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Fiesta Restaurant Group Inc (FRGI) Q1 2020 Earnings Call Transcript

By Motley Fool Transcribers - May 8, 2020 at 11:00PM

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FRGI earnings call for the period ending March 31, 2020.

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Fiesta Restaurant Group Inc (FRGI 0.72%)
Q1 2020 Earnings Call
May 8, 2020, 11:30 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good afternoon, and welcome to the Fiesta Restaurant Group, Inc. First Quarter 2020 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]

I would now like to turn the call over to Raphael Gross, Managing Director at ICR. Please go ahead.

Raphael Gross -- Managing Director

Thank you, operator. Fiesta Restaurant Group's first quarter 2020 earnings release was issued after the market closed today. If you have not already accessed it, it can be found on the company's website,, under the Investor Relations section. Before we begin, I'd like to inform you that during the call today, the company will make various statements that are not based on historical information. These forward-looking statements include, without limitation, statements regarding the company's future financial position and results of operations, business strategy, budget, projected costs and plans and objectives of management for future operations. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements, and the company can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements can be found in the company's SEC filings. Please note that during today's conference call, certain non-GAAP financial measures will be discussed, which the company believes can be useful in evaluating its performance. Any discussion of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and reconciliation to comparable GAAP measures is available in the earnings in the company's earnings release. On the call today are President and Chief Executive Officer, Rich Stockinger; and Chief Financial Officer, Dirk Montgomery.

And now I'll turn the call over to Rich.

Richard Stockinger -- Chief Executive Officer and President

Thank you, Ray. The world is a much place until our last earnings call and update to our shareholders. I'd first like to thank all the investors and other participants on the call today for the continued support during the COVID-19 crisis. I'll be covering three topics today: oru key priorities during this crisis, an update on our operational and other changes in response to the crisis and a brief update on our sales driving efforts and first quarter results. Dirk will then provide a financial update. Our priorities in this time of crisis have been and will continue to be as bold, taking steps to ensure the safety and well-being of our team members and customers, protecting the reputation of our brands and our company. Doing right by our employees, our shareholders, our branded partners, our service providers and landlords and continuing to be a leader in our communities. I'm proud of our team with a focus on those priorities while maximizing liquidity and developing new and better ways to drive sales and maximize results. We've been working to maximize efficiency and operating flexibility since the crisis began. In order to detect cash availability, early in the second quarter, we drew down our capacity all our capacity on revolver and had a total cash balance of $91.6 million as of May 6. We have been successfully working with our vendor partners, service providers and landlords regarding more flexible payment terms and cost reductions.

We cut our 2020 capex plans in half and are focusing only on necessary capital projects. We will full compliance of our loan financial covenants at the end of the first quarter, and we are proactively working with our lenders to amend our own loan financial covenants to avoid any potential issues in the future given the economic uncertainty related to this global pandemic benefit. Dirk will provide more color on our liquidity management activities in a moment. Now more than ever, finding new and better way to drive sales is a key focus for us. We are developing a better business model designed to enable our customers to enjoy our brand safely, wherever and however they choose. We have expanded and will continue to expand delivery options. We have created more in-home dining options, including Pollo Pantry and TC Pantry, and are rapidly improving our curbside and pick-up capabilities to be faster and safer for our customers. Additionally, we are in the final stages of making our restaurants ready for a return to safe dining activity in Florida and Texas, and we are confident that we will ultimately exit these crisis as the company's better positioned for future sales growth.

On March 16, 2020, we announced we have closed all our dining and seating areas in all the [Indecipherable] restaurants in Florida and Texas, respectively due to the COVID-19 pandemic. To the deadline, we have continued to make proactive changes designed to ensure the safety of our guests and team members, which is our top priority. We have taken the following health preventive measures in response to the COVID-19 investment. We tightened our sanitation procedures regarding restaurant cleanliness, with additional emphasis on high-traffic areas in the restaurants. We stocked our restaurants with effective disinfectors and sanitation products, including hand sanitizer and gloves. We increased our handwashing protocols with all the restaurant team members. All customer-facing employees and vendors in restaurants are required to gloves and masks. We've implemented a COVID-19 employee protocol, consistent with the Center for Disease control, or CDC, and the National Restaurant Association Guidelines. We closed soft and self-service patients and now providing [Indecipherable] in pre-packaged containers. We closed all self-service stations in every restaurant.

