SYRACUSE, N.Y. — A week after announcing a major merger deal, Carrols Restaurant Group, Inc. (NASDAQ: TAST) on Wednesday said its net income fell in the fourth quarter but improved for the full year of 2018.
The Syracuse–based fast-food restaurant operator reported net income of $1.8 million, or 4 cents a share, in the fourth quarter, down from $3.9 million, or 9 cents, in the year-ago quarter.
For the full year, Carrols, the largest Burger King franchisee in the U.S., reported net income of $10.1 million, or 22 cents a share, up from $7.2 million, or 16 cents, in 2017.
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“In 2018, we generated growth of 8.3 percent in restaurant sales and 12.0 percent in adjusted EBITDA compared to 2017, achieving the high-end of our top-line and comparable restaurant sales guidance and the midpoint of our profitability expectation for the year,” Daniel Accordino, CEO of Carrols Restaurant Group, said in the company’s earnings report.
EBITDA is short for earnings before interest, taxes, depreciation, and amortization. Carrols “modestly” improved adjusted EBITDA margin in 2018, however, the impact from the “heightened promotional environment was evident” in the firm’s fourth-quarter results, Accordino said.
“The variety of promotional deals included the $1 chicken nuggets offer, the $3.49 King Deal, a 2 for $6 Mix & Match, the $6 King Box and the 2 for $10 Meal Deal, balanced somewhat with the cheesy bacon crispy chicken and Philly Cheese King offers. Despite driving higher sales, adjusted EBITDA margin decreased from the prior-year quarter reflecting the impact of these deals combined with ongoing pressure on our labor costs,” he said.
Carrols owned and operated 849 Burger King restaurants as of Dec. 30, 2018. Last year, it acquired 44 Burger King restaurants, opened eight new restaurants, and closed 10 restaurants.
Carrols on Feb. 20 said it agreed to acquire 166 Burger King and 55 Popeyes restaurants in 10 Southeastern and Southern states in a merger with a Tennessee franchisee that will diversify Carrols’ business into a fried chicken chain. Carrols plans to merge with Memphis, Tennessee–based Cambridge Franchise Holdings, LLC in a deal that it anticipates should close in the spring.
Contact Reinhardt at ereinhardt@cnybj.com
BJNN file photo of Burger King restaurant in Clay by Adam Rombel
