Document and Entity Information

3 Months Ended

Mar. 31, 2013

May 1, 2013

Document And Entity Information [Abstract]

Entity Registrant Name

FIESTA RESTAURANT GROUP, INC.

Entity Central Index Key

0001534992

Current Fiscal Year End Date

--12-29

Entity Filer Category

Accelerated Filer

Document Type

10-Q

Document Period End Date

Mar. 31, 2013

Document Fiscal Year Focus

2013

Document Fiscal Period Focus

Q1

Amendment Flag

false

Entity Common Stock, Shares Outstanding

23,638,746

Consolidated Balance Sheets (Unaudited) (USD $)

In Thousands, unless otherwise specified

Mar. 31, 2013

Dec. 30, 2012

Current assets:

Cash

$ 6,454

$ 15,533

Trade receivables

7,306

5,935

Inventories

2,341

2,750

Prepaid rent

2,219

2,094

Prepaid expenses and other current assets

3,155

2,596

Deferred income taxes

2,171

2,049

Total current assets

23,646

30,957

Property and equipment, net

130,936

126,516

Goodwill

123,484

Intangible assets, net

182

202

Deferred income taxes

12,919

13,101

Deferred financing costs, net

5,306

5,690

Other assets

3,566

3,779

Total assets

300,039

303,729

Current liabilities:

Current portion of long-term debt

58

60

Accounts payable

8,969

10,411

Accrued interest

2,222

6,761

Accrued income taxes

1,833

287

Accrued payroll, related taxes and benefits

11,544

14,719

Accrued real estate taxes

2,003

3,366

Other liabilities

6,491

5,674

Total current liabilities

33,120

41,278

Long-term debt, net of current portion

200,875

200,889

Lease financing obligations

3,031

3,029

Deferred income--sale-leaseback of real estate

35,457

36,096

Other liabilities

11,827

11,933

Total liabilities

284,310

293,225

Commitments and contingencies

Stockholder's equity:

Common stock, par value $.01; authorized 100,000,000 shares; issued 23,638,746 and 23,514,437 shares, respectively, and outstanding 22,894,633 and 22,748,241 shares, respectively

229

227

Additional paid-in capital

10,678

10,254

Retained earnings

4,822

23

Total stockholder's equity

15,729

10,504

Total liabilities and stockholder's equity

$ 300,039

$ 303,729

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)

Mar. 31, 2013

Dec. 30, 2012

Statement of Financial Position [Abstract]

Common stock, par value

$ 0.01

Common stock, shares authorized

100,000,000

Common stock, shares issued

23,638,746

23,514,437

Common stock, shares outstanding

22,894,633

22,748,241

Consolidated Statements of Operations (Unaudited) (USD $)

In Thousands, except Share data, unless otherwise specified

3 Months Ended

Mar. 31, 2013

Apr. 1, 2012

Revenues:

Restaurant sales

$ 133,090

$ 125,566

Franchise royalty revenues and fees

534

576

Total revenues

133,624

126,142

Costs and expenses:

Cost of sales

42,411

40,784

Restaurant wages and related expenses (including stock-based compensation expense of $1 and $4, respectively)

35,116 ¹

33,825 ¹

Restaurant rent expense

6,435

3,915

Other restaurant operating expenses

16,164

15,829

Advertising expense

4,549

4,292

General and administrative (including stock-based compensation expense of $425 and $1,046, respectively)

12,211 ²

11,016 ²

Depreciation and amortization

4,810

4,840

Pre-opening costs

831

119

Impairment and other lease charges

95

6,900

Other income

(497)

0

Total operating expenses

122,125

121,520

Income from operations

11,499

4,622

Interest expense

5,007

7,969

Income (loss) before income taxes

6,492

(3,347)

Provision for (benefit from) income taxes

1,693

(1,482)

Net income (loss)

$ 4,799

$ (1,865)

Basic and diluted net income (loss) per share

$ 0.20

$ (0.08)

Basic and diluted weighted average common shares outstanding

22,868,894

23,161,822

[1] (1) Includes stock-based compensation expense of $1 and $4 for the three months ended March 31, 2013 and April 1, 2012, respectively.

[2] (2) Includes stock-based compensation expense of $425 and $1,046 for the three months ended March 31, 2013 and April 1, 2012, respectively.

Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2013

Apr. 1, 2012

Stock-based compensation

$ 426

$ 1,050

Restaurant Wages And Related Expenses [Member]

Stock-based compensation

1

4

General and Administrative Expense [Member]

Stock-based compensation

$ 425

$ 1,046

Consolidated Statement of Changes in Stockholder's Equity Statement (USD $)

In Thousands, except Share data, unless otherwise specified

Total

USD ($)

Number of Common Stock Shares [Member]

Common Stock [Member]

USD ($)

Additional Paid-in Capital [Member]

USD ($)

Retained Earnings [Member]

USD ($)

Balance at December 30, 2012 at Dec. 30, 2012

$ 10,504

$ 227

$ 10,254

$ 23

Shares, outstanding beginnning at Dec. 30, 2012

22,748,241

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Stock-based compensation

426

Vesting of non-vested shares

2

(2)

Vesting of non-vested shares

146,392

Net income

4,799

Balance at March 31, 2013 at Mar. 31, 2013

$ 15,729

$ 229

$ 10,678

$ 4,822

Shares, outstanding ending at Mar. 31, 2013

22,894,633

Consolidated Statements of Cash Flows (Unaudited) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2013

