SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST), a Syracuse–based firm that is the largest Burger King franchisee in the nation, today reported a net loss of $7.4 million, or 32 cents per share, during the first quarter that ended March 30.
Those figures compare to a net loss of $5.2 million, or 23 cents a share, in the prior-year period.
Legislative delays extending the Work Opportunity Tax Credit (WOTC) tax incentives in both years caused timing differences that led to the higher net-loss figures, the company said in a news release.
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The net loss included impairment and other lease charges in both years, and U.S. Equal Employment Opportunity Commission litigation costs in 2013, the company said.
The charges totaled about $600,000 in the first quarter of this year and $700,000 in the first quarter of 2013, or 2 cents per share after tax in both periods, according to Carrols.
The firm’s Burger King restaurants generated sales of more than $151 million during the first quarter, down 3 percent from over $156 million in the same quarter in 2013.
Comparable restaurant sales decreased 2.5 percent reflecting the “widespread” effect of severe winter weather compared to a 1 percent increase in the prior-year period.
The comparable-restaurant sales decrease was a “direct consequence” of the severe and persistent winter weather that affected many of the markets throughout the first quarter, Daniel Accordino, CEO of Carrols, said in the news release.
“Despite top-line challenges from the weather, both restaurant-level EBITDA and our restaurant-level EBITDA margin increased compared to the first quarter of 2013 due to improved financial performance at the restaurants that we acquired from Burger King in 2012. These restaurants contributed $3.9 million to restaurant-level EBITDA in the first quarter of 2014, 126 percent higher than in the prior year period,” Accordino said.
The quick-service restaurant segment remains “intensely competitive with aggressive marketing and focused promotions,” he added.
“We continue to address the needs of our economically-sensitive customer with our value offerings, while maintaining a balanced marketing approach with compelling limited-time offers and premium products,” Accordino said.
Carrols is also hoping to enhance the “brand experience” with its remodeling program at Burger King restaurants.
“Despite the slow start to 2014, we anticipate that both our sales trends and margins will improve over the course of the year,” Accordino added.
Carrols issued its earnings report before the open of trading Tuesday. Its shares fell 19 cents, or 2.8 percent, to $6.60 on the day, according to Yahoo Finance data.
As of March 30, Carrols owned and operated 564 Burger King restaurants, the company said.
Contact Reinhardt at ereinhardt@cnybj.com
