FRGI Jan 2016 Investor Presentation

8/20/2019 FRGI Jan 2016 Investor Presentation

1/58

www.frgi.com

Investor Presentation

January 2016


2/58

www.frgi.com

Tim TaftPresident & Chief Executive Officer

Presenters

President & Chief Executive Officer

Lynn SchweinfurthChief Financial Officer


3/58

www.frgi.com

Forward-looking Statements

This document and our presentation contain “forward-looking statements” within the meaning of Section 27A of the Securities Act ofand Section 21E of the Securities Exchange Act of 1934, as amended and are intended to be covered by the “safe harbor” create d statements, other than statements of historical facts included herein, including, without limitation, statements regarding our future fin

results of operations, business strategy, budgets, projected costs and plans and objectives of management for future operations, arstatements.” Forward-looking statements generally can be identified by the use of forward- looking terminology such as “may,” “will,”“intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and s imilar exprstatements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and wethat such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially froimplied by the forward-looking statements, or “cautionary statements,” include, but are not limited to: increases in food and ot her coassociated with the expansion of our business; our ability to manage our growth and successfully implement our business strategy; conditions, particularly in the retail sector; competitive conditions; weather conditions; fuel prices; significant disruptions in service o

suppliers or distributors; changes in consumer perception of dietary health and food safety; labor and employment benefit costs; regoutcome of pending or future legal claims or proceedings; environmental condi tions and regulations; our borrowing costs; the availanecessary or desirable financing or refinancing and other related risks and uncertainties; the risk of an act of terrorism or escalationarmed conflict involving the United States or any other national or international calamity; factors that affect the restaurant industry gproduct recalls, liability if our products cause injury, ingredient disclosure and labeling laws and regulations, reports of cases of foodas “mad cow” disease and “avian” flu, and the possibility that consumers could lose confidence in the safety and quality of certain foas negative publicity regarding food quality, illness, injury or other health concerns.


4/58

www.frgi.com

Strategic & Operational Overview


5/58

www.frgi.com

Investment Considerations

Accelerating Development Given Significant Potential

Compelling Business Model

Well Positioned Within the Growing Fast-Casual Segment

Proven Financial Results

Two Leading, Differentiated Brands

What you want to know


6/58

www.frgi.com

MeaningfulEPS

Growth

MarginExpansion

10%-12%RevenueGrowth

2%-3%SSS

Growth

Long-term Business Model

8%-10%Company

RestaurantGrowth


7/58

www.frgi.com

Industry-leading AUVs

As of FY 2014, $s in millions. Sources: company filings

$2.7$2.5 $2.4

$1.2 $1$1.5

$1.8

https://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=chttps://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=c


8/58

www.frgi.com

Industry-leading AUVs

AUV Growth CAGR = 7.3%

$2.1

$2.3

$2.5$2.7 $2.7

20142013201220112010

AUV Growth CAGR =

$1.6

$1.7

$1.8 $1

2010 2011 2012 2


9/58

www.frgi.com

Compelling Restaurant-level EBITD

Restaurant-level EBITDA is defined as restaurant sales minus cost of sales, labor, occupancy, other operating

and advertising expenses. Pre-opening cost is excluded from the calculation. Sources: companyfilings

25.5%

28.3%

16.7%

19.3%

21.5%19.7% 19.4%

Q3 YTD 2015, % of Resta

https://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=chttps://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=c


10/58

www.frgi.com

Restaurant Growth Potential

Unit 3,200 4,500 2,000 N/A 2,500 N/A N/A N/A NPotential% of Unit 60% 41% 32% N/A 19% N/A N/A N/A NPotential

169168

1,946

661

611

488420

358

1,895

16

Number of System-wide Re

Sources: Company brands as of FY 2015. Domestic system wide unit counts for competitors as of the most recent filings.

