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Fiesta Restaurant Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

  Fiesta Restaurant Group, Inc. Reports Fourth Quarter and Full Year 2013
  Results

Business Wire

ADDISON, Texas -- February 25, 2014

Fiesta Restaurant Group, Inc. (“Fiesta” or the “Company”) (NASDAQ:FRGI), the
owner, operator, and franchisor of the Pollo Tropical® and Taco Cabana®
fast-casual restaurant brands, today reported results for the fourth quarter
and the full year 2013, which ended on December 29, 2013.

Highlights of fourth quarter 2013 results include:

  *Total revenues increased 7.6% to $136.2 million;
  *Comparable restaurant sales increased 7.0% and comparable restaurant guest
    traffic increased 3.8% at Pollo Tropical;
  *Comparable restaurant sales decreased 2.9% and comparable restaurant guest
    traffic decreased 3.4% at Taco Cabana, negatively affected by unfavorable
    weather and a slowed remodeling schedule;
  *Two Company-owned Pollo Tropical restaurants and one Company-owned Taco
    Cabana restaurant were opened;
  *The fourth quarter 2013 included a pre-tax charge of $16.4 million, or
    $0.42 per share after tax, related to the early extinguishment of debt,
    resulting in a net loss of $5.6 million, or $0.22 per share (on a base of
    24.3 million shares), compared to net income of $2.6 million, or $0.11 per
    share (on a base of 22.7 million shares), in the fourth quarter of 2012;
  *Adjusted net income increased $2.2 million to $4.9 million, or $0.20 per
    share, compared to adjusted net income of $2.7 million, or $0.12 per
    share, in the fourth quarter of 2012 (see non-GAAP reconciliation table
    below); and
  *Raised $135.3 million in net proceeds from an equity offering and secured
    a new $150 million senior secured revolving credit facility to reduce
    outstanding debt by $129.0 million to $71.0 million at quarter end and
    reduce the interest rate on the Company’s long-term borrowings from 8.88%
    to a weighted average rate of 2.25% at quarter end.

Highlights of the full year 2013 results include:

  *Revenues increased 8.2% to $551.3 million;
  *Comparable restaurant sales increased 5.9% and comparable guest traffic
    increased 2.7% at Pollo Tropical;
  *Comparable restaurant sales increased 0.5% and comparable guest traffic
    decreased 1.1% at Taco Cabana, negatively affected by unfavorable weather
    and a slowed remodeling schedule;
  *18 Company-owned restaurants were opened in 2013, including 12 Pollo
    Tropical and six Taco Cabana restaurants;
  *2013 net income increased $1.0 million to $9.3 million, or $0.39 per share
    (on a base of 23.3 million shares), compared to $8.3 million, or $0.35 per
    share (on a base of 22.9 million shares), in 2012; and
  *2013 adjusted net income increased $6.0 million to $20.2 million, or $0.84
    per share, compared to $14.1 million in 2012, or $0.60 per share, in 2012
    (see non-GAAP reconciliation table below).

Fiesta President and Chief Executive Officer Tim Taft commented, “The fourth
quarter marked the completion of a transformative year at Fiesta and we are
proud of the many accomplishments our teams have produced. Our quarterly
financial results were solid in large part due to Pollo’s performance and,
despite weather challenges at Taco Cabana, we significantly expanded
restaurant-level EBITDA and increased adjusted EPS on a larger share base. We
also completed the administrative transition from our former parent company 18
months ahead of the original schedule, reduced and refinanced our outstanding
debt, and issued new equity.”

Taft continued, “Our development strategy is centered on aggressive expansion
of Pollo Tropical westward while backfilling existing southeastern markets to
achieve media efficiency. This year we will nearly double the number of
Company-owned Pollo Tropical openings including restaurants across four Texas
cities with a completely reworked prototype. We are also introducing an
elevated Taco Cabana concept in Atlanta named Cabana Grill^TM that will
feature an updated menu, softer color scheme, and new service model.”

