actions after Carrols’ distribution of our shares in the Spin-off that result in or cause the distribution to be taxable to Carrols, the Company will be responsible under the Tax Matters Agreement for any resulting taxes imposed on the Company or on Carrols or Carrols Corp. Further, the Tax Matters Agreement provides that the Company will be responsible for 50% of the losses and taxes of Carrols and its affiliates resulting from the Spin-off not attributable to any such action of the Company or an equivalent action by Carrols. |
• | Transition Services Agreement. Under the TSA, Carrols and Carrols Corp. agreed to provide certain support services (including accounting, tax accounting, treasury management, internal audit, financial reporting and analysis, human resources and employee benefits management, information systems, restaurant systems support, legal, property management and insurance and risk management services) to the Company, and the Company agreed to provide certain limited management services (including certain legal services) to Carrols and Carrols Corp. The charge for transition services is intended to allow Carrols to recover its direct and indirect costs incurred in providing those services. The TSA became effective upon consummation of the Spin-off and will continue for a period of three years provided that the Company may extend the term of the TSA by one additional year upon 90 days prior written notice to Carrols or may terminate the TSA with respect to any service provided thereunder at any time upon 90 days prior written notice to Carrols. During the three and six months ended June 30, 2013, the Company incurred costs of $1.1 million and $2.4 million, respectively, related to the TSA. The Company incurred costs of $1.0 million in the three and six months ended July 1, 2012 related to the TSA. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2013 | July 1, 2012 | June 30, 2013 | July 1, 2012 | ||||||||||||
Current | $ | 3,050 | $ | 3,283 | $ | 4,683 | $ | 3,882 | |||||||
Deferred | (83 | ) | (683 | ) | (23 | ) | (2,764 | ) | |||||||
$ | 2,967 | $ | 2,600 | $ | 4,660 | $ | 1,118 |
Weighted | ||||||
Average | ||||||
Grant Date | ||||||
Shares | Price | |||||
Non-vested at December 30, 2012 | 766,196 | $ | 12.49 | |||
Granted | 161,546 | 21.35 | ||||
Vested | (202,532 | ) | 11.49 | |||
Forfeited | (30,403 | ) | 12.86 | |||
Non-vested at June 30, 2013 | 694,807 | $ | 14.83 |
Three Months Ended | Pollo Tropical | Taco Cabana | Other | Consolidated | ||||||||||||
June 30, 2013: | ||||||||||||||||
Restaurant sales | $ | 64,509 | $ | 75,767 | $ | — | $ | 140,276 | ||||||||
Franchise revenue | 483 | 121 | — | 604 | ||||||||||||
Cost of sales | 21,350 | 23,968 | — | 45,318 | ||||||||||||
Restaurant wages and related expenses (1) | 14,183 | 21,636 | — | 35,819 | ||||||||||||
Restaurant rent expense | 2,238 | 4,173 | — | 6,411 | ||||||||||||
Other restaurant operating expenses | 7,410 | 9,929 | — | 17,339 | ||||||||||||
Advertising expense | 1,148 | 3,307 | — | 4,455 | ||||||||||||
General and administrative expense (2) | 6,233 | 5,766 | — | 11,999 | ||||||||||||
Depreciation and amortization | 2,314 | 2,864 | — | 5,178 | ||||||||||||
Pre-opening costs | 737 | 221 | — | 958 | ||||||||||||
Impairment and other lease charges | (101 | ) | 557 | — | 456 | |||||||||||
Interest expense | 2,247 | 2,764 | — | 5,011 | ||||||||||||
Income before taxes | 7,233 | 703 | — | 7,936 | ||||||||||||
Capital expenditures | 9,348 | 6,145 | 924 | 16,417 | ||||||||||||
July 1, 2012: | ||||||||||||||||
Restaurant sales | $ | 56,640 | $ | 71,568 | $ | — | $ | 128,208 | ||||||||
Franchise revenue | 550 | 75 | — | 625 | ||||||||||||
Cost of sales | 18,729 | 22,572 | — | 41,301 | ||||||||||||
Restaurant wages and related expenses (1) | 13,199 | 20,937 | — | 34,136 | ||||||||||||
Restaurant rent expense | 1,939 | 3,343 | — | 5,282 | ||||||||||||
Other restaurant operating expenses | 6,368 | 9,393 | — | 15,761 | ||||||||||||
Advertising expense | 860 | 3,014 | — | 3,874 | ||||||||||||
General and administrative expense (2) | 5,154 | 5,432 | — | 10,586 | ||||||||||||
Depreciation and amortization | 1,960 | 2,417 | — | 4,377 | ||||||||||||
Pre-opening costs | 570 | 135 | — | 705 | ||||||||||||
Impairment and other lease charges | (42 | ) | 3 | — | (39 | ) | ||||||||||
Interest expense | 2,689 | 3,640 | — | 6,329 | ||||||||||||
Income before taxes | 5,761 | 760 | — | 6,521 | ||||||||||||
Capital expenditures | 4,710 | 4,089 | 82 | 8,881 |
Six Months Ended | Pollo Tropical | Taco Cabana | Other | Consolidated | ||||||||||||
June 30, 2013: | ||||||||||||||||
Restaurant sales | $ | 126,378 | $ | 146,988 | $ | — | $ | 273,366 | ||||||||
Franchise revenue | 896 | 242 | — | 1,138 | ||||||||||||
Cost of sales | 41,843 | 45,886 | — | 87,729 | ||||||||||||
Restaurant wages and related expenses (1) | 28,500 | 42,435 | — | 70,935 | ||||||||||||
Restaurant rent expense | 4,595 | 8,251 | — | 12,846 | ||||||||||||
Other restaurant operating expenses | 14,613 | 18,890 | — | 33,503 | ||||||||||||
Advertising expense | 2,722 | 6,282 | — | 9,004 | ||||||||||||
General and administrative expense (2) | 12,467 | 11,743 | — | 24,210 | ||||||||||||
Depreciation and amortization | 4,413 | 5,575 | — | 9,988 | ||||||||||||
Pre-opening costs | 1,230 | 559 | — | 1,789 | ||||||||||||
Impairment and other lease charges | (62 | ) | 613 | — | 551 | |||||||||||
Interest expense | 4,499 | 5,519 | — | 10,018 | ||||||||||||
Income before taxes | 12,951 | 1,477 | — | 14,428 | ||||||||||||
Capital expenditures | 14,695 | 11,093 | 1,981 | 27,769 | ||||||||||||
July 1, 2012: | ||||||||||||||||
Restaurant sales | $ | 113,973 | $ | 139,801 | $ | — | $ | 253,774 | ||||||||
Franchise revenue | 1,051 | 150 | — | 1,201 | ||||||||||||
Cost of sales | 37,897 | 44,188 | — | 82,085 | ||||||||||||
Restaurant wages and related expenses (1) | 26,491 | 41,470 | — | 67,961 | ||||||||||||
Restaurant rent expense | 3,088 | 6,109 | — | 9,197 | ||||||||||||
Other restaurant operating expenses | 13,341 | 18,249 | — | 31,590 | ||||||||||||