We are marking the restaurants for social distancing. All orders served are now enclosed in field carryout packaging, and reduced restaurant operating hours in accordance within the federal, state and local mandate. As government authorities forward reducing covenant restrictions. We are in the process of implementing the following additional safety measures. We've added dedicated dining areas members in all restaurants to continuelsy continue to be canopies open hours. We are measuring the temperature of all restaurant employees and any service provider daily at the time they enter the restaurants. We're installing shields at restaurant counters and drive-thru sections of our restaurants. We've created a separate entrance and exit access points to ensure, modifying seat arrangements to ensure required guest distancing, providing drive-thru customers with credit card processing devices outside the drive-thru to allow distancing and not exchange credit cards with our cashiers, extending our credit card process at the drive-thru to allow customers to insert their card without leaving the cards with a drive-thru attendee, and all guests are required to wear masks upon entering any of our facilities.

We have also adjusted our operating model to better meet our customers' needs in this crisis. We improved speed of service and improved efficiencies. We've eliminated certain low mix sales, menu options and reduced restaurant hours in periods of low sales and/or in response to government-mandated restrictions. We've also invented staffing models to match shifting traffic and general patterns of our guests and to improve efficiency. Taking care of our people a top priority, and we have implemented the following actions to better support our restaurant team members during this crisis. We've offered additional bonus incentives during the prices of $1 per hour for all hourly employees and an special incentive for store supervisors and management who are taking risk to serve our customers. Additional enhanced hourly employee health benefit programs were just recently announced. The company made a significant donation to its employee foundation, the [Indecipherable] Foundation that is dedicated to assisting employee needs. Those donations were in part made possible by the Fiesta Restaurant's Group Board of Directors before going the executive quarter fees. Supporting our community and showing our appreciation for service providers on the time of the crisis has been and will always continue to be important, and we are showing our support through the following actions.

Both brands have been donating delivery food weekly to local hospitals, person's family and members as a way of thanking those that are working on the frontline of the COVID-19 crisis in all of the markets in which we operate. Both brands increased discounts to 50% for all medical personal first responders, delivery and logistics providers as well as Militants. To provide needed meals for school-aged children from 11 a.m. to noon, both the brands are offering free kid meals. To help our community to recognize frontline workers that deserve thanks, in April, Pollo Tropical launched a Nominate a Local Hero social campaign that allows our fans to nominate a frontline worker who deserves a thank you. For you using the social media submissions to coordinate food donations on the heroes to their teams of top hero's work locations such as a hospital floor or fire station. Copacabana will also be launching a similar local hero program during the second quarter. Every day, in each of our Pollo Tropical and Taco Cabana restaurants, we take part in [Indecipherable], what we demand for and the way in which our team members are representative of the broader communities we serve.

We are working to provide our investors and our guests with more information about our culture and how who are, as a business, put us in a strong particularly, we are proud of how our senior capital investments promote diverse opportunity and respectful treatment of all people, which, in turn, drives quality, productivity and innovation. We are particularly proud of the fact that 65% of our field management team are women and 11% of our field management team, our minorities. 29% of our officers are women, and 57% of our officers or minorities, and 25% of our Board of Directors are women, which includes our Chairperson. We believe that these core beliefs and competencies have strongly contributed to our ability to serve our mission to each other and our communities during this untrusted difficult times. We anticipate that this commitment will enable our growth as we move forward toward together in a post-COVID world and are continuing to be more transparent about these efforts on our website and our reporting, giving all our stakeholders additional insight into how we are driving long-term value.

