FIESTA RESTAURANT GROUP, INC., 10-Q filed on 8/13/2021
Quarterly Report
v3.21.2
Document and Entity Information - shares
6 Months Ended
Jul. 04, 2021
Aug. 06, 2021
Document And Entity Information [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jul. 04, 2021  
Document Transition Report false  
Entity File Number 001-35373  
Entity Registrant Name FIESTA RESTAURANT GROUP, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 90-0712224  
Entity Address, Address Line One 14800 Landmark Boulevard, Suite 500  
Entity Address, City or Town Dallas  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75254  
City Area Code 972  
Local Phone Number 702-9300  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Entity Trading Symbol FRGI  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0001534992  
Current Fiscal Year End Date --01-02  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   26,459,570
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jul. 04, 2021
Jan. 03, 2021
Current assets:    
Cash $ 65,830 $ 49,778
Restricted cash 3,837 3,584
Accounts receivable 4,580 4,933
Inventories 2,022 2,101
Prepaid rent 109 107
Income tax receivable 2,606 9,399
Prepaid expenses and other current assets 6,671 5,646
Current assets held for sale 159,564 8,478
Total current assets 245,219 84,026
Property and equipment, net 94,773 97,867
Operating lease right-of-use assets 157,533 164,665
Goodwill 56,307 56,307
Other assets 6,557 5,855
Non-current assets held for sale 0 160,023
Total assets 560,389 568,743
Current liabilities:    
Current portion of long-term debt 71,541 816
Accounts payable 10,264 8,325
Accrued payroll, related taxes and benefits 8,108 9,738
Accrued real estate taxes 2,775 1,735
Other current liabilities 18,795 17,070
Current liabilities held for sale 120,956 27,225
Total current liabilities 232,439 64,909
Long-term debt, net of current portion 810 71,588
Operating lease liabilities 166,793 174,116
Deferred tax liabilities 2,353 2,269
Other non-current liabilities 9,981 9,757
Non-current liabilities held for sale 0 98,323
Total liabilities 412,376 420,962
Commitments and contingencies
Stockholders' equity:    
Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued 0 0
Common stock, $0.01 par value; 100,000,000 shares authorized, 28,454,149 and 28,278,320 shares issued, respectively, and 25,529,468 and 25,293,149 shares outstanding, respectively 275 273
Additional paid-in capital 179,016 176,614
Retained earnings (accumulated deficit) (10,499) (8,327)
Treasury stock, at cost; 1,993,495 shares (20,779) (20,779)
Total stockholders' equity 148,013 147,781
Total liabilities and stockholders' equity $ 560,389 $ 568,743
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jul. 04, 2021
Jan. 03, 2021
Statement of Financial Position [Abstract]    
Preferred stock, par value (usd per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 20,000,000 20,000,000
Preferred stock, shares issued 0 0
Common stock, par value (usd per share) $ 0.01 $ 0.01
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 28,454,149 28,278,320
Common stock, shares outstanding 25,529,468 25,293,149
Treasury Stock, Shares 1,993,495 1,993,495
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jul. 04, 2021
Jun. 28, 2020
Jul. 04, 2021
Jun. 28, 2020
Costs and expenses:        
Impairment and other lease charges     $ 40 $ 6,518
Income (loss) from continuing operations before income taxes $ 1,839 $ (8,294) 4,221 (13,427)
Provision for (benefit from) income taxes (841) (1,687) 2,236 (3,112)
Income (loss) from continuing operations 2,680 (6,607) 1,985 (10,315)
Loss from discontinued operations, net of tax (2,763) (1,736) (4,157) (5,345)
Net loss $ (83) $ (8,343) $ (2,172) $ (15,660)
Earnings (loss) per common share:        
Continuing operations – basic $ 0.11 $ (0.26) $ 0.07 $ (0.41)
Discontinued operations – basic (0.11) (0.07) (0.16) (0.21)
Basic (usd per share) 0 (0.33) (0.09) (0.62)
Continuing operations – diluted 0.11 (0.26) 0.07 (0.41)
Discontinued operations – diluted (0.11) (0.07) (0.16) (0.21)
Diluted (usd per share) $ 0 $ (0.33) $ (0.09) $ (0.62)
Weighted average common shares outstanding:        
Basic (in shares) 25,496,038 25,267,404 25,410,123 25,393,325
Diluted (in shares) 25,496,038 25,267,404 25,410,783 25,393,325
Continuing Operations        
Revenues:        
Revenues $ 91,155 $ 63,438 $ 179,370 $ 149,563
Costs and expenses:        
Cost of sales 27,558 20,321 54,859 48,052
Restaurant wages and related expenses (including stock-based compensation expense of $15, $27, $31, and $38, respectively) 21,901 15,108 42,240 36,145
Restaurant rent expense 5,824 5,660 11,701 11,300
Other restaurant operating expenses 14,215 10,823 27,520 23,347
Advertising expense 2,898 1,174 5,273 4,678
General and administrative (including stock-based compensation expense of $1,046, $850, $2,040, and $1,348, respectively) 11,050 9,240 21,716 19,458
Depreciation and amortization 4,875 5,455 9,963 10,948
Impairment and other lease charges (202) 1,932 (254) 5,628
Closed restaurant rent expense, net of sublease income 966 1,258 1,716 2,381
Other expense (income), net 170 698 293 927
Total operating expenses 89,255 71,669 175,027 162,864
Income (loss) from operations 1,900 (8,231) 4,343 (13,301)
Interest expense 61 63 122 126
Income (loss) from continuing operations before income taxes 1,839 (8,294) 4,221 (13,427)
Provision for (benefit from) income taxes (841) (1,687) 2,236 (3,112)
Loss from discontinued operations, net of tax 2,763 1,736 4,157 5,345