Taft concluded, “I believe our management team of corporate and brand leaders
have solidified Fiesta for ongoing, successful execution of our business
plan.”

Fourth Quarter 2013 Financial Review

Consolidated Results

Total revenues increased 7.6% in the fourth quarter of 2013 to $136.2 million
from $126.6 million in the fourth quarter of 2012. Restaurant sales in the
fourth quarter of 2013 increased 7.6% to $135.5 million from $125.9 million in
the fourth quarter of 2012 due to the opening of new Company-owned restaurants
and comparable restaurant sales growth at Pollo Tropical, which was partially
offset by a comparable restaurant sales decline at Taco Cabana due largely to
unfavorable weather.

Cost of sales decreased as a percentage of restaurant sales in the fourth
quarter of 2013 compared to the prior year period as supply chain management
initiatives and modest price increases mitigated commodity cost increases.

Restaurant wages and related expenses improved as a percentage of restaurant
sales in the fourth quarter of 2013 compared to the prior year period due
primarily to the favorable impact of sales increases on fixed costs and lower
medical and other benefits costs.

Other restaurant operating expenses increased slightly as a percentage of
restaurant sales in the fourth quarter of 2013 compared to the prior year
period due primarily to higher insurance costs. Pre-opening costs were $0.4
million compared to $0.6 million in the prior year period due to the timing of
expenses for future openings. Rent expense increased as a percentage of
restaurant sales as a consequence of new Company-owned restaurant openings and
sale-leasebacks completed during the year.

Advertising expense decreased as a percentage of restaurant sales in the
fourth quarter of 2013 compared to the prior year period due primarily to the
timing of promotions and a reduction in advertising given adverse weather
conditions.

General and administrative expenses increased $1.6 million to $12.6 million in
the fourth quarter of 2013 from $11.1 million in the fourth quarter of 2012,
due primarily to Fiesta employee additions and costs incurred related to
completing the transition of various functions from the Company's former
parent company, Carrols Restaurant Group, Inc.

Depreciation and amortization increased to $5.3 million in the fourth quarter
of 2013 compared to $4.6 million in the prior year period. This increase was
due to new Company-owned restaurant development as well as restaurant
remodeling expenditures.

Interest expense decreased $1.5 million to $3.6 million in the fourth quarter
of 2013 from $5.1 million in the fourth quarter 2012 due to the reduction in
Fiesta’s outstanding debt and a lower interest rate on our borrowings under
the new senior credit facility.

Loss on extinguishment of debt in the fourth quarter of 2013 of $16.4 million
was related to the repurchase and redemption of the 8.875% Senior Secured
Second Lien Notes due 2016, and included a write-off of $3.9 million in
deferred financing costs and $12.5 million of debt redemption premiums,
consent payments, additional interest and other fees.

The effective tax rate for 2013 decreased to 29.1% as compared to an effective
tax rate for 2012 of 34.2%, due primarily to the effect of the Work
Opportunity Tax Credit that was renewed in early 2013. The 2013 effective tax
rate also includes the positive impacts of discrete items, which include the
retroactive effect of renewing the 2012 Work Opportunity Tax Credit in 2013.

Net loss was $5.6 million, or $0.22 per share (on a base of 24.3 million
shares), compared to net income of $2.6 million, or $0.11 per share (on a base
of 22.7 million shares), in the fourth quarter of 2012. Net loss for the
fourth quarter of 2013 included a pre-tax charge of $16.4 million, or $0.42
per share after tax, related to the early extinguishment of debt.