Advertising expense | 2,117 | 6,049 | — | 8,166 | ||||||||||||
General and administrative expense (2) | 10,302 | 11,300 | — | 21,602 | ||||||||||||
Depreciation and amortization | 4,183 | 5,034 | — | 9,217 | ||||||||||||
Pre-opening costs | 687 | 137 | — | 824 | ||||||||||||
Impairment and other lease charges | 5,837 | 1,024 | — | 6,861 | ||||||||||||
Interest expense | 5,975 | 8,323 | — | 14,298 | ||||||||||||
Income (loss) before taxes | 5,103 | (1,929 | ) | — | 3,174 | |||||||||||
Capital expenditures | 9,260 | 7,989 | 175 | 17,424 | ||||||||||||
Identifiable Assets: | ||||||||||||||||
June 30, 2013: | $ | 137,930 | $ | 164,463 | $ | 10,075 | $ | 312,468 | ||||||||
December 30, 2012 | 128,593 | 167,348 | 7,788 | 303,729 |
Three Months Ended | Six Months Ended | |||||||||||||
June 30, 2013 | July 1, 2012 | June 30, 2013 | July 1, 2012 | |||||||||||
Basic and diluted net income per share: | ||||||||||||||
Net income | $ | 4,969 | $ | 3,921 | $ | 9,768 | $ | 2,056 | ||||||
Less: income allocated to participating securities | (154 | ) | (52 | ) | (311 | ) | (14 | ) | ||||||
Net income available to common stockholders | $ | 4,815 | $ | 3,869 | $ | 9,457 | $ | 2,042 | ||||||
Basic and diluted weighted average common shares outstanding | 22,908,191 | 22,902,944 | 22,888,542 | 23,032,383 | ||||||||||
Basic and diluted net income per share | $ | 0.21 | $ | 0.17 | $ | 0.41 | $ | 0.09 |
Three Months Ended | |||||
June 30, 2013 | July 1, 2012 | ||||
Restaurant sales: | |||||
Pollo Tropical | 46.0 | % | 44.2 | % | |
Taco Cabana | 54.0 | % | 55.8 | % | |
Consolidated restaurant sales | 100.0 | % | 100.0 | % | |
Costs and expenses: | |||||
Cost of sales | 32.3 | % | 32.2 | % | |
Restaurant wages and related expenses | 25.5 | % | 26.6 | % | |
Restaurant rent expense | 4.6 | % | 4.1 | % | |
Other restaurant operating expenses | 12.4 | % | 12.3 | % | |
Advertising expense | 3.2 | % | 3.0 | % | |
Pre-opening costs | 0.7 | % | 0.5 | % |
Pollo Tropical | Taco Cabana | ||||||||||||||||
Owned | Franchised | Total | Owned | Franchised | Total | ||||||||||||
December 30, 2012 | 91 | 35 | 126 | 160 | 8 | 168 | |||||||||||
New | 2 | 1 | 3 | 2 | — | 2 | |||||||||||
Closed | — | — | — | — | — | — | |||||||||||
March 31, 2013 | 93 | 36 | 129 | 162 | 8 | 170 | |||||||||||
New | 4 | 3 | 7 | 3 | — | 3 | |||||||||||
Closed | (1 | ) | (1 | ) | (2 | ) | (1 | ) | — | (1 | ) | ||||||
June 30, 2013 | 96 | 38 | 134 | 164 | 8 | 172 | |||||||||||
January 1, 2012 | 91 | 31 | 122 | 158 | 5 | 163 | |||||||||||
New | — | 2 | 2 | — | — | — | |||||||||||
Closed | (5 | ) | — | (5 | ) | (1 | ) | — | (1 | ) | |||||||
April 1, 2012 | 86 | 33 | 119 | 157 | 5 | 162 | |||||||||||
New | 3 | 2 | 5 | 1 | — | 1 | |||||||||||
Closed | — | — | — | — | — | — | |||||||||||
July 1, 2012 | 89 | 35 | 124 | 158 | 5 | 163 |
Pollo Tropical: | |||
Increase in comparable restaurant sales | $ | 3.5 | |
Impact of new stores, net of closed stores | 4.4 | ||
Other | — | ||
Total increase | $ | 7.9 | |
Taco Cabana: | |||
Increase in comparable restaurant sales | $ | 0.8 | |
Impact of new stores, net of closed stores | 3.3 | ||
Other | 0.1 | ||
Total increase | $ | 4.2 |
Pollo Tropical: | ||
Cost of sales: | ||
Higher commodity costs | 0.8 | % |
Menu price increases | (0.8 | )% |
Sales mix and waste | 0.1 | % |
Discounts and promotions | (0.2 | )% |
Other | 0.1 | % |
Net change in cost of sales as a percentage of restaurant sales | — | % |
Restaurant wages and related expenses: | ||
Impact of higher sales volumes on fixed labor costs | (0.2 | )% |
Lower workers' compensation claim costs | (1.0 | )% |
Other | (0.1 | )% |
Net decrease in restaurant wages and related costs as a percentage of restaurant sales | (1.3 | )% |
Other operating expenses: | ||
Lower utility costs | (0.3 | )% |
Higher repairs and maintenance costs | 0.1 | % |
Higher insurance costs | 0.4 | % |
Other | 0.1 | % |
Net increase in other restaurant operating expenses as a percentage of restaurant sales | 0.3 | % |
Advertising expense: | ||
Timing of promotions | 0.3 | % |
Net increase in advertising expense as a percentage of restaurant sales | 0.3 | % |
Pre-opening expense: | ||
Number of restaurants opened | 0.1 | % |
Net increase in pre-opening expense | 0.1 | % |
Taco Cabana: | ||
Cost of sales: | ||
Higher commodity costs | 0.4 | % |
Menu price increases | (0.6 | )% |
Sales mix and waste | 0.4 | % |
Other | (0.1 | )% |
Net increase in cost of sales as a percentage of restaurant sales | 0.1 | % |
Restaurant wages and related expenses: | ||
Impact of higher sales volumes on fixed labor costs | (0.3 | )% |
Lower medical and other benefit costs | (0.4 | )% |
Net decrease in restaurant wages and related costs as a percentage of restaurant sales | (0.7 | )% |
Other operating expenses: | ||
Lower repairs and maintenance costs | (0.2 | )% |
Other | 0.2 | % |
Net change in other restaurant operating expenses as a percentage of restaurant sales | — | % |
Advertising expense: | ||
Timing of promotions | 0.2 | % |
Net increase in advertising expense as a percentage of restaurant sales | 0.2 | % |
Pre-opening expense: | ||
Number of restaurants opened | 0.1 | % |
Net increase in pre-opening expense | 0.1 | % |
Six Months Ended | |||||
June 30, 2013 | July 1, 2012 | ||||
Restaurant sales: | |||||
Pollo Tropical | 46.2 | % | 44.9 | % | |
Taco Cabana | 53.8 | % | 55.1 | % | |
Consolidated restaurant sales | 100.0 | % | 100.0 | % | |
Costs and expenses: | |||||
Cost of sales | 32.1 | % | 32.3 | % | |
Restaurant wages and related expenses | 25.9 | % | 26.8 | % | |
Restaurant rent expense | 4.7 | % | 3.6 | % | |
Other restaurant operating expenses | 12.3 | % | 12.4 | % | |
Advertising expense | 3.3 | % | 3.2 | % | |
Pre-opening costs | 0.7 | % | 0.3 | % |
Pollo Tropical: | |||
Increase in comparable restaurant sales | $ | 5.6 | |
Impact of new stores, net of closed stores | 7.1 | ||
Other | (0.3 | ) | |
Total increase | $ | 12.4 | |
Taco Cabana: | |||
Increase in comparable restaurant sales | $ | 2.1 | |
Impact of new stores, net of closed stores | 5.0 | ||
Other | 0.1 | ||
