JCP Reiterates The Facts For Fiesta Restaurant Group Stockholders

HOUSTON, May 26, 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 9.0% of the Company's outstanding shares, feels compelled to remind Fiesta stockholders of the facts following additional false and misleading statements made by the Company in its May 25, 2017 press release.

1.  During their tenure on Fiesta's Board of Directors (the "Board"), Barry J. Alperin and Brian P. Friedman, the two Jefferies-affiliated directors we are seeking to replace, have not proven themselves capable of executing a plan to enhance stockholder value.

• Fiesta has produced negative total shareholder returns over the last 1, 2 and 3-year periods under the incumbents' leadership
• Messrs. Alperin and Friedman approved the prior plan that squandered more than $70 million expanding Pollo Tropical into Texas
  • The failed expansion into Texas was pursued only after Jefferies sold its last shares at a significant premium to where Fiesta trades today
  • After the expansion into Texas was abandoned, Leucadia (Jefferies' parent company and where Mr. Friedman serves as President and a director) purchased Fiesta shares at a discount to where the Company trades today
    • We question whether Messrs. Alperin and Friedman have been representing stockholders' best interests or those of Jefferies and its parent company
• Fiesta's "Strategic Renewal Plan" is void of specifics, hardly making it the "detailed and sophisticated" plan claimed by the Company
  • JCP has put forth a detailed illustrative plan for the Company in its Investor Presentation available at https://tinyurl.com/FRGI-Presentation

2.  JCP's track record of value creation speaks for itself.

JCP has driven stockholder value and effected positive change from inside and outside of the boardroom. In the midst of the Casella proxy contest, Casella actually replaced two incumbent directors, made a number of corporate governance enhancements and released 3 year earnings guidance – JCP served as a catalyst for these changes and its stock is up over 144% since JCP's involvement. JCP believes similar changes are needed at Fiesta.

Fiesta represents JCP's largest investment – incentivizing maximum effort to ensure that value is maximized for Fiesta's stockholders. Messrs. Alperin and Friedman have not invested a single dollar into Fiesta shares – the minimal shares they do own have been awarded to them. Who should stockholders trust more to represent their best interests?

3.  Fiesta has materially underperformed its OWN peer group and produced negative total shareholder returns over the last 1, 2 and 3-year periods. No cherry-picking necessary!

4.  Fiesta maintains a classified Board structure and many other anti-stockholder provisions that serve to entrench the incumbents.

Given the Board's mishandling of the CEO succession, JCP feels investors should understand the current Board dynamics. Carrols spun-out Fiesta in 2012 with numerous entrenchment devices, including a classified Board structure, no ability for stockholders to act by written consent or call special meetings, and supermajority voting requirements. Considering Jefferies was a nearly 30% stockholder of Carrols and Mr. Friedman and director Nicholas Daraviras were also on Carrols' board at the time, we believe it is appropriate to hold them responsible for Fiesta's insulating corporate machinery.

Poor governance is never acceptable, and is particularly alarming at such a crucial transition period for Fiesta.  Fiesta claims the Board began retirement discussions with the former CEO in May 2016.  If true, why was the Company left without a permanent CEO for 5 months and why did it take until February 2017 to identify a new CEO?  Succession planning is a crucial responsibility of the Board under normal circumstances, but even more so when CEO retirement is imminent.

JCP believes focus should remain on the fundamental issues plaguing the Company – abysmal shareholder returns, poor corporate governance and an overarching lack of accountability at the Board level. We are presenting stockholders with an opportunity to elect representatives of their choosing at the Annual Meeting to restore the value of their investments – we believe the choice is clear.

FIESTA STOCKHOLDERS – VOTE FOR THE CHANGE THAT FIESTA DESPERATELY NEEDS BY VOTING THE GOLD PROXY CARD TODAY

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.

Investor Contacts:

James C. Pappas
JCP Investment Management, LLC
(713) 333-5540

John Glenn Grau
InvestorCom
(203) 972-9300

Media Contact:

Gotham Communications
Bill Douglass, (646) 504-0890
[email protected]

SOURCE JCP Investment Management, LLC

Related Links

http://www.jcpinv.com