Apr. 1, 2012

Cash flows from operating activities:

Net income (loss)

$ 4,799

$ (1,865)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Loss (gain) on disposals of property and equipment

(421)

60

Stock-based compensation

426

871

Impairment and other lease charges

95

6,900

Depreciation and amortization

4,810

4,840

Amortization of deferred financing costs

398

385

Amortization of deferred gains from sale-leaseback transactions

(863)

(70)

Accretion of interest on lease financing obligations

2

213

Deferred income taxes

60

(2,081)

Changes in other operating assets and liabilities:

(9,982)

(9,875)

Net cash used in operating activities

(676)

(622)

Capital expenditures:

New restaurant development

(7,834)

(5,365)

Restaurant remodeling

(918)

(1,273)

Other restaurant capital expenditures

(1,362)

(1,692)

Corporate and restaurant information systems

(1,238)

(213)

Total capital expenditures

11,352

8,543

Properties purchased for sale-leaseback

(1,277)

(2,082)

Proceeds from sale-leaseback transactions

2,523

0

Proceeds from Sale of Other Real Estate

1,734

0

Net cash used in investing activities

(8,372)

(10,625)

Cash flows from financing activities:

Payments to parent company, net

0

(181)

Capital contribution from parent company

0

2,500

Principal payments on capital leases

(16)

(15)

Other

(15)

0

Net cash provided by (used in) fnancing activities

(31)

2,304

Net increase (decrease) in cash

(9,079)

(8,943)

Cash, beginning of period

15,533

13,670

Cash, end of period

6,454

4,727

Supplemental disclosures:

Interest paid on long-term debt

9,161

9,407

Interest paid on lease financing obligations

64

2,754

Accruals for capital expenditures

1,107

475

Income tax payments, net

$ 91

$ 0

Basis of Presentation

Business Description. Fiesta Restaurant Group, Inc. ("Fiesta Restaurant Group" or "Fiesta") owns, operates and franchises two fast-casual restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc. and 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 March 31, 2013, Fiesta operated 93 Pollo Tropical® restaurants, of which 90 were located in Florida, two were located in Georgia and one was located in Tennessee, and franchised a total of 36 Pollo Tropical restaurants, including 20 in Puerto Rico, two in Ecuador, two in Honduras, one in the Bahamas, one in Trinidad & Tobago, three in Venezuela, two in Costa Rica, one in Panama and four on college campuses in Florida. At March 31, 2013, the Company also owned and operated 162 Taco Cabana® restaurants located primarily in Texas and franchised a total of eight Taco Cabana restaurants, including four in New Mexico, three in Texas and one in Georgia.

Spin-Off from Carrols Restaurant Group, Inc. On May 7, 2012, Carrols Restaurant Group, Inc. ("Carrols Restaurant Group" or "Carrols") completed the spin-off of Fiesta into an independent public company, through the distribution of all of the outstanding shares of Fiesta Restaurant Group's common stock to the stockholders of Carrols Restaurant Group (the "Spin-off"). As a result of the Spin-off, Fiesta Restaurant Group is now an independent public company whose common stock is traded on The NASDAQ Global Select Market under the symbol “FRGI.”

In connection with the Spin-off, Fiesta and Carrols entered into several agreements that govern Carrols' post Spin-off relationship with Fiesta, including a Separation and Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement and Transition Services Agreement ("TSA"). See Note 4—Former Related Party Transactions.

Basis of Consolidation. The unaudited consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. The consolidated financial statements have been prepared as if the Company was in existence for all periods presented.

Through the date of the Spin-off, these unaudited consolidated financial statements have been prepared on a stand-alone basis from the separate records maintained by Carrols and may not necessarily be indicative of the results of operations or cash flows that would have resulted had allocations and other related-party transactions been consummated with unrelated parties or had the Company been an independent, publicly traded company during all of the periods presented. The unaudited interim consolidated financial statements reflect the historical financial position, results of operations and cash flows of Fiesta as it has historically operated, in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). All intercompany transactions have been eliminated in consolidation.

In connection with the Spin-off, the board of directors of the Company authorized a 23,161.8 for one split of its outstanding common stock that was effective on April 19, 2012. Accordingly, all references to share and per share amounts related to common stock included in the consolidated financial statements and accompanying notes have been adjusted to reflect the stock split and change in the number of authorized shares. The stock split has been retroactively applied to the Company’s financial statements.

Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 30, 2012 contained 52 weeks. The three months ended March 31, 2013 and April 1, 2012 each contained thirteen weeks.

Basis of Presentation. The accompanying unaudited consolidated financial statements for the three months ended March 31, 2013 and April 1, 2012 have been prepared without an audit pursuant to the rules and regulations of the SEC and do not include certain information and the footnotes required by 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 months ended March 31, 2013 and April 1, 2012 are not necessarily indicative of the results to be expected for the full year.

These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2012 included in the Company's 2012 Annual Report on Form 10-K. The December 30, 2012 balance sheet data is derived from those audited financial statements.