Brand Results

Pollo Tropical restaurant sales increased 16.7% to $65.5 million in the fourth
quarter of 2013 from $56.1 million in the fourth quarter of 2012 due to a
comparable restaurant sales increase of 7.0% along with a net increase in the
number of Company-owned restaurants. This is the seventeenth consecutive
quarter the brand has delivered comparable restaurant sales growth and, on a
two year basis, fourth quarter comparable restaurant sales grew 15.3%. The
growth in comparable restaurant sales resulted from a 3.8% increase in
comparable restaurant guest traffic along with a 3.2% increase in average
check. Adjusted EBITDA for Pollo Tropical, a non-GAAP financial measure,
increased to $11.3 million in the fourth quarter of 2013 from $7.9 million in
the fourth quarter of 2012.

Taco Cabana restaurant sales increased 0.4% to $70.1 million in the fourth
quarter of 2013 from $69.8 million in the fourth quarter of 2012 due to a net
increase in the number of Company-owned restaurants that was largely offset by
a 2.9% decrease in comparable restaurant sales. Prior to this quarter, the
brand has delivered thirteen consecutive quarters of comparable restaurant
sales growth and, on a two year basis, fourth quarter comparable restaurant
sales grew 3.9%. The decrease in comparable restaurant sales resulted from a
decrease of 3.4% in comparable restaurant guest traffic due to unfavorable
weather conditions in Texas and a strategic slow-down of the number of
remodeled restaurants completed, partially offset by a 0.5% increase in
average check. Adjusted EBITDA for Taco Cabana, a non-GAAP financial measure,
decreased to $5.6 million in the fourth quarter of 2013 from $5.9 million in
the fourth quarter of 2012.

Full Year 2013 Financial Summary

Total revenues increased 8.2% to $551.3 million compared to $509.7 million in
the prior year period, driven by comparable restaurant sales growth of 5.9% at
Pollo Tropical and 0.5% at Taco Cabana. The growth in comparable restaurant
sales resulted from an increase in comparable restaurant guest traffic of 2.7%
at Pollo Tropical and an increase in average check of 3.2% at Pollo Tropical
and 1.6% at Taco Cabana, partially offset by a decrease in comparable
restaurant guest traffic of 1.1% at Taco Cabana.

Net income increased $1.0 million to $9.3 million, or $0.39 per share (on a
base of 23.3 million shares), compared to $8.3 million, or $0.35 per share (on
a base of 22.9 million shares), in 2012. Full year 2013 results included the
negative impact of a pre-tax charge of $16.4 million related to the early
extinguishment of debt, or $0.42 per share after tax. Full year 2012 results
included the impact of the spin-off from Carrols on May 7, 2012, and related
expenses, the establishment of a separate public company with a transitioning
infrastructure and senior management team, and impairment charges primarily
associated with the closure of Pollo Tropical restaurants in the New Jersey
market.

Restaurant Development

During the fourth quarter of 2013, Fiesta opened two new Company-owned Pollo
Tropical restaurants, one in the Atlanta market and one in the Tampa market,
and one new Company-owned Taco Cabana restaurant in the Austin market. In
addition, one international franchised Pollo Tropical restaurant in Panama was
opened during the quarter.

As of December 29, 2013, the Company owned and operated 102 Pollo Tropical
restaurants and 165 Taco Cabana restaurants and franchised 39 Pollo Tropical
restaurants in the U.S., Puerto Rico, the Bahamas, Costa Rica, Ecuador,
Honduras, India, Panama, Trinidad & Tobago, Venezuela and the Dominican
Republic, and seven Taco Cabana restaurants in the U.S.

Refinancing and Public Offering of Common Stock

On November 20, 2013, the Company completed an underwritten public offering of
its common stock, which included 3,078,336 shares of common stock issued and
sold by the Company.

On December 11, 2013, the Company entered into a new senior secured revolving
credit facility with a new syndicate of lenders, which provides for up to $150
million of revolving credit borrowings (including $15 million available for
letters of credit).

The Company used the net proceeds of the equity offering and revolving credit
borrowings under its new senior credit facility, to (i) repurchase and redeem
all of its $200 million of 8.875% Senior Secured Second Lien Notes due 2016
and (ii) pay fees and expenses related to the transactions.