https://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=chttps://www.google.com/imgres?imgurl=http://investorplace.com/wp-content/uploads/2014/04/Zoes-Kitchen.jpg&imgrefurl=http://investorplace.com/2014/04/zoes-cmg-zoes-kitchen-chipotle/&docid=TjJRmhoV6ZLtLM&tbnid=FpYvObzDQQDFbM:&w=432&h=432&ei=ZeVsU6TRAefC8AGN8IHABg&ved=0CAIQxiAwAA&iact=chttp://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=TVxK52836-6CYM&tbnid=HkzC2EOiSLzWiM&ved=0CAgQjRw&url=http://fast-food-nutrition.findthebest.com/l/3303/El-Pollo-Loco-House-Salsa-Mild&ei=w-lsU7KNOu6nsASWr4CgCQ&psig=AFQjCNEE1nAwVS22eio8KRy8UnWTZ14yTA&ust=1399733060023679http://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=TVxK52836-6CYM&tbnid=HkzC2EOiSLzWiM&ved=0CAgQjRw&url=http://fast-food-nutrition.findthebest.com/l/3303/El-Pollo-Loco-House-Salsa-Mild&ei=w-lsU7KNOu6nsASWr4CgCQ&psig=AFQjCNEE1nAwVS22eio8KRy8UnWTZ14yTA&ust=1399733060023679


11/58

www.frgi.com


12/58

www.frgi.com

A Unique and Extraordinary Bran

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 an

• Additional proteins, side dishes, salads and wraps further broaden target audience

• Rum punch and Caribbean beer

• Self service Saucing Island includes made from scratch salsas and sauces

Significant restaurant growth potential

Best-in-class restaurant economics

Attractive value proposition - great quality food with an average check of ~ $10

Convenience with dine-in, take out and drive-thru

Catering growth is a meaningful opportunity


13/58

www.frgi.com

Restaurant Sales Growth and Margin T

2012 2013 2014 Q3 YTD2015

8.1%

5.9%

6.6%

5.0%

SSS Growth

Restaurant-level EBITDA Marg(% of Restaurant Sales)

2012 2013 2014

25.6%

26.3%

25.9%


14/58

www.frgi.com

Freshly Prepared, Caribbean-inspired


15/58

www.frgi.com

Our Differentiated Restaurant Growth V

New Prototype Introduced in Texas in March 2014


16/58

www.frgi.com

Our Differentiated Restaurant Growth


17/58

www.frgi.com

Accelerating Growth and National Pot

155 Company& 36 Franchise

Restaurants

36-40 NewCompany

Restaurants in2016, or 23%

BrandRestaurant

Growth

Short-termSouthern Focus;

Long-termNational

Potential

Non-traditionalU.S. LicensingOpportunities


18/58

www.frgi.com

Accelerating Growth and National Pot

23/ 0

11 / 0

117 / 5

Current U.S. Footprint New Company-Owned Restaurants

2010....................................................2011....................................................2012....................................................2013....................................................2014……………………………...………

2015………………………………………

2016 ………………………………………

Where two numbers appear on the map, the first represents company-owned restaurants and the secondrepresents franchised and licensed restaurants.


19/58

www.frgi.com

Development Strategy

CORE SOUTH FLORIDA MARKETSSUPERIOR BRAND AWARENESS

Miami-Dade, Broward, & Palm Beach Counties

Exceptional financial performance

OTHER FLORIDA MARKETSDRIVING TRAFFIC GROWTH WITH MEDIA

Orlando, Naples/Fort Myers, Tampa,Jacksonville & Nashville

Driving higher brand awareness throughnew development and media strategies

At scale to drive meaningful sales growthwith media

EMERGINGLOW BRAND

NOT ON BRO

Dallas, Houston, S

Robust developmbuild out Atlant

area

Atlanta & Sabroadcast m


20/58

www.frgi.com

Reimaging Program Initiated in 20

Former Reimaged


21/58

www.frgi.com


22/58

www.frgi.com

Broad Menu Offerings with Mexican Auth

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, quesadiand 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 peakExpansion in Texas

Attractive value proposition - great quality food with an average check of ~ $9

Convenience with dine-in, take out and drive-thru

Catering growth is a meaningful opportunity


23/58

www.frgi.com

Restaurant Sales Growth and Margin T

2012 2013 2014 Q3 YTD2015

4.7%

0.5%

3.3%

4.8%

SSS Growth

Restaurant-level EBITDA Marg(% of Restaurant Sales)

2012 2013 2014

16.9% 16.7%

17.9%

Restaurant-level EBITDA Margin excludes pre-opening costs.