Net loss (83) (8,343) (2,172) (15,660)
Restaurant sales | Continuing Operations        
Revenues:        
Revenues 90,764 63,292 178,604 149,013
Franchise royalty revenues and fees | Continuing Operations        
Revenues:        
Revenues $ 391 $ 146 $ 766 $ 550
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - Continuing Operations - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jul. 04, 2021
Jun. 28, 2020
Jul. 04, 2021
Jun. 28, 2020
Stock-based compensation $ 1,100 $ 900 $ 2,100 $ 1,400
Restaurant Wages And Related Expenses        
Stock-based compensation 15 27 31 38
General and Administrative Expense        
Stock-based compensation $ 1,046 $ 850 $ 2,040 $ 1,348
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Treasury Stock
Beginning shares at Dec. 29, 2019   25,612,597      
Beginning balance at Dec. 29, 2019 $ 158,236 $ 271 $ 173,132 $ 1,884 $ (17,051)
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 812   812    
Vesting of restricted shares (in shares)   73,998      
Vesting of restricted shares 0 $ 0 0    
Purchase of treasury stock (in shares)   (500,000)      
Purchase of treasury stock (3,728)       (3,728)
Net income (loss) (7,317)     (7,317)  
Ending shares at Mar. 29, 2020   25,186,595      
Ending balance at Mar. 29, 2020 148,003 $ 271 173,944 (5,433) (20,779)
Beginning shares at Dec. 29, 2019   25,612,597      
Beginning balance at Dec. 29, 2019 $ 158,236 $ 271 173,132 1,884 (17,051)
Increase (Decrease) in Stockholders' Equity          
Purchase of treasury stock (in shares) (500,000)        
Purchase of treasury stock $ (3,700)        
Net income (loss) (15,660)        
Ending shares at Jun. 28, 2020   25,288,256      
Ending balance at Jun. 28, 2020 140,688 $ 273 174,970 (13,776) (20,779)
Beginning shares at Mar. 29, 2020   25,186,595      
Beginning balance at Mar. 29, 2020 148,003 $ 271 173,944 (5,433) (20,779)
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 1,028   1,028    
Vesting of restricted shares (in shares)   101,661      
Vesting of restricted shares 0 $ 2 (2)    
Net income (loss) (8,343)     (8,343)  
Ending shares at Jun. 28, 2020   25,288,256      
Ending balance at Jun. 28, 2020 $ 140,688 $ 273 174,970 (13,776) (20,779)
Beginning shares at Jan. 03, 2021 25,293,149 25,293,149      
Beginning balance at Jan. 03, 2021 $ 147,781 $ 273 176,614 (8,327) (20,779)
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 1,163   1,163    
Vesting of restricted shares (in shares)   109,528      
Vesting of restricted shares 0 $ 1 (1)    
Net income (loss) (2,089)     (2,089)  
Ending shares at Apr. 04, 2021   25,402,677      
Ending balance at Apr. 04, 2021 $ 146,855 $ 274 177,776 (10,416) (20,779)
Beginning shares at Jan. 03, 2021 25,293,149 25,293,149      
Beginning balance at Jan. 03, 2021 $ 147,781 $ 273 176,614 (8,327) (20,779)
Increase (Decrease) in Stockholders' Equity          
Net income (loss) $ (2,172)        
Ending shares at Jul. 04, 2021 25,529,468 25,529,468      
Ending balance at Jul. 04, 2021 $ 148,013 $ 275 179,016 (10,499) (20,779)
Beginning shares at Apr. 04, 2021   25,402,677      
Beginning balance at Apr. 04, 2021 146,855 $ 274 177,776 (10,416) (20,779)
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 1,241   1,241    
Vesting of restricted shares (in shares)   126,791      
Vesting of restricted shares 0 $ 1 (1)    
Net income (loss) $ (83)     (83)  
Ending shares at Jul. 04, 2021 25,529,468 25,529,468      
Ending balance at Jul. 04, 2021 $ 148,013 $ 275 $ 179,016 $ (10,499) $ (20,779)
v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
6 Months Ended
Jul. 04, 2021
Jun. 28, 2020
Operating activities:    
Net loss $ (2,172) $ (15,660)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Loss (gain) on disposals of property and equipment, net (285) 571
Stock-based compensation 2,404 1,840
Impairment and other lease charges 40 6,518
Depreciation and amortization 17,762 18,995
Amortization of deferred financing costs 400 135
Deferred income taxes (975) 3,107
Changes in other operating assets and liabilities 4,342 13,462
Net cash provided by operating activities 21,516 28,968
Capital expenditures:    
New restaurant development 0 (1,840)
Restaurant remodeling (1,237) (1,087)
Other restaurant capital expenditures (6,458) (3,741)
Corporate and restaurant information systems (1,374) (2,035)
Total capital expenditures (9,069) (8,703)
Proceeds from disposals of properties 1,307 0
Proceeds from sale-leaseback transactions 3,083 0
Net cash used in investing activities (4,679) (8,703)
Financing activities:    
Borrowings on revolving credit facility 0 146,940
Repayments on revolving credit facility 0 (75,420)
Borrowings of unsecured debt 0 15,000
Repayments of unsecured debt 0 (15,000)
Repayment of secured debt (375) 0
Principal payments on finance leases (154) (95)
Payments to purchase treasury stock 0 (3,728)
Net cash provided by (used in) financing activities (529) 67,697
Net change in cash and restricted cash 16,308 87,962
Cash and restricted cash, beginning of period 53,362 13,089
Cash and restricted cash of discontinued operations, beginning of period 257 324
Cash and restricted cash of discontinued operations, end of period (260) (282)
Cash and restricted cash, end of period $ 69,667 $ 101,093
v3.21.2
Basis of Presentation
6 Months Ended
Jul. 04, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of Presentation