Total increase | $ | 7.2 |
Pollo Tropical: | ||
Cost of sales: | ||
Higher commodity costs | 0.7 | % |
Menu price increases | (0.8 | )% |
Sales mix and waste | 0.2 | % |
Discounts and promotions | (0.2 | )% |
Other | (0.1 | )% |
Net decrease in cost of sales as a percentage of restaurant sales | (0.2 | )% |
Restaurant wages and related expenses: | ||
Impact of higher sales volumes on fixed labor costs | (0.2 | )% |
Lower workers' compensation claim costs | (0.2 | )% |
Lower medical and other benefit costs | (0.2 | )% |
Net decrease in restaurant wages and related costs as a percentage of restaurant sales | (0.6 | )% |
Other operating expenses: | ||
Lower utility costs | (0.3 | )% |
Lower repairs and maintenance costs | (0.1 | )% |
Higher insurance costs | 0.2 | % |
Other | 0.1 | % |
Net decrease in other restaurant operating expenses as a percentage of restaurant sales | (0.1 | )% |
Advertising expense: | ||
Timing of promotions | 0.3 | % |
Net increase in advertising expense as a percentage of restaurant sales | 0.3 | % |
Pre-opening expense: | ||
Number of restaurants opened | 0.4 | % |
Net increase in pre-opening expense | 0.4 | % |
Taco Cabana: | ||
Cost of sales: | ||
Higher commodity costs | 0.1 | % |
Menu price increases | (0.7 | )% |
Sales mix and waste | 0.1 | % |
Other | 0.1 | % |
Net decrease in cost of sales as a percentage of restaurant sales | (0.4 | )% |
Restaurant wages and related expenses: | ||
Impact of higher sales volumes on fixed labor costs | (0.4 | )% |
Lower medical and other benefit costs | (0.4 | )% |
Net decrease in restaurant wages and related costs as a percentage of | (0.8 | )% |
restaurant sales | ||
Other operating expenses: | ||
Lower repairs and maintenance costs | (0.3 | )% |
Other | 0.1 | % |
Net decrease in other restaurant operating expenses as a percentage of | (0.2 | )% |
restaurant sales | ||
Advertising expense: | ||
Net change in advertising expense as a percentage of restaurant sales | — | % |
Pre-opening expense: | ||
Number of restaurants opened | 0.3 | % |
Net increase in pre-opening expense | 0.3 | % |
• | restaurant operations are primarily conducted on a cash basis; |
• | rapid turnover results in a limited investment in inventories; and |
• | cash from sales is usually received before related liabilities for food, supplies and payroll become due. |
Pollo Tropical | Taco Cabana | Other | Consolidated | ||||||||||||
Six Months Ended June 30, 2013: | |||||||||||||||
New restaurant development | $ | 12,969 | $ | 8,415 | $ | — | $ | 21,384 | |||||||
Restaurant remodeling | 394 | 1,098 | — | 1,492 | |||||||||||
Other restaurant capital expenditures (1) | 1,249 | 1,430 | — | 2,679 | |||||||||||
Corporate and restaurant information systems | 83 | 150 | 1,981 | 2,214 | |||||||||||
Total capital expenditures | $ | 14,695 | $ | 11,093 | $ | 1,981 | $ | 27,769 | |||||||
Number of new restaurant openings | 6 | 5 | 11 | ||||||||||||
Six Months Ended July 1, 2012: | |||||||||||||||
New restaurant development | $ | 7,236 | $ | 3,190 | $ | — | $ | 10,426 | |||||||
Restaurant remodeling | 315 | 2,662 | — | 2,977 | |||||||||||
Other restaurant capital expenditures (1) | 1,645 | 1,846 | — | 3,491 | |||||||||||
Corporate and restaurant information systems | 64 | 291 | 175 | 530 | |||||||||||
Total capital expenditures | $ | 9,260 | $ | 7,989 | $ | 175 | $ | 17,424 | |||||||
Number of new restaurant openings | 3 | 1 | 4 |
1) | Excludes restaurant repair and maintenance expenses included in other restaurant operating expenses in our consolidated financial statements. For the six months ended June 30, 2013 and July 1, 2012, total restaurant repair and maintenance expenses were approximately $5.7 million and $6.0 million, respectively. |
• | such financial information does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments to purchase capital equipment; |
• | such financial information does not reflect interest expense or the cash requirements necessary to service principal or interest payments on our debt; |
• | although depreciation and amortization are non-cash charges, the assets that we currently depreciate and amortize will likely have to be replaced in the future, and such financial information does not reflect the cash required to fund such replacements; and |
• | such financial information does not reflect the effect of earning or charges resulting from matters that our management does not consider to be indicative of our ongoing operations. However, some of these charges (such as impairment and other lease charges, other income and expense and stock-based compensation expense) have recurred and may recur. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2013 | July 1, 2012 | June 30, 2013 | July 1, 2012 | ||||||||||||
Adjusted EBITDA: | |||||||||||||||
Pollo Tropical | $ | 11,973 | $ | 10,450 | $ | 21,778 | $ | 21,664 | |||||||
Taco Cabana | 7,203 | 6,911 | 13,731 | 13,109 | |||||||||||
Consolidated | 19,176 | 17,361 | 35,509 | 34,773 | |||||||||||
Less: | |||||||||||||||
Depreciation and amortization | 5,178 | 4,377 | 9,988 | 9,217 | |||||||||||
Impairment and other lease charges | 456 | (39 | ) | 551 | 6,861 | ||||||||||
Interest expense | 5,011 | 6,329 | 10,018 | 14,298 | |||||||||||
Provision for income taxes | 2,967 | 2,600 | 4,660 | 1,118 | |||||||||||
Stock-based compensation expense | 595 | 173 | 1,021 | 1,223 | |||||||||||
Other income | — | — | (497 | ) | — | ||||||||||
Net income | $ | 4,969 | $ | 3,921 | $ | 9,768 | $ | 2,056 |
• | The effect of the Spin-off; |
• | The potential tax liability associated with the Spin-off; |
• | Increases in food and other commodity costs; |
• | Competitive conditions; |
• | Regulatory factors; |
• | Environmental conditions and regulations; |
• | General economic conditions, particularly in the retail sector; |
• | Weather conditions; |
• | Fuel prices; |
• | Significant disruptions in service or supply by any of our suppliers or distributors; |
• | Changes in consumer perception of dietary health and food safety; |
• | Labor and employment benefit costs; |