24/58

www.frgi.com

Fresh, Authentic Flavors of Mexic


25/58

www.frgi.com

Renewed Texas Expansion Leveraging Proven Brand

2012 Prototype New Prototype

All stores reimaged between 2012 and 2015


26/58

www.frgi.com

Renewed Texas Expansion Leveraging Proven Bran


27/58

www.frgi.com

2016 sales and traffic drivers

1% pricing

Incremental advertising expense at Pollo ~ 50 bps or $4 million+

• Increased media weights in mature markets

• At least 84% of restaurants will be supported by broadcast media

• Earlier investment in new markets

New advertising campaign at PolloNew product news with limited-time-promotions

Continuation of the Pollo remodel program

Introduction of new loyalty programs

Continuation of new focus on off premise

Ongoing operations focus and execution

Guidance – low to mid single digit comparable sales growth at both bra

1% to 2% of pricing

New product news with limited-time-promo

Recently completed Taco Cabana remode

Introduction of new loyalty programs

Continuation of new focus on off premise

Ongoing operations focus and execution


28/58

www.frgi.com


29/58

www.frgi.com

The rest of the story.(what you need to know)


30/58

www.frgi.com

Not the typical growth story

THE BIGMiami-Dade, Palm Beach an

• Represents 65 of the 91 re• Average Unit Volume of $2

Atlanta

Jacksonville

OrlandoTampa

Ft. Myers

26restaurants

5cities

Other five markets


31/58

www.frgi.com

From 2012 to 2015

THE BIG65 to 77 un

$2.8 to $3.3


32/58

www.frgi.com

Growth of the other five cities

26 to 50 units

$1.9 to $2.0 AU

Now Media Ef

Atlanta

Jacksonville

OrlandoTampa

Ft. Myers

• Media in Atlanta to b


33/58

www.frgi.com

In 2016, 84% Restaurants in Markets with Broadcas


34/58

www.frgi.com

Case Study – Naples / Ft Myers

Ft. Myers


35/58

www.frgi.com

Case Study – Naples / Ft Myers, Building Market S

2012

3

2013

4

2014

6

2015

7

Company-owned Restaurants

2012

0.4

2013

0.7

2014

1.1

2015

1.3

Total Transactions

2012

$1.6

2013

$2.1

Annual U(in m


36/58

www.frgi.com

Growth in Texas

Opened Texas in 2014

Increased units in 2015

Dallas

Houston

Austin

San Antonio

Project 41 total units by

San Antonio media begi


37/58

www.frgi.com

•

Management teams overh• Recipes & portion sizes m

• Achieving all-time best cusfeedback scores

• Positive transactions desp

price increases

• Enhanced culinary team

• System reimage program

The rest of the story


38/58

www.frgi.com

• The Big 3 represent 50% all restaurants

• Maintain highest AUVs in

• Funded emerging Florida

• Reworked process, proceI.T. infrastructure, HR, devand supply chain all while

The rest of the story


39/58

www.frgi.com

Still many levers to pull to drive SS

53%

OFF PREMISECONSUMPTION

MARKETINGCATERING

LOYALTY


40/58

www.frgi.com

By end of 2016

Doubling in size since 2012


41/58

www.frgi.com

And now you knowthe rest of the story.


42/58

www.frgi.com

Financial Summary


43/58

www.frgi.com

Accelerating Growth Since 2012 Spin

Note: Restaurant-level EBITDA Margin excludes pre-opening costs.

