Carrols Restaurant Group Inc., the parent company of Carrols Corp., has announced financial results for the third quarter ended Sept. 27. The company is the largest Burger King franchisee, based on number of restaurants, with 314 stores. It also operates fast casual brands Pollo Tropical and Taco Cabana.
Comparable restaurant sales were down 6.1 percent at its Burger King stores, down 0.1 percent at its Pollo Tropical locations and down 4.3 percent at Taco Cabana.
Total revenues for the quarter were down 3.8 percent to $201.2 million, compared to $209.1 million in the same period last year. Burger King revenues were down 7.3 percent to $94.1 million during the quarter, compared to $101.5 million in the same period last year. This reflected the 6.1 percent comps decrease and the net closing of five Burger King restaurants since the beginning of the same period in 2008. Year to date, total revenues were down 1.5 to $606.4 million, compared to $615.5 million last year.
Net income increased 51 percent to $5.6 million, compared $3.7 million in the same period last year, impacted by an increase in income from operations and a significant reduction in interest expense. Income from operations rose 6.3 percent to $13.5 million from $12.7 million in the same period last year, improving from 6.1 percent to 6.7 percent as a percentage of total revenues. During the third quarter, the company reduced its outstanding debt balances by $3.7 million to $291.2 million at Sept. 27.
Year-to-date net income increased to $17.7 million, up significantly from $8.4 million last year.
"Under current economic conditions, building top-line momentum has been our greatest challenge, and we are working diligently to drive sales at all of our brands," said Alan Vituli, chairman and CEO of Carrols Restaurant Group. "We are focusing our media efforts for our Hispanic brands, including television, radio and direct mail advertising, on our new products, limited-time offers and our value positioning to stimulate guest traffic."
Outlook
Based on the company's nine-month results and an expectation that current earnings trends will continue, the company believes that it will exceed its previously issued 2009 earnings guidance. The company anticipates:
- A revenue increase of approximately 0 percent to 0.5 percent for the year
- One additional new Taco Cabana restaurant opening in the fourth quarter, bringing new Hispanic brand restaurant openings to five for 2009, and the closing of one Burger King restaurant in the fourth quarter
In 2010, the company anticipates opening five to eight new Hispanic brand restaurants and closing approximately five Burger King restaurants.
"We expect to exceed our previously issued earnings guidance due to our strong year-to-date earnings performance and the favorable cost trends that are positively impacting our profitability," Vituli said. "At the same time, we remain cautious regarding the consumer spending environment and our sales outlook."
A replay of the company's conference call to discuss the third quarter 2009 financial results can be accessed by dialing (800) 406-7325 or (303) 590-3030 for international callers; the passcode is 4173077. The call will be available until Nov. 9.