• | The outcome of pending or future legal claims or proceedings; |
• | Our ability to manage our growth and successfully implement our business strategy; |
• | Risks associated with the expansion of our business; |
• | Our borrowing costs and credit ratings, which may be influenced by the credit ratings of our competitors; |
• | The availability and terms of necessary or desirable financing or refinancing and other related risks and uncertainties; |
• | The risk of an act of terrorism or escalation of any insurrection or armed conflict involving the United States or any other national or international calamity; and |
• | Factors that affect the restaurant industry generally, including product recalls, liability if our products cause injury, ingredient disclosure and labeling laws and regulations, reports of cases of food borne illnesses such as “mad cow” disease and avian flu, and the possibility that consumers could lose confidence in the safety and quality of certain food products, as well as negative publicity regarding food quality, illness, injury or other health concerns. |
Exhibit No. | ||
31.1 | Chief Executive Officer’s Certificate Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Fiesta Restaurant Group, Inc. | |
31.2 | Chief Financial Officer’s Certificate Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Fiesta Restaurant Group, Inc. | |
32.1 | Chief Executive Officer’s Certificate Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Fiesta Restaurant Group, Inc. | |
32.2 | Chief Financial Officer’s Certificate Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Fiesta Restaurant Group, Inc. | |
*101.INS | XBRL Instance Document | |
*101.SCH | XBRL Taxonomy Extension Schema Document | |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
*101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | As provided in Rule 406T of Regulation S-T, this information is deemed furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended. |
FIESTA RESTAURANT GROUP, INC. | |
Date: August 8, 2013 | /S/ TIMOTHY P. TAFT |
(Signature) | |
Timothy P. Taft Chief Executive Officer | |
Date: August 8, 2013 | /S/ LYNN S. SCHWEINFURTH |
(Signature) | |
Lynn S. Schweinfurth Vice President, Chief Financial Officer and Treasurer | |
Date: August 8, 2013 | /S/ ANGELA J. NEWELL |
(Signature) | |
Angela J. Newell Vice President, Corporate Controller |
Date: August 8, 2013 | /s/TIMOTHY P. TAFT |
Timothy P. Taft Chief Executive Officer |
Date: August 8, 2013 | /s/LYNN SCHWEINFURTH |
Lynn Schweinfurth Vice President, Chief Financial Officer and Treasurer |
/s/ TIMOTHY P. TAFT |
Timothy P. Taft |
Chief Executive Officer |
/s/ LYNN SCHWEINFURTH |
Lynn Schweinfurth |
Vice President, Chief Financial Officer and Treasurer |
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Disclosure [Text Block] | Commitments and Contingencies The Company is a party to various litigation matters incidental to the conduct of business. The Company does not believe that the outcome of any of these matters will have a material effect on its consolidated financial statements. |
Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jul. 01, 2012
|
Jun. 30, 2013
|
Jul. 01, 2012
|
|||||||||
Revenues: | ||||||||||||
Restaurant sales | $ 140,276 | $ 128,208 | $ 273,366 | $ 253,774 | ||||||||
Franchise royalty revenues and fees | 604 | 625 | 1,138 | 1,201 | ||||||||
Total revenues | 140,880 | 128,833 | 274,504 | 254,975 | ||||||||
Costs and expenses: | ||||||||||||
Cost of sales | 45,318 | 41,301 | 87,729 | 82,085 | ||||||||
Restaurant wages and related expenses (including stock-based compensation expense of $0, $4, $1 and $8, respectively) | 35,819 | [1] | 34,136 | [1] | 70,935 | [1] | 67,961 | [1] | ||||
Restaurant rent expense | 6,411 | 5,282 | 12,846 | 9,197 | ||||||||
Other restaurant operating expenses | 17,339 | 15,761 | 33,503 | 31,590 | ||||||||
Advertising expense | 4,455 | 3,874 | 9,004 | 8,166 | ||||||||
General and administrative (including stock-based compensation expense of $595, $169, $1020 and $1,215, respectively) | 11,999 | [2] | 10,586 | [2] | 24,210 | [2] | 21,602 | [2] | ||||
Depreciation and amortization | 5,178 | 4,377 | 9,988 | 9,217 | ||||||||
Pre-opening costs | 958 | 705 | 1,789 | 824 | ||||||||
Impairment and other lease charges | 456 | (39) | 551 | 6,861 | ||||||||
Other income | 0 | 0 | (497) | 0 | ||||||||
Total operating expenses | 127,933 | 115,983 | 250,058 | 237,503 | ||||||||
Income from operations | 12,947 | 12,850 | 24,446 | 17,472 | ||||||||
Interest expense | 5,011 | 6,329 | 10,018 | 14,298 | ||||||||
Income before income taxes | 7,936 | 6,521 | 14,428 | 3,174 | ||||||||
Provision for income taxes | 2,967 | 2,600 | 4,660 | 1,118 | ||||||||
Net income | $ 4,969 | $ 3,921 | $ 9,768 | $ 2,056 | ||||||||
Basic and diluted net income per share | $ 0.21 | $ 0.17 | $ 0.41 | $ 0.09 | ||||||||
Basic and diluted weighted average common shares outstanding | 22,908,191 | 22,902,944 | 22,888,542 | 23,032,383 | ||||||||
|
Other Liabilities, Long-Term
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Other Liabilities, Long-Term [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Text Block] | Other Liabilities, Long-Term Other liabilities, long-term, consisted of the following:
Accrued occupancy costs include obligations pertaining to closed restaurant locations and accruals to expense operating lease rental payments on a straight-line basis over the lease term. The following table presents the activity in the closed-store reserve, of which $1.3 million and $1.7 million are included in long-term accrued occupancy costs above at June 30, 2013 and December 30, 2012, respectively, with the remainder in other current liabilities:
|
Stock-based Compensation Stock-based Compensation (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | Non-vested Shares A summary of all non-vested restricted share activity for the six months ended June 30, 2013 was as follows:
The fair value of the non-vested restricted shares is based on the closing price on the date of grant. |
