Fiesta Restaurant Group,Inc

Fiesta Restaurant Group,Inc
Fiesta Restaurant Group,Inc
Ticker Symbol (FRGI)
Ticker
Symbol (FRGI)
• Market Capitalization $1.4 B
• Current Stock Price $54.98
C
S k i $ 98
Company Background
Company Background
• Company
Company spun out of Carrols Restaurant Group spun out of Carrols Restaurant Group
(TAST) on May 7, 2012.
• 166 Taco Cabana restaurants. • 119 Pollo Tropical restaurants.
Revenue & Profitability
Revenue & Profitability
• 2013
2013 Revenue $550 million.
Revenue $550 million
Taco Cabana 53%
Pollo Tropical 47%
ll
i l %
• 2013 EBITDA $70 Million.
Taco Cabana 37%
Taco Cabana 37%
Pollo Tropical 63%
Taco Cabana
Taco Cabana
• Founded in Texas 35+ years ago
ou ded
e as 35 yea s ago
• 166 total company‐owned restaurants as of September p y
p
28, 2014
• $1.8 million AUV • Average check of $8.50 Sales
• Dinner 26%
• Lunch 23% • Other 20%
• Breakfast 19%
• Late night 12%
• 53% Drive‐Thru
53% Dri e Thr
• 47% Counter service (takeout or restaurant)
Menu Items
Menu Items
•
•
•
•
•
Flame‐grilled beef and chicken fajitas served on sizzling iron skillets
Made to order quesadillas, nachos, tacos, flautas and enchiladas
Fresh flour tortillas made daily on display
S lf
Self‐service salsa, sauce and condiment bar
i
l
d
di
b
Frozen margaritas and beer Locations
Company owned (166)
Company
owned (166)
Texas (162), Oklahoma (3), Georgia (1)
Franchised
hi d (7)
( )
New Mexico (4) College campuses in Texas (3)
Pollo Tropical
Pollo Tropical • Founded in Miami 25+ years ago
y
g
• Caribbean‐inspired brand with no direct competitors
• 119 company‐owned restaurants as of September 28 2014
28, 2014
• $2.7 million AUV, highest in fast‐casual segment
$
, g
g
• Average check of $10 Sales
• Lunch 47% • Dinner 53%
• 45% Drive
45% Drive‐Thru
Thru
• 55% Counter service (takeout or restaurant)
Menu Items
Menu Items
• Menu includes grilled bone‐in chicken marinated in a blend of tropical fruit juices and spices
• Other grilled items include boneless, marinated chicken breast chicken wings Mojo Roast Pork and Calypso Beef
breast, chicken wings, Mojo Roast Pork and Calypso Beef
• Self‐service sauce, salsa and condiment bar
• Sides include rice, beans, fried yuca, green beans and corn soufflé
Locations
Company owned (119)
Company owned (119)
Florida (107), Texas (5), G
Georgia (5), Tennessee (2)
i (5) T
(2)
Franchised (36)
Puerto Rico (17), Ecuador (1), Honduras (1), The Bahamas (1), Trinidad & Tobago (2), Venezuela (2), Panama (5), Dominican Republic (1), Guatemala (1), College campuses in Florida (5).
Average Unit Volumes (2013)
3.0 2.8 2.5 2.5 2.2 2.0 1.8 1.5 1.5 1.2 1.1 1.0 1.0 0.5 ‐
Pollo Tropical
Panera
Taco Cabana
Chipotle Mexican Grill
Mexican Grill
Values in Millions of Dollars
Zoes
Noodles
Qdoba
Potbelly
Restaurant Level EBITDA
30.0%
26.6%
26.3%
25.0%
20.7%
20.2%
20.0%
20.0%
19.6%
17.9%
16.7%
15.0%
10.0%
5.0%
0.0%
Chipotle Pollo Tropical
Mexican Grill
Mexican Grill
Noodles
Potbelly
Zoes
Panera
Qdoba
Taco Cabana
Number of U.S. Restaurants
2000
1818
1800
1681
1600
1400
1200
1000
800
632
600
410
337
400
200
173
125
119
Taco Cabana
Zoes
Pollo Tropical
0
Panera
Chipotle Mexican Grill
Mexican Grill
Qdoba
Noodles
Potbelly
200
150
133
100
50
0
222
242
Q3
3 2014
243
Q2
2 2014
250
Q1 2014
Q4
4 2013
200
Q3
3 2013
181
201
Q2
2 2013
Q1 2013
Q4
4 2012
Fund Ownership
300
249
Earnings Growth
1.80 1.58 1.60 1.33 1.40 1.20 1.00 0.85 0.80 0.60 0.50 0.37 0.40 0.30 0.30
0.20 ‐
2010
2011
2012
2013
2014
2015
Negatives
• Broke
Broke out of late stage base (4) at $53.08 on out of late stage base (4) at $53 08 on
10/27/2014 on average volume
• Sales growth averaged less than 10%
Sales growth averaged less than 10%
• Late in economic cycle for small/mid cap stocks
k
• Potential future competition could negatively impact profit margins Positives
• Company in expansion mode with years of growth ahead.
ahead
• Healthy alternative offering at value prices.
• Management focused on allocating capital toward M
tf
d
ll ti
it l t
d
highest return assets (Pollo Tropical)
• IBD EPS rating 97
IBD EPS rating 97
• IBD industry rank 8/197
• ROE 23%
ROE 23%