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» Carrols Restaurant Group, Inc. Q2 2010 Earnings Call Transcript
We also refer you to our filings with the SEC for a more detailed discussion of the risks that could impact our business and our financial results.On the call with me today is Alan Vituli, our Chairman and CEO, and Dan Accordino, our President and Chief Operating Officer. After Alan and Dan provide an update on the business in the second quarter I’ll walk through the financial results and then provide some commentary regarding our 2011 projections. We will then be happy to address any questions that you might have. With that, I'll turn the call over to Alan. Alan Vituli Thanks, Paul, and good afternoon everyone. Before I open up I would like to thank all of you on the line coming certainly given the straight of the cash in the equity markets, Carrols earnings call is not going to be your highest priority but both Dan and Paul cover our second quarter performance, I would like to bring you up to date on several important steps we’ve taken in connection with our plan tax-free spinoff of Fiesta Restaurant Group the indirect wholly-owned subsidiary which operates our Pollo Tropical and Taco Cabana businesses. As we have previously announced, we’re planning to spinoff the asset to our shareholders, thus creating a separate publicly traded company of it. We believe that this will offer Carrols and Fiesta to be ability to up pursue their own business plan in growth strategies based upon opportunities available to them breaking into two separate business entities of this potential group improving value at each of those entities. First we’ve recently named industry veteran Tim Taft as Fiesta Restaurants Group new Chief Executive Officer that will be effective on August 15. Tim will succeed me as CEO of Fiesta while I will remain as Chairman of the Board for Fiesta. Tim is a proven leader in the restaurant industry and brings a broad range of experience and skills to Fiesta. His background is a successful marketed brand builder and operator in the restaurant industry will provide a great blend of practical knowledge, customer orientation and team building to our growing Pollo Tropical and Taco Cabana restaurant brands.
We certainly look forward to Tim joining the Carrols team as we have to see how. Dan Accordino will remain President and Chief Operating Officer for Carrols and at the time to the spinoff we expect that he will appointed as CEO of Carrols Restaurant Group. Dan has a deep understanding of our Burger King operations and the overall Burger King system. He is very well suited for this expanded role. He is a strong leader, a great operator and highly respected member of the Carrols’ team.Secondly I would like to tell you, at last Friday, we completed the refinancing of our existing debt. We entered into new and independent financing agreements for both Fiesta Restaurant Group and the Carrols Subsidiary that operates our Burger King restaurants. Proceeds from these financings were or will be used to repay our existing indebtedness as Paul will discuss in further detail. In terms of the Fiesta Restaurant Group, it sold $200 million of 8 and 7A senior secured secondly notes due in 2016 and entered into an undrawn $25 million secured revolving credit facility. Carrols LLC entered into an $85 million secured credit facility including a term loan borrowing of $65 million and an undrawn $20 million of revolving credit facility. The leadership changes and the refinancing were critical steps toward completing the spin-off of our Pollo Tropical and Taco Cabana businesses. We continue to work on a number of the other details pertaining to the spin-off and will provide additional updates on our progresses as we move more closely to the end of the year. With that said, I’ll turn it over to Dan to give you an overview of our second quarter results. Dan? Daniel T. Accordino Thanks, Alan. Our strong second quarter results reflect our continued success in gaining new customers and increasing traffic at our Pollo Tropical and Taco Cabana restaurants through innovative menus, effective promotions and our brand elevation initiatives. Both Pollo and Taco posted strong top line growth resulting in a 9.2% increase in total revenues for Fiesta Restaurant Group in the second quarter. Read the rest of this transcript for free on seekingalpha.com