Investor Conference Call Today

Fiesta will host a conference call to review fourth quarter and full year 2013
results today at 4:30 PM ET. Hosting the call will be President and Chief
Executive Officer Tim Taft and Vice President and Chief Financial Officer Lynn
Schweinfurth.

The conference call can be accessed live over the phone by dialing
877-795-3604 or for international callers by dialing 719-325-4853. A replay
will be available after the call and can be accessed by dialing 877-870-5176
or for international callers by dialing 858-384-5517; the passcode is 5697508.
The replay will be available until Tuesday, March 4, 2014.

The conference call will also be webcast live from the corporate website at
www.frgi.com, under the investor relations section. A replay of the webcast
will be available through the corporate website shortly after the call has
concluded.

About Fiesta Restaurant Group, Inc.

Fiesta Restaurant Group, Inc. owns, operates and franchises the Pollo
Tropical®and Taco Cabana® restaurant brands. The brands specialize in the
operation of fast-casual, ethnic restaurants that offer distinct and unique
flavors with broad appeal at a compelling value. Both brands feature
made-from-scratch cooking, fresh salsa bars, and drive-thru service and
catering. For more information about Fiesta Restaurant Group, Inc., visit the
corporate website at www.frgi.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 Fiesta's 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 Fiesta's 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 Fiesta's control. Investors are referred to the full
discussion of risks and uncertainties as included in Fiesta's filings with the
Securities and Exchange Commission.


Fiesta Restaurant Group, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)
(unaudited)
                                                
                   Three months ended (a)            Twelve months ended (a)
                   December 29,   December 30,     December 29,   December 30,
                   2013             2012             2013             2012
                                                                      
Revenues:
Restaurant         $  135,545       $  125,929       $  548,980       $  507,351
sales
Franchise
royalty            610             649             2,357           2,375      
revenues and
fees
Total revenues     136,155          126,578          551,337          509,726
Costs and
expenses:
Cost of sales      43,232           40,408           176,123          163,514
Restaurant
wages and          35,478           34,444           143,392          136,265
related
expenses (b)
Restaurant
rent expense       7,150            6,174            26,849           21,595
(c)
Other
restaurant         17,235           15,694           69,021           63,813
operating
expenses
Advertising        3,863            4,868            17,138           16,791
expense
General and
administrative     12,626           11,070           48,521           43,870
expenses
(b)(d)(e)
Depreciation
and                5,258            4,575            20,375           18,278
amortization
(c)
Pre-opening        388              617              2,767            1,673
costs
Impairment and
other lease        (40        )     223              199              7,039
charges
Other income       —               (92        )     (554       )     (92        )
Total costs        125,190         117,981         503,831         472,746    
and expenses
Income from        10,965           8,597            47,506           36,980
operations
Interest           3,568            5,090            18,043           24,424
expense (c)
Loss on
extinguishment     16,411          —               16,411          —          
of debt (f)
Income (loss)
before income      (9,014     )     3,507            13,052           12,556
taxes
Provision
(benefit) for      (3,461     )     945             3,795           4,289      
income taxes
Net income         $  (5,553  )     $  2,562        $  9,257        $  8,267   
(loss)
                                                                      
Basic and
diluted net        $  (0.22   )     $  0.11         $  0.39         $  0.35    
income (loss)
per share (g)
                                                                      
Basic and
diluted
weighted           24,322,025      22,748,241      23,271,431      22,890,018 
average common
shares
outstanding
                                                          
                                                                      

(a) The Company uses a 52 or 53 week fiscal year that ends on the Sunday
closest to December 31. The three and twelve month periods ended December 29,
2013 and December 30, 2012 included 13 and 52 weeks, respectively.

(b) Restaurant wages and related expenses include stock-based compensation
expense of $0 and $2 for the three month periods ended December 29, 2013 and
December 30, 2012, respectively, and $2 and $11 for the years ended December
29, 2013 and December 30, 2012, respectively. General and administrative
expenses include stock-based compensation expense of $619 and $431 for the
three month periods ended December 29, 2013 and December 30, 2012,
respectively, and $2,296 and $2,025 for the years ended December 29, 2013 and
December 30, 2012, respectively.