Business Description. Fiesta Restaurant Group, Inc. ("Fiesta Restaurant Group" or "Fiesta") owns, operates and franchises two restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc. and its subsidiaries, Pollo Franchise, Inc. (collectively "Pollo Tropical"), and Taco Cabana, Inc. and its subsidiaries (collectively "Taco Cabana"). Unless the context otherwise requires, Fiesta and its subsidiaries, Pollo Tropical and Taco Cabana, are collectively referred to as the "Company." At July 4, 2021, the Company owned and operated 138 Pollo Tropical® restaurants and 142 Taco Cabana® restaurants. All of the Pollo Tropical restaurants are located in Florida and all of the Taco Cabana restaurants are located in Texas. At July 4, 2021, the Company franchised a total of 29 Pollo Tropical restaurants and six Taco Cabana restaurants. The franchised Pollo Tropical restaurants include 17 in Puerto Rico, two in Panama, one in Guyana, two in Ecuador, one in the Bahamas, five on college campuses and one at a hospital in Florida. The franchised Taco Cabana restaurants include six in New Mexico.
Discontinued Operations. On July 1, 2021, the Company entered into a stock purchase agreement for the sale of Taco Cabana. The Company has classified the revenues, costs and expenses and income taxes attributable to the Taco Cabana business segment, together with certain costs related to the transaction, within loss from discontinued operations, net of tax, on the condensed consolidated statements of operations for all periods presented. See Note 2—Dispositions. Unless otherwise noted, amounts and disclosures throughout these notes to the condensed consolidated financial statements relate to the Company's continuing operations.
Basis of Consolidation. The unaudited condensed consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
Fiscal Year. The Company uses a 52–53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended January 3, 2021 contained 53 weeks. The three and six months ended July 4, 2021 and June 28, 2020 each contained thirteen weeks. The fiscal year ending January 2, 2022 will contain 52 weeks.
Basis of Presentation. The accompanying unaudited condensed consolidated financial statements for the three and six months ended July 4, 2021 and June 28, 2020 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission and do not include certain information and footnotes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation of such financial statements have been included. The results of operations for the three and six months ended July 4, 2021 and June 28, 2020 are not necessarily indicative of the results to be expected for the full year.
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended January 3, 2021 included in the Company's Annual Report on Form 10-K for the fiscal year ended January 3, 2021. The January 3, 2021 balance sheet data is derived from those audited financial statements.
Reclassification. Certain reclassifications have been made in the 2020 condensed consolidated financial statements to conform with current year presentation related to the discontinued operations of Taco Cabana. See Note 2—Dispositions.
Guidance Adopted in 2021. In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740) ("ASU No. 2019-12"), which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The Company adopted this new accounting standard on January 4, 2021, and will apply it prospectively in each period after the date of adoption. The impact of the standard is largely dependent on interim and anticipated profit or loss in a given period, however the Company does not expect ASU No. 2019-12 to have a significant impact on its financial statements.
Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percentage of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services.
Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date under current market conditions. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect management's own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
Current Assets and Liabilities. The carrying values reported on the condensed consolidated balance sheets of cash and restricted cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.
Term Loan Borrowings. The fair value of outstanding term loan borrowings under the Company's new senior credit facility, which is considered Level 2, is based on current LIBOR rates. The fair value of the Company's senior credit facility was approximately $77.1 million at July 4, 2021 and $74.4 million at January 3, 2021, respectively. The carrying value of the Company's senior credit facility was $71.5 million at July 4, 2021 and $71.5 million at January 3, 2021, respectively.
Long-Lived Assets. The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. See Note 4—Impairment of Long-Lived Assets and Other Lease Charges.
Leases. The Company assesses whether an agreement contains a lease at inception. All leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the condensed consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the condensed consolidated balance sheets. Operating and financing leases related to discontinued operations are included within current assets held for sale and current liabilities held for sale in the condensed consolidated balance sheet as of July 4, 2021 and non-current assets held for sale, current liabilities held for sale, and non-current liabilities held for sale in the condensed consolidated balance sheet as of January 3, 2021.
ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20-year lease term for new restaurant properties and when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component.