So our Board of Directors, which includes our share base. We believeAnd competencies have strongly contributed to our ability to serve our mention to each other and our communities during the unprecedented and difficult count. We anticipate that this commission will enable our growth as we move forward toward together in a post portal world and are continuing to be more tense about these efforts. On our website and our reporting. Giving all our stakeholders additionally by future how we are driving long-term value. Regarding the impact of COVID-19 on our supply chain, the pandemic has not had a significant negative disruptive impact on our supply chain or access to labor. Although there can be no assurance that there will not be a significant impact on our supply chain or access to labor in the future. We are actively monitoring our food suppliers to determine how they are managing their operations to mitigate supply growth and food safety risk. To ensure we indicate potential supply availability risk, we are building additional inventory back stock levels as appropriate, and we have also identified alternative supply sources in key product categories, including but not limited to clothing, sanitation and safety supplies. The response to COVID-19 virus constantly changes.

We'll continue to monitor the situation closely and implement additional measures are needed to ensure the safety of our commitments and goals. Now I'll highlight recent sales strengths and our efforts to accelerate sales in the changing environment. Post-COVID-19 comp sales trends stabilized in late March to earlier both, having realized sequential sales improvement increase at all since that time. As comp sales were down 49% for Pollo Tropical and 26% for Taco Cabana. For both brands, our sales have been improving every day over the previous weeks, driven by strong drive-thru and carryout alcohol sales, weekly Taco Cabana comps sales for the two ended May 3, an improvement began at 18.6%. Pollo Tropical sales for the two weeks ended May three were down 37.8%, driven by increased drive-thru and delivery sales. At those sales of trends, we estimate that we will generate roughly breakeven profitability, which we believe should expanse to provide us a pace from which to rebuild the bottom line as the economy accelerates. The changes in the state of Texas to allow drive-thru, delivery and pick-up alcohol sales have created a big opportunity for Taco Cabana. This change has brought new and lack customers to the brand and has been a big driver in post-COVID period, driving sales growth at Taco.

Alcohol mix has averaged just under 11% during the first quarter period, driven by $2 margarita and gallon-margatita packages for $34.99. This led to a record-setting day at Cinco de Mayo, with sales growth versus last year of 24%. Reported on account was up 61.5%. And we sold over 60,000 alcoholic beverages. We are working on improving visit frequency to these new customers with food focused repeat purchase donations, such as return digit and bounce back levels. Cost sales more than doubled versus last year in the first quarter at both brands, with penetration improving from 2.6% of restaurant sales to 7.1% of restaurant sales at Pollo, and Taco penetration improving from 2.5% of sales to 5.6% of sales. Both brands continues to be a big opportunity, and we continue to improve our capability in this area as follows. During the first quarter, we significantly grew the number of delivery service providers. That offers our brands, including the addition of Uber Eats, Postmates and Favor to supplement our previous and ongoing partnership with Door Dash. With the additional Grubhub in May, the restaurants now has partnerships with all major DSPs. In addition to the expansion of additional DSPs, we are testing delivery with our own delivery drivers, first, with Taco to enable alcohol and order deliveries.

We believe that the added benefit of home delivery of alcohol represents a big potential and incremental participations, and we will leverage the popularity of drive-thru alcohol and food sales that are currently producing drive-thru lines throughout the day at taco. We have continued to work with Bottle Rocket, a leading digital strategy, design and development company. We significantly improved the digital experience via our app at both brands. Those enhancements will include a curbside pickup feature, mobile payment features and frictionless ordering experience to go with go-to-marketplace of June to Pollo Tropical and September to Taco Cabana. These improvements will provide RGS control over their interactions with our brands, features which we feel are essential in the evolving landscape. To better meet consumer dining-at-home preferences, in April, the company launched the Pollo Pantry and TC Pantry menu platforms. The Pollo Pantry menu can provide fresh, high-quality, in-home dining solutions at a great value. The many features are famous 24-hour marinated chicken that consumers can cook at home. The [Indecipherable] and six of our chicken breasts for $10. Additional [Indecipherable] include marinated Churasco steak and shrimp.