(c) Prior to the spin-off from Carrols Restaurant Group, Inc. ("Carrols"),
certain sale-leaseback transactions were classified as lease financing
transactions because Carrols guaranteed the related lease payments. Effective
upon the spin-off, the provisions that previously precluded sale-leaseback
accounting were cured or eliminated. As a result, the real property leases
entered into in connection with these transactions are now recorded as
operating leases. Additionally, in the second quarter of 2012, we exercised
purchase options associated with the leases for five restaurant properties
also previously accounted for as lease financing obligations and purchased
those properties from the lessor. Subsequently, four of the five properties
have been sold in qualifying sale-leaseback transactions. Because of the
qualification of these leases and purchase of the five properties, restaurant
rent expense was $2.8 million higher, depreciation expense was $0.7 million
lower, and interest expense was $3.9 million lower in the twelve month period
ended December 29, 2013 as compared to the twelve month period ended December
30, 2012.

(d) General and administrative expenses include expenses related directly to
Fiesta and corporate expenses allocated from Carrols (parent company of Fiesta
until May 7, 2012). Such allocated expenses were for administrative support
including executive management, information systems and certain accounting,
legal and other administrative functions. Following the spin-off, the Company
performs these functions or purchases services from either Carrols (under a
transition services agreement) or third parties. The Company terminated the
remaining services under the transition services agreement in December 2013.

(e) General and administrative expenses for the twelve months ended December
29, 2013 include expenses related to the underwritten secondary public equity
offering completed during March 2013 totaling $425. The Company did not
receive any proceeds from the sale of shares in the offering. General and
administrative expenses in the year ended December 30, 2012 include a charge
of $0.6 million associated with announced retirements of the Executive Vice
Presidents of both the Pollo Tropical and Taco Cabana brands effective January
31, 2013.

(f) In the year ended December 29, 2013, we commenced a tender offer and
consent solicitation for all of our outstanding $200.0 million 8.875% Senior
Secured Second Lien Notes due 2016 (the "Notes") and called for redemption of
the Notes that were not validly tendered and accepted for payment in the
tender offer. We recognized a loss on extinguishment of debt of $16.4 million
in the fourth quarter of 2013 related to the repurchase and redemption of the
Notes. The loss on extinguishment of debt includes the write-off of $3.9
million in deferred financing costs related to the Notes and $12.5 million of
debt redemption premiums, consent payments, additional interest and other fees
related to the redemption of the Notes.

(g) As previously disclosed, Fiesta has granted shares of restricted stock to
certain of its employees. Because the unvested shares participate in any
dividends declared, the unvested shares are considered a second class of
common stock for accounting purposes, impacting the calculation of net income
per share. For further information, please see the Company's audited financial
statements to be included in the Company's Annual Report on Form 10-K for the
year ended December 29, 2013.


Fiesta Restaurant Group, Inc.

Condensed Consolidated Balance Sheet

(in thousands)
                                                        
                                       December 29, 2013     December 30, 2012
                                                             
Assets
Cash                                   $   10,978            $     15,533
Other current assets                   21,947                15,424
Property and equipment, net            144,527               126,516
Goodwill                               123,484               123,484
Intangible assets, net                 121                   202
Deferred income taxes                  12,046                13,101
Deferred financing costs, net          1,530                 5,690
Other assets                           4,152                3,779
Total assets                           $   318,785          $     303,729
                                                             
Liabilities and Stockholders'
Equity
Current liabilities                    $   38,087            $     41,278
Long-term debt, net of current         72,324                200,889
portion
Lease financing obligations            1,657                 3,029
Deferred income sale-leaseback of      35,873                36,096
real estate
Other liabilities                      12,538               11,933
Total liabilities                      160,479               293,225
Stockholders' equity                   158,306              10,504
Total liabilities and                  $   318,785          $     303,729
stockholders' equity
                                                                   


Fiesta Restaurant Group, Inc.

