Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 29, 2020 | Apr. 30, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35373 | |
Entity Registrant Name | FIESTA RESTAURANT GROUP, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0712224 | |
Entity Address, Address Line One | 14800 Landmark Boulevard, Suite 500 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75254 | |
City Area Code | 972 | |
Local Phone Number | 702-9300 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Entity Trading Symbol | FRGI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001534992 | |
Current Fiscal Year End Date | --01-03 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 27,974,418 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Current assets: | ||
Cash | $ 4,009 | $ 13,413 |
Accounts receivable | 6,145 | 7,933 |
Inventories | 2,894 | 3,394 |
Prepaid rent | 121 | 117 |
Income tax receivable | 9,964 | 3,821 |
Prepaid expenses and other current assets | 11,722 | 10,605 |
Total current assets | 34,855 | 39,283 |
Property and equipment, net | 203,042 | 211,944 |
Operating lease right-of-use assets | 255,810 | 251,272 |
Goodwill | 56,307 | 56,307 |
Other assets | 9,016 | 9,835 |
Total assets | 559,030 | 568,641 |
Current liabilities: | ||
Current portion of long-term debt | 228 | 212 |
Accounts payable | 14,324 | 14,776 |
Accrued payroll, related taxes and benefits | 8,272 | 9,866 |
Accrued real estate taxes | 3,160 | 6,497 |
Other current liabilities | 32,788 | 32,269 |
Total current liabilities | 58,772 | 63,620 |
Long-term debt, net of current portion | 72,783 | 76,823 |
Operating lease liabilities | 262,117 | 256,798 |
Deferred tax liabilities | 8,971 | 4,759 |
Other non-current liabilities | 8,384 | 8,405 |
Total liabilities | 411,027 | 410,405 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued | 0 | 0 |
Common stock, $0.01 par value; 100,000,000 shares authorized, 27,634,722 and 27,461,697 shares issued, respectively, and 25,186,595 and 25,612,597 shares outstanding, respectively | 271 | 271 |
Additional paid-in capital | 173,944 | 173,132 |
Retained earnings (accumulated deficit) | (5,433) | 1,884 |
Treasury stock, at cost; 1,993,495 and 1,493,495 shares, respectively | (20,779) | (17,051) |
Total stockholders' equity | 148,003 | 158,236 |
Total liabilities and stockholders' equity | $ 559,030 | $ 568,641 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 29, 2020 | Dec. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,634,722 | 27,461,697 |
Common stock, shares outstanding | 25,186,595 | 25,612,597 |
Treasury stock, shares | 1,993,495 | 1,493,495 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Revenues | $ 146,699 | $ 165,852 |
Costs and expenses: | ||
Cost of sales | 46,276 | 50,510 |
Restaurant wages and related expenses (including stock-based compensation expense of $36, and $27, respectively) | 40,495 | 45,036 |
Restaurant rent expense | 11,339 | 11,745 |
Other restaurant operating expenses | 21,511 | 21,763 |
Advertising expense | 5,783 | 5,521 |
General and administrative (including stock-based compensation expense of $776, and $765, respectively) | 14,384 | 15,071 |
Depreciation and amortization | 9,430 | 9,548 |
Pre-opening costs | 69 | 401 |
Impairment and other lease charges | 4,233 | (338) |
Closed restaurant rent expense, net of sublease income | 1,632 | 1,424 |
Other expense (income), net | 908 | 702 |
Total operating expenses | 156,060 | 161,383 |
Income (loss) from operations | (9,361) | 4,469 |
Interest expense | 961 | 1,234 |
Income (loss) before income taxes | (10,322) | 3,235 |
Provision for (benefit from) income taxes | (3,005) | 946 |
Net income (loss) | $ (7,317) | $ 2,289 |
Earnings (loss) per common share: | ||
Basic (usd per share) | $ (0.29) | $ 0.08 |
Diluted (usd per share) | $ (0.29) | $ 0.08 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 25,519,247 | 26,842,704 |
Diluted (in shares) | 25,519,247 | 26,845,077 |
Restaurant sales | ||
Revenues: | ||
Revenues | $ 146,086 | $ 165,181 |
Franchise royalty revenues and fees | ||
Revenues: | ||
Revenues | $ 613 | $ 671 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Stock-based compensation | $ 800 | $ 800 |
Restaurant Wages And Related Expenses | ||
Stock-based compensation | 36 | 27 |
General and Administrative Expense | ||
Stock-based compensation | $ 776 | $ 765 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock |
Beginning shares at Dec. 30, 2018 | 26,858,988 | ||||
Beginning balance at Dec. 30, 2018 | $ 240,059 | $ 270 | $ 170,290 | $ 72,268 | $ (2,769) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 792 | 792 | |||
Vesting of restricted shares (in shares) | 68,286 | ||||
Vesting of restricted shares | (1) | $ 0 | (1) | ||
Cumulative effect of adopting a new accounting standard | $ 14,002 | 14,002 | |||
Purchase of treasury stock (in shares) | (158,269) | (158,269) | |||
Purchase of treasury stock | $ (2,199) | (2,199) | |||
Net income (loss) | 2,289 | 2,289 | |||
Ending shares at Mar. 31, 2019 | 26,769,005 | ||||
Ending balance at Mar. 31, 2019 | $ 254,942 | $ 270 | 171,081 | 88,559 | (4,968) |
Beginning shares at Dec. 29, 2019 | 25,612,597 | 25,612,597 | |||
Beginning balance at Dec. 29, 2019 | $ 158,236 | $ 271 | 173,132 | 1,884 | (17,051) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 812 | 812 | |||
Vesting of restricted shares (in shares) | 73,998 | ||||
Vesting of restricted shares | $ 0 | $ 0 | 0 | ||
Purchase of treasury stock (in shares) | (500,000) | (500,000) | |||
Purchase of treasury stock | $ (3,728) | (3,728) | |||
Net income (loss) | $ (7,317) | (7,317) | |||
Ending shares at Mar. 29, 2020 | 25,186,595 | 25,186,595 | |||
Ending balance at Mar. 29, 2020 | $ 148,003 | $ 271 | $ 173,944 | $ (5,433) | $ (20,779) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income (loss) | $ (7,317) | $ 2,289 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Loss (gain) on disposals of property and equipment | 0 | (13) |
Stock-based compensation | 812 | 792 |
Impairment and other lease charges | 4,233 | (338) |
Depreciation and amortization | 9,430 | 9,548 |
Amortization of deferred financing costs | 68 | 67 |
Deferred income taxes | 4,212 | 0 |
Changes in other operating assets and liabilities | (6,974) | (4,597) |
Net cash provided by operating activities | 4,464 | 7,748 |
Capital expenditures: | ||
New restaurant development | (1,590) | (3,839) |
Restaurant remodeling | (1,025) | (171) |
Other restaurant capital expenditures | (2,536) | (5,015) |
Corporate and restaurant information systems | (932) | (2,512) |
Total capital expenditures | (6,083) | (11,537) |
Proceeds from disposals of properties | 0 | 1,774 |
Net cash used in investing activities | (6,083) | (9,763) |
Financing activities: | ||
Borrowings on revolving credit facility | 71,420 | 11,000 |
Repayments on revolving credit facility | (75,420) | (7,000) |
Principal payments on finance leases | (57) | (26) |
Payments to purchase treasury stock | (3,728) | (2,199) |
Net cash provided by (used in) financing activities | (7,785) | 1,775 |
Net change in cash | (9,404) | (240) |
Cash, beginning of period | 13,413 | 5,258 |
Cash, end of period | 4,009 | 5,018 |
Supplemental disclosures: | ||
Interest paid on long-term debt | 941 | 1,685 |
Accruals for capital expenditures | 2,161 | 4,589 |
Income tax payments (refunds), net | (1,073) | (58) |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating lease ROU assets | 11,193 | 5,191 |
Finance lease ROU assets | 33 | 0 |
Right-of-use assets and lease liabilities reduced for terminated leases: | ||
Operating lease ROU assets | 0 | 2,196 |
Operating lease right-of-use assets obtained and lease liabilities incurred as a result of adoption of ASC 842: | ||
Operating lease ROU assets | 0 | 267,743 |
Operating lease liabilities | $ 0 | $ 291,373 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 29, 2020 | |
