Carrols Restaurant Group, Inc. Reports Financial Results for the Third Quarter of 2013

  Carrols Restaurant Group, Inc. Reports Financial Results for the Third
  Quarter of 2013

Business Wire

SYRACUSE, N.Y. -- November 5, 2013

Carrols Restaurant Group, Inc. ("Carrols" or the “Company”) (Nasdaq:TAST)
today announced financial results for the third quarter ended September29,
2013.

Highlights for the third quarter of 2013 versus the third quarter of 2012
include:

  *Restaurant sales were $168.3 million compared to $169.5 million in the
    prior year and decreased 0.7% due to eight fewer restaurants in operation;
  *Comparable restaurant sales increased 0.4% compared to a 6.2% increase in
    the prior year period, marking nine consecutive quarters of positive
    comparable restaurant sales growth. Comparable restaurant sales increased
    0.6% at legacy restaurants and increased 0.2% at the restaurants acquired
    in May 2012;
  *Net loss from continuing operations was $2.8 million, or $0.12 per diluted
    share, compared to a net loss from continuing operations of $6.3 million,
    or $0.28 per diluted share, in the prior year period;
  *Net loss from continuing operations included a charge of $1.1 million
    ($0.03 per diluted share after tax) related to impairment charges. Net
    loss from continuing operations in the prior year period included
    integration costs related to the acquisition and costs related to the EEOC
    litigation settled in early 2013, which were approximately $5.3 million in
    total ($0.14 per diluted share after tax); and
  *Adjusted EBITDA, a non-GAAP measure, increased 10% to $10.1 million from
    $9.2 million in the prior year period. (Please refer to the reconciliation
    of Adjusted EBITDA to net loss from continuing operations in the tables at
    the end of this release).

As of September29, 2013, Carrols owned and operated 564 BURGER KING®
restaurants.

Daniel T. Accordino, Chief Executive Officer of Carrols Restaurant Group, Inc.
said, “Our increased restaurant-level profitability and higher operating
margins demonstrate our progress over the past year in improving operating
performance at the acquired restaurants while continuing to maintain strong
margins at our legacy restaurants. The contribution from the acquired
restaurants was reflected in both an increase in Adjusted EBITDA and a
reduction in our net loss from continuing operations versus the prior year
period. In addition, comparable restaurant sales remained positive despite
general weakness in consumer spending, heightened competition within the QSR
segment, and a difficult 6.2% comparison to the prior year.”

Accordino concluded, “We have lowered our full year sales projection slightly
to reflect our third quarter results. However, October sales trends have
reaccelerated and we expect fourth quarter comparable restaurant sales to
increase 2.0% to 2.5% as we finish the year.”

Third Quarter 2013 Financial Results

Restaurant sales decreased 0.7% to $168.3 million in the third quarter of 2013
compared to $169.5 million in the third quarter of 2012 due to eight fewer
restaurants in operation at the end of the third quarter of this year.
Comparable restaurant sales increased 0.4% on an overall basis including an
increase of 0.6% at legacy restaurants and a 0.2% increase at acquired
restaurants. Average check was 0.1% lower due to higher promotional activity
but was more than offset by an increase in customer traffic of 0.5%.

Adjusted EBITDA, a non-GAAP measure, was $10.1 million in the third quarter of
2013, or 6.0% of restaurant sales, compared to $9.2 million in the third
quarter of 2012, or 5.4% of restaurant sales. The improvement in Adjusted
EBITDA margin reflected a 1.8% decrease in cost of sales (as a percentage of
restaurant sales) due to favorable sales mix changes and performance
improvements at both legacy and acquired restaurants, offset in part by the
effect of higher promotional activity and commodity increases. A number of
other restaurant operating costs were also favorably leveraged in the quarter
due to cost improvements at the acquired restaurants.

General and administrative expenses were $8.7 million in the third quarter of
2013, or 5.2% of restaurant sales, compared to $9.3 million in the third
quarter of 2012, or 5.5% of restaurant sales. Such expenses in 2012 included
$1.9 million related to the EEOC litigation settled in early 2013 and $0.5
million of integration costs related to the acquisition.

Interest expense was $4.7 million in the third quarter of 2013 compared to
$4.5 million in the third quarter of 2012.

Net loss from continuing operations in the third quarter of 2013 was $2.8
million, or $0.12 per diluted share, including impairment charges of $1.1
million, or $0.03 per diluted share after tax. Net loss from continuing
operations in the third quarter of 2012 was $6.3 million, or $0.28 per diluted
share, including integration costs related to the acquisition and EEOC
litigation costs of $5.3 million in total, or $0.14 per diluted share after
tax.