Supplemental Information

The following table sets forth certain unaudited supplemental financial and
other data for the periods indicated

(in thousands, except percentages and number of restaurants):
                                               
                     (unaudited)                    (unaudited)
                     Three months ended             Twelve months ended
                     December      December       December      December
                     29, 2013        30, 2012       29, 2013        30, 2012
Segment
Revenues:
Pollo Tropical       $ 65,950        $ 56,535       $ 259,702       $ 229,343
Taco Cabana          70,205         70,043        291,635        280,383   
Total revenues       136,155         126,578        551,337         509,726
                                                                    
Change in
comparable
restaurant
sales: (a)
Pollo Tropical       7.0      %      8.3      %     5.9       %     8.1       %
Taco Cabana          (2.9     )%     6.8      %     0.5       %     4.7       %
                                                                    
Average Sales
per
Company-Owned
Restaurant (b):
Pollo Tropical       $ 644           $ 623          $ 2,666         $ 2,538
Taco Cabana          426             432            1,783           1,768
                                                                    
Income (loss)
before income
taxes (c):
Pollo Tropical       $ 6,966         $ 3,425        $ 26,049        $ 13,051
Taco Cabana          431             104            3,414           (468      )
                                                                    
Adjusted EBITDA
(d):
Pollo Tropical       $ 11,251        $ 7,850        $ 43,738        $ 38,592
Taco Cabana          5,551           5,886          26,086          25,649
                                                                    
Restaurant-Level
Adjusted EBITDA
(d):
Pollo Tropical       $ 16,845        $ 12,723       $ 65,738        $ 57,094
Taco Cabana          11,354          11,003         47,954          46,617
                                                                    
Number of
Company-Owned
Restaurants:
Pollo Tropical       102             91             102             91
Taco Cabana          165            160           165            160       
Total
Company-owned        267             251            267             251
restaurants
                                                                    
Company-Owned
Restaurant
Openings:
Pollo Tropical       2               1              12              5
Taco Cabana          1              2             6              5         
Total new
restaurant           3               3              18              10
openings
                                                                    
Company-Owned
Restaurant
Closings:
Pollo Tropical       —               —              1               5
Taco Cabana          —              2             1              3         
Net change in        3               1              16              2
restaurants
                                                                    
Number of
Franchised
Restaurants:
Pollo Tropical       39              35             39              35
Taco Cabana          7              8             7              8         
Total franchised     46              43             46              43
restaurants
                                                                    

(a) Restaurants are included in comparable restaurant sales after they have
been open for 18 months.

(b) Average sales for Company-owned restaurants are derived by dividing
restaurant sales for such period for the applicable segment by the average
number of open restaurants for the applicable segment for such period.

(c) The Company recognized a loss on extinguishment of debt of $16.4 million
in the fourth quarter of 2013 related to the repurchase and redemption of its
Notes. This loss was not allocated to the Pollo Tropical and Taco Cabana
segments as the notes were issued by Fiesta Restaurant Group, Inc.

(d) Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are non-GAAP
financial measures. Please see the reconciliation of Restaurant-Level Adjusted
EBITDA and Adjusted EBITDA to net income in the table on the following page of
this release.