Company-owned Restaurant Growth Revenue Growth

0.8%

6.4%

9.0%

2012 2013 2014

7.3%8.2%

10.8%

2012 2013 2014

20.8%

21.2%

21.9%

2012 2013 2014

Restaurant-level EBITDA Margin% of Restaurant Sales110 bps Margin Expansion

$0.60

2012


44/58

www.frgi.com

Proven Business Model


0.0%

12.1%

21.6%

2012 2013 2014

Company-owned Restaurant Growth

11.3%

2012

Restaura

8.5%

13.3%

20.5%

2012 2013 2014

Adjusted EBITDA Growth

9.5%

13.2%

18.4%

2012 2013 2014

Revenue Growth


45/58

www.frgi.com

Performance Trends Improved to Current Record


Company-owned Restaurant Growth Adjusted EBITDA Growth

1.3%

3.1%

1.2%

2012 2013 2014

Restaur

5.2%

2012

-4.2%

1.7%

26.5%

2013 2014

2012

Revenue Growth

5.6%

4.0% 4.1%

2012 2013 2014


46/58

www.frgi.com

3Q15 YTD Financial Results


47/58

www.frgi.com

Leverage and Liquidity

End of Q3 2015, $77.0M in Borrowing Capa

$150M revolving credit facili ty (currently, L

through 2018

Repurchased $200M, 8.875% Notes in Q4 2

• Refinancing including $135M equity offering

• New Capital Structure Contributed ~ 25% EP


48/58

www.frgi.com

2016 Operating Targets

Cost of Sales, as a % of Sales, Between 30% to 31%

Effective Tax Rate of 37% to 39%

G&A of Approximately $60 million to $62 million

SSS at Low to Mid Single Digit at Both Brands

Company-owned Restaurant Openings of 40 to 44

Capital Expenditures of $95 million to $110 million


49/58

www.frgi.com

Commodity Cost Overview

The Company Contracts CommoditiesWith Some Suppliers

2016 Projected Consolidate Commodity

Decrease ~ Low Single Digits

2016 Commodities Under Fixed PricingBy Year End ~ 70%-80% COGS

Top 5 Food Purchases – 2016F Top 5 Food P


50/58

www.frgi.com

Focused Capital Allocation

New Restaurant Development Focused on Pollo Tropical

Continued Reimaging Initiative at Pollo Tropical, ~ 15 in 2016Ongoing Strategic Investments to Optimize Restaurant Management, Gue

Experience and Infrastructure


51/58

www.frgi.com

Appendix


52/58

www.frgi.com

FranchisingFranchise

Bahamas..........

Ecuador.............

Honduras.........

Guatemala.........

Panama.............

Puerto Rico ......

Trinidad and Tob

Venezuela.. .......

United States……

• Current focus is U.S. non-traditional franchising (universities and airports)

- Currently, 5 Pollo and 2 Taco locations

• International franchise locations are Pollo Tropical restaurants

• We have one traditional Taco franchisee in Albuquerque, NM with 4 restaurants

• Franchise revenues are not meaningful today,


53/58

www.frgi.com

Total Adjusted EBITDA Reconciliatio

($s in millions) FY2012 FY2013 FY2014 3Q14 YTD 3Q15 YTD

Restaurant-level Adjusted EBITDA Excluding Pre-Opening Costs:

Pollo Tropical 58.2$ 67.8$ 79.0$ 58.4$ 68.2$

Taco Cabana 47.2 48.7 54.2 41.6 46.1Consolidated 105.4$ 116.5$ 133.2$ 99.9$ 114.3$

Less:

Pre-Opening Costs 1.7 2.8 4.1 3.3 3.9

Restaurant-level Adjusted EBITDA:

Pollo Tropical 57.1 65.7 75.6 55.5 64.6

Taco Cabana 46.6 48.0 53.5 41.1 45.9

Consolidated 103.7$ 113.7$ 129.1$ 96.6$ 110.5$

Add:

Franchise Royalty Revenues and Fees 2.4 2.4 2.6 1.9 2.1

Less:

General and Administrative (Excluding Stock-based Compensation) 41.8 46.2 46.0 33.5 38.6

Adjusted EBITDA:

Pollo Tropical 38.6 43.7 52.7 39.2 44.0Taco Cabana 25.6 26.1 33.0 25.8 30.0

Consolidated 64.2$ 69.8$ 85.7$ 65.0$ 74.0$

Less:

Depreciation and Amortization 18.3 20.4 23.0 17.0 21.8

Impairment and Other Lease Charges 7.0 0.2 0.4 0.2 0.5

Interest Expense 24.4 18.0 2.2 1.7 1.3

Loss on Extinguishment of Debt - 16.4 - - -

Provision for Income Taxes 4.3 3.8 21.0 16.9 18.1

Stock-Based Compensation 2.0 2.3 3.5 2.6 3.2

Other Expense / (Gain) (0.1) (0.6) (0.6) (0.6) (0.7)

Net Income 8.3$ 9.3$ 36.2$ 27.2$ 29.7$


54/58

www.frgi.com

Adjusted EBITDA Reconciliation

($s in millions) FY2012 FY2013 FY2014 3Q

Restaurant Sales 227.4$ 257.8$ 305.4$ $ Less:Cost of Sales 75.4 85.5 100.5Restaurant Wages and Related Expenses 53.6 57.9 67.5Restaurant Rent Expense 7.7 10.1 12.5Other Restaurant Operating Expenses 26.8 30.8 38.3