2013 Guidance

Carrols has updated its prior guidance for 2013 to the following:

  *Total restaurant sales of $660 million to $665 million ($660 million to
    $680 million previously) including a comparable restaurant sales increase
    of 2.0% to 2.5% in the fourth quarter;
  *A commodity cost increase of 1% to 2%;
  *General and administrative expenses of approximately $36 million
    (excluding stock compensation costs);
  *An effective income tax benefit of 42% to 45% including the carryover
    benefit for 2012 WOTC credits;
  *Capital expenditures of approximately $50 million to $52 million ($45
    million to $50 million previously) including $40 million to $42 million
    for remodeling 110 to 115 restaurants, 93 of which were completed during
    the first nine months of the year. Estimated remodeling expenditures
    include approximately $6.5 million for the relocation of two restaurants
    to new sites and for costs to scrape and completely rebuild four
    restaurants; and
  *Approximately ten restaurant closures for the year (excluding the two
    restaurant relocations).

Conference Call Today

Daniel T. Accordino, Chief Executive Officer, and Paul Flanders, Chief
Financial Officer, will host a conference call to discuss third quarter 2013
financial results today at 8:30 AM ET.

The conference call can be accessed live over the phone by dialing
877-941-4774 or for international callers by dialing 480-629-9760. A replay
will be available one hour after the call and can be accessed by dialing
800-406-7325 or for international callers by dialing 303-590-3030; the
passcode is 4646528. The replay will be available until Tuesday, November 12,
2013. The call will also be webcast live from www.carrols.com under the
investor relations section.

About the Company

Carrols Restaurant Group, Inc. is Burger King Corporation's largest
franchisee, globally, with 564 BURGER KING® restaurants as of September29,
2013 and has operated BURGER KING® restaurants since 1976. For more
information on Carrols, please visit the company's website at www.carrols.com.

Forward-Looking Statements

Except for the historical information contained in this news release, the
matters addressed are forward-looking statements. Forward-looking statements,
written, oral or otherwise made, represent Carrols' expectation or belief
concerning future events. Without limiting the foregoing, these statements are
often identified by the words "may", "might", "believes", "thinks",
"anticipates", "plans", "expects", "intends" or similar expressions. In
addition, expressions of our strategies, intentions or plans are also
forward-looking statements. Such statements reflect management's current views
with respect to future events and are subject to risks and uncertainties, both
known and unknown. You are cautioned not to place undue reliance on these
forward-looking statements as there are important factors that could cause
actual results to differ materially from those in forward-looking statements,
many of which are beyond our control. Investors are referred to the full
discussion of risks and uncertainties as included in Carrols' filings with the
Securities and Exchange Commission.

                                              
Carrols Restaurant Group, Inc.

Consolidated Statements of Operations

(in thousands except per share amounts)
                                                   
                   (unaudited)                     (unaudited)
                   Three Months Ended (a)          Nine Months Ended (a)
                   September     September       September     September
                   29,             30,             29,             30,
                   2013            2012            2013            2012
Restaurant         $ 168,312       $ 169,471       $ 497,969       $ 377,025
sales
Costs and
expenses:
Cost of sales      51,125          54,456          152,626         119,455
Restaurant
wages and          52,395          53,494          156,727         118,808
related
expenses
Restaurant
rent expense       11,779          12,209          35,357          25,824
(d)
Other
restaurant         26,973          28,820          80,756          60,684
operating
expenses
Advertising        7,476           7,837           22,496          15,137
expense
General and
administrative     8,740           9,331           27,342          23,611
expenses (b)
Depreciation
and                8,536           7,695           24,990          18,537
amortization
(d)
Impairment and
other lease        1,079           125             3,907           252
charges
Other income       —              (236      )     (185      )     (236      )
Total costs        168,103        173,731        504,016        382,072   
and expenses
Income (loss)
from               209             (4,260    )     (6,047    )     (5,047    )
operations
Interest           4,708           4,492           14,130          8,053
expense (d)
Loss on
extinguishment     —              —              —              1,509     
of debt
Loss from
continuing
operations         (4,499    )     (8,752    )     (20,177   )     (14,609   )
before income
taxes
Benefit for
income taxes       (1,737    )     (2,412    )     (8,720    )     (4,587    )
(d)
Income from
continuing         (2,762    )     (6,340    )     (11,457   )     (10,022   )
operations
Income (loss)
from
discontinued       —              (2        )     —              42        
operations,
net of tax
Net loss           $ (2,762  )     $ (6,342  )     $ (11,457 )     $ (9,980  )
                                                                   
