Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q2 2020 Earnings Conference Call - Preliminary Transcript

Aug 06, 2020 • 08:30 am ET


Carrols Restaurant Group, Inc. (NASDAQ:TAST) Q2 2020 Earnings Conference Call - Preliminary Transcript


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Welcome to the Carrols Restaurant Group Inc. Second Quarter 2020 Earnings Conference Call.

I would like to remind everyone that this conference call is being recorded today, Thursday, August 6, 2020 at 8:30 a.m. Eastern Time and would be available for replay.

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

Anthony E. Hull

Thank you, Mora, and good morning, everyone. By now, you should have access to our earnings announcement and earnings review presentation that are both -- were both released earlier this morning and are available on our website at 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 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 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 with our earnings release.

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

Daniel T. Accordino

Thanks, Tony, and good morning, everyone. I would like to begin today by -- today's call by thanking each and every one of our employees for their tireless efforts and dedication to safely serve our guests during COVID-19. Since the onset of the pandemic, we have been nimble in adjusting our operations to the realities of the marketplace and our efforts have certainly paid off. In fact, our very solid results during the second quarter clearly demonstrate our ability to do well in this ever-changing and unpredictable environment despite the operating challenges that we face.

With that in mind, I would like to summarize where we stand today. Our restaurant performance has stabilized and continues to adapt. This is driving both sales and profitability improvement. We are generating significant free cash flow that we believe will strengthen our balance sheet and enhance our already ample liquidity position. And we believe we are prudently managing our capital expenditures, which should enable us to continue generating positive free cash flow for the foreseeable future.

Let me briefly discuss each of these points. Restaurant performance. Our strong business model is built upon limited and no-contact channels, such as drive-through, which today comprises about 91% of our restaurant sales and to a lesser extent, at the counter takeout and a recently implemented delivery business. We believe that these service models provide customers the convenience that they need and ideally situate us to navigate the current COVID environment.

Our geographically diverse restaurant portfolio in 23