Basis of Presentation Accounting Policies (Policies)
|
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Consolidation, Policy [Policy Text Block] | Basis of Consolidation. The unaudited condensed consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. The condensed consolidated financial statements have been prepared as if the Company was in existence for all periods presented. Through the date of the Spin-off, these unaudited condensed consolidated financial statements have been prepared on a stand-alone basis from the separate records maintained by Carrols and may not necessarily be indicative of the results of operations or cash flows that would have resulted had allocations and other related-party transactions been consummated with unrelated parties or had the Company been an independent, publicly traded company during all of the periods presented. The unaudited interim condensed consolidated financial statements reflect the historical financial position, results of operations and cash flows of the Company as it has historically operated, in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). All intercompany transactions have been eliminated in consolidation. In connection with the Spin-off, the board of directors of the Company authorized a 23,161.8 for one split of its outstanding common stock that was effective on April 19, 2012. Accordingly, all references to share and per share amounts related to common stock included in the unaudited condensed consolidated financial statements and accompanying notes have been adjusted to reflect the stock split and change in the number of authorized shares. The stock split has been retroactively applied to the Company’s financial statements. |
||||||||
Fiscal Period, Policy [Policy Text Block] | Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 30, 2012 contained 52 weeks. The three and six months ended June 30, 2013 and July 1, 2012 each contained thirteen and twenty-six weeks, respectively. |
||||||||
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the three and six months ended June 30, 2013 and July 1, 2012 have been prepared without an audit pursuant to the rules and regulations of the Securities Exchange Commission and do not include certain information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of such financial statements have been included. The results of operations for the three and six months ended June 30, 2013 and July 1, 2012 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2012 included in the Company's 2012 Annual Report on Form 10-K. The December 30, 2012 balance sheet data is derived from those audited financial statements. |
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Allocations [Policy Text Block] | Allocations. Through the date of the Spin-off, Carrols provided administrative support to the Company for executive management, information systems and certain accounting, legal and other administrative functions. The cost of these services were allocated to the Company based primarily on a pro-rata share of either the Company’s revenues, number of restaurants or number of employees. The allocations may not reflect the expenses the Company would have incurred as an independent, publicly traded company for the periods presented. Following the Spin-off, certain of these functions continue to be provided by Carrols under the TSA, and the Company is performing certain functions using its own resources or purchased services from third parties. Refer to Note 4—Former Related Party Transactions for further discussion related to agreements entered into effective as of the Spin-off. Management believes that its allocations are reasonable and based on a systematic and rational method; however, they are not necessarily indicative of the actual financial results of the Company, including such expenses that would have been incurred by the Company had it been operating as a separate, stand-alone entity for the periods presented. As a stand-alone entity, the Company expects to incur expenses that may not be comparable in future periods to what is presented for the historical periods presented in the condensed consolidated financial statements. Consequently, the financial information herein may not reflect the financial position, results of operations and cash flows of the Company in the future or if the Company had been an independent stand-alone entity during all periods presented. In our opinion, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of its results of operations. |
||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
See Note 2 for discussion of the fair value measurement of non-financial assets. |
||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: allocations of Carrols' general and administrative expenses and interest expense on amounts due to Carrols prior to the Spin-off, accrued occupancy costs, insurance liabilities, evaluation for impairment of goodwill and long-lived assets and lease accounting matters. Actual results could differ from those estimates. |
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Reclassifications [Text Block] | Reclassifications. Certain amounts have been reclassified from Restaurant rent expense, Advertising expense and Other restaurant operating expenses to Pre-opening costs in order to conform to the current year presentation. |
Business Segment Information Business Segment Details (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jul. 01, 2012
|
Jun. 30, 2013
|
Jul. 01, 2012
|
Dec. 30, 2012
|
|||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restaurant sales | $ 140,276 | $ 128,208 | $ 273,366 | $ 253,774 | |||||||||
Franchise revenue | 604 | 625 | 1,138 | 1,201 | |||||||||
Cost of sales | 45,318 | 41,301 | 87,729 | 82,085 | |||||||||
Restaurant wages and related expenses | 35,819 | [1] | 34,136 | [1] | 70,935 | [1] | 67,961 | [1] | |||||
Restaurant rent expense | 6,411 | 5,282 | 12,846 | 9,197 | |||||||||
Other restaurant operating expenses | 17,339 | 15,761 | 33,503 | 31,590 | |||||||||
Advertising expense | 4,455 | 3,874 | 9,004 | 8,166 | |||||||||