Allocations. Through the date of the consummation of the Spin-off, Carrols provided administrative support to the Company for executive management, information systems and certain accounting, legal and other administrative functions. The cost of these services were allocated to the Company based primarily on a pro-rata share of either the Company’s revenues, number of restaurants or number of employees. The allocations may not reflect the expenses the Company would have incurred as an independent, publicly traded company for the periods presented. Following the Spin-off, certain of these functions continue to be provided by Carrols under the TSA, and the Company is performing certain functions using its own resources or purchased services from third parties. Refer to Note 4—Former Related Party Transactions for further discussion related to agreements entered into effective as of the Spin-off.

Management believes that its allocations are reasonable and based on a systematic and rational method; however, they are not necessarily indicative of the actual financial results of the Company, including such expenses that would have been incurred by the Company had it been operating as a separate, stand-alone entity for the periods presented. As a stand-alone entity, the Company expects to incur expenses that may not be comparable in future periods to what is presented for the historical periods presented in the consolidated financial statements. Consequently, the financial information herein may not reflect the financial position, results of operations and cash flows of the Company in the future or if the Company had been an independent stand-alone entity during all periods presented. In our opinion, the consolidated financial statements include all adjustments necessary for a fair presentation of its results of operations.

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. 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 our 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 balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.


•	Senior Secured Second Lien Notes. The fair value of outstanding senior secured second lien notes, which was approximately $217.0 million at March 31, 2013, is based on recent trading values, which are considered Level 1. The senior secured second lien notes are recorded in Long-term debt, net of current portion and had a carrying value of $200.0 million at March 31, 2013.

See Note 2 for discussion of the fair value measurement of non-financial assets.

Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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: allocations of Carrols' general and administrative expenses and interest expense on amounts due to Carrols prior to the Spin-off, accrued occupancy costs, insurance liabilities, evaluation for impairment of goodwill and long-lived assets and lease accounting matters. Actual results could differ from those estimates.

Reclassifications. Certain amounts have been reclassified from Restaurant rent expense, Advertising expense and General and administrative expense to Pre-opening costs in order to conform to the current year presentation.

Subsequent Events. The Company reviewed and evaluated subsequent events through the issuance date of the Company’s financial statements.

Impairment of Long-Lived Assets and Other Lease Charges

Impairment of Long Lived Assets and Other Lease Charges [Text Block]

Impairment of Long-Lived Assets and Other Lease Charges

The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. 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. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.

The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of using these assets in the operation of its business. For those restaurants reviewed for impairment where the Company owns the land and building, the Company also utilized third-party information such as a broker market price opinion to determine the fair value of the property. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy.

Impairment on long-lived assets for the Company’s segments and other lease charges recorded were as follows:



	Three Months Ended
	March 31, 2013		April 1, 2012
Pollo Tropical	$	39	$	5,879
Taco Cabana	56		1,021
	$	95	$	6,900

During the three months ended March 31, 2013, the Company recorded other lease charges of $0.1 million related to previously closed locations.

During the three months ended April 1, 2012, the Company recorded other lease charges, net of recoveries, of $1.8 million and impairment charges of $4.1 million associated with the closure of the Company’s five Pollo Tropical restaurants in New Jersey in the first quarter of 2012. The Company also recorded an impairment charge of $1.0 million related to two Taco Cabana restaurants during the three months ended April 1, 2012.

Other Liabilities, Long-Term

Other Liabilities Disclosure [Text Block]

Other Liabilities, Long-Term

Other liabilities, long-term, consisted of the following:



	March 31, 2013		December 30, 2012
Accrued occupancy costs	$	8,737	$	8,493
Accrued workers’ compensation and general liability claims	1,045		1,270
Deferred compensation	674		812
Other	1,371		1,358
	$	11,827	$	11,933

Accrued occupancy costs include obligations pertaining to closed restaurant locations, contingent rent and accruals to expense operating lease rental payments on a straight-line basis over the lease term.

The following table presents the activity in the closed-store reserve, of which $1.4 million and $1.7 million are included in long-term accrued occupancy costs above at March 31, 2013 and December 30, 2012, respectively, with the remainder in other current liabilities:



	Three Months Ended March 31, 2013			Year Ended December 30, 2012
Balance, beginning of period	$	2,432		$	2,246
Provisions for restaurant closures	—			1,796
Accruals (recoveries) for additional lease charges	87			(377		)
Payments, net	(324		)	(1,496		)
Other adjustments	8			263
Balance, end of period	$	2,203		$	2,432

Former Related Party Transactions

Related Party Transactions Disclosure [Text Block]

Former Related Party Transactions

Effective upon the completion of the Spin-off, Fiesta Restaurant Group ceased to be a related party of Carrols.

Prior to the date of the Spin-off, the Company's expenses included allocations from Carrols of costs associated with administrative support functions which included executive management, information systems, finance, legal, accounting, internal audit and human resources and certain other administrative functions. The Company's allocated administrative expenses from Carrols were $3.2 million for the three months ended April 1, 2012.

As discussed in Note 1, the Company believes the assumptions and methodologies underlying the allocation of administrative expenses and stock-based compensation are reasonable. However, such expenses may not be indicative of the actual expenses that would have been or will be incurred by the Company now that it is operating as a stand-alone company. As such, the financial information herein may not necessarily reflect the consolidated financial position, results of operations, and cash flows of the Company in the future or if the Company had been a stand-alone entity during the periods presented.

