HOUSTON, May 11, 2017 /PRNewswire/ -- JCP Investment Management, LLC, together with its affiliates and the other participants in its solicitation (collectively, "JCP" or "we"), collectively one of the largest stockholders of Fiesta Restaurant Group, Inc. ("Fiesta" or the "Company") (NASDAQ: FRGI), with aggregate ownership of approximately 8.6% of the Company's outstanding shares, today commented on Fiesta's disappointing first quarter earnings announcement.
JCP was disappointed, but not surprised, by the Company's first quarter 2017 results announcement. Beyond Fiesta's poor reported performance, including a 10.7%1 decline in April comparable restaurant transaction counts at Pollo Tropical from the same period in 2016, CEO Richard Stockinger highlighted a number of alarming issues plaguing Fiesta's operations, including:
- sub-optimal product specifications,
- inefficient kitchen procedures,
- low front-of-the-house hospitality,
- ill-managed labor schedules, and
- ineffective advertising program.
In fact, the Company is facing so many issues that Mr. Stockinger apparently has a list of 170 action items that must be taken to address Fiesta's ever-worsening performance. We appreciate a good list, but what Fiesta really needs is a sense of accountability – something that has been lacking in the boardroom for far too long.
Following Monday's earnings call, we believe stockholders now can fully appreciate the "deferred maintenance needs" referred to in the Company's April 24th press release announcing certain preliminary financial results and the "Strategic Renewal Plan." The fact that the Board wasted more than $70 million investing in new markets while neglecting the core Florida market and failing to maintain these once highly profitable stores demonstrates the need to hold the incumbent directors accountable who authorized this value destruction.
We remind stockholders that not one non-executive director has stepped down from the Board despite the Company's continued underperformance.
A vote on the GOLD proxy for John B. Morlock and James C. Pappas means a vote for:
- Increased management accountability
- We intend to establish stated EBITDA goals and other performance metrics to make expectations clear and enhance accountability
- Improved corporate governance
- We intend to seek stockholder approval to declassify the Board and eliminate other stockholder-unfriendly governance practices
- Additional restaurant expertise on the Board
- Messrs. Morlock and Pappas each bring a wealth of restaurant industry experience
- Direct stockholder representation in the boardroom
- We will bring an owner's mentality to ensure decisions are made with the best interests of public stockholders in mind
- Reduced influence of Jefferies
- There are still 3 Jefferies-affiliated directors on the Board despite Jefferies selling its entire position after previously owning approximately 28.3% of the Company. We are running against 2 of these directors: Barry J. Alperin and Brian P. Friedman
The time for accountability is now. We urge stockholders to send a clear message to the Board that Fiesta's continued underperformance and pattern of entrenchment will not be tolerated by voting the GOLD proxy to elect our highly qualified candidates John B. Morlock and James C. Pappas.
VOTE THE GOLD PROXY CARD TO ELECT JOHN B. MORLOCK AND JAMES C. PAPPAS TODAY
If you have any questions, or require assistance with your vote, please contact InvestorCom, toll-free at (877) 972-0090, call direct at (203) 972-9300
About JCP Investment Management:
JCP Investment Management, LLC is an investment firm headquartered in Houston, TX that engages in value-based investing across the capital structure. JCP follows an opportunistic approach to investing across different equity, credit and distressed securities largely in North America.
1 Fiesta's May 8, 2017 Earnings Call Transcript
James C. Pappas
JCP Investment Management, LLC
John Glenn Grau
Bill Douglass, (646) 504-0890
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SOURCE JCP Investment Management, LLC