During the first quarter of 2021, the Company sold two Taco Cabana restaurant properties for total proceeds of $3.1 million in sale-leaseback transactions that resulted in a total gain of $0.3 million. During the second quarter of 2021, the Company sold one Taco Cabana restaurant property for total proceeds of $1.3 million that resulted in a gain of $0.1 million. These gains are recognized in discontinued operations, in the condensed consolidated statements of operations.Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates. Due to the uncertainty associated with the unprecedented nature of the COVID-19 pandemic and the impact it will have on the Company's operations and future cash flows, it is reasonably possible that the estimates of future cash flows used in impairment assessments will change in the near term and the effect of the change could be material.
v3.21.2
Dispositions
6 Months Ended
Jul. 04, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Dispositions Dispositions
On June 30, 2021, the Company's Board of Directors approved a stock purchase agreement, which was subsequently entered into by the Company on July 1, 2021, for the sale of all of the outstanding capital stock of Taco Cabana, Inc., including nearly all related assets and liabilities, for a cash purchase price of $85.0 million subject to reduction for (i) closing adjustments of approximately $4.6 million and (ii) certain other working capital adjustments as set forth in the stock purchase agreement. The Company expects this transaction to be completed in the third quarter of 2021, subject to the satisfaction of customary closing conditions, although there is no assurance that the transaction will be completed in the third quarter of 2021.
The assets and liabilities of Taco Cabana that are to be sold are classified as current assets held for sale and current liabilities held for sale, respectively, in the condensed consolidated balance sheet as of July 4, 2021 and current assets held for sale, non-current assets held for sale, current liabilities held for sale, and non-current liabilities held for sale, respectively, in the condensed consolidated balance sheet as of January 3, 2021. Taco Cabana assets and liabilities that will be retained by the Company are not classified as held for sale.
All revenues, costs and expenses and income taxes attributable to Taco Cabana, together with certain costs related to the transaction, have been aggregated within loss from discontinued operations, net of tax, in the condensed consolidated statements of operations for all periods presented. No amounts for shared general and administrative operating support expense were allocated to discontinued operations. As required by the terms of the senior credit facility, the proceeds from the sale will be used to fully repay Fiesta's outstanding term loan borrowings. The early repayment is subject to a 103% loan prepayment premium. The interest expense and the amortization of discount and debt issuance costs of the term loan portion of the senior credit facility are included within loss from discontinued operations, net of tax. As of July 4, 2021, outstanding term loan borrowings, net of unamortized discount and debt issuance costs, are included in current liabilities in the condensed consolidated balance sheet. As of July 4, 2021, the unamortized discount on the debt was $1.3 million and unamortized debt issuance costs were $1.8 million.
Upon completion of the sale of Taco Cabana, the Company will provide certain services to Taco Cabana subject to a transition service agreement which is expected to continue for up to 120 days. The Company will retain certain closed Taco Cabana restaurant leases, including the associated operating lease right-of-use assets and operating lease liabilities. The Company will also retain liability for Taco Cabana's accrued worker's compensation and general liability claims for periods prior to the sale. These liabilities are recognized in other current liabilities and other non-current liabilities in the condensed consolidated balance sheets. As there are estimates and assumptions inherent in recording these insurance liabilities, including the ability to estimate the future development of incurred claims based on historical trends or the severity of the claims, differences between actual future events and prior estimates and assumptions could result in adjustments to these liabilities.
A summary of assets and liabilities of the discontinued operations is as follows:
July 4, 2021January 3, 2021
Carrying amount of major classes of assets included as part of discontinued operations:
Accounts receivable$3,990 $3,951 
Inventories1,997 2,104 
Prepaid expenses and other current assets1,929 2,423 
Total current assets of the disposal group classified as held for sale8,478 
Property and equipment, net57,469 63,214 
Operating lease right-of-use assets94,076 96,639 
Other assets103 170 
Total non-current assets of the disposal group classified as held for sale160,023 
Total assets of the disposal group classified as held for sale$159,564 $168,501 
Carrying amount of major classes of liabilities included as part of discontinued operations:
Current portion of long-term debt$207 $199 
Accounts payable6,498 5,014 
Accrued liabilities7,562 9,363 
Other current liabilities13,079 12,649 
Total current liabilities of the disposal group classified as held for sale27,225 
Long-term debt, net of current portion627 740 
Operating lease liabilities90,697 93,970 
Deferred tax liabilities781 1,840 
Other non-current liabilities1,505 1,773 
Total non-current liabilities of the disposal group classified as held for sale98,323 
Total liabilities of the disposal group classified as held for sale$120,956 $125,548 
A summary of the results of the discontinued operations is as follows:
Three Months EndedSix Months Ended
July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Major classes of line items constituting pretax loss of discontinued operations:
Revenues:
Total revenues$66,352 $58,430 $122,876 $119,004 
Costs and expenses:
Cost of sales18,823 17,486 34,608 36,031 
Restaurant wages and related expenses (including stock-based compensation expense of $24, $42, $50, and $67, respectively)
20,640 18,639 38,345 38,097 
Restaurant rent expense5,657 5,619 11,413 11,318 
Other restaurant operating expenses10,459 8,166 19,450 17,153 
General and administrative (including stock-based compensation expense of $156, $109, $283, and $387, respectively)
4,089 3,048 7,991 7,214 
Depreciation and amortization3,961 4,110 7,799 8,047 
Pre-opening costs— — — 69 
Other income and expense items that are not major2,658 1,980 4,381 5,984 
Total operating expenses66,287 59,048 123,987 123,913 