In the first quarter of 2012, Carrols made a capital contribution in cash to the Company of $2.5 million and a non-cash capital contribution of $0.9 million in stock compensation expense applicable to equity awards in Carrols' common stock. The capital contribution in cash was a portion of the excess cash proceeds from debt financings completed in August 2011.

As of March 31, 2013 and December 30, 2012, the Company owed $1.4 million and $2.7 million, respectively, to Carrols, which is included in accounts payable in the accompanying consolidated balance sheets.

All intercompany transactions between the Company and Carrols prior to the Spin-off were included in the Company's historical financial statements and are considered to be effectively settled at the time of the Spin-off.

Relationship Between Fiesta and Carrols After the Spin-Off

For purposes of governing certain of the ongoing relationships between the Company and Carrols at and after the Spin-off, the Company and Carrols have entered into the following agreements:

•

Tax Matters Agreement. The tax matters agreement dated April 24, 2012, (the "Tax Matters Agreement"), (1) governs the allocation of the tax assets and liabilities between the Company and Carrols and Carrols Corporation, a subsidiary of Carrols ("Carrols Corp."), (2) provides for certain restrictions and indemnities in connection with the tax treatment of the Spin-off and (3) addresses certain other tax related matters, including, without limitation, those relating to (a) the obligations of Carrols, Carrols Corp. and the Company with respect to the preparation or filing of tax returns for all periods, and (b) the control of any income tax audits and any indemnities with respect thereto. The Tax Matters Agreement provides that if the Company takes any actions after Carrols’ distribution of our shares in the Spin-off that result in or cause the distribution to be taxable to Carrols, the Company will be responsible under the Tax Matters Agreement for any resulting taxes imposed on the Company or on Carrols or Carrols Corp. Further, the Tax Matters Agreement provides that the Company will be responsible for 50% of the losses and taxes of Carrols and its affiliates resulting from the Spin-off not attributable to any such action of the Company or an equivalent action by Carrols.

•

Transition Services Agreement. Under the TSA, Carrols and Carrols Corp. agreed to provide certain support services (including accounting, tax accounting, treasury management, internal audit, financial reporting and analysis, human resources and employee benefits management, information systems, restaurant systems support, legal, property management and insurance and risk management services) to the Company, and the Company agreed to provide certain limited management services (including certain legal services) to Carrols and Carrols Corp. The charge for transition services is intended to allow Carrols to recover its direct and indirect costs incurred in providing those services. The TSA became effective upon consummation of the Spin-off and will continue for a period of three years provided that the Company may extend the term of the TSA by one additional year upon 90 days prior written notice to Carrols or may terminate the TSA with respect to any service provided thereunder at any time upon 90 days prior written notice to Carrols. During the three months ended March 31, 2013, the Company incurred costs of $1.3 million related to the TSA.

Lease Financing Obligations

Lease Financing Obligations [Text Block]

Lease Financing Obligations

The Company entered into sale-leaseback transactions in various years that did not qualify for sale-leaseback accounting due to certain forms of continuing involvement and, as a result, the leases were classified as financing transactions in the Company’s consolidated financial statements.

Under the financing method, the assets remain on the consolidated balance sheet and the net proceeds received by the Company from these transactions are recorded as a lease financing liability. Payments under these leases are applied as payments of imputed interest and deemed principal on the underlying financing obligations.

These leases generally provide for an initial term of 20 years plus renewal options. The rent payable under such leases includes a minimum rent provision and in some cases, includes rent based on a percentage of sales. These leases also require payment of property taxes, insurance and utilities.

During the second quarter of 2012, the Company exercised its purchase options under the leases for five restaurant properties previously accounted for as lease financing obligations and purchased these properties from the lessor. As a result, the Company reduced its lease financing obligations by $6.0 million in the second quarter of 2012. Subsequently, four of the five properties have been sold in qualifying sale-leaseback transactions.

For certain of the Company’s historical sale-leaseback transactions, Carrols has guaranteed the lease payments on an unsecured basis or is the primary lessee on the leases associated with certain of the Company’s sale-leaseback transactions. Prior to the Spin-off, ASC 840-40 “Sale-Leaseback Transactions” required the Company to classify these leases as lease financing transactions in the Company’s consolidated financial statements because the guarantee from a related party constituted continuing involvement and caused the sale to not qualify for sale-leaseback accounting.

At the time of the Spin-off, these sale-leaseback transactions qualified for sale-leaseback accounting (and the treatment of such related leases as operating leases) due to the cure or elimination of the provisions that previously precluded sale-leaseback accounting in the Company's financial statements. As a result of the qualification for sale-leaseback accounting during the second quarter of 2012, the Company removed the associated lease financing obligations, property and equipment, and deferred financing costs from its balance sheet, and recognized deferred gains on sale-leaseback transactions related to the qualification of $32.1 million that is being amortized as a reduction of rent expense over the individual remaining lease terms. This resulted in a decrease in lease financing obligations of $114.2 million, a decrease in assets under lease financing obligations of $80.4 million, and a decrease of $1.6 million in deferred financing fees.

The interest rates on the remaining lease financing obligations ranged from 8.6% to 8.8% at March 31, 2013. Interest expense associated with lease financing obligations for the three months ended March 31, 2013 and April 1, 2012 was $0.1 million and $3.0 million, respectively.