In addition, the main features are tenored by white light and black beef in larger-sized packages that can set up with 10 people which just $5. Taco Cabana TC Pantry is also designed to provide consumers with additional quality in-home dining options at a value that includes ready-to-cook items, such as frozen [Indecipherable] at $6.99 and [Indecipherable] sized seasoned steak and [Indecipherable] chicken breast that can be cooked on the grill in minutes. TC Pantry offers key new options, including our popular sirloin ground beef at $5.49 per pound and shredded chicken at $4.49 per pound. TC Pantry also includes large quantity options of our most popular side dish, including refried beans, rice and peppers and onions for $4.99 and shifting [Indecipherable] with $8.99, all in portion sizes to feed 20 people. Sales of these pantry menus have been building weekly with more aggressive marketing to support recent demand. Product innovation in our field will continue to be a priority of both brands. At Pollo, we recently brought back multiple fan-favorite on our menu item, including [Indecipherable], empanadas and cornflakes, all priced at a value of under $3.29 and performing well since they were reintroduced.

Taco Cabana's upcoming product interactions include delicious [Indecipherable] Mexican corn and the empanadas. In closing, I want to express my appreciation for all our employees, especially our restaurant and operation commitments who [Indecipherable] to continue to serve our guests as well as my leadership team that has been working around the clock to respond in a positive way to this crisis. We are encouraged by the improving sales trends we are seeing week over week. And we believe we will exit the crisis as a stronger company ready to continue market share gains and to continue to be a positive influence in our communities.

Now I'll turn it over to Dirk to cover the financial highlights.

Dirk Montgomery -- Chief Financial Officer

Thank you, Rich, and good afternoon, everyone. I'm going to provide an update on first quarter results and then provide some commentary on our financial management strategies during this period of economic uncertainty. Total first quarter revenues decreased 11.5% from the prior year period to $146.7 million, due primarily to the comparable restaurant sales declines at both brands and the impact of COVID-19 underperforming Taco Cabana restaurants in the first quarter of 2020. We continue to make progress in off-premise sales during the quarter, consisting of online catering and delivery. Off-premise sales more than doubled compared to last year in the first quarter compared to prior year. And our penetration is still well below our competitors with 7.1% of and 5.6% in Taco Cabana. Off-premise continues to be a huge opportunity for us, especially in these times. The consolidated net loss was $7.3 million or $0.29 per diluted share, including a $0.17 per diluted share negative impact from other items, including $3.2 million in impairment charges and $1.2 million in closed restaurant rent charges compared to net income of $2.3 million or $0.08 per diluted share, including a $0.05 negative impact primarily from 1.1 million closed restaurant charges in the first quarter of 2019. On an adjusted basis, the net loss of $2.9 million or $0.11 per diluted share. This compared to adjusted net income of $4.1 million or $0.15 per diluted share in the first quarter of 2019.

Please see the non-GAAP reconciliation table in our earnings release for more details. With that, let's go through some of the significant accounting entries during the first quarter. We recorded a $4.2 million noncash impairment charge primarily related to assets for three underperforming Pollo Tropical restaurants and two underperforming Taco Cabana restaurants that we intend to operate, which had an unfavorable impact on net income of $3.2 million or $0.13 per diluted share in the first quarter of 2020. Now turning to our individual brands. At Pollo Tropical, comparable restaurant sales decreased 7.3% compared to a 2.6% decrease in the first quarter of last year. This year's decline consisted of an 8.3% decrease in comparable restaurant transactions, partially offset by a 1% increase in average check, includes approximately 0.2% in pricing. Pollo Tropical continues to gain market share as evidenced by the outperformance compared to Black Box on both the comparable sales and transaction basis for the quarter. We have also experienced an estimated 35 basis point impact during the first quarter from new store cannibalization within our core South Florida market. However, we believe new development is a positive for the brand overall since it allows us to enhance the guest experience while growing our total share in the market. Comparable restaurant sales before traffic out increased 0.6% during the first 10 weeks of the first quarter of 2020, building on the sales momentum in the fourth quarter.