Income (loss) from operations65 (618)(1,111)(4,909)
Interest expense1,906 1,174 3,868 2,072 
Loss from discontinued operations before income taxes(1,841)(1,792)(4,979)(6,981)
Provision for (benefit from) income taxes922 (56)(822)(1,636)
Loss from discontinued operations$(2,763)$(1,736)$(4,157)$(5,345)
A summary of significant investing activity and non-cash operating, investing, and financing activity of the discontinued operations from the condensed consolidated statements of cash flows is as follows:
Six Months Ended
July 4, 2021June 28, 2020
Non-cash operating activities:
Gain on disposals of property and equipment, net$(290)$— 
Stock-based compensation333 454 
Impairment and other lease charges294 890 
Depreciation and amortization7,799 8,047 
Investing activities:
Capital expenditures:
New restaurant development$— $(854)
Restaurant remodeling(645)(730)
Other restaurant capital expenditures(2,708)(1,722)
Corporate and restaurant information systems(110)(354)
Total capital expenditures(3,463)(3,660)
Proceeds from disposals of properties1,307 — 
Proceeds from sale-leaseback transactions3,083 — 
Net cash provided by (used in) investing activities – discontinued operations$927 $(3,660)
Supplemental cash flow disclosures:
Interest paid on long-term debt$3,356 $1,989 
Supplemental cash flow disclosures of non-cash investing and financing activities:
Accruals for capital expenditures$1,692 $862 
Right-of-use assets obtained in exchange for lease liabilities:
Operating lease ROU assets5,156 8,680 
Finance lease ROU assets— 33 
Right-of-use assets and lease liabilities reduced for terminated leases:
Operating lease ROU assets2,194 628 
Operating lease liabilities2,795 872 
v3.21.2
Prepaid Expenses and Other Current Assets
6 Months Ended
Jul. 04, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:
July 4, 2021January 3, 2021
Prepaid contract expenses$4,155 $4,138 
Other2,516 1,508 
$6,671 $5,646 
v3.21.2
Impairment of Long-Lived Assets and Other Lease Charges
6 Months Ended
Jul. 04, 2021
Property, Plant and Equipment [Abstract]  
Impairment of Long-Lived Assets and Other Lease Charges Impairment of Long-Lived Assets and Other Lease Charges
The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material.
A summary of impairment of long-lived assets and other lease charges (recoveries) is as follows:
 Three Months EndedSix Months Ended
 July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Impairment of long-lived assets$32 $1,072 $142 $4,763 
Other lease charges (recoveries)(234)860 (396)865 
$(202)$1,932 $(254)$5,628 
Impairment and other lease charges for the three and six months ended July 4, 2021 include gains from lease terminations of $(0.3) million and $(0.4) million, respectively. Additionally, impairment charges for the six months ended July 4, 2021 includes charges of $0.1 million related primarily to impairment of equipment from previously impaired and closed restaurants. Impairment and other lease charges for the three and six months ended June 28, 2020 for Pollo Tropical include impairment charges of $1.1 million and $4.8 million, respectively, and other lease charges of $0.9 million for both periods. Pollo Tropical impairment charges for the three months ended June 28, 2020 related primarily to the write-down of assets held for sale to their fair value less costs to sell. For the six months ended June 28, 2020, impairment charges also include the impairment of assets from three underperforming Pollo Tropical restaurants, two of which were closed in the third quarter of 2020, for which continued sales declines coupled with the impact of expected sales declines resulted in a decrease in the estimated future cash flows. For the three and six months ended June 28, 2020, other lease charges for Pollo Tropical related primarily to lease termination charges of $0.9 million for restaurant locations the Company decided not to develop.
The Company determines the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions, the Company's history of using these assets in the operation of its business and the Company's expectation of how a market participant would value the assets. In addition, for those restaurants reviewed for impairment where the Company owns the land and building, the Company utilizes third-party information such as a broker quoted value to determine the fair value of the property, when applicable. The Company also utilizes discounted future cash flows to determine the fair value of assets for certain leased restaurants with positive discounted projected future cash flows. The Company utilizes current market lease rent and discount rates to determine the fair value of right-of-use lease assets. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy. Impairment charges for the six months ended July 4, 2021 related primarily to impairment of equipment from previously impaired restaurants.
v3.21.2
Other Liabilities
6 Months Ended
Jul. 04, 2021
Other Liabilities Disclosure [Abstract]  
Other Liabilities Other Liabilities
Other current liabilities consist of the following:
July 4, 2021January 3, 2021
Operating lease liabilities$9,963 $9,715 
Accrued workers' compensation and general liability claims3,491 3,619 
Sales and property taxes1,143 1,209 
Accrued occupancy costs(1)
210 269 
Other3,988 2,258 
$18,795 $17,070 
(1)    Accrued occupancy costs primarily consisted of obligations pertaining to closed restaurant locations.

Other non-current liabilities consist of the following:
July 4, 2021January 3, 2021
Accrued workers' compensation and general liability claims$6,791 $6,791 
Accrued payroll taxes(1)
1,530 1,318 
Deferred compensation466 491 
Other1,194 1,157 
$9,981 $9,757 
(1)    Includes employer Social Security payroll tax deferred as a result of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act").
The following table presents the activity in the closed restaurant reserve, which is included within other current liabilities on the condensed consolidated balance sheets at July 4, 2021 and January 3, 2021.
Six Months Ended July 4, 2021Year Ended January 3, 2021
Balance, beginning of period$163 $528 
Payments, net(12)(178)
Other adjustments(41)(187)
Balance, end of period$110 $163 
v3.21.2
Stockholders' Equity
6 Months Ended
Jul. 04, 2021
Equity [Abstract]  
Stockholders' Equity Stockholders' Equity
Purchase of Treasury Stock
In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 500,000 shares of common stock valued at approximately $3.7 million during the six months ended June 28, 2020. The shares repurchased in 2020 were purchased on or before March 12, 2020. The repurchased shares are held as treasury stock at cost. The Company's senior credit facility prohibits share repurchases.
