BK franchisee Carrols records 65% jump in 2nd-Q profit

SYRACUSE N.Y. Carrols Restaurant Group Inc., the largest Burger King franchisee and owner-operator of the fast-casual Pollo Tropical and Taco Cabana brands, reported a 65-percent surge in second-quarter profit on a 5-percent revenue gain and reduced costs from lease refinancings and debt reduction.

For the quarter ended June 30, Carrols earned $5.1 million, or 24 cents per share, compared with $3.1 million, or 19 cents per share, a year ago.

The company said that in 2006 it refinanced lease obligations and paid down debt with proceeds from its initial public offering, helping the company save $5.4 million in interest expense in the second quarter. 

Revenue totaled $200.4 million. At the Burger King division, second-quarter sales rose 3.8 percent to $96.9 million despite the closing of eight units over the past 12 months, Carrols reported. Same-store sales at units of the No. 2 burger brand increased 5.3 percent.

Pollo Tropical’s second-quarter revenue rose 11.1 percent to $42.7 million, on the opening of 11 restaurants in the past year and a same-store sales increase of 1.2 percent.

Revenue at Taco Cabana rose 3.6 percent to $60.8 million, aided by the opening of 10 restaurants during the past year, offset by a same-store sales dip of 0.5 percent, Carrols reported.

Alan Vituli, chairman and CEO of Carrols, which operates or franchises a total of 578 restaurants, said the company is projecting a total revenue increase of about 5 percent in 2007, a same-store sales increases of between 3 percent and 3.5 percent at its Burger King units, between 1.5 percent and 2 percent at Pollo Tropical, and up to 1 percent at Taco Cabana.