Income Taxes

Income Tax Disclosure [Text Block]

Income Taxes

Prior to the Spin-off, the Company’s taxable income was included in the consolidated U.S. federal income tax return of Carrols and in income tax returns filed by Carrols on a consolidated basis with certain state taxing jurisdictions. Subsequent to the Spin-off, the Company is responsible for filing its own consolidated U.S. federal and state tax returns. Prior to the Spin-off, the Company determined its provision for income taxes on a separate return basis.

The Tax Matters Agreement governs the methodology for allocating responsibility for federal, state, local and foreign income and other taxes related to taxable periods prior to and subsequent to the Spin-off. Under the Tax Matters Agreement, Carrols is generally responsible for Federal income taxes related to the Company for all periods prior to the date of the Spin-off and the Company is responsible for Federal income taxes for periods after the date of the Spin-off. The Company is also responsible for all state taxes that were filed on a consolidated basis both before and after the date of Spin-off, specifically Florida and Texas, and any other states where the Company was filing or will file separate state tax returns.

The Company’s income tax provision (benefit) was comprised of the following for the three months ended March 31, 2013 and April 1, 2012:



	Three Months Ended
	March 31, 2013		April 1, 2012
Current	$	1,633	$	599
Deferred	60		(2,081		)
	$	1,693	$	(1,482	)

The American Taxpayer Relief Act of 2013 (the "Act") was signed into law on January 2, 2013. The Act included a provision to retroactively restore several expired business tax provisions, including the Work Opportunity Tax Credit, as of January 1, 2012, with a new expiration date of December 31, 2013. Because a change in tax law is accounted for in the period of enactment, and the Act was enacted after Fiesta's fiscal year-end, the retroactive effect of renewing the Work Opportunity Tax Credit is recorded as a discrete item in the first quarter of 2013.

The provision for income taxes for the three months ended March 31, 2013 was derived using an estimated effective annual income tax rate for 2013 of 35.8%, which excludes any discrete tax adjustments. The discrete tax adjustment for the retroactive effect of renewing the Work Opportunity Tax Credit decreased the provision for income taxes by $0.6 million in the three months ended March 31, 2013.

The provision for income taxes for the three months ended April 1, 2012 was derived using an estimated effective annual income tax rate for 2012 of 42.6%, which excludes any discrete tax adjustments. Discrete tax adjustments decreased the provision for income taxes by $56,000 for the three months ended April 1, 2012.

Stock-based Compensation

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Compensation

Prior to the Spin-off, certain of the Company's employees participated in the Carrols Restaurant Group, Inc. 2006 Stock Incentive Plan, as amended (the "Carrols Plan"). In conjunction with the Spin-off, the Company established the Fiesta Restaurant Group, Inc. 2012 Stock Incentive Plan (the "Fiesta Plan") in order to be able to compensate its employees and directors by issuing stock options, stock appreciation rights, or stock awards to them under this plan. For the three months ended March 31, 2013, the consolidated statements of operations include expenses related to the Company's employees' and directors' participation in both the Carrols Plan and the Fiesta Plan. For the three months ended April 1, 2012, the consolidated statement of operations includes expenses related to the Company's employees' and directors' participation in the Carrols Plan.

Effective as of the completion of the Spin-off, all holders of Carrols unvested restricted stock (awarded under the Carols Plan) on April 26, 2012, the record date of the Spin-off, received one share of Fiesta Restaurant Group unvested restricted stock for every one share of Carrols unvested restricted stock held, with terms and conditions substantially similar to the terms and conditions applicable to the Carrols unvested restricted stock. Future stock compensation expense on all unvested restricted Carrols and Fiesta stock awards held by Fiesta employees will be recorded by the Company.

During the three months ended March 31, 2013, the Company granted in the aggregate 152,703 non-vested restricted shares under the Fiesta Plan to certain employees. These shares vest and become non-forfeitable over a four year vesting period and will be expensed according to the vesting period. The weighted average fair value at the grant date for restricted non-vested shares issued during the three months ended March 31, 2013 was $20.54.

Stock-based compensation expense for the three months ended March 31, 2013 was $0.4 million. Stock-based compensation expense for the three months ended April 1, 2012 was $1.1 million, which included $0.4 million of expense related to the accelerated vesting of the unvested shares of the former Chairman of the Company's board of directors upon his departure from the Company's board of directors in the first quarter of 2012. As of March 31, 2013, the total unrecognized stock-based compensation expense relating to non-vested shares was approximately $7.6 million. At March 31, 2013, the remaining weighted average vesting period for non-vested shares was 2.8 years.

Non-vested Shares

A summary of all non-vested restricted share activity for the three months ended March 31, 2013 was as follows:



			Weighted
			Average
			Grant Date
	Shares		Price
Nonvested at December 30, 2012	766,196		$	12.49
Granted	152,703		20.54
Vested	(146,392	)	11.10
Forfeited	(28,394	)	12.89
Nonvested at March 31, 2013	744,113		$	14.40

The fair value of the non-vested shares is based on the closing price on the date of grant.

Business Segment Information

The Company is engaged in the fast-casual restaurant industry, with two restaurant concepts (each of which is an operating segment): Pollo Tropical and Taco Cabana. Pollo Tropical is a fast-casual restaurant brand offering a wide variety of freshly prepared Caribbean inspired food, while our Taco Cabana restaurants offer a broad selection of hand-made, fresh and authentic Mexican food.