Stock-Based Compensation
On April 28, 2021, the stockholders of the Company approved the Fiesta Restaurant Group, Inc. 2021 Stock Incentive Plan (the "2021 Plan"). Following a grant of a total 37,874 shares to non-employee directors under the Company's 2012 Stock Incentive Plan (the "2012 Plan") on April 28, 2021, no additional shares will be granted under the 2012 Plan. During the six months ended July 4, 2021, the Company did not grant any shares under the 2021 Plan.
During the six months ended July 4, 2021, the Company granted certain employees and non-employee directors a total of 191,872 non-vested restricted shares under the 2012 Plan, of which 37,820 non-vested restricted shares related to discontinued operations. The shares granted to employees vest and become non-forfeitable over a four-year vesting period. The shares granted to non-employee directors vest and become non-forfeitable over a one-year vesting period. The weighted average fair value at grant date for non-vested shares issued during the six months ended July 4, 2021 and June 28, 2020 was $16.83 and $8.27 per share, respectively.
During the six months ended July 4, 2021, the Company also granted certain employees a total of 64,089 restricted stock units under the 2012 Plan subject to performance conditions, of which 4,619 restricted stock units related to discontinued operations. The restricted stock units vest and become non-forfeitable at the end of a three-year vesting period. The number of shares into which these restricted stock units convert is based on the attainment of certain financial performance conditions and ranges from no shares, if the minimum performance condition is not met, to 128,178 shares if the maximum performance condition is met. The weighted average fair value at grant date for the restricted stock units granted in the six months ended July 4, 2021 was $17.43 per share.
Stock-based compensation expense for the three and six months ended July 4, 2021 was $1.1 million and $2.1 million, respectively, and for the three and six months ended June 28, 2020 was $0.9 million and $1.4 million, respectively. Stock-based compensation expense from discontinued operations for the three and six months ended July 4, 2021 was $0.2 million and $0.3 million, respectively, and for the three and six months ended June 28, 2020 was $0.2 million and $0.5 million, respectively. At July 4, 2021, the total unrecognized stock-based compensation expense related to non-vested restricted shares and restricted stock units was approximately $9.6 million, of which $1.5 million related to discontinued operations. At July 4, 2021, the remaining weighted average vesting period for non-vested restricted shares was 2.2 years and restricted stock units was 2.7 years.
A summary of all non-vested restricted shares and restricted stock units activity for the six months ended July 4, 2021 is as follows:
Non-Vested SharesRestricted Stock Units
SharesWeighted
Average
Grant Date
Fair Value
UnitsWeighted
Average
Grant Date
Fair Value
Outstanding at January 3, 2021991,676 $10.26 150,585 $9.49 
Granted191,872 16.83 64,089 17.43 
Vested and released(234,289)10.84 (2,030)20.75 
Forfeited(18,073)12.78 (148,469)9.32 
Outstanding at July 4, 2021931,186 $11.42 64,175 $17.45 
The fair value of non-vested restricted shares and restricted stock units granted during the six months ended July 4, 2021, is based on the closing stock price on the date of grant.
v3.21.2
Business Segment Information
6 Months Ended
Jul. 04, 2021
Segment Reporting [Abstract]  
Business Segment Information Business Segment Information
The Company owns, operates and franchises two restaurant brands, Pollo Tropical® and Taco Cabana®, each of which is an operating segment. Pollo Tropical restaurants feature fire-grilled and crispy citrus marinated chicken and other freshly prepared menu items, while Taco Cabana restaurants specialize in Mexican-inspired food with most items made fresh. The Taco Cabana operating segment is included in discontinued operations in the condensed consolidated financial statements for all periods presented.
Each segment's accounting policies are described in the summary of significant accounting policies in Note 1 to the Company's audited financial statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended January 3, 2021. The primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants as set forth in the reconciliation table below.
The "Other" column includes corporate-related items not allocated to reportable segments and consists primarily of corporate-owned property and equipment, lease assets, miscellaneous prepaid costs, capitalized costs associated with the issuance of indebtedness, corporate cash accounts, and a current income tax receivable. The "Other" column also includes corporate costs that were previously allocated to Taco Cabana and are not included in discontinued operations.
