1 Investor Presentation Spring 2016 www.frgi.com
2 Presenters President & Chief Executive Officer Lynn Schweinfurth Chief Financial Officer www.frgi.com
3 Forward-looking Statements This document and our presentation contain “forward -looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and are intended to be covered by the “safe harbor” created by those sections. All statements, other than statements of historical facts included herein, including, without limitation, statements regarding our future financial position and results of operations, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward -looking statements. ” Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to: increases in food and other commodity costs; risks associated with the expansion of our business; our ability to manage our growth and successfully implement our business strategy; general economic conditions, particularly in the retail sector; competitive conditions; weather conditions; fuel prices; significant disruptions in service or supply by any of our suppliers or distributors; changes in consumer perception of dietary health and food safety; labor and employment benefit costs; regulatory factors; the outcome of pending or future legal claims or proceedings; environmental conditions and regulations; our borrowing costs; the availability and terms of necessary or desirable financing or refinancing and other related risks and uncertainties; the risk of an act of terrorism or escalation of any insurrection or armed conflict involving the United States or any other national or international calamity; factors that affect the restaurant industry generally, including product recalls, liability if our products cause injury, ingredient disclosure and labeling laws and regulations, reports of cases of food-borne illnesses such as “mad cow” disease and “avian” flu, and the possibility that consumers could lose confidence in the safety and quality of certain food products, as well as negative publicity regarding food quality, illness, injury or other health concerns. www.frgi.com
4 Strategic & Operational Overview www.frgi.com
Investment Considerations 5 What you want to know Compelling Business Model Two Leading, Differentiated Brands Accelerating Development of Pollo Tropical Given Significant Potential Well Positioned Within the Growing Fast-Casual Segment Proven Financial Results www.frgi.com
Separation of Pollo Tropical and Taco Cabana 6 Two Standalone Companies with Dedicated Strategy and Execution No Significant G&A Investment in 2016 Tax- efficient Distribution of 100% of TC’s Stock to Fiesta’s Shareholder Build Two Fully Independent Management Teams Closer to Separation Expected Completion in 2017 or 2018 www.frgi.com
7 Long-term Business Model 8%-10% Company Restaurant Growth 2%-3% Meaningful SSS EPS Growth Growth 10%-12% Margin Revenue Expansion Growth www.frgi.com
8 Industry-leading AUVs FY 2015, Average Annual Sales at Company-owned Restaurants $2.6 $2.6 $2.4 $1.9 $1.6 $1.2 $1.1 $1.0 www.frgi.com $s in millions. Sources: company filings.
9 Industry-leading AUVs AUV Growth CAGR = 3.5% AUV Growth CAGR = 4.7% $1.9 $1.8 $1.8 $1.8 $2.7 $2.6 $2.7 $2.5 $1.7 $2.3 $1.6 $2.1 2014 2015 2010 2011 2012 2013 2010 2011 2012 2013 2014 2015 www.frgi.com
10 10 Compelling Restaurant-level EBITDA 26.1% FY 2015, % of Restaurant Sales 24.8% 21.1% 19.4% 19.0% 16.6% 16.3% 16.2% Restaurant-level EBITDA is defined as restaurant sales minus cost of sales, labor, occupancy, other operating www.frgi.com and advertising expenses. Pre-opening cost is excluded from the calculation. Sources: company filings
11 11 Restaurant Growth Potential 2,023 1,997 1Q 2016, Number of System-wide Restaurants in U.S . 683 611 507 436 403 177 168 169 166 Unit 4,500 3,200 2,000 N/A 2,500 1,900 N/A 1,600 N/A 1,600 Potential % of Unit 45% 62% 34% N/A 20% 23% N/A 11% N/A 10% Potential www.frgi.com Sources: Domestic system wide unit counts for competitors as of the most recent publicly disclosed information.
12 12 www.frgi.com
13 13 A Unique and Extraordinary Brand Freshly prepared Caribbean-inspired food you feel good about eating. A 28 year old brand originating in South Florida Truly differentiated restaurant concept with no direct competitor Signature offerings: fresh, grilled bone-in chicken marinated with tropical fruit juices and spices, rice and beans • Additional proteins, side dishes, salads and wraps further broaden target audience • Self service Saucing Island includes made from scratch salsas and sauces Significant restaurant growth potential Superior restaurant economics Attractive value proposition - great quality food with an average check of ~ $10 to $11 Convenience with dine-in, take out and drive-thru Off-premise growth is a meaningful opportunity with catering and third party delivery www.frgi.com
14 14 Restaurant Sales Growth and Margin Trends Restaurant-level EBITDA Margin (% of Restaurant Sales) SSS Growth 26.3% 25.9% 8.1% 25.6% 24.8% 6.6% 5.9% 3.8% 2012 2013 2014 2015 2012 2013 2014 2015 Restaurant-level EBITDA Margin excludes pre-opening costs. See www.frgi.com Adjusted EBITDA Reconciliation in appendix.
15 15 Freshly Prepared, Caribbean-inspired Menu www.frgi.com
16 16 Our Differentiated Restaurant Growth Vehicle New Prototype Introduced in Texas in March 2014 www.frgi.com
17 17 Our Differentiated Restaurant Growth Vehicle www.frgi.com
18 18 Accelerating Growth and National Potential 161 Company 30-34 New Short-term Non-traditional Market Share & 36 Franchise Company Southern Focus; U.S. Licensing Growth with Restaurants Restaurants in Long-term Opportunities Planned 2016 National Cannibalization Potential www.frgi.com
19 19 Accelerating Growth and National Potential Current U.S. Footprint New Company-Owned Restaurants Opened 2010................................................................ 2 2011................................................................ 2 2012................................................................ 5 2013.............................................................. 12 11 / 0 2014……………………………...……………. 22 2015………………………………………….... . 27/ 0 32 2016 ………………………………………. 30-34E 119 / 5 Where two numbers appear on the map, the first represents company-owned restaurants and the second represents franchised and licensed restaurants. Store count as of 1Q 2016. www.frgi.com
20 20 Development Strategy CORE SOUTH FLORIDA MARKETS OTHER FLORIDA MARKETS EMERGING MARKETS SUPERIOR BRAND AWARENESS DRIVING TRAFFIC GROWTH WITH MEDIA LOW BRAND AWARENESS, NOT ON BROADCAST MEDIA Miami-Dade, Broward, & Palm Beach Counties Orlando, Naples/Fort Myers, Tampa, Jacksonville & Nashville Dallas, Houston, San Antonio & Atlanta Exceptional financial performance Driving higher brand awareness through Robust development pipeline in Texas; new development and media strategies build out Atlanta over time as trade areas develop At scale to drive meaningful sales growth with media San Antonio started media in 1Q 2016, Atlanta to begin media in 3Q 2016 www.frgi.com
21 21 Reimaging Program Initiated in 2015 Nearly 20 Restaurants Updated as of 1Q 2016 Former Reimaged www.frgi.com
22 22 www.frgi.com
23 23 Broad Menu Offerings with Mexican Authenticity Fresh, contemporary food prepared with authentic flavors of Mexico A 38 year old brand originating in San Antonio 24-hour format Broad, authentic Mexican product offerings including sizzling fajitas, enchiladas, quesadillas, burritos and salads • Margaritas and beer • Fresh tortillas made daily • Self service salsa bar includes made from scratch salsas and sauces Top five AUV in the fast casual segment, operating performance at peak Expansion in Texas by utilizing a smaller, lower-cost building prototype Attractive value proposition - great quality food with an average check of ~ $9 Convenience with dine-in, take out and drive-thru Off-premise growth is a meaningful opportunity with catering www.frgi.com
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