The accounting policies of each segment are the same as those described in the summary of significant accounting policies discussed in Note 1. The Company reports more than one measure of segment profit or loss to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. Prior to January 2013, the primary measure of segment profit or loss used to assess performance and allocate resources was Adjusted EBITDA, a non-GAAP financial measure. Beginning in January 2013, the primary measures of segment profit or loss used to assess performance and allocate resources are income before taxes and Adjusted EBITDA, which is defined as earnings attributable to the applicable operating segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense, other income and expense and gains and losses on extinguishment of debt. Although the chief operating decision maker continues to use Adjusted EBITDA as a measure of segment profitability, in accordance with Accounting Standards Codification 280, Segment Reporting, the following table includes segment income before taxes, which is the measure of segment profit or loss determined in accordance with the measurement principles that are most consistent with the principles used in measuring the corresponding amounts in the consolidated financial statements. The Company has included the presentation of income before tax for all periods presented.

The “Other” column includes corporate related items not allocated to reportable segments and consists primarily of corporate owned property and equipment and capitalized costs associated with the issuance of indebtedness.



Three Months Ended	Pollo Tropical			Taco Cabana			Other		Consolidated
March 31, 2013:
Restaurant sales	$	61,869		$	71,221		$	—	$	133,090
Franchise revenue	413			121			—		534
Cost of sales	20,493			21,918			—		42,411
Restaurant wages and related expenses ⁽¹⁾	14,317			20,799			—		35,116
Restaurant rent expense	2,357			4,078			—		6,435
Other restaurant operating expenses	7,203			8,961			—		16,164
Advertising expense	1,574			2,975			—		4,549
General and administrative expense⁽²⁾	6,234			5,977			—		12,211
Depreciation and amortization	2,099			2,711			—		4,810
Pre-opening costs	493			338			—		831
Impairment and other lease charges	39			56			—		95
Interest expense	2,252			2,755			—		5,007
Income before taxes	5,718			774			—		6,492
Capital expenditures	5,347			4,948			1,057		11,352
April 1, 2012:
Restaurant sales	$	57,333		$	68,233		$	—	$	125,566
Franchise revenue	501			75			—		576
Cost of sales	19,168			21,616			—		40,784
Restaurant wages and related expenses ⁽¹⁾	13,292			20,533			—		33,825
Restaurant rent expense	1,149			2,766			—		3,915
Other restaurant operating expenses	6,973			8,856			—		15,829
Advertising expense	1,257			3,035			—		4,292
General and administrative expense⁽²⁾	5,148			5,868			—		11,016
Depreciation and amortization	2,223			2,617			—		4,840
Pre-opening costs	117			2			—		119
Impairment and other lease charges	5,879			1,021			—		6,900
Interest expense	3,286			4,683			—		7,969
Income (loss) before taxes	(658		)	(2,689		)	—		(3,347		)
Capital expenditures	4,550			3,900			93		8,543
Identifiable Assets:
March 31, 2013:	$	130,673		$	161,122		$	8,244	$	300,039
December 30, 2012	128,593			167,348			7,788		303,729

(1) Includes stock-based compensation expense of $1 and $4 for the three months ended March 31, 2013 and April 1, 2012, respectively.

(2) Includes stock-based compensation expense of $425 and $1,046 for the three months ended March 31, 2013 and April 1, 2012, respectively.

Net Income (Loss) per Share

Earnings Per Share [Text Block]

Net Income (Loss) per Share

We compute basic net income (loss) per share by dividing net income applicable to common shares by the weighted average number of common shares outstanding during each period. Our 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 net income (loss) per share pursuant to the two-class method. The two-class method of computing earnings per share 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. Net income (loss) per common share was computed by dividing undistributed earnings allocated to common shareholders 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 pro-rata weighted average shares outstanding during the period.

For the three months ended April 1, 2012, in determining the weighted average number of shares outstanding for basic net income (loss) per share, the 23.2 million shares distributed from Carrols on May 7, 2012 were assumed to be outstanding for the period from January 2, 2012 through April 1, 2012.

The computation of basic and diluted net income (loss) per share for the three months ended March 31, 2013 and April 1, 2012 is as follows:



	Three Months Ended
	March 31, 2013			April 1, 2012
Basic and diluted net income (loss) per share:
Net income	$	4,799		$	(1,865	)
Less: income allocated to participating securities	(157		)	—
Net income available to common stockholders	$	4,642		$	(1,865	)
Basic and diluted weighted average common shares outstanding	22,868,894			23,161,822
Basic and diluted net income (loss) per share	$	0.20		$	(0.08	)

Commitments and Contingencies

Commitments Disclosure [Text Block]

Commitments and Contingencies

The Company is a party to various litigation matters incidental to the conduct of business. The Company does not believe that the outcome of any of these matters will have a material effect on its consolidated financial statements.

Basis of Presentation Accounting Policies (Policies)

Consolidation, Policy [Policy Text Block]

Basis of Consolidation. The unaudited consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. The consolidated financial statements have been prepared as if the Company was in existence for all periods presented.