Three Months EndedPollo TropicalOtherContinuing OperationsTaco CabanaOtherDiscontinued Operations
July 4, 2021:
Restaurant sales$90,764 $— $90,764 $66,132 $— $66,132 
Franchise revenue391 — 391 220 — 220 
Cost of sales27,558 — 27,558 18,823 — 18,823 
Restaurant wages and related expenses(1)
21,901 — 21,901 20,640 — 20,640 
Restaurant rent expense5,824 — 5,824 5,657 — 5,657 
Other restaurant operating expenses14,100 115 14,215 10,574 (115)10,459 
Advertising expense2,898 — 2,898 2,017 — 2,017 
General and administrative expense(2)
8,335 2,715 11,050 6,804 (2,715)4,089 
Adjusted EBITDA11,949 (2,826)9,123 3,039 2,826 5,865 
Depreciation and amortization4,844 31 4,875 3,992 (31)3,961 
Capital expenditures4,352 189 4,541 1,432 — 1,432 
June 28, 2020:
Restaurant sales$63,292 $— $63,292 $58,255 $— $58,255 
Franchise revenue146 — 146 175 — 175 
Cost of sales20,321 — 20,321 17,486 — 17,486 
Restaurant wages and related expenses(1)
15,108 — 15,108 18,639 — 18,639 
Restaurant rent expense5,660 — 5,660 5,619 — 5,619 
Other restaurant operating expenses10,714 109 10,823 8,275 (109)8,166 
Advertising expense1,178 (4)1,174 965 969 
General and administrative expense(2)
6,538 2,702 9,240 5,750 (2,702)3,048 
Adjusted EBITDA4,993 (2,347)2,646 2,672 2,347 5,019 
Depreciation and amortization5,233 222 5,455 4,332 (222)4,110 
Capital expenditures763 797 1,560 1,060 — 1,060 
Six Months EndedPollo TropicalOtherContinuing OperationsTaco CabanaOtherDiscontinued Operations
July 4, 2021:
Restaurant sales$178,604 $— $178,604 $122,456 $— $122,456 
Franchise revenue766 — 766 420 — 420 
Cost of sales54,859 — 54,859 34,608 — 34,608 
Restaurant wages and related expenses(1)
42,240 — 42,240 38,345 — 38,345 
Restaurant rent expense11,701 — 11,701 11,413 — 11,413 
Other restaurant operating expenses27,284 236 27,520 19,686 (236)19,450 
Advertising expense5,273 — 5,273 3,630 — 3,630 
General and administrative expense(2)
16,215 5,501 21,716 13,492 (5,501)7,991 
Adjusted EBITDA24,296 (5,495)18,801 3,836 5,495 9,331 
Depreciation and amortization9,782 181 9,963 7,980 (181)7,799 
Capital expenditures5,061 545 5,606 3,463 — 3,463 
June 28, 2020:
Restaurant sales$149,013 $— $149,013 $118,620 $— $118,620 
Franchise revenue550 — 550 384 — 384 
Cost of sales48,052 — 48,052 36,031 — 36,031 
Restaurant wages and related expenses(1)
36,145 — 36,145 38,097 — 38,097 
Restaurant rent expense11,300 — 11,300 11,318 — 11,318 
Other restaurant operating expenses23,100 247 23,347 17,400 (247)17,153 
Advertising expense4,682 (4)4,678 3,244 3,248 
General and administrative expense(2)
14,026 5,432 19,458 12,646 (5,432)7,214 
Adjusted EBITDA13,773 (5,027)8,746 1,765 5,027 6,792 
Depreciation and amortization10,511 437 10,948 8,484 (437)8,047 
Capital expenditures4,044 999 5,043 3,660 — 3,660 
Identifiable Assets:
July 4, 2021$305,648 $95,177 $400,825 $159,564 $— $159,564 
January 3, 2021311,942 88,300 400,242 168,501 — 168,501 
(1) Continuing operations includes stock-based compensation expense of $15 and $31 for the three and six months ended July 4, 2021, respectively, and $27 and $38 for the three and six months ended June 28, 2020, respectively. Discontinued operations includes stock-based compensation expense of $24 and $50 for the three and six months ended July 4, 2021, respectively, and $42 and $67 for the three and six months ended June 28, 2020, respectively.
(2) Continuing operations includes stock-based compensation expense of $1,046 and $2,040 for the three and six months ended July 4, 2021, respectively, and $850 and $1,348 for the three and six months ended June 28, 2020, respectively. Discontinued operations includes stock-based compensation expense of $156 and $283 for the three and six months ended July 4, 2021, respectively, and $109 and $387 for the three and six months ended June 28, 2020, respectively.
A reconciliation of consolidated net loss to Adjusted EBITDA follows:
Three Months EndedPollo TropicalOtherContinuing OperationsTaco CabanaOtherDiscontinued Operations
July 4, 2021:
Net loss$(83)$(2,763)
Loss from discontinued operations, net of tax2,763 — 
Provision for (benefit from) income taxes(841)922 
Income (loss) before taxes$4,336 $(2,497)$1,839 $(4,338)$2,497 $(1,841)
Add:
     Non-general and administrative adjustments:
          Depreciation and amortization4,844 31 4,875 3,992 (31)3,961 
          Impairment and other lease charges(332)130 (202)494 (130)364 
          Interest expense994 (933)61 973 933 1,906 
Closed restaurant rent expense, net of sublease income567 399 966 640 (399)241 
          Other expense (income), net130 40 170 76 (40)36 
          Stock-based compensation expense15 — 15 24 — 24 
Total non-general and administrative adjustments6,218 (333)5,885 6,199 333 6,532 
     General and administrative adjustments:
          Stock-based compensation expense641 405 1,046 561 (405)156 
          Restructuring costs and retention bonuses18 — 18 14 — 14 
          Digital and brand repositioning costs335 — 335 275 — 275 
  Transaction costs401 (401)— 328 401 729 
               Total general and administrative adjustments1,395 1,399 1,178 (4)1,174 
Adjusted EBITDA$11,949 $(2,826)$9,123 $3,039 $2,826 $5,865 
June 28, 2020:
Net loss$(8,343)$(1,736)
Loss from discontinued operations, net of tax1,736 — 