Advertising Expense 5.7 5.7 7.7Restaurant-Level Adjusted EBITDA Excluding Pre-

Opening Costs 58.2$ 67.8$ 79.0$ $ Less: Pre-Opening Costs 1.1 2.0 3.4Restaurant-Level Adjusted EBITDA 57.1$ 65.7$ 75.6$ $

Add: Franchise Revenue 1.9 1.9 2.1Less: General and Administrative Expenses 20.4 23.9 24.9

Adjusted EBITDA 38.6$ 43.7$ 52.7$ $


55/58

www.frgi.com

Adjusted EBITDA Reconciliation

($s in millions) FY2012 FY2013 FY2014 3Q

Restaurant Sales 279.9$ 291.1$ 303.1$ $ Less:Cost of Sales 88.1 90.6 91.8Restaurant Wages and Related Expenses 82.6 85.5 87.6Restaurant Rent Expense 13.9 16.7 17.2Other Restaurant Operating Expenses 37.0 38.2 40.6

Advertising Expense 11.1 11.4 11.8Restaurant-Level Adjusted EBITDA Excluding Pre-Opening Costs 47.2$ 48.7$ 54.2$ $

Less: Pre-Opening Costs 0.6 0.7 0.7Restaurant-Level Adjusted EBITDA 46.6$ 48.0$ 53.5$ $

Add: Franchise Revenue 0.5 0.5 0.5Less: General and Administrative Expenses 21.4 22.4 21.1

Adjusted EBITDA 25.6$ 26.1$ 33.0$ $


56/58

www.frgi.com

Adjusted Income from Operations Reconc

($s in millions) 3Q14 YTD 3Q15 YTD

Income from Operations 45.8$ 49.1$

Add:

Impairment and Other Lease Charges 0.2 0.5

Gain on Condemnation (0.6) (0.4)

Legal Settlements and Related Costs (0.5) 1.1

Adjusted Income from Operations 44.9$ 50.3$


57/58

www.frgi.com

Adjusted Net Income Reconciliatio

(a) Impairment and other lease charges for the twelve months ended December 30, 2012 are primarily related to the closure of five Pollo Tropical restaurants in New Jersey in the first quarter of 2012. Impairment anperiod are presented net of taxes of $0.1 million, $0.1 million and $2.4 million for the twelve months ended December 28, 2014, December 29, 2013 and December 30, 2012, respectively, and $0.2 million and $0.1 September 27, 2015 and September 28, 2014, respectively.

(b) Prior to the spin-off from Carrols Restaurant Group, Inc. ("Carrols"), certain sale-leaseback transactions were classified as lease financing transactions because Carrols guaranteed the related lease payments. Eprovisions that previously precluded sale-leaseback accounting were cured or eliminated. As a result, the real property leases entered into in connection with these transactions are now recorded as operating leasequarter of 2012, we exercised purchase options associated with the leases for five restaurant properties also previously accounted for as lease financing obligations and purchased those properties from the lessor.

The amount reported as "qualification for sale leaseback accounting" represents the net increase in rent expense, decrease in depreciation expense and decrease in interest expense, that would have impacted netaccounted for as operating leases for all periods presented, based on the deferred gain on sale-leaseback transactions calculated at the time of the spin-off, and had the five properties been owned for the full year Qualification for sale leaseback accounting is shown net of taxes of $0.6 million in the twelve months ended December 30, 2012. This amount is included for comparative purposes only, and may not be indicative obeen had the qualification for sale-leaseback accounting treatment of these leases (and the treatment of such leases as operating leases) occurred on the dates described above.

(c) Secondary offering expenses for the twelve months ended December 29, 2013 include expenses related to the underwritten secondary public equity offering completed during March 2013 totaling $0.4 million. Thproceeds from the sale of shares in the offering. Secondary offering expenses are presented net of taxes of $0.2 million.

(d) The Company recognized a loss on extinguishment of debt of $16.4 million in the fourth quarter of 2013 related to the repurchase and redemption of its Notes. The loss on extinguishment of debt for the twelve mois presented net of taxes of $5.9 million.