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 restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc. and its subsidiaries, 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 March 29, 2020 , the Company owned and operated 141 Pollo Tropical ® restaurants and 146 Taco Cabana ® restaurants. All of the Pollo Tropical restaurants are located in Florida and all of the Taco Cabana restaurants are located in Texas. At March 29, 2020 , the Company franchised a total of 33 Pollo Tropical restaurants and eight Taco Cabana restaurants. The franchised Pollo Tropical restaurants include 17 in Puerto Rico, four in Panama, two in Guyana, one in Ecuador, one in the Bahamas, seven on college campuses and one at a hospital in Florida. The franchised Taco Cabana restaurants include six in New Mexico and two on college campuses in Texas. Going Concern. The unaudited condensed consolidated financial statements have been prepared on the going concern basis of accounting, assuming the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The COVID-19 pandemic and related "shelter-in-place" orders and other mandates are affecting the restaurant industry and the economy. In response to COVID-19 and in compliance with governmental restrictions, the Company closed the dining room seating areas in all Pollo Tropical and Taco Cabana restaurants, limiting service to take-out, drive-thru, and delivery operations beginning in mid-March 2020. The Company expects the COVID-19 restrictions and economic impact to result in reduced earnings. As the COVID-19 situation is dynamic, the Company does not currently know when it will be able to resume full operations or when its results of operations will return to pre-COVID-19 levels. The Company has a senior secured revolving credit facility with a syndicate of lenders that provides for aggregate revolving credit borrowings up to $150.0 million and matures on November 30, 2022 ("senior credit facility"). The Company was in compliance with the financial covenants under its senior credit facility, with an outstanding balance of $71.0 million , as of March 29, 2020 . The Company borrowed the remaining $75.5 million available for borrowing early in the second quarter of 2020. However, due to the continued governmental restrictions on operating dine-in services and public gatherings and the resulting declines in revenues, the Company projects it will not remain in compliance with its debt covenants under its senior credit facility during the next twelve months. A breach of its debt covenants will result in an event of default, and the lenders could exercise their right to call the outstanding balance under the Company's senior credit facility. This would result in the Company's total outstanding balance of $146.5 million under its senior credit facility to be immediately due and payable. In such event, the Company believes that it will not have sufficient cash on hand or available liquidity to repay the outstanding balance under its senior credit facility. Management's plans include executing an amendment related to its debt covenants in its senior credit facility with its lenders and the Company is currently in discussions with its lenders. Management believes that the amendment is probable of occurring. The Company has concluded that Management's plans are probable of being achieved to obtain covenant compliance within the twelve months after the date that the unaudited condensed consolidated financial statements are issued. 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. All intercompany transactions have been eliminated in consolidation. Fiscal Year . The Company uses a 52 – 53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 29, 2019 contained 52 weeks. The three months ended March 29, 2020 and March 31, 2019 each contained thirteen weeks. The fiscal year ending January 3, 2021 will contain 53 weeks. Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the three months ended March 29, 2020 and March 31, 2019 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission and do not include certain information and footnotes required by U.S. Generally Accepted Accounting Principles ("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 months ended March 29, 2020 and March 31, 2019 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 29, 2019 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . The December 29, 2019 balance sheet data is derived from those audited financial statements. Guidance Adopted in 2020. In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this new accounting standard on December 30, 2019 and will apply it prospectively to all implementation costs incurred after the date of adoption. The adoption of this standard did not have a material effect on the Company's financial statements. The Company deferred and amortized application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement in the same line item that the fees associated with the subscription arrangement were presented prior to adoption of the new standard. Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. 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 at the measurement date under current market conditions. 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 management's 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: • 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. • Revolving Credit Borrowings. The fair value of outstanding revolving credit borrowings under the Company's senior credit facility, which is considered Level 2, is based on current LIBOR rates. The fair value of the Company's senior credit facility was approximately $71.0 million at March 29, 2020 , and $75.0 million at December 29, 2019 . The carrying value of the Company's senior credit facility was $71.0 million at March 29, 2020 and $ 75.0 million at December 29, 2019 . Long-Lived Assets . The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. See Note 3—Impairment of Long-Lived Assets. Leases. The Company assesses whether an agreement contains a lease at inception. All leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the condensed consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20 -year lease term for new restaurant properties and when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component. As a result of the COVID-19 pandemic the Company entered into a rent deferral agreement with one landlord as of March 29, 2020 , and entered into similar agreements with other landlords in the second quarter of 2020. Under these agreements, certain rent payments will be deferred without penalty for various periods, generally for up to three months. The Company has elected to account for lease concessions and deferrals resulting directly from COVID-19 as though the enforceable rights and obligations to the concessions and deferrals existed in the respective contracts at lease inception and will not account for the concessions and deferrals as lease modifications. 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 the 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: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates. Due to the uncertainty associated with the unprecedented nature of the COVID-19 pandemic and the impact it will have on the Company's operations and future cash flows, it is reasonably possible that the estimates of future cash flows used in impairment assessments will change in the near term and the effect of the change could be material. The Company's current estimates assume that "shelter-in-place" mandates, social distancing, closing dining rooms in restaurants and other changes related to COVID-19 will continue to have a significant impact for the remainder of the year with the greatest impact in the near term. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 29, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets, consist of the following: March 29, 2020 December 29, 2019 Prepaid contract expenses $ 4,369 $ 4,410 Assets held for sale (1) 4,110 4,110 Other 3,243 2,085 $ 11,722 $ 10,605 (1) One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of March 29, 2020 and December 29, 2019 . |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets and Other Lease Charges | 3 Months Ended |