General and administrative expense | 11,999 | [2] | 10,586 | [2] | 24,210 | [2] | 21,602 | [2] | |||||
Depreciation and amortization | 5,178 | 4,377 | 9,988 | 9,217 | |||||||||
Pre-opening costs | 958 | 705 | 1,789 | 824 | |||||||||
Impairment and other lease charges | 456 | (39) | 551 | 6,861 | |||||||||
Interest expense | 5,011 | 6,329 | 10,018 | 14,298 | |||||||||
Income before income taxes | 7,936 | 6,521 | 14,428 | 3,174 | |||||||||
Capital expenditures | 16,417 | 8,881 | 27,769 | 17,424 | |||||||||
Identifiable Assets | 312,468 | 312,468 | 303,729 | ||||||||||
Stock-based compensation | 600 | 200 | 1,000 | 1,200 | |||||||||
Pollo Tropical [Member]
|
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restaurant sales | 64,509 | 56,640 | 126,378 | 113,973 | |||||||||
Franchise revenue | 483 | 550 | 896 | 1,051 | |||||||||
Cost of sales | 21,350 | 18,729 | 41,843 | 37,897 | |||||||||
Restaurant wages and related expenses | 14,183 | [1] | 13,199 | [1] | 28,500 | [1] | 26,491 | [1] | |||||
Restaurant rent expense | 2,238 | 1,939 | 4,595 | 3,088 | |||||||||
Other restaurant operating expenses | 7,410 | 6,368 | 14,613 | 13,341 | |||||||||
Advertising expense | 1,148 | 860 | 2,722 | 2,117 | |||||||||
General and administrative expense | 6,233 | [2] | 5,154 | [2] | 12,467 | [2] | 10,302 | [2] | |||||
Depreciation and amortization | 2,314 | 1,960 | 4,413 | 4,183 | |||||||||
Pre-opening costs | 737 | 570 | 1,230 | 687 | |||||||||
Impairment and other lease charges | (101) | (42) | (62) | 5,837 | |||||||||
Interest expense | 2,247 | 2,689 | 4,499 | 5,975 | |||||||||
Income before income taxes | 7,233 | 5,761 | 12,951 | 5,103 | |||||||||
Capital expenditures | 9,348 | 4,710 | 14,695 | 9,260 | |||||||||
Identifiable Assets | 137,930 | 137,930 | 128,593 | ||||||||||
Taco Cabana [Member]
|
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restaurant sales | 75,767 | 71,568 | 146,988 | 139,801 | |||||||||
Franchise revenue | 121 | 75 | 242 | 150 | |||||||||
Cost of sales | 23,968 | 22,572 | 45,886 | 44,188 | |||||||||
Restaurant wages and related expenses | 21,636 | [1] | 20,937 | [1] | 42,435 | [1] | 41,470 | [1] | |||||
Restaurant rent expense | 4,173 | 3,343 | 8,251 | 6,109 | |||||||||
Other restaurant operating expenses | 9,929 | 9,393 | 18,890 | 18,249 | |||||||||
Advertising expense | 3,307 | 3,014 | 6,282 | 6,049 | |||||||||
General and administrative expense | 5,766 | [2] | 5,432 | [2] | 11,743 | [2] | 11,300 | [2] | |||||
Depreciation and amortization | 2,864 | 2,417 | 5,575 | 5,034 | |||||||||
Pre-opening costs | 221 | 135 | 559 | 137 | |||||||||
Impairment and other lease charges | 557 | 3 | 613 | 1,024 | |||||||||
Interest expense | 2,764 | 3,640 | 5,519 | 8,323 | |||||||||
Income before income taxes | 703 | 760 | 1,477 | (1,929) | |||||||||
Capital expenditures | 6,145 | 4,089 | 11,093 | 7,989 | |||||||||
Identifiable Assets | 164,463 | 164,463 | 167,348 | ||||||||||
Other [Member]
|
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Restaurant sales | 0 | 0 | 0 | 0 | |||||||||
Franchise revenue | 0 | 0 | 0 | 0 | |||||||||
Cost of sales | 0 | 0 | 0 | 0 | |||||||||
Restaurant wages and related expenses | 0 | 0 | 0 | 0 | |||||||||
Restaurant rent expense | 0 | 0 | 0 | 0 | |||||||||
Other restaurant operating expenses | 0 | 0 | 0 | 0 | |||||||||
Advertising expense | 0 | 0 | 0 | 0 | |||||||||
General and administrative expense | 0 | 0 | 0 | 0 | |||||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||||||||
Pre-opening costs | 0 | 0 | 0 | 0 | |||||||||
Impairment and other lease charges | 0 | 0 | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | 0 | |||||||||
Income before income taxes | 0 | 0 | 0 | 0 | |||||||||
Capital expenditures | 924 | 82 | 1,981 | 175 | |||||||||
Identifiable Assets | 10,075 | 10,075 | 7,788 | ||||||||||
Restaurant Wages And Related Expenses [Member]
|
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Stock-based compensation | 0 | 4 | 1 | 8 | |||||||||
General and Administrative Expense [Member]
|
|||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Stock-based compensation | $ 595 | $ 169 | $ 1,020 | $ 1,215 | |||||||||
|
Basis of Presentation Fair Value Disclosures (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fiesta Restaurant Group 8.875% Senior Secured Second Lien Notes, Carrying Value | $ 200.0 |
Fair Value, Inputs, Level 1 [Member]
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fiesta Restaurant Group 8.875% Senior Secured Second Lien Notes, Fair Value Disclosure | $ 214.0 |
Net Income per Share (Tables)
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Jun. 30, 2013
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Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block] | The computation of basic and diluted net income per share for the three and six months ended June 30, 2013 and July 1, 2012 is as follows:
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Other Liabilities, Long-Term Other Liabilities Details (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 30, 2012
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Jan. 01, 2012
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Accrued occupancy costs | $ 9,048 | $ 8,493 | |
Accrued workers' compensation and general liability claims | 1,180 | 1,270 | |
Deferred compensation | 732 | 812 | |
Other | 1,298 | 1,358 | |
Other Liabilities, Noncurrent | 12,258 | 11,933 | |
Restructuring Reserve [Abstract] | |||
Closed-store reserve | 1,883 | 2,432 | 2,246 |
Long-Term Liability [Member]
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Restructuring Reserve [Abstract] | |||
Closed-store reserve | $ 1,300 | $ 1,700 |
Business Segment Information Business Segment (Tables)
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Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The “Other” column includes corporate related items not allocated to reportable segments and consists primarily of corporate owned property and equipment and capitalized costs associated with the issuance of indebtedness.