                        Fiesta Restaurant Group, Inc.
                      Supplemental Non-GAAP Information
 The following table sets forth certain unaudited supplemental financial data
                          for the periods indicated
                  (in thousands, except per share amounts):

Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are non-GAAP financial
measures. Adjusted EBITDA is defined as earnings before interest, loss on
extinguishment of debt, income taxes, depreciation and amortization,
impairment and other lease charges, stock-based compensation expense and other
income and expense. Adjusted EBITDA for each of our segments includes an
allocation of general and administrative expenses associated with
administrative support for executive management, information systems and
certain accounting, legal and other administrative functions. Restaurant-Level
Adjusted EBITDA is defined as Adjusted EBITDA excluding franchise royalty
revenues and fees and general and administrative expenses (including
corporate-level general and administrative expenses). Adjusted EBITDA for each
of our segments is a measure of segment profitability reported to our chief
operating decision maker for purposes of allocating resources to the segments
and assessing each segment's performance. In addition, management believes
that Adjusted EBITDA and Restaurant-Level Adjusted EBITDA, when viewed with
our results of operations calculated in accordance with GAAP and our
reconciliation of Restaurant-Level Adjusted EBITDA and Adjusted EBITDA (both
on a consolidated basis and on a segment basis) to net income (i) provides
useful information (including at the restaurant level) about our operating
performance and period-over-period growth, (ii) provides additional
information that is useful for evaluating the operating performance of our
business, and (iii) permits investors to gain an understanding of the factors
and trends affecting our ongoing earnings, from which capital investments are
made and debt is serviced. However, such measures are not a measure of
financial performance or liquidity under GAAP and, accordingly, should not be
considered as an alternative to net income or net income per share as
indicators of operating performance or liquidity. Also these measures may not
be comparable to similarly titled captions of other companies.

                                                           
                      (unaudited)                    (unaudited)
                      Three months ended             Twelve months ended
                      December        December       December       December
                      29,             30,            29,            30,
                      2013            2012          2013           2012
                                                                    
Restaurant-Level
Adjusted EBITDA:
Pollo Tropical        $  16,845       $ 12,723       $ 65,738       $ 57,094
Taco Cabana           11,354         11,003        47,954        46,617   
Consolidated          28,199          23,726         113,692        103,711
Add:
Franchise royalty     610             649            2,357          2,375
revenue and fees
Less:
General and
administrative
(excluding
stock-based
compensation          12,007          10,639         46,225         41,845
expense of $619,
$431, $2,296 and
$2,025,
respectively)
Adjusted EBITDA:
Pollo Tropical        11,251          7,850          43,738         38,592
Taco Cabana           5,551          5,886         26,086        25,649   
Consolidated          16,802          13,736         69,824         64,241
Less:
Depreciation and      5,258           4,575          20,375         18,278
amortization
Impairment and
other lease           (40       )     223            199            7,039
charges
Interest expense      3,568           5,090          18,043         24,424
Loss on
extinguishment of     16,411          —              16,411         —
debt
Provision for         (3,461    )     945            3,795          4,289
income taxes
Stock-based           619             433            2,298          2,036
compensation
Other income          —              (92      )     (554     )     (92      )
Net income (loss)     $  (5,553 )     $ 2,562       $ 9,257       $ 8,267  
                                                                             
                                                                             

                        Fiesta Restaurant Group, Inc.
                      Supplemental Non-GAAP Information
 The following table sets forth certain unaudited supplemental financial data
                          for the periods indicated
                  (in thousands, except per share amounts):

Adjusted net income and related adjusted earnings per share are non-GAAP
financial measures. Adjusted net income is defined as net income before
impairment and other lease charges, the impact of the qualification for
sale-leaseback accounting (primarily upon the spin-off from Carrols) for
certain leases previously accounted for as lease financing obligations,
secondary offering expenses and loss on extinguishment of debt. Management
believes that adjusted net income and related adjusted earnings per share,
when viewed with our results of operations calculated in accordance with GAAP
(i) provide useful information about our operating performance and
period-over-period growth, (ii) provide additional information that is useful
for evaluating the operating performance of our business, and (iii) permit
investors to gain an understanding of the factors and trends affecting our
ongoing earnings, from which capital investments are made and debt is
serviced. However, such measures are not measures of financial performance or
liquidity under GAAP and, accordingly should not be considered as alternatives
to net income or net income per share as indicators of operating performance
or liquidity. Also these measures may not be comparable to similarly titled
captions of other companies.