Mar. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Impairment of Long-Lived Assets and Other Lease Charges | Impairment of Long-Lived Assets and Other Lease Charges The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. 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. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. A summary of impairment of long-lived assets and other lease charges (recoveries) recorded by segment is as follows: Three Months Ended March 29, 2020 March 31, 2019 Pollo Tropical $ 3,696 $ (379 ) Taco Cabana 537 41 $ 4,233 $ (338 ) Impairment and other lease charges for the three months ended March 29, 2020 for Pollo Tropical include impairment charges of $3.7 million , related primarily to the impairment of assets from three underperforming Pollo Tropical restaurants for which the near-term impact of temporary COVID-19 related closure for two locations and sustained low sales resulted in a decline in expected future cash flows. Impairment and other lease charges for the three months ended March 29, 2020 for Taco Cabana include impairment charges of $0.5 million , related primarily to impairment of assets for two underperforming Taco Cabana restaurants for which continued sales declines coupled with the near-term impact of expected sales declines resulted in a decrease in the estimated future cash flows. Impairment and other lease charges for the three months ended March 31, 2019 for Pollo Tropical include impairment charges of $0.4 million , related primarily to impairment of equipment from previously impaired restaurants and a lease charge recoveries benefit of $(0.7) million related to previously closed restaurant lease terminations. Impairment and other lease charges for the three months ended March 31, 2019 for Taco Cabana include impairment charges related primarily to impairment of equipment from previously impaired restaurants. The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions, the Company's history of using these assets in the operation of its business and the Company's expectation of how a market participant would value the assets. In addition, for those restaurants reviewed for impairment where the Company owns the land and building, the Company utilized third-party information such as a broker quoted value to determine the fair value of the property. The Company also utilized discounted future cash flows to determine the fair value of assets for certain leased restaurants with positive discounted projected future cash flows. The Company utilized current market lease rent and discount rates to determine the fair value of right-of-use lease assets. 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 three months ended March 29, 2020 totaled $3.4 million . |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 29, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Other current liabilities consist of the following: March 29, 2020 December 29, 2019 Operating lease liabilities $ 23,050 $ 22,338 Accrued workers' compensation and general liability claims 4,876 4,354 Sales and property taxes 865 1,889 Accrued occupancy costs 424 891 Other 3,573 2,797 $ 32,788 $ 32,269 Other non-current liabilities consist of the following: March 29, 2020 December 29, 2019 Accrued workers' compensation and general liability claims $ 7,348 $ 7,348 Deferred compensation 427 424 Accrued occupancy costs 78 78 Other 531 555 $ 8,384 $ 8,405 Accrued occupancy costs primarily consisted of obligations pertaining to closed restaurant locations. The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $ 0.1 million are included in non-current liabilities at March 29, 2020 and December 29, 2019 , respectively, with the remainder in other current liabilities. Three Months Ended March 29, 2020 Year Ended December 29, 2019 Balance, beginning of period $ 752 $ 8,819 Payments, net (228 ) (1,405 ) Other adjustments (1) (129 ) (6,662 ) Balance, end of period $ 395 $ 752 (1) As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 29, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Purchase of Treasury Stock In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 500,000 shares of common stock valued at approximately $3.7 million and 158,269 shares of common stock valued at approximately $2.2 million during the three months ended March 29, 2020 and March 31, 2019 , respectively. The shares repurchased in 2020 were purchased on or before March 12, 2020. The repurchased shares are held as treasury stock at cost. Stock-Based Compensation During the three months ended March 29, 2020 , the Company granted certain employees and a new non-employee director a total of 183,426 non-vested restricted shares under the Fiesta Restaurant Group, Inc. 2012 Stock Incentive Plan (the "Fiesta Plan"). The shares granted to employees generally vest and become non-forfeitable over a four -year vesting period. The shares granted to the new non-employee director vest and become non-forfeitable over a five -year vesting period. The weighted average fair value at grant date for non-vested shares issued during the three months ended March 29, 2020 and March 31, 2019 was $8.99 and $13.44 per share, respectively. The weighted average fair value at grant date for the restricted stock units subject to market conditions granted in the three months ended March 31, 2019 was $1.76 per share. Stock-based compensation expense for each of the three months ended March 29, 2020 and March 31, 2019 was $0.8 million . At March 29, 2020 , the total unrecognized stock-based compensation expense related to non-vested restricted shares and restricted stock units was approximately $4.6 million . At March 29, 2020 , the remaining weighted average vesting period for non-vested restricted shares was 2.9 years and restricted stock units was 0.9 years. A summary of all non-vested restricted shares and restricted stock units activity for the three months ended March 29, 2020 is as follows: Non-Vested Shares Restricted Stock Units Shares Weighted Units Weighted Outstanding at December 29, 2019 355,605 $ 15.47 176,362 $ 9.42 Granted 183,426 8.99 — — Vested and released (73,251 ) 19.03 (747 ) 32.44 Forfeited (11,148 ) 14.11 (607 ) 24.86 Outstanding at March 29, 2020 454,632 $ 12.31 175,008 $ 9.27 The fair value of the non-vested restricted shares and all other restricted stock units is based on the closing price on the date of grant. The fair value of the restricted stock units subject to market conditions was estimated using the Monte Carlo simulation method. The assumptions used to value grant restricted stock units subject to market conditions are detailed below: 2019 Grant date stock price $ 14.66 Fair value at grant date $ 1.76 Risk free interest rate 2.53 % Expected term (in years) 2 Dividend yield — % Expected volatility 43.18 % |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company owns, operates and franchises two restaurant brands, Pollo Tropical ® and Taco Cabana ® , each of which is an operating segment. Pollo Tropical restaurants feature fire-grilled and crispy citrus marinated chicken and other freshly prepared tropical-inspired menu items, while Taco Cabana restaurants specialize in Mexican-inspired food. Each segment's accounting policies are described in the summary of significant accounting policies in Note 1 to the Company's audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . The primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants as set forth in the reconciliation table below. The "Other" column includes corporate-related items not allocated to reportable segments and consists primarily of corporate-owned property and equipment, lease assets, miscellaneous prepaid costs, capitalized costs associated with the issuance of indebtedness, corporate