We were pleased that the Pollo brand has generated four consecutive months of positive comps through February of 2020 before the impact of the COVID prices. Reflecting the impact of COVID-19, comparable store sales decreased 32% during the last three weeks of the first quarter of 2020. Comp sales declined due to the COVID crisis stabilized in late March and early April, and Pollo has realized sequential sales improvement, we believe, since that time with the sales trend for the two weeks ended May three of down 37.8%. We are seeing improvement every week now. Into branch profitability for the first quarter. Restaurant level adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased at Pollo Tropical by $5.7 million to $15.4 million or 18% of restaurant sales from $21.2 million or 22.3% of restaurant sales. As a percentage of restaurant sales in the first quarter, Pollo Tropical experienced higher cost of sales due to sales mix and higher commodity costs, restaurant wages and related expenses due to the impact of lower sales and fixed costs and other operating expenses. Other operating expense increases included higher third-party delivery fees and contracted cleaning services, in addition to the negative impact of lower comparable restaurant sales. Adjusted EBITDA and non-GAAP measures defined in our SEC filings decreased by $5.5 million to $8.8 million for Pollo Tropical the first quarter of 2020. During the quarter, we also recorded $3.7 million of impairment charges primarily related to the assets for the three underperforming Pollo Tropical restaurants that we continue to operate.

At Taco Cabana, comparable restaurant sales decreased 13.5% compared to a 0.5% decrease in the first quarter of last year. This year's decline consisted of a 14.9% decrease in comparable restaurant transactions, partially offset by a 1.4% increase in average check. The increase in average check was driven primarily by limited time offerings and an increase in transactions with alcohol sales. Comparable restaurant sales for Taco Cabana decreased 8.6% during the first 10 weeks of the first quarter of 2020 prior to the impact of COVID-19 and decreased 28.3% during the last three weeks of the first quarter of 2020. Constant declined due to counter prices stabilized in late March and early April, and Taco had realized sequential sales improvement weekly since that time with the sales trend for the two weeks ended May three down 18.6%. Drive-thru sales from March nine through the end of April grew 11%, driven in part by alcohol promotions and strong food sales. As Rich mentioned, driven by the strength of our Cinco de Mayo margarita promotions, we have the strongest Cinco de Mayo holiday sales in five years, with May five holiday sales growth of 24% compared to last year's holiday sales. We believe the Taco brand has very good momentum, and we're seeing new customers come to the brand. Turning to the brand's first quarter profitability. Restaurant level adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased to Taco Cabana by $4.2 million to $5.3 million or 8.8% of restaurant sales from $9.5 million or 12.8% of restaurant sales.

As a percent of restaurant sales in the first quarter, incurred a higher cost of sales due to operating inefficiencies and increased discounting and promotional activity and higher other operating expenses, including higher third-party delivery fees and insurance costs, in addition to the negative impact of lower comparable restaurant sales. Adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased to Taco Cabana by $3.8 million to negative $0.1 million in the first quarter of 2020. During the quarter, we also recorded $0.5 million in impairment charges related to assets for two underperforming takecab restaurants that we continue to operate. Turning now to a few additional financial items. Under our current share repurchase program, we repurchased 25 million shares during the first quarter on or before March 12. We suspended share repurchases during this period in which we are closely managing cash flow. Total capital expenditures in the first quarter of 2020 were $6.1 million. Our expenditures consisted of $2.5 million for maintenance, $1.6 million for new company-owned restaurant development, $1.9 million for restaurant remodeling and $0.9 million for technology and corporate. Now turning to our financial management plans in response to the economic challenges presented by the COVID crisis.

Our entire organization has been working to improve efficiency and protect staff from day one, implementing the following measures: we aggressively cut our capital expenditure budget for 2020 to only necessary investments. 2020 capital expenditures are currently expected to be in the range of $20 million to $25 million compared to previous estimates for 2020 of less than $40 million. Working capital efficiency has been improved as a result of vendor and landlord payment term and pricing renegotiations, which are expected to improve cash flow in 2020 by $10 million to $15 million. We have a very disciplined process in place for improving capital spending and vendor payments. Rich and I review all projects and payments. In early April, it totaled 168 office and field personnel were terminated or furloughed, representing total annualized salary savings