(e) Gain on condemnation in 2015 primarily includes a previously deferred gain from a sale-leaseback transaction that was recognized upon termination of the lease. Gain on condemnation in 2014 includes a gain frresulting from an eminent domain proceeding. Gain on condemnation for each period is presented n et of taxes of $(0.2) million for the twelve months ended December 28, 2014, and $(0.1) million and $(0.2) millioSeptember 27, 2015 and September 28, 2014, respectively.

(f) Legal settlements and related costs in 2015 include legal fees and other costs, including estimated settlement charges, associated with a class action litigation, and in 2014 include the benefit of a payment receivmatter. Legal settlements and related costs for each period are presented net of taxes of $(0.2) million for the twelve months ended December 28, 2014, and $0.4 million and $(0.2) million for the nine months endeSeptember 28, 2014, respectively.

(g) Gain on sale of property for each period is presented net of taxes of $(0.2) million and $(0.0) million for the twelve months ended December 29, 2013 and December 30, 2012, respectively.

($s in millions, except per share amounts)

$ EPS $ EPS $ EPS $ EPS $

Net Income 8.3$ 0.35$ 9.3$ 0.39$ 36.2$ 1.35$ 27.2$ 1.02$ 29.7$

Add (each net of tax effect):

Impairment and other lease charges (a) 4.6 0.20 0.1 - 0.2 0.01 0.1 - 0.3

Qualifi cat ion for sale l easeback account ing (b) 1.2 0.05 - - - - - - -Secondary offering expenses (c) - - 0.3 0.01 - - - - -

Loss on extinguishment of debt (d) - - 10.5 0.44 - - - - -

Gain on condemnation (e) - - - - (0.3) (0.01) (0.3) (0.01) (0.2)

Legal settlements and related costs (f) - - - - (0.3) (0.01) (0.3) (0.01) 0.7

Gain on sale of property (g) (0.1) - (0.3) (0.01) - - - - -

Adjusted net income & EPS 14.1$ 0.60$ 19.9$ 0.83$ 35.7$ 1.33$ * 26.6$ 1.00$ 30.5$

* Amounts do not add to adjusted total due to rounding

FY2012 FY2013 FY2014 Q314YTD Q31


58/58

f i

Use of Non-GAAP Financial Measur

Adjusted EBITDA, restaurant-level adjusted EBITDA, and restaurant-level adjusted EBITDA excluding pre-opening costs are all non-G Adjusted EBITDA is defined as earnings attributable to the applicable segment before interest, loss on extinguishment of debt, incomeamortization, impairment and other lease charges, stock-based compensation expense and other income and expense. It includes an albrand general and administrative expenses (each excluding stock-based compensation). Restaurant-level adjusted EBITDA (excluding pre-as Adjusted EBITDA excluding franchise royalty revenues and fees, pre-opening costs and general and administrative expenses. Managfinancial measures, when viewed with our results of operations calculated in accordance with GAAP and our reconciliation of restaurant-lerestaurant-level adjusted EBITDA excluding pre-opening costs and adjusted EBITDA to net income (i) provide useful information about our operiod-over-period growth (including at the restaurant level), (ii) provide additional information that is useful for evaluating the operating perfand (ii i) permit investors to gain an understanding of the factors and trends affecting our ongoing earnings, from which capital investmenserviced. However, such measures are not measures of financial performance or liquidity under GAAP and, accordingly, should not be connet income or cash flow from operating activities as indicators of operating performance or liquidity. Also these measures may not be comcaptions of other companies.

Adjusted income from operations and adjusted net income and related adjusted earnings per share are non-GAAP financial measures

operations is defined as income from operations before impairment and other lease charges, gain on condemnation and legal settlements annet income is defined as net income before impairment and other lease charges, the impact of the qualification for sale-leaseback accountingoff from Carrols) for certain leases previously accounted for as lease financing obligations, secondary offering expenses, loss on extingucondemnation, legal settlements and related costs and gain on sale of property. Management believes that adjusted income from operationsrelated adjusted earnings per diluted share, when viewed with our results of operations calculated in accordance with GAAP (i) provide usoperating performance and period-over-period growth, (ii) provide additional information that is useful for evaluating the operating performancpermit investors to gain an understanding of the factors and trends affecting our ongoing earnings, from which capital investments are maHowever, such measures are not measures of financial performance or liquidity under GAAP and, accordingly should not be considered as aor net income per share as indicators of operating performance or liquidity. Also these measures may not be comparable to similarlcompanies.

Documents

FRGI Jan 2016 Investor Presentation