SYRACUSE — Carrols Restaurant Group, Inc. reported a net loss of $6.7 million from continuing operations in the third quarter of 2012, its first full quarter since spinning off its former Fiesta Restaurant Group, Inc. subsidiary and acquiring nearly 300 additional Burger King restaurants.
The loss, 29 cents per share, compares to net income from continuing operations of $400,000, or 2 cents per share, in the same quarter last year. It includes costs from integrating 278 Burger King restaurants Carrols (NASDAQ: TAST) acquired at the end of May, litigation with the U.S. Equal Employment Opportunity Commission, tax expenses for a valuation allowance against deferred tax assets, and a loss on refinancing.
Carrols acquired the Burger King locations on May 30 after spinning off Fiesta (NASDAQ: FRGI), the owner of the Pollo Tropical and Taco Cabana restaurant chains. The move gave it 572 Burger King restaurants as of Sept. 30.
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Comparable sales at legacy restaurants — those Carrols did not acquire in May — increased to $94.4 million in the third quarter. All restaurant sales jumped to $169.5 million, an increase of 87.1 percent, as Carrols included results from the acquired Burger Kings. Their sales totaled $75.1 million.
Carrols expects to boost the acquired restaurants’ performance in the future, its CEO, Daniel Accordino, said in a news release.
“Our primary focus in the quarter was to begin improving the overall operation of these restaurants in order to improve sales trends,” he said. “As a consequence, we overinvested in labor, as well as management recruitment and training. We also incurred unusually high repair costs as we addressed deferred maintenance at these restaurants. Although we continue to focus on training and staffing into the fourth quarter, much of the initial integration and related costs are behind us.”
Carrols is headquartered at 968 James St. in Syracuse.
Contact Seltzer at rseltzer@cnybj.com