Through the date of the Spin-off, these unaudited consolidated financial statements have been prepared on a stand-alone basis from the separate records maintained by Carrols and may not necessarily be indicative of the results of operations or cash flows that would have resulted had allocations and other related-party transactions been consummated with unrelated parties or had the Company been an independent, publicly traded company during all of the periods presented. The unaudited interim consolidated financial statements reflect the historical financial position, results of operations and cash flows of Fiesta as it has historically operated, in conformity with U.S. Generally Accepted Accounting Principles ("GAAP"). All intercompany transactions have been eliminated in consolidation.

In connection with the Spin-off, the board of directors of the Company authorized a 23,161.8 for one split of its outstanding common stock that was effective on April 19, 2012. Accordingly, all references to share and per share amounts related to common stock included in the consolidated financial statements and accompanying notes have been adjusted to reflect the stock split and change in the number of authorized shares. The stock split has been retroactively applied to the Company’s financial statements.

Fiscal Period, Policy [Policy Text Block]

Fiscal Year. The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The fiscal year ended December 30, 2012 contained 52 weeks. The three months ended March 31, 2013 and April 1, 2012 each contained thirteen weeks.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation. The accompanying unaudited consolidated financial statements for the three months ended March 31, 2013 and April 1, 2012 have been prepared without an audit pursuant to the rules and regulations of the SEC and do not include certain information and the footnotes required by 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 months ended March 31, 2013 and April 1, 2012 are not necessarily indicative of the results to be expected for the full year.

These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2012 included in the Company's 2012 Annual Report on Form 10-K. The December 30, 2012 balance sheet data is derived from those audited financial statements.

Allocations [Policy Text Block]

Allocations. Through the date of the consummation of the Spin-off, Carrols provided administrative support to the Company for executive management, information systems and certain accounting, legal and other administrative functions. The cost of these services were allocated to the Company based primarily on a pro-rata share of either the Company’s revenues, number of restaurants or number of employees. The allocations may not reflect the expenses the Company would have incurred as an independent, publicly traded company for the periods presented. Following the Spin-off, certain of these functions continue to be provided by Carrols under the TSA, and the Company is performing certain functions using its own resources or purchased services from third parties. Refer to Note 4—Former Related Party Transactions for further discussion related to agreements entered into effective as of the Spin-off.

Management believes that its allocations are reasonable and based on a systematic and rational method; however, they are not necessarily indicative of the actual financial results of the Company, including such expenses that would have been incurred by the Company had it been operating as a separate, stand-alone entity for the periods presented. As a stand-alone entity, the Company expects to incur expenses that may not be comparable in future periods to what is presented for the historical periods presented in the consolidated financial statements. Consequently, the financial information herein may not reflect the financial position, results of operations and cash flows of the Company in the future or if the Company had been an independent stand-alone entity during all periods presented. In our opinion, the consolidated financial statements include all adjustments necessary for a fair presentation of its results of operations.

Fair Value of Financial Instruments, Policy [Policy Text Block]

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. 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 our 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 balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.


•	Senior Secured Second Lien Notes. The fair value of outstanding senior secured second lien notes, which was approximately $217.0 million at March 31, 2013, is based on recent trading values, which are considered Level 1. The senior secured second lien notes are recorded in Long-term debt, net of current portion and had a carrying value of $200.0 million at March 31, 2013.

See Note 2 for discussion of the fair value measurement of non-financial assets.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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: allocations of Carrols' general and administrative expenses and interest expense on amounts due to Carrols prior to the Spin-off, accrued occupancy costs, insurance liabilities, evaluation for impairment of goodwill and long-lived assets and lease accounting matters. Actual results could differ from those estimates.

Reclassifications [Text Block]

Reclassifications. Certain amounts have been reclassified from Restaurant rent expense, Advertising expense and General and administrative expense to Pre-opening costs in order to conform to the current year presentation.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events. The Company reviewed and evaluated subsequent events through the issuance date of the Company’s financial statements.

Impairment of Long-Lived Assets and Other Lease Charges Impairment Accounting Policy (Policies)

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. 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. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.

Lease Financing Obligations (Policies)

Lease Financing Obligations [Policy Text Block]

The Company entered into sale-leaseback transactions in various years that did not qualify for sale-leaseback accounting due to certain forms of continuing involvement and, as a result, the leases were classified as financing transactions in the Company’s consolidated financial statements.

Under the financing method, the assets remain on the consolidated balance sheet and the net proceeds received by the Company from these transactions are recorded as a lease financing liability. Payments under these leases are applied as payments of imputed interest and deemed principal on the underlying financing obligations.

These leases generally provide for an initial term of 20 years plus renewal options. The rent payable under such leases includes a minimum rent provision and in some cases, includes rent based on a percentage of sales. These leases also require payment of property taxes, insurance and utilities

Impairment of Long-Lived Assets and Other Lease Charges Impairment by segment (Tables)

Impairment of long lived assets and other lease charge [Table Text Block]

Impairment on long-lived assets for the Company’s segments and other lease charges recorded were as follows:



	Three Months Ended
	March 31, 2013		April 1, 2012
Pollo Tropical	$	39	$	5,879
Taco Cabana	56		1,021
	$	95	$	6,900

Other Liabilities, Long-Term Other Liabilities (Tables)

Schedule of Accrued Liabilities [Table Text Block]

Other liabilities, long-term, consisted of the following:



	March 31, 2013		December 30, 2012
Accrued occupancy costs	$	8,737	$	8,493
Accrued workers’ compensation and general liability claims	1,045		1,270
Deferred compensation	674		812
Other	1,371		1,358
	$	11,827	$	11,933

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

The following table presents the activity in the closed-store reserve, of which $1.4 million and $1.7 million are included in long-term accrued occupancy costs above at March 31, 2013 and December 30, 2012, respectively, with the remainder in other current liabilities:



	Three Months Ended March 31, 2013			Year Ended December 30, 2012
Balance, beginning of period	$	2,432		$	2,246
Provisions for restaurant closures	—			1,796
Accruals (recoveries) for additional lease charges	87			(377		)
Payments, net	(324		)	(1,496		)
Other adjustments	8			263
Balance, end of period	$	2,203		$	2,432

Income Taxes (Tables)

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The Company’s income tax provision (benefit) was comprised of the following for the three months ended March 31, 2013 and April 1, 2012:



	Three Months Ended
	March 31, 2013		April 1, 2012
Current	$	1,633	$	599
Deferred	60		(2,081		)
	$	1,693	$	(1,482	)

Stock-based Compensation Stock-based Compensation (Tables)

Schedule of Nonvested Share Activity [Table Text Block]

Non-vested Shares

A summary of all non-vested restricted share activity for the three months ended March 31, 2013 was as follows:



			Weighted
			Average
			Grant Date
	Shares		Price
Nonvested at December 30, 2012	766,196		$	12.49
Granted	152,703		20.54
Vested	(146,392	)	11.10
Forfeited	(28,394	)	12.89
Nonvested at March 31, 2013	744,113		$	14.40

The fair value of the non-vested shares is based on the closing price on the date of grant.

Business Segment Information Business Segment (Tables)

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The “Other” column includes corporate related items not allocated to reportable segments and consists primarily of corporate owned property and equipment and capitalized costs associated with the issuance of indebtedness.



Three Months Ended	Pollo Tropical			Taco Cabana			Other		Consolidated
March 31, 2013:
Restaurant sales	$	61,869		$	71,221		$	—	$	133,090
Franchise revenue	413			121			—		534
Cost of sales	20,493			21,918			—		42,411
Restaurant wages and related expenses ⁽¹⁾	14,317			20,799			—		35,116
Restaurant rent expense	2,357			4,078			—		6,435
Other restaurant operating expenses	7,203			8,961			—		16,164
Advertising expense	1,574			2,975			—		4,549
General and administrative expense⁽²⁾	6,234			5,977			—		12,211
Depreciation and amortization	2,099			2,711			—		4,810
Pre-opening costs	493			338			—		831
Impairment and other lease charges	39			56			—		95
Interest expense	2,252			2,755			—		5,007
Income before taxes	5,718			774			—		6,492
Capital expenditures	5,347			4,948			1,057		11,352
April 1, 2012:
Restaurant sales	$	57,333		$	68,233		$	—	$	125,566
Franchise revenue	501			75			—		576
Cost of sales	19,168			21,616			—		40,784
Restaurant wages and related expenses ⁽¹⁾	13,292			20,533			—		33,825
Restaurant rent expense	1,149			2,766			—		3,915
Other restaurant operating expenses	6,973			8,856			—		15,829
Advertising expense	1,257			3,035			—		4,292
General and administrative expense⁽²⁾	5,148			5,868			—		11,016
Depreciation and amortization	2,223			2,617			—		4,840
Pre-opening costs	117			2			—		119
Impairment and other lease charges	5,879			1,021			—		6,900
Interest expense	3,286			4,683			—		7,969
Income (loss) before taxes	(658		)	(2,689		)	—		(3,347		)
Capital expenditures	4,550			3,900			93		8,543
Identifiable Assets:
March 31, 2013:	$	130,673		$	161,122		$	8,244	$	300,039
December 30, 2012	128,593			167,348			7,788		303,729

(1) Includes stock-based compensation expense of $1 and $4 for the three months ended March 31, 2013 and April 1, 2012, respectively.

(2) Includes stock-based compensation expense of $425 and $1,046 for the three months ended March 31, 2013 and April 1, 2012, respectively.

Net Income (Loss) per Share (Tables)

Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block]

The computation of basic and diluted net income (loss) per share for the three months ended March 31, 2013 and April 1, 2012 is as follows:



	Three Months Ended
	March 31, 2013			April 1, 2012
Basic and diluted net income (loss) per share:
Net income	$	4,799		$	(1,865	)
Less: income allocated to participating securities	(157		)	—
Net income available to common stockholders	$	4,642		$	(1,865	)
Basic and diluted weighted average common shares outstanding	22,868,894			23,161,822
Basic and diluted net income (loss) per share	$	0.20		$	(0.08	)

Basis of Presentation Fair Value Disclosures (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2013

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fiesta Restaurant Group 8.875% Senior Secured Second Lien Notes, Carrying Value

$ 200.0

Fair Value, Inputs, Level 1 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fiesta Restaurant Group 8.875% Senior Secured Second Lien Notes, Fair Value Disclosure

$ 217.0

Basis of Presentation Basis of Presentation Narrative (Details)

3 Months Ended

12 Months Ended

Mar. 31, 2013

Apr. 1, 2012

Dec. 30, 2012