                 (unaudited)                                           (unaudited)
                   Three months ended                                      Twelve months ended
                   December 29, 2013          December 30, 2012          December 29, 2013         December 30, 2012
                   $            EPS           $           EPS          $            EPS          $            EPS
Net income         $ (5,553 )     $ (0.22 )     $ 2,562       $ 0.11       $ 9,257        $ 0.39       $ 8,267        $ 0.35
Add (each net
of tax
effect):
Impairment and
other lease        (26      )     —             148           0.01         128            —            4,632          0.20
charges (a)
Qualification
for sale           —              —             —             —            —              —            1,249          0.05
leaseback
accounting (b)
Secondary
offering           —                                                       272            0.01
expenses (c)
Loss on
extinguishment     10,521        0.42         —            —           10,521        0.44        —             —
of debt (d)
Adjusted net       $ 4,942       $ 0.20       $ 2,710      $ 0.12      $ 20,178      $ 0.84      $ 14,148      $ 0.60
income


(a) Impairment and other lease charges for the twelve months ended December
30, 2012 are primarily related to the closure of five Pollo Tropical
restaurants in New Jersey in the first quarter of 2012. Impairment and other
lease charges for each period are presented net of taxes of $(14), $76, $71
and $2,407 for the three and twelve months ended December 29, 2013 and
December 30, 2012, respectively.

(b) Prior to the spin-off from Carrols Restaurant Group, Inc. ("Carrols"),
certain sale-leaseback transactions were classified as lease financing
transactions because Carrols guaranteed the related lease payments. Effective
upon the spin-off, the provisions that previously precluded sale-leaseback
accounting were cured or eliminated. As a result, the real property leases
entered into in connection with these transactions are now recorded as
operating leases. Additionally, in the second quarter of 2012, we exercised
purchase options associated with the leases for five restaurant properties
also previously accounted for as lease financing obligations and purchased
those properties from the lessor. Subsequently, four of the five properties
have been sold in qualifying sale-leaseback transactions. Because of the
qualification of these leases and purchase of the five properties, restaurant
rent expense was $2.8 million higher, depreciation expense was $0.7 million
lower, and interest expense was $3.9 million lower in the twelve month period
ended December 29, 2013 as compared to the twelve month period ended December
30, 2012 and restaurant rent expense was $1.6 million and $4.4 million higher,
depreciation expense was $0.5 million and $1.4 million lower and interest
expense was $2.7 million and $7.1 million lower in the three and twelve months
ended December 30, 2012, respectively, compared to the prior year periods.

The amounts reported as "qualification for sale leaseback accounting"
represent the net increase in rent expense, decrease in depreciation expense
and decrease in interest expense, that would have impacted net income had the
leases been accounted for as operating leases for all periods presented, based
on the deferred gain on sale-leaseback transactions calculated at the time of
the spin-off, and had the five properties been owned for all periods
presented. These amounts are shown net of taxes of $649 in the twelve months
ended December 30, 2012. These amounts are included for comparative purposes
only, and may not be indicative of what actual results would have been had the
qualification for sale-leaseback accounting treatment of these leases (and the
treatment of such leases as operating leases) occurred on the dates described
above.

(c) Secondary offering expenses for the twelve months ended December 29, 2013
include expenses related to the underwritten secondary public equity offering
completed during March 2013 totaling $425. The Company did not receive any
proceeds from the sale of shares in the offering. Secondary offering expenses
are presented net of taxes of $153.

(d) The Company recognized a loss on extinguishment of debt of $16.4 million
in the fourth quarter of 2013 related to the repurchase and redemption of its
Notes. The loss on extinguishment of debt for the three and twelve months
ended December 29, 2013 is presented net of taxes of $5,890.

Contact:

Fiesta Restaurant Group, Inc.
Investor Relations:
Raphael Gross, 203-682-8253
investors@frgi.com
 
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