Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 08:30 am ET

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Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Carrols Restaurant Group, Inc. First Quarter 2020 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Thursday, May 7, 2020, at 8:30 a.m. Eastern Time and will be available for replay.

I would now like to turn the conference over to Tony Hull, Chief Financial Officer. Please go ahead, sir.

Executive
Anthony E. Hull

Thank you, Sarah, and good morning, everyone. By now, you should have access to our earnings announcement released earlier this morning, which is available on our website at www.carrols.com under the Investor Relations section.

Before we begin our remarks, I would like to remind everyone that our discussion will include forward-looking statements, which may consist of comments regarding our strategies, intentions, guidance or plans. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them. We also refer you to our filings with the SEC for more details, especially the risks that could impact our business and results, including the impact of COVID-19.

During today's call, we will discuss certain non-GAAP measures that we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. A reconciliation to comparable GAAP measures is available for our earnings -- in our earnings release.

With that, I will now turn the call over to our Chairman and CEO, Dan Accordino. Dan?

Executive
Daniel T. Accordino

Thanks, Tony, and good morning, everyone. As you will recall from our Q4 call, we began 2020 with optimism with respect to what we intended to accomplish this year in improving operations across our restaurants, resetting our priorities in terms of capital allocation and generating free cash flow. Of course, our company, our industry and our fellow citizens were faced with a whole new set of challenges beginning in March due to the worldwide pandemic caused by COVID-19. We, as a management team, reacted quickly and decisively to align with the realities of the new marketplace.

First, to comply with national, state and local guidelines and for the safety and well-being of our team members and guests, we closed our dining rooms across the system and ramped up our off-premise capabilities, including takeout and drive-through. We also launched delivery services to the majority of our Burger King and Popeyes restaurants during the last few weeks ahead of our original timetable of late in the second quarter, which had a positive impact on sales.

As approximately 75% of our 2019 restaurant sales were generated from takeout and drive-through orders, we were fortunate to be able to continue generating a consistent level of base revenue as conditions unfolded, but traffic and sales still rapidly declined. This put a lot of pressure on us to protect every shift and every job that we could.

To address near-term financial flexibility, we looked for every efficiency, including cutting executive salaries, starting with my own. We