cash accounts, and a current income tax receivable. Three Months Ended Pollo Tropical Taco Cabana Other Consolidated March 29, 2020: Restaurant sales $ 85,721 $ 60,365 $ — $ 146,086 Franchise revenue 404 209 — 613 Cost of sales 27,731 18,545 — 46,276 Restaurant wages and related expenses (1) 21,037 19,458 — 40,495 Restaurant rent expense 5,640 5,699 — 11,339 Other restaurant operating expenses 12,386 9,125 — 21,511 Advertising expense 3,504 2,279 — 5,783 General and administrative expense (2) 7,488 6,896 — 14,384 Adjusted EBITDA 8,780 (907 ) — 7,873 Depreciation and amortization 5,278 4,152 — 9,430 Capital expenditures 3,281 2,600 202 6,083 March 31, 2019: Restaurant sales $ 91,026 $ 74,155 $ — $ 165,181 Franchise revenue 455 216 — 671 Cost of sales 28,298 22,212 — 50,510 Restaurant wages and related expenses (1) 21,153 23,883 — 45,036 Restaurant rent expense 5,421 6,324 — 11,745 Other restaurant operating expenses 11,958 9,805 — 21,763 Advertising expense 3,032 2,489 — 5,521 General and administrative expense (2) 8,347 6,724 — 15,071 Adjusted EBITDA 14,317 2,895 — 17,212 Depreciation and amortization 5,213 4,335 — 9,548 Capital expenditures 7,145 4,037 355 11,537 Identifiable Assets: March 29, 2020 $ 339,684 $ 189,898 $ 29,448 $ 559,030 December 29, 2019 340,012 195,883 32,746 568,641 (1) Includes stock-based compensation expense of $36 and $27 for the three months ended March 29, 2020 and March 31, 2019 , respectively. (2) Includes stock-based compensation expense of $776 and $765 for the three months ended March 29, 2020 and March 31, 2019 , respectively. A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows: Three Months Ended Pollo Tropical Taco Cabana Consolidated March 29, 2020: Net loss $ (7,317 ) Benefit from income taxes (3,005 ) Loss before taxes $ (1,827 ) $ (8,495 ) $ (10,322 ) Add: Non-general and administrative expense adjustments: Depreciation and amortization 5,278 4,152 9,430 Impairment and other lease charges 3,696 537 4,233 Interest expense 483 478 961 Closed restaurant rent expense, net of sublease income 602 1,030 1,632 Other expense (income), net 107 801 908 Stock-based compensation expense in restaurant wages 11 25 36 Total non-general and administrative expense adjustments 10,177 7,023 17,200 General and administrative expense adjustments: Stock-based compensation expense 310 466 776 Digital and brand repositioning costs 120 99 219 Total general and administrative expense adjustments 430 565 995 Adjusted EBITDA $ 8,780 $ (907 ) $ 7,873 March 31, 2019: Net income $ 2,289 Provision for income taxes 946 Income (loss) before taxes $ 5,956 $ (2,721 ) $ 3,235 Add: Non-general and administrative expense adjustments: Depreciation and amortization 5,213 4,335 9,548 Impairment and other lease charges (379 ) 41 (338 ) Interest expense 656 578 1,234 Closed restaurant rent expense, net of sublease income 1,144 280 1,424 Other expense (income), net 596 106 702 Stock-based compensation expense in restaurant wages 5 22 27 Total non-general and administrative expense adjustments 7,235 5,362 12,597 General and administrative expense adjustments: Stock-based compensation expense 577 188 765 Restructuring costs and retention bonuses 549 66 615 Total general and administrative expense adjustments 1,126 254 1,380 Adjusted EBITDA $ 14,317 $ 2,895 $ 17,212 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method. For the three months ended March 29, 2020 , all shares of outstanding restricted stock units were excluded from the computation of diluted EPS because including such restricted stock units would have been antidilutive as a result of the net loss in the three months ended March 29, 2020 . For the three months ended March 31, 2019 , no shares of outstanding restricted stock units were excluded from the computation of diluted EPS. The computation of basic and diluted EPS is as follows: Three Months Ended March 29, 2020 March 31, 2019 Basic and diluted EPS: Net income (loss) $ (7,317 ) $ 2,289 Less: income allocated to participating securities — 22 Net income (loss) available to common shareholders $ (7,317 ) $ 2,267 Weighted average common shares—basic 25,519,247 26,842,704 Restricted stock units — 2,373 Weighted average common shares—diluted 25,519,247 26,845,077 Earnings (loss) per common share—basic $ (0.29 ) $ 0.08 Earnings (loss) per common share—diluted (0.29 ) 0.08 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Assignments . Taco Cabana has assigned two leases to various parties on properties where it no longer operates restaurants with lease terms expiring on various dates through 2029. The assignees are responsible for making the payments required by the leases. The Company is a guarantor under one of the leases, and it remains secondarily liable as a surety with respect to one of the leases. Pollo Tropical assigned one lease to a third party on a property where it no longer operates with a lease term expiring in 2033. The assignee is responsible for making the payments required by the lease. The Company is a guarantor under the lease. The maximum potential liability for future rental payments that the Company could be required to make under these leases at March 29, 2020 was $3.1 million . The Company could also be obligated to pay property taxes and other lease-related costs. The obligations under these leases will generally continue to decrease over time as the operating leases expire. The Company does not believe it is probable that it will be ultimately responsible for the obligations under these leases. Legal Matters . 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 condensed consolidated financial statements. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) , which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) ("ASU No. 2020-04"), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. As of March 29, 2020, the Company's only exposure to LIBOR rates was its senior credit facility. Upon cessation of the LIBOR, the senior credit agreement will be amended to reflect an alternative reference rate. According to ASU No. 2020-04, modifications of contracts within the scope of Topic 470 Debt should be accounted for by prospectively adjusting the effective interest rate. The Company does not expect ASU No. 2020-04 to have a significant impact on its financial statements. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annualized effective tax rate for the full fiscal year to "ordinary" income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Due to the uncertainty created by the events surrounding the COVID-19 pandemic, the actual effective tax rate for the year to date period was used to calculate the income tax benefit for the three months ended March 29, 2020 as permitted by Accounting Standards Codification ("ASC") 740-270-30-18. Tax Law Changes. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. The CARES Act includes provisions that allow net operating losses in 2018, 2019, and 2020 to be carried back for up to five years and eliminates the 80% taxable income limitation on net operating loss deductions for 2018 through 2020. These changes allowed the Company to record an incremental benefit of $1.8 million during the first quarter of 2020, which represents the impact of carrying net operating losses from 2018 and 2019 back to years with a higher federal corporate income tax rate. The CARES Act also includes technical amendments that are retroactive to 2018 which permit certain assets to be classified as qualified improvement property and expensed immediately. Reclassifying certain assets as qualified improvement property will result in an incremental benefit. The amount of the incremental benefit is not yet known due to the complexity and interaction of other items and tax years involved in the calculation, but will be quantified prior to filing the 2019 federal income tax return. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | 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. All intercompany transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year . The Company uses a 52 – 53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 29, 2019 contained 52 weeks. The three months ended March 29, 2020 and March 31, 2019 each contained thirteen weeks. The fiscal year ending January 3, 2021 will contain 53 weeks. |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the three months ended March 29, 2020 and March 31, 2019 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission and do not include certain information and footnotes required by U.S. Generally Accepted Accounting Principles ("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 months ended March 29, 2020 and March 31, 2019 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 29, 2019 included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . The December 29, 2019 balance sheet data is derived from those audited financial statements. |
Guidance Adopted in 2020 and Recent Accounting Pronouncements | Guidance Adopted in 2020. In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this new accounting standard on December 30, 2019 and will apply it prospectively to all implementation costs incurred after the date of adoption. The adoption of this standard did not have a material effect on the Company's financial statements. The Company deferred and amortized application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement in the same line item that the fees associated with the subscription arrangement were presented prior to adoption of the new standard. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) , which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) ("ASU No. 2020-04"), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update are effective as of March 12, 2020 through December 31, 2022. As of March 29, 2020, the Company's only exposure to LIBOR rates was its senior credit facility. Upon cessation of the LIBOR, the senior credit agreement will be amended to reflect an alternative reference rate. According to ASU No. 2020-04, modifications of contracts within the scope of Topic 470 Debt should be accounted for by prospectively adjusting the effective interest rate. The Company does not expect ASU No. 2020-04 to have a significant impact on its financial statements. |
Revenue Recognition | Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. |
Fair Value of Financial Instruments | 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 at the measurement date under current market conditions. 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 management's 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: • 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. • Revolving Credit Borrowings. |
Long-Lived Assets | Long-Lived Assets |
Leases | Leases. The Company assesses whether an agreement contains a lease at inception. All leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the condensed consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20 -year lease term for new restaurant properties and when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component. As a result of the COVID-19 pandemic the Company entered into a rent deferral agreement with one landlord as of March 29, 2020 , and entered into similar agreements with other landlords in the second quarter of 2020. Under these agreements, certain rent payments will be deferred without penalty for various periods, generally for up to three months. The Company has elected to account for lease concessions and deferrals resulting directly from COVID-19 as though the enforceable rights and obligations to the concessions and deferrals existed in the respective contracts at lease inception and will not account for the concessions and deferrals as lease modifications. |
Use of Estimates | 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 the 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: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates. Due to the uncertainty associated with the unprecedented nature of the COVID-19 pandemic and the impact it will have on the Company's operations and future cash flows, it is reasonably possible that the estimates of future cash flows used in impairment assessments will change in the near term and the effect of the change could be material. The Company's current estimates assume that "shelter-in-place" mandates, social distancing, closing dining rooms in restaurants and other changes related to COVID-19 will continue to have a significant impact for the remainder of the year with the greatest impact in the near term. |
Impairment of Long-Lived Assets | The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. 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. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. |
Purchase of Treasury Stock | Purchase of Treasury Stock In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 500,000 shares of common stock valued at approximately $3.7 million and 158,269 shares of common stock valued at approximately $2.2 million during the three months ended March 29, 2020 and March 31, 2019 , respectively. The shares repurchased in 2020 were purchased on or before March 12, 2020. The repurchased shares are held as treasury stock at cost. |
Segment Reporting | The primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants |
Earnings per Share | Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period. |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets, consist of the following: March 29, 2020 December 29, 2019 Prepaid contract expenses $ 4,369 $ 4,410 Assets held for sale (1) 4,110 4,110 Other 3,243 2,085 $ 11,722 $ 10,605 (1) One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of March 29, 2020 and December 29, 2019 . |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets and Other Lease Charges (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Impairment on Long-Lived Assets by Segment | A summary of impairment of long-lived assets and other lease charges (recoveries) recorded by segment is as follows: Three Months Ended March 29, 2020 March 31, 2019 Pollo Tropical $ 3,696 $ (379 ) Taco Cabana 537 41 $ 4,233 $ (338 ) |
Other Lease Charges (Recoveries) by Segment | A summary of impairment of long-lived assets and other lease charges (recoveries) recorded by segment is as follows: Three Months Ended March 29, 2020 March 31, 2019 Pollo Tropical $ 3,696 $ (379 ) Taco Cabana 537 41 $ 4,233 $ (338 ) |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities, Current | Other current liabilities consist of the following: March 29, 2020 December 29, 2019 Operating lease liabilities $ 23,050 $ 22,338 Accrued workers' compensation and general liability claims 4,876 4,354 Sales and property taxes 865 1,889 Accrued occupancy costs 424 891 Other 3,573 2,797 $ 32,788 $ 32,269 |
Other Liabilities, Non-current | Other non-current liabilities consist of the following: March 29, 2020 December 29, 2019 Accrued workers' compensation and general liability claims $ 7,348 $ 7,348 Deferred compensation 427 424 Accrued occupancy costs 78 78 Other 531 555 $ 8,384 $ 8,405 |
Activity in the Closed-Restaurant Reserve | The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $ 0.1 million are included in non-current liabilities at March 29, 2020 and December 29, 2019 , respectively, with the remainder in other current liabilities. Three Months Ended March 29, 2020 Year Ended December 29, 2019 Balance, beginning of period $ 752 $ 8,819 Payments, net (228 ) (1,405 ) Other adjustments (1) (129 ) (6,662 ) Balance, end of period $ 395 $ 752 (1) As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Equity [Abstract] | |
Schedule of Non-vested Restricted Shares and Restricted Stock Units Activity | A summary of all non-vested restricted shares and restricted stock units activity for the three months ended March 29, 2020 is as follows: Non-Vested Shares Restricted Stock Units Shares Weighted Units Weighted Outstanding at December 29, 2019 355,605 $ 15.47 176,362 $ 9.42 Granted 183,426 8.99 — — Vested and released (73,251 ) 19.03 (747 ) 32.44 Forfeited (11,148 ) 14.11 (607 ) 24.86 Outstanding at March 29, 2020 454,632 $ 12.31 175,008 $ 9.27 |