(1) Includes stock-based compensation expense of $0 and $1 for the three and six months ended June 30, 2013, respectively, and $4 and $8 for the three and six months ended July 1, 2012, respectively. (2) Includes stock-based compensation expense of $595 and $1,020 for the three and six months ended June 30, 2013, respectively, and $169 and $1,215 for the three and six months ended July 1, 2012, respectively. |
Basis of Presentation
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6 Months Ended | ||||||||
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Jun. 30, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation Business Description. Fiesta Restaurant Group, Inc. ("Fiesta Restaurant Group" or "Fiesta") owns, operates and franchises two fast-casual restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively “Pollo Tropical”) and Taco Cabana, Inc. and its subsidiaries (collectively “Taco Cabana”). Unless the context otherwise requires, Fiesta and its subsidiaries, Pollo Tropical and Taco Cabana, are collectively referred to as the “Company”. At June 30, 2013, Fiesta operated 96 Pollo Tropical® restaurants, of which 92 were located in Florida, three were located in Georgia and one was located in Tennessee, and franchised a total of 38 Pollo Tropical restaurants, including 19 in Puerto Rico, two in Ecuador, two in Honduras, one in the Bahamas, one in Trinidad & Tobago, three in Venezuela, three in Costa Rica, two in Panama, one in India and four on college campuses in Florida. At June 30, 2013, the Company also owned and operated 164 Taco Cabana® restaurants, of which 161 were located in Texas and three were located in Oklahoma, and franchised a total of eight Taco Cabana restaurants, including four in New Mexico, one in Georgia and three non-traditional locations (two college campuses and one sports arena) in Texas. Spin-Off from Carrols Restaurant Group, Inc. On May 7, 2012, Carrols Restaurant Group, Inc. ("Carrols Restaurant Group" or "Carrols") completed the spin-off of Fiesta through the distribution of all of the outstanding shares of Fiesta Restaurant Group's common stock to the stockholders of Carrols Restaurant Group (the "Spin-off"). As a result of the Spin-off, Fiesta Restaurant Group is now an independent public company whose common stock is traded on The NASDAQ Global Select Market under the symbol “FRGI.” In connection with the Spin-off, Fiesta and Carrols entered into several agreements that govern Carrols' post Spin-off relationship with Fiesta, including a Separation and Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement and Transition Services Agreement ("TSA"). See Note 4—Former Related Party Transactions. Basis of Consolidation. The unaudited condensed consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. The condensed consolidated financial statements have been prepared as if the Company was in existence for all periods presented. Through the date of the Spin-off, these unaudited condensed consolidated financial statements have been prepared on a stand-alone basis from the separate records maintained by Carrols and may not necessarily be indicative of the results of operations or cash flows that would have resulted had allocations and other related-party transactions been consummated with unrelated parties or had the Company been an independent, publicly traded company during all of the periods presented. The unaudited interim condensed consolidated financial statements reflect the historical financial position, results of operations and cash flows of the Company as it has historically operated, in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). All intercompany transactions have been eliminated in consolidation. In connection with the Spin-off, the board of directors of the Company authorized a 23,161.8 for one split of its outstanding common stock that was effective on April 19, 2012. Accordingly, all references to share and per share amounts related to common stock included in the unaudited condensed consolidated financial statements and accompanying notes have been adjusted to reflect the stock split and change in the number of authorized shares. The stock split has been retroactively applied to the Company’s financial statements. Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 30, 2012 contained 52 weeks. The three and six months ended June 30, 2013 and July 1, 2012 each contained thirteen and twenty-six weeks, respectively. Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the three and six months ended June 30, 2013 and July 1, 2012 have been prepared without an audit pursuant to the rules and regulations of the Securities Exchange Commission and do not include certain information and footnotes required by GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of such financial statements have been included. The results of operations for the three and six months ended June 30, 2013 and July 1, 2012 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2012 included in the Company's 2012 Annual Report on Form 10-K. The December 30, 2012 balance sheet data is derived from those audited financial statements. Allocations. Through the date of the Spin-off, Carrols provided administrative support to the Company for executive management, information systems and certain accounting, legal and other administrative functions. The cost of these services were allocated to the Company based primarily on a pro-rata share of either the Company’s revenues, number of restaurants or number of employees. The allocations may not reflect the expenses the Company would have incurred as an independent, publicly traded company for the periods presented. Following the Spin-off, certain of these functions continue to be provided by Carrols under the TSA, and the Company is performing certain functions using its own resources or purchased services from third parties. Refer to Note 4—Former Related Party Transactions for further discussion related to agreements entered into effective as of the Spin-off. Management believes that its allocations are reasonable and based on a systematic and rational method; however, they are not necessarily indicative of the actual financial results of the Company, including such expenses that would have been incurred by the Company had it been operating as a separate, stand-alone entity for the periods presented. As a stand-alone entity, the Company expects to incur expenses that may not be comparable in future periods to what is presented for the historical periods presented in the condensed consolidated financial statements. Consequently, the financial information herein may not reflect the financial position, results of operations and cash flows of the Company in the future or if the Company had been an independent stand-alone entity during all periods presented. In our opinion, the condensed consolidated financial statements include all adjustments necessary for a fair presentation of its results of operations. Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect our own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
See Note 2 for discussion of the fair value measurement of non-financial assets. Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: allocations of Carrols' general and administrative expenses and interest expense on amounts due to Carrols prior to the Spin-off, accrued occupancy costs, insurance liabilities, evaluation for impairment of goodwill and long-lived assets and lease accounting matters. Actual results could differ from those estimates. Reclassifications. Certain amounts have been reclassified from Restaurant rent expense, Advertising expense and Other restaurant operating expenses to Pre-opening costs in order to conform to the current year presentation. |
Former Related Party Transactions
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6 Months Ended | ||||||||
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |||||||||
Related Party Transactions Disclosure [Text Block] | Former Related Party Transactions Effective upon the completion of the Spin-off, Fiesta Restaurant Group ceased to be a related party of Carrols. Prior to the date of the Spin-off, the Company's expenses included allocations from Carrols of costs associated with administrative support functions which included executive management, information systems, finance, legal, accounting, internal audit and human resources and certain other administrative functions. The Company's allocated administrative expenses from Carrols were $0.9 million and $4.2 million, respectively, for the three and six months ended July 1, 2012. As discussed in Note 1, the Company believes the assumptions and methodologies underlying the allocation of administrative expenses and stock-based compensation expenses are reasonable. However, such expenses may not be indicative of the actual expenses that would have been or will be incurred by the Company now that it is operating as a stand-alone company. As such, the financial information herein may not necessarily reflect the consolidated financial position, results of operations, and cash flows of the Company in the future or if the Company had been a stand-alone entity during the periods presented. In the first quarter of 2012, Carrols made a capital contribution in cash to the Company of $2.5 million. The capital contribution in cash was a portion of the excess cash proceeds from debt financings completed in August 2011. In 2012, and prior to the Spin-off, Carrols made non-cash contributions of $1.7 million to the Company, which related to the transfer of income tax- related assets and liabilities. In addition, in the second quarter of 2013, Carrols made additional non-cash contributions of $0.2 million to the Company, which also related to the transfer of income tax-related assets and liabilities for periods prior to the Spin-off. As of June 30, 2013 and December 30, 2012, the Company owed $2.5 million and $2.7 million, respectively, to Carrols, which is included in accounts payable in the accompanying condensed consolidated balance sheets. All intercompany transactions between the Company and Carrols prior to the Spin-off were included in the Company's historical financial statements and were considered to be effectively settled at the time of the Spin-off. Relationship Between Fiesta and Carrols After the Spin-Off For purposes of governing certain of the ongoing relationships between the Company and Carrols at and after the Spin-off, the Company and Carrols have entered into the following agreements:
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Impairment of Long-Lived Assets and Other Lease Charges
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Jun. 30, 2013
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Asset Impairment Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long Lived Assets and Other Lease Charges [Text Block] | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries. The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of using these assets in the operation of its business. For those restaurants reviewed for impairment where the Company owns the land and building, the Company also utilized third-party information such as a broker market price opinion to determine the fair value of the property. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. The Level 3 assets measured at fair value associated with impairment charges recorded during the six months ended June 30, 2013 totaled less than $0.1 million. Impairment on long-lived assets for the Company’s segments and other lease charges recorded were as follows:
During the three and six months ended June 30, 2013, the Company recorded other lease charges, net of recoveries, of $0.1 million and $0.2 million, respectively, related to previously closed locations. The Company also recorded an impairment charge of $0.4 million related to a Taco Cabana restaurant during the three and six months ended June 30, 2013. During the six months ended July 1, 2012, the Company recorded other lease charges, net of recoveries, of $1.8 million and impairment charges of $4.1 million associated with the closure of the Company’s five Pollo Tropical restaurants in New Jersey in the first quarter of 2012. The Company also recorded an impairment charge of $1.0 million related to two Taco Cabana restaurants during the six months ended July 1, 2012. |
Basis of Presentation Basis of Presentation Narrative (Details)
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3 Months Ended | 6 Months Ended | 12 Months Ended | ||
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Jun. 30, 2013
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Jul. 01, 2012
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Jun. 30, 2013
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Jul. 01, 2012
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Dec. 30, 2012
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Entity Information [Line Items] | |||||
Weeks In Fiscal Period | 13 | 13 | 26 | 26 | 52 |
Entity Operated Units [Member] | Pollo Tropical [Member]
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Entity Information [Line Items] | |||||
Number of Restaurants | 96 | 96 | |||
Entity Operated Units [Member] | Pollo Tropical [Member] | FLORIDA
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Entity Information [Line Items] | |||||
Number of Restaurants | 92 | 92 | |||
Entity Operated Units [Member] | Pollo Tropical [Member] | GEORGIA
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Entity Information [Line Items] | |||||
Number of Restaurants | 3 | 3 | |||
Entity Operated Units [Member] | Pollo Tropical [Member] | TENNESSEE
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Entity Information [Line Items] | |||||
Number of Restaurants | 1 | 1 | |||
Entity Operated Units [Member] | Taco Cabana [Member]
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Entity Information [Line Items] | |||||
Number of Restaurants | 164 | 164 | |||
Entity Operated Units [Member] | Taco Cabana [Member] | TEXAS
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Entity Information [Line Items] | |||||
Number of Restaurants | 161 | 161 | |||
Entity Operated Units [Member] | Taco Cabana [Member] | OKLAHOMA
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Entity Information [Line Items] | |||||
Number of Restaurants | 3 | 3 | |||
Franchised Units [Member] | Pollo Tropical [Member]
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Entity Information [Line Items] | |||||
Number of Restaurants | 38 | 38 | |||
Franchised Units [Member] | Pollo Tropical [Member] | FLORIDA
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Entity Information [Line Items] | |||||
Number of Restaurants | 4 | 4 | |||
Franchised Units [Member] | Pollo Tropical [Member] | PUERTO RICO
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Entity Information [Line Items] | |||||
Number of Restaurants | 19 | 19 | |||
Franchised Units [Member] | Pollo Tropical [Member] | ECUADOR
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Entity Information [Line Items] | |||||
Number of Restaurants | 2 | 2 | |||
Franchised Units [Member] | Pollo Tropical [Member] | HONDURAS
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Entity Information [Line Items] | |||||
Number of Restaurants | 2 | 2 | |||
Franchised Units [Member] | Pollo Tropical [Member] | BAHAMAS
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Entity Information [Line Items] | |||||
Number of Restaurants | 1 | 1 | |||
Franchised Units [Member] | Pollo Tropical [Member] | TRINIDAD AND TOBAGO
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Entity Information [Line Items] | |||||
Number of Restaurants | 1 | 1 | |||
Franchised Units [Member] | Pollo Tropical [Member] | VENEZUELA
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Entity Information [Line Items] | |||||
Number of Restaurants | 3 | 3 | |||
Franchised Units [Member] | Pollo Tropical [Member] | COSTA RICA
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Entity Information [Line Items] | |||||
Number of Restaurants | 3 | 3 | |||
Franchised Units [Member] | Pollo Tropical [Member] | PANAMA
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Entity Information [Line Items] | |||||
Number of Restaurants | 2 | 2 | |||
Franchised Units [Member] | Pollo Tropical [Member] | INDIA
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Entity Information [Line Items] | |||||
Number of Restaurants | 1 | 1 | |||
Franchised Units [Member] | Taco Cabana [Member]
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Entity Information [Line Items] | |||||
Number of Restaurants | 8 | 8 | |||
Franchised Units [Member] | Taco Cabana [Member] | GEORGIA
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Entity Information [Line Items] | |||||
Number of Restaurants | 1 | 1 | |||
Franchised Units [Member] | Taco Cabana [Member] | NEW MEXICO
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Entity Information [Line Items] | |||||
Number of Restaurants | 4 | 4 | |||
Franchised Units [Member] | Taco Cabana [Member] | TEXAS
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Entity Information [Line Items] | |||||
Number of Restaurants | 3 | 3 | |||
Maximum [Member]
|
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Entity Information [Line Items] | |||||
Weeks In Fiscal Period | 53 | ||||
Stock Split, Conversion Ratio | 23,161.8 | ||||
Minimum [Member]
|
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Entity Information [Line Items] | |||||
Weeks In Fiscal Period | 52 | ||||
Stock Split, Conversion Ratio | 1.0 |
Other Liabilities, Long-Term Restructuring Reserve (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
|
Dec. 30, 2012
|
|
Restructuring Cost and Reserve [Line Items] | ||
Balance, beginning of period | $ 2,432 | $ 2,246 |
Provisions for restaurant closures | 0 | 1,796 |
Accruals (recoveries) for additional lease charges | 155 | (377) |
Payments, net | (762) | (1,496) |
Other adjustments | 58 | 263 |
Balance, end of period | $ 1,883 | $ 2,432 |