Benefit from income taxes(1,687)(56)
Income (loss) before taxes$(5,186)$(3,108)$(8,294)$(4,900)$3,108 $(1,792)
Add:
     Non-general and administrative adjustments:
          Depreciation and amortization5,233 222 5,455 4,332 (222)4,110 
          Impairment and other lease charges1,932 — 1,932 353 — 353 
          Interest expense625 (562)63 612 562 1,174 
Closed restaurant rent expense, net of sublease income671 587 1,258 1,159 (587)572 
          Other expense (income), net644 54 698 140 (54)86 
          Stock-based compensation expense27 — 27 42 — 42 
Total non-general and administrative adjustments9,132 301 9,433 6,638 (301)6,337 
     General and administrative adjustments:
          Stock-based compensation expense523 327 850 436 (327)109 
          Restructuring costs and retention bonuses452 133 585 439 (133)306 
          Digital and brand repositioning costs72 — 72 59 — 59 
Total general and administrative adjustments1,047 460 1,507 934 (460)474 
Adjusted EBITDA$4,993 $(2,347)$2,646 $2,672 $2,347 $5,019 
Six Months EndedPollo TropicalOtherContinuing OperationsTaco CabanaOtherDiscontinued Operations
July 4, 2021:
Net loss$(2,172)$(4,157)
Loss from discontinued operations, net of tax4,157 — 
Provision for (benefit from) income taxes2,236 (822)
Income (loss) before taxes$9,271 $(5,050)$4,221 $(10,029)$5,050 $(4,979)
Add:
     Non-general and administrative adjustments:
          Depreciation and amortization9,782 181 9,963 7,980 (181)7,799 
          Impairment and other lease charges(222)(32)(254)262 32 294 
          Interest expense1,964 (1,842)122 2,026 1,842 3,868 
Closed restaurant rent expense, net of sublease income807 909 1,716 1,491 (909)582 
          Other expense (income), net196 97 293 (28)(97)(125)
          Stock-based compensation expense31 — 31 50 — 50 
Total non-general and administrative adjustments12,558 (687)11,871 11,781 687 12,468 
     General and administrative adjustments:
          Stock-based compensation expense1,242 798 2,040 1,081 (798)283 
          Restructuring costs and retention bonuses18 — 18 14 — 14 
          Digital and brand repositioning costs651 — 651 534 — 534 
          Transaction costs556 (556)— 455 556 1,011 
Total general and administrative adjustments2,467 242 2,709 2,084 (242)1,842 
Adjusted EBITDA$24,296 $(5,495)$18,801 $3,836 $5,495 $9,331 
June 28, 2020:
Net loss$(15,660)$(5,345)
Loss from discontinued operations, net of tax5,345 — 
Benefit from income taxes(3,112)(1,636)
Income (loss) before taxes$(7,013)$(6,414)$(13,427)$(13,395)$6,414 $(6,981)
Add:
     Non-general and administrative adjustments:
          Depreciation and amortization10,511 437 10,948 8,484 (437)8,047 
          Impairment and other lease charges5,628 — 5,628 890 — 890 
          Interest expense1,108 (982)126 1,090 982 2,072 
Closed restaurant rent expense, net of sublease income1,273 1,108 2,381 2,189 (1,108)1,081 
          Other expense (income), net751 176 927 941 (176)765 
          Stock-based compensation expense38 — 38 67 — 67 
Total non-general and administrative adjustments19,309 739 20,048 13,661 (739)12,922 
     General and administrative adjustments:
          Stock-based compensation expense833 515 1,348 902 (515)387 
          Restructuring costs and retention bonuses452 133 585 439 (133)306 
          Digital and brand repositioning costs192 — 192 158 — 158 
Total general and administrative adjustments1,477 648 2,125 1,499 (648)851 
Adjusted EBITDA$13,773 $(5,027)$8,746 $1,765 $5,027 $6,792 
v3.21.2
Earnings (Loss) Per Share
6 Months Ended
Jul. 04, 2021
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share Earnings (Loss) Per Share
Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method.
All outstanding restricted stock units in the three months ended July 4, 2021 were performance based awards. For the six months ended July 4, 2021, no shares of outstanding restricted stock units were excluded from the computation of diluted EPS, as all outstanding restricted stock units were dilutive. For the three and six months ended June 28, 2020, all shares of outstanding restricted stock units were excluded from the computation of diluted EPS because including these restricted stock units would have been antidilutive as a result of the loss from continuing operations in the three and six months ended June 28, 2020.
The computation of basic and diluted EPS is as follows:
Three Months EndedSix Months Ended
July 4, 2021June 28, 2020July 4, 2021June 28, 2020
Basic and diluted EPS:
Income (loss) from continuing operations$2,680 $(6,607)$1,985 $(10,315)
Income (loss) from discontinued operations(2,763)(1,736)(4,157)(5,345)
Net loss$(83)$(8,343)$(2,172)$(15,660)
Weighted average common shares—basic25,496,038 25,267,404 25,410,123 25,393,325 
Restricted stock units— — 660 — 
Weighted average common shares—diluted25,496,038 25,267,404 25,410,783 25,393,325 
Loss from continuing operations per common share—basic$0.11 $(0.26)$0.07 $(0.41)
Loss from discontinued operations per common share—basic(0.11)(0.07)(0.16)(0.21)
Loss per common share—basic— (0.33)(0.09)(0.62)
Loss from continuing operations per common share—diluted0.11 (0.26)0.07 (0.41)
Loss from discontinued operations per common share—diluted(0.11)(0.07)(0.16)(0.21)