Diluted net
income (loss)
per share:
Continuing         $ (0.12   )     $ (0.28   )     $ (0.50   )     $ (0.44   )
operations
Discontinued       $ —             $ —             $ —             $ —
operations
Diluted
weighted
average common     23,021          22,747          22,930          22,525
shares
outstanding
(c)
                                                                             

      The Company uses a 52 or 53 week fiscal year that ends on the Sunday
(a)  closest to December 31. The three and nine months ended September 29,
      2013 and September 30, 2012 each included thirteen and thirty nine
      weeks, respectively.
      General and administrative expenses include stock-based compensation
      expense of $302 and $309 for the three months ended September 29, 2013
      and September 30, 2012, respectively, and $899 and $588 for the nine
      months ended September 29, 2013 and September 30, 2012, respectively.
      General and administrative expenses for the nine months ended September
      29, 2013 also included $85 of costs related to the Company's litigation
(b)   with the EEOC that was settled in January 2013. General and
      administrative expenses for the three and nine months ended months ended
      September 30, 2012 also included $0 and $4,647, respectively, of
      expenses incurred in connection with the acquisition and integration of
      the Burger King restaurants from Burger King Corporation, and $1,938 and
      $2,707, respectively of costs related to the Company's litigation with
      the EEOC settled in early 2013.
      Shares issuable for convertible preferred stock and non-vested
(c)   restricted stock were not included in the computation of diluted net
      loss per share because their effect would have been anti-dilutive for
      the periods presented.
      In the fourth quarter of 2012, the Company finalized its allocation of
      the purchase price for the acquisition of 278 Burger King restaurants
      from Burger King Corporation, to the tangible and identifiable
      intangible assets acquired and liabilities assumed with the acquisition.
      Adjustments were primarily related to changes in the valuations in the
(d)   preliminary appraisals of identifiable intangible assets, tangible
      assets, the Company's determination of the fair value of restaurant
      equipment and leasehold improvements and the valuation of favorable and
      unfavorable lease arrangements. The three and nine month information
      herein has been recast to reflect the impact of the fair value
      adjustments for the acquisition as if they had originally been recorded
      on May 30, 2012.
      

                        Carrols Restaurant Group, Inc.
                           Supplemental Information

The following table sets forth certain unaudited supplemental financial and
other data for the periods indicated (in thousands, except number of
restaurants, percentages and average weekly sales per restaurant):

                (unaudited)                      (unaudited)
                  Three Months Ended (a)            Nine Months Ended (a)
                  September 29,   September       September       September
                                    30,             29,              30,
                  2013              2012            2013             2012
Restaurant
Sales: (a)
Legacy            $  94,307         $  94,405       $ 275,383        $ 274,489
restaurants
Acquired          74,005           75,066         222,586         102,536
restaurants
Total
restaurant        $  168,312       $  169,471     $ 497,969       $ 377,025
sales
Change in
Comparable        0.4         %     6.2        %    0.7        %     7.0
Restaurant
Sales (b)
Adjusted          10,126            9,207           23,834           21,684
EBITDA (c)
Adjusted
EBITDA margin     6.0         %     5.4        %    4.8        %     5.8
(c)
Average
Weekly Sales
per
Restaurant:
(d)
Legacy            25,069            24,833          24,222           23,919
restaurants
Acquired          21,008            20,804          20,901           21,061
restaurants
Expenses -
Legacy
Restaurants:
(e)
Cost of sales     29.7        %     30.0       %    29.7       %     30.6
Restaurant
wages and         29.9        %     29.5       %    30.5       %     30.7
related
expenses
Restaurant        6.0         %     6.2        %    6.2        %     6.3
rent expense
Other
restaurant        14.9        %     14.7       %    15.1       %     15.0
operating
expenses
Advertising       4.3         %     4.4        %    4.3        %     3.8
expense
Expenses -
Acquired
Restaurants:
(e)
Cost of sales     31.2        %     34.8       %    31.8       %     34.7
Restaurant
wages and         32.6        %     34.2       %    32.6       %     33.7
related
expenses
Restaurant        8.2         %     8.5        %    8.2        %     8.3
rent expense
Other
restaurant        17.4        %     19.9       %    17.6       %     19.0
operating
expenses
Advertising       4.7         %     5.0        %    4.8        %     4.7
expense
Number of
Restaurants:
Restaurants
at beginning      566               574             572              298
of period
New               —                 —               —                —
restaurants
Acquired          —                 —               —                278
restaurants
Closed            (2          )     (2         )    (8         )     (4
restaurants
Restaurants
at end of         564              572            564             572
period
                                                                   
                                                    At             At
                                                    9/29/2013      12/30/2012
Long-term Debt (f)                                  $ 160,705      $ 161,492
Cash (including $20 million of restricted cash)     33,317         58,290
                                                                   

      Acquired restaurants represent the Burger King restaurants acquired from
(a)  Burger King Corporation on May 30, 2012. Legacy restaurants refer to the
      Company's Burger King restaurants other than the acquired restaurants.
(b)   Restaurants are generally included in comparable restaurant sales after
      they have been open or owned for 12 months.
      EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP
      financial measures and may not necessarily be comparable to other
      similarly titled captions of other companies due to differences in
(c)   methods of calculation. Refer to the Company's reconciliation of EBITDA
      and Adjusted EBITDA to net loss from continuing operations for further
      detail. Adjusted EBITDA Margin represents Adjusted EBITDA as a
      percentage of total restaurant sales.
(d)   Average weekly restaurant sales are derived by dividing restaurant sales
      by the average number of restaurants operating during the period.
(e)   Represents restaurant expenses as a percentage of sales for the
      respective group of restaurants.
      Long-term debt (including current portion) at September 29, 2013
      included $150,000 of the Company's 11.25% Senior Secured Second Lien
      Notes, $1,199 of lease financing obligations and $9,506 of capital lease
(f)   obligations. Long-term debt (including current portion) at December 30,
      2012 included $150,000 of the Company's 11.25% Senior Secured Second
      Lien Notes, $1,197 of lease financing obligations and $10,295 of capital
      lease obligations.
      

                                              
Carrols Restaurant Group, Inc.

EBITDA and Adjusted EBITDA GAAP Reconciliation
                                                   
                    (unaudited)                    (unaudited)
                    Three Months Ended (a)         Nine Months Ended (a)
                    September     September      September     September
                    29,             30,            29,             30,
                    2013            2012           2013            2012
EBITDA and
Adjusted
EBITDA: (a)
Net loss from
continuing          $  (2,762 )     $ (6,340 )     $ (11,457 )     $ (10,022 )
operations
Benefit for         (1,737    )     (2,412   )     (8,720    )     (4,587    )
income taxes
Interest            4,708           4,492          14,130          8,053
expense
Depreciation
and                 8,536          7,695         24,990         18,537    
amortization
EBITDA              8,745           3,435          18,943          11,981
Impairment and
other lease         1,079           125            3,907           252
charges
Acquisition and
integration         —               3,400          —               4,647
costs
EEOC litigation
and settlement      —               1,938          85              2,707
costs
Stock
compensation        302             309            899             588
expense
Loss on
extinguishment      —              —             —              1,509     
of debt
Adjusted EBITDA     $  10,126      $ 9,207       $ 23,834       $ 21,684  
                                                                             

      EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA
      represents net loss from continuing operations, before benefit for
      income taxes, interest expense and depreciation and amortization.
      Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and
      other lease charges, acquisition and integration costs, EEOC litigation
      and settlement costs, stock compensation expense and loss on
      extinguishment of debt. Management excludes these items from EBITDA when
      evaluating the Company's operating performance and believes that
      Adjusted EBITDA provides a more meaningful comparison than EBITDA of the
      Company's core business operating results, as well as with those of
      other similar companies. Management believes that EBITDA and Adjusted
      EBITDA, when viewed with the Company's results of operations calculated
      in accordance with GAAP and the accompanying reconciliation in the table
(a)  above, provide useful information about operating performance and
      period-over-period growth, and provide additional information that is
      useful for evaluating the operating performance of the Company's core
      business without regard to potential distortions. Additionally,
      management believes that EBITDA and Adjusted EBITDA permit investors to
      gain an understanding of the factors and trends affecting our ongoing
      cash earnings, from which capital investments are made and debt is
      serviced. However, EBITDA and Adjusted EBITDA are not measures of
      financial performance or liquidity under GAAP and, accordingly, should
      not be considered as alternatives to net income (loss) or cash flow from
      operating activities as indicators of operating performance or
      liquidity. Also, these measures may not be comparable to similarly
      titled captions of other companies. The table above provides a
      reconciliation between net loss from continuing operations and EBITDA
      and Adjusted EBITDA.

Contact:

Carrols Restaurant Group, Inc.
Investor Relations:
800-348-1074, ext. 3333
investorrelations@carrols.com