Restricted Stock Units Subject to Market Conditions Assumptions | The assumptions used to value grant restricted stock units subject to market conditions are detailed below: 2019 Grant date stock price $ 14.66 Fair value at grant date $ 1.76 Risk free interest rate 2.53 % Expected term (in years) 2 Dividend yield — % Expected volatility 43.18 % |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Three Months Ended Pollo Tropical Taco Cabana Other Consolidated March 29, 2020: Restaurant sales $ 85,721 $ 60,365 $ — $ 146,086 Franchise revenue 404 209 — 613 Cost of sales 27,731 18,545 — 46,276 Restaurant wages and related expenses (1) 21,037 19,458 — 40,495 Restaurant rent expense 5,640 5,699 — 11,339 Other restaurant operating expenses 12,386 9,125 — 21,511 Advertising expense 3,504 2,279 — 5,783 General and administrative expense (2) 7,488 6,896 — 14,384 Adjusted EBITDA 8,780 (907 ) — 7,873 Depreciation and amortization 5,278 4,152 — 9,430 Capital expenditures 3,281 2,600 202 6,083 March 31, 2019: Restaurant sales $ 91,026 $ 74,155 $ — $ 165,181 Franchise revenue 455 216 — 671 Cost of sales 28,298 22,212 — 50,510 Restaurant wages and related expenses (1) 21,153 23,883 — 45,036 Restaurant rent expense 5,421 6,324 — 11,745 Other restaurant operating expenses 11,958 9,805 — 21,763 Advertising expense 3,032 2,489 — 5,521 General and administrative expense (2) 8,347 6,724 — 15,071 Adjusted EBITDA 14,317 2,895 — 17,212 Depreciation and amortization 5,213 4,335 — 9,548 Capital expenditures 7,145 4,037 355 11,537 Identifiable Assets: March 29, 2020 $ 339,684 $ 189,898 $ 29,448 $ 559,030 December 29, 2019 340,012 195,883 32,746 568,641 (1) Includes stock-based compensation expense of $36 and $27 for the three months ended March 29, 2020 and March 31, 2019 , respectively. (2) Includes stock-based compensation expense of $776 and $765 for the three months ended March 29, 2020 and March 31, 2019 , respectively. |
Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA | A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows: Three Months Ended Pollo Tropical Taco Cabana Consolidated March 29, 2020: Net loss $ (7,317 ) Benefit from income taxes (3,005 ) Loss before taxes $ (1,827 ) $ (8,495 ) $ (10,322 ) Add: Non-general and administrative expense adjustments: Depreciation and amortization 5,278 4,152 9,430 Impairment and other lease charges 3,696 537 4,233 Interest expense 483 478 961 Closed restaurant rent expense, net of sublease income 602 1,030 1,632 Other expense (income), net 107 801 908 Stock-based compensation expense in restaurant wages 11 25 36 Total non-general and administrative expense adjustments 10,177 7,023 17,200 General and administrative expense adjustments: Stock-based compensation expense 310 466 776 Digital and brand repositioning costs 120 99 219 Total general and administrative expense adjustments 430 565 995 Adjusted EBITDA $ 8,780 $ (907 ) $ 7,873 March 31, 2019: Net income $ 2,289 Provision for income taxes 946 Income (loss) before taxes $ 5,956 $ (2,721 ) $ 3,235 Add: Non-general and administrative expense adjustments: Depreciation and amortization 5,213 4,335 9,548 Impairment and other lease charges (379 ) 41 (338 ) Interest expense 656 578 1,234 Closed restaurant rent expense, net of sublease income 1,144 280 1,424 Other expense (income), net 596 106 702 Stock-based compensation expense in restaurant wages 5 22 27 Total non-general and administrative expense adjustments 7,235 5,362 12,597 General and administrative expense adjustments: Stock-based compensation expense 577 188 765 Restructuring costs and retention bonuses 549 66 615 Total general and administrative expense adjustments 1,126 254 1,380 Adjusted EBITDA $ 14,317 $ 2,895 $ 17,212 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | The computation of basic and diluted EPS is as follows: Three Months Ended March 29, 2020 March 31, 2019 Basic and diluted EPS: Net income (loss) $ (7,317 ) $ 2,289 Less: income allocated to participating securities — 22 Net income (loss) available to common shareholders $ (7,317 ) $ 2,267 Weighted average common shares—basic 25,519,247 26,842,704 Restricted stock units — 2,373 Weighted average common shares—diluted 25,519,247 26,845,077 Earnings (loss) per common share—basic $ (0.29 ) $ 0.08 Earnings (loss) per common share—diluted (0.29 ) 0.08 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||
May 07, 2020USD ($) | Mar. 29, 2020USD ($)leasesegmentrestaurant | Mar. 31, 2019USD ($) | Dec. 29, 2019USD ($) | Nov. 30, 2017USD ($) | |
Entity Information [Line Items] | |||||
Number of operating segments | segment | 2 | ||||
Maximum aggregate revolving credit borrowings | $ | $ 150,000,000 | ||||
Borrowings on revolving credit facility | $ | $ 71,420,000 | $ 11,000,000 | |||
Number of leases with rent deferral agreements | lease | 1 | ||||
Minimum | |||||
Entity Information [Line Items] | |||||
Lease term | 20 years | ||||
Revolver | |||||
Entity Information [Line Items] | |||||
Revolving credit facility, outstanding balance | $ | $ 71,000,000 | $ 75,000,000 | |||
Revolver | Subsequent Event | |||||
Entity Information [Line Items] | |||||
Revolving credit facility, outstanding balance | $ | $ 146,500,000 | ||||
Borrowings on revolving credit facility | $ | $ 75,500,000 | ||||
Entity Operated Units | Pollo Tropical | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 141 | ||||
Entity Operated Units | Taco Cabana | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 146 | ||||
Franchised Units | Pollo Tropical | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 33 | ||||
Franchised Units | Pollo Tropical | Puerto Rico | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 17 | ||||
Franchised Units | Pollo Tropical | Panama | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 4 | ||||
Franchised Units | Pollo Tropical | Guyana | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 2 | ||||
Franchised Units | Pollo Tropical | Ecuador | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 1 | ||||
Franchised Units | Pollo Tropical | Bahamas | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 1 | ||||
Franchised Units | Pollo Tropical | Florida | College Campus | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 7 | ||||
Franchised Units | Pollo Tropical | Florida | Hospital | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 1 | ||||
Franchised Units | Taco Cabana | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 8 | ||||
Franchised Units | Taco Cabana | New Mexico | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 6 | ||||
Franchised Units | Taco Cabana | Texas | |||||
Entity Information [Line Items] | |||||
Number of restaurants | 2 |
Basis of Presentation - Fair Va
Basis of Presentation - Fair Value Disclosures (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Revolver | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of senior credit facility | $ 71 | $ 75 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of senior credit facility | $ 71 | $ 75 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) $ in Thousands | Mar. 29, 2020USD ($)restaurant | Dec. 29, 2019USD ($)restaurant |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid contract expenses | $ 4,369 | $ 4,410 |
Assets held for sale | 4,110 | 4,110 |
Other | 3,243 | 2,085 |
Prepaid expenses and other current assets | $ 11,722 | $ 10,605 |
Pollo Tropical | ||
Property, Plant and Equipment [Line Items] | ||
Restaurant properties classified as held for sale | restaurant | 1 | 1 |
Taco Cabana | ||
Property, Plant and Equipment [Line Items] | ||
Restaurant properties classified as held for sale | restaurant | 2 | 2 |
Impairment of Long-Lived Asse_3
Impairment of Long-Lived Assets and Other Lease Charges - Summary by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Impairment and Other Lease Charges [Line Items] | ||
Impairment and other lease charges | $ 4,233 | $ (338) |
Pollo Tropical | ||
Impairment and Other Lease Charges [Line Items] | ||
Impairment and other lease charges | 3,696 | (379) |
Taco Cabana | ||
Impairment and Other Lease Charges [Line Items] | ||
Impairment and other lease charges | $ 537 | $ 41 |
Impairment of Long-Lived Asse_4
Impairment of Long-Lived Assets and Other Lease Charges - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 29, 2020USD ($)restaurant | Mar. 31, 2019USD ($) | |
Level 3 | ||
Impairment and Other Lease Charges [Line Items] | ||
Assets measured at fair value associated with impairment charges | $ 3.4 | |
Pollo Tropical | ||
Impairment and Other Lease Charges [Line Items] | ||
Impairment charges | $ 3.7 | $ 0.4 |
Number of underperforming restaurants | restaurant | 3 | |
Lease charge (recoveries) | $ (0.7) | |
Taco Cabana | ||
Impairment and Other Lease Charges [Line Items] | ||
Impairment charges | $ 0.5 | |
Number of underperforming restaurants | restaurant | 2 | |
COVID-19 Impact | Pollo Tropical | ||
Impairment and Other Lease Charges [Line Items] | ||
Number of underperforming restaurants | restaurant | 2 |
Other Liabilities - Current (De
Other Liabilities - Current (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Operating lease liabilities | $ 23,050 | $ 22,338 |
Accrued workers' compensation and general liability claims | 4,876 | 4,354 |
Sales and property taxes | 865 | 1,889 |
Accrued occupancy costs | 424 | 891 |
Other | 3,573 | 2,797 |
Other current liabilities | $ 32,788 | $ 32,269 |
Other Liabilities - Non-current
Other Liabilities - Non-current (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Accrued workers' compensation and general liability claims | $ 7,348 | $ 7,348 |
Deferred compensation | 427 | 424 |
Accrued occupancy costs | 78 | 78 |
Other | 531 | 555 |
Other non-current liabilities | $ 8,384 | $ 8,405 |
Other Liabilities - Narrative (
Other Liabilities - Narrative (Details) - Closed Stores - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 | Dec. 30, 2018 |
Restructuring Cost and Reserve [Line Items] | |||
Closed-restaurant reserve | $ 395 | $ 752 | $ 8,819 |
Other Liabilities, Non-current | |||
Restructuring Cost and Reserve [Line Items] | |||
Closed-restaurant reserve | $ 100 | $ 100 |
Other Liabilities - Closed-Rest
Other Liabilities - Closed-Restaurant Reserve (Details) - Closed Stores - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 29, 2020 | Dec. 29, 2019 | |
Activity in the Closed-Restaurant Reserve | ||
Balance, beginning of period | $ 752 | $ 8,819 |
Payments, net | (228) | (1,405) |
Other adjustments | (129) | (6,662) |
Balance, end of period | $ 395 | 752 |
Operating lease rental payments | $ 6,000 |
Stockholders' Equity - Purchase
Stockholders' Equity - Purchase of Treasury Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | Feb. 26, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized to be repurchased | 3,000,000 | |||
Treasury stock purchases (in shares) | 500,000 | 158,269 | ||
Treasury stock purchases | $ 3,728 | $ 2,199 | ||
Share Repurchase Program 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized to be repurchased | 1,500,000 | |||
Share Repurchase Program 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized to be repurchased | 1,500,000 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 0.8 | $ 0.8 | |
Unrecognized stock-based compensation expense | $ 4.6 | ||
Nonvested Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted in period | 183,426 | ||
Weighted average grant date fair value, grants in period (usd per share) | $ 8.99 | ||
Share-based compensation cost not yet recognized, period for recognition | 2 years 10 months 24 days | ||
Nonvested Restricted Shares | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted in period | 183,426 | ||
Vesting period | 4 years | ||
Weighted average grant date fair value, grants in period (usd per share) | $ 8.99 | $ 13.44 | |
Nonvested Restricted Shares | Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted in period | 0 | ||
Weighted average grant date fair value, grants in period (usd per share) | $ 0 | ||
Share-based compensation cost not yet recognized, period for recognition | 10 months 24 days | ||
Market Performance-Based Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value, grants in period (usd per share) | $ 1.76 | ||
Market Performance-Based Restricted Stock Units (RSUs) | Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value, grants in period (usd per share) | $ 1.76 |
Stockholders' Equity - Non-vest
Stockholders' Equity - Non-vested Restricted Shares and Restricted Stock Units Activity (Details) | 3 Months Ended |
Mar. 29, 2020$ / sharesshares | |
Non-Vested Shares | |
Non-vested Restricted Shares and Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 355,605 |
Granted (in shares) | shares | 183,426 |
Vested and released (in shares) | shares | (73,251) |
Forfeited (in shares) | shares | (11,148) |
Outstanding at end of period (in shares) | shares | 454,632 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (usd per share) | $ / shares | $ 15.47 |
Granted (usd per share) | $ / shares | 8.99 |
Vested and released (usd per share) | $ / shares | 19.03 |
Forfeited (usd per share) | $ / shares | 14.11 |
Outstanding at end of period (usd per share) | $ / shares | $ 12.31 |
Restricted Stock Units | |
Non-vested Restricted Shares and Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 176,362 |
Granted (in shares) | shares | 0 |
Vested and released (in shares) | shares | (747) |
Forfeited (in shares) | shares | (607) |
Outstanding at end of period (in shares) | shares | 175,008 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (usd per share) | $ / shares | $ 9.42 |
Granted (usd per share) | $ / shares | 0 |
Vested and released (usd per share) | $ / shares | 32.44 |
Forfeited (usd per share) | $ / shares | 24.86 |
Outstanding at end of period (usd per share) | $ / shares | $ 9.27 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units Subject to Market Conditions (Details) - Market Performance-Based Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 29, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date stock price (usd per share) | $ 14.66 |
Fair value at grant date (usd per share) | $ 1.76 |
Risk free interest rate | 2.53% |
Expected term (in years) | 2 years |
Dividend yield | 0.00% |
Expected volatility | 43.18% |
Business Segment Information -
Business Segment Information - Segment Reporting Information, by Segment (Details) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020USD ($)segment | Mar. 31, 2019USD ($) | Dec. 29, 2019USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Revenues | $ 146,699 | $ 165,852 | |
Cost of sales | 46,276 | 50,510 | |
Restaurant wages and related expenses | 40,495 | 45,036 | |
Restaurant rent expense | 11,339 | 11,745 | |
Other restaurant operating expenses | 21,511 | 21,763 | |
Advertising expense | 5,783 | 5,521 | |
General and administrative expense | 14,384 | 15,071 | |
Adjusted EBITDA | 7,873 | 17,212 | |
Depreciation and amortization | 9,430 | 9,548 | |
Capital expenditures | 6,083 | 11,537 | |
Identifiable assets | 559,030 | $ 568,641 | |
Stock-based compensation expense | 800 | 800 | |
Restaurant Wages And Related Expenses | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 36 | 27 | |
General and Administrative Expense | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 776 | 765 | |
Restaurant sales | |||
Segment Reporting Information [Line Items] | |||
Revenues | 146,086 | 165,181 | |
Franchise revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | 613 | 671 | |
Operating Segments | Pollo Tropical | |||
Segment Reporting Information [Line Items] | |||
Cost of sales | 27,731 | 28,298 | |
Restaurant wages and related expenses | 21,037 | 21,153 | |
Restaurant rent expense | 5,640 | 5,421 | |
Other restaurant operating expenses | 12,386 | 11,958 | |
Advertising expense | 3,504 | 3,032 | |
General and administrative expense | 7,488 | 8,347 | |
Adjusted EBITDA | 8,780 | 14,317 | |
Depreciation and amortization | 5,278 | 5,213 | |
Capital expenditures | 3,281 | 7,145 | |
Identifiable assets | 339,684 | 340,012 | |
Operating Segments | Pollo Tropical | Restaurant Wages And Related Expenses | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 11 | 5 | |
Operating Segments | Pollo Tropical | General and Administrative Expense | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 310 | 577 | |
Operating Segments | Pollo Tropical | Restaurant sales | |||
Segment Reporting Information [Line Items] | |||
Revenues | 85,721 | 91,026 | |
Operating Segments | Pollo Tropical | Franchise revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | 404 | 455 | |
Operating Segments | Taco Cabana | |||
Segment Reporting Information [Line Items] | |||
Cost of sales | 18,545 | 22,212 | |
Restaurant wages and related expenses | 19,458 | 23,883 | |
Restaurant rent expense | 5,699 | 6,324 | |
Other restaurant operating expenses | 9,125 | 9,805 | |
Advertising expense | 2,279 | 2,489 | |
General and administrative expense | 6,896 | 6,724 | |
Adjusted EBITDA | (907) | 2,895 | |
Depreciation and amortization | 4,152 | 4,335 | |
Capital expenditures | 2,600 | 4,037 | |
Identifiable assets | 189,898 | 195,883 | |
Operating Segments | Taco Cabana | Restaurant Wages And Related Expenses | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 25 | 22 | |
Operating Segments | Taco Cabana | General and Administrative Expense | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation expense | 466 | 188 | |
Operating Segments | Taco Cabana | Restaurant sales | |||
Segment Reporting Information [Line Items] | |||
Revenues | 60,365 | 74,155 | |
Operating Segments | Taco Cabana | Franchise revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | 209 | 216 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Cost of sales | 0 | 0 | |
Restaurant wages and related expenses | 0 | 0 | |
Restaurant rent expense | 0 | 0 | |
Other restaurant operating expenses | 0 | 0 | |
Advertising expense | 0 | 0 | |
General and administrative expense | 0 | 0 | |
Adjusted EBITDA | 0 | 0 | |
Depreciation and amortization | 0 | 0 | |
Capital expenditures | 202 | 355 | |
Identifiable assets | 29,448 | $ 32,746 | |
Other | Restaurant sales | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | |
Other | Franchise revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 0 | $ 0 |
Business Segment Information _2
Business Segment Information - Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net income (loss) | $ (7,317) | $ 2,289 |
Provision for (benefit from) income taxes | (3,005) | 946 |
Income (loss) before income taxes | (10,322) | 3,235 |
Non-general and administrative expense adjustments: | ||
Depreciation and amortization | 9,430 | 9,548 |
Impairment and other lease charges | 4,233 | (338) |
Interest expense | 961 | 1,234 |
Closed restaurant rent expense, net of sublease income | 1,632 | 1,424 |
Other expense (income), net | 908 | 702 |
Stock-based compensation expense in restaurant wages | 800 | 800 |
Total non-general and administrative expense adjustments | 17,200 | 12,597 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 800 | 800 |
Restructuring costs and retention bonuses | 615 | |
Digital and brand repositioning costs | 219 | |
Total general and administrative expense adjustments | 995 | 1,380 |
Adjusted EBITDA | 7,873 | 17,212 |
Restaurant Wages And Related Expenses | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 36 | 27 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 36 | 27 |
General and Administrative Expense | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 776 | 765 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 776 | 765 |
Pollo Tropical | ||
Non-general and administrative expense adjustments: | ||
Impairment and other lease charges | 3,696 | (379) |
Taco Cabana | ||
Non-general and administrative expense adjustments: | ||
Impairment and other lease charges | 537 | 41 |
Operating Segments | Pollo Tropical | ||
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | (1,827) | 5,956 |
Non-general and administrative expense adjustments: | ||
Depreciation and amortization | 5,278 | 5,213 |
Impairment and other lease charges | 3,696 | (379) |
Interest expense | 483 | 656 |
Closed restaurant rent expense, net of sublease income | 602 | 1,144 |
Other expense (income), net | 107 | 596 |
Total non-general and administrative expense adjustments | 10,177 | 7,235 |
General and administrative expense adjustments: | ||
Restructuring costs and retention bonuses | 549 | |
Digital and brand repositioning costs | 120 | |
Total general and administrative expense adjustments | 430 | 1,126 |
Adjusted EBITDA | 8,780 | 14,317 |
Operating Segments | Pollo Tropical | Restaurant Wages And Related Expenses | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 11 | 5 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 11 | 5 |
Operating Segments | Pollo Tropical | General and Administrative Expense | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 310 | 577 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 310 | 577 |
Operating Segments | Taco Cabana | ||
Segment Reporting Information [Line Items] | ||
Income (loss) before income taxes | (8,495) | (2,721) |
Non-general and administrative expense adjustments: | ||
Depreciation and amortization | 4,152 | 4,335 |
Impairment and other lease charges | 537 | 41 |
Interest expense | 478 | 578 |
Closed restaurant rent expense, net of sublease income | 1,030 | 280 |
Other expense (income), net | 801 | 106 |
Total non-general and administrative expense adjustments | 7,023 | 5,362 |
General and administrative expense adjustments: | ||
Restructuring costs and retention bonuses | 66 | |
Digital and brand repositioning costs | 99 | |
Total general and administrative expense adjustments | 565 | 254 |
Adjusted EBITDA | (907) | 2,895 |
Operating Segments | Taco Cabana | Restaurant Wages And Related Expenses | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 25 | 22 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | 25 | 22 |
Operating Segments | Taco Cabana | General and Administrative Expense | ||
Non-general and administrative expense adjustments: | ||
Stock-based compensation expense in restaurant wages | 466 | 188 |
General and administrative expense adjustments: | ||
Stock-based compensation expense | $ 466 | $ 188 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2019shares | Mar. 29, 2020 | |
Earnings Per Share [Abstract] | ||
Nonvested restricted shares right to receive dividends, per share ratio to common shares | 1 | |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0 |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Basic and diluted EPS: | ||
Net income (loss) | $ (7,317) | $ 2,289 |
Less: income allocated to participating securities | 0 | 22 |
Net income (loss) available to common shareholders | $ (7,317) | $ 2,267 |
Weighted average common shares—basic | 25,519,247 | 26,842,704 |
Restricted stock units (in shares) | 0 | 2,373 |
Weighted average common shares—diluted | 25,519,247 | 26,845,077 |
Earnings per common share—basic (usd per share) | $ (0.29) | $ 0.08 |
Earnings per common share—diluted (usd per share) | $ (0.29) | $ 0.08 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Assignments (Details) $ in Millions | Mar. 29, 2020USD ($)lease |
Loss Contingencies [Line Items] | |
Maximum potential liability for future rental payments | $ | $ 3.1 |
Taco Cabana | |
Loss Contingencies [Line Items] | |
Number of leases assigned | 2 |
Pollo Tropical | |
Loss Contingencies [Line Items] | |
Number of leases assigned | 1 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 29, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Incremental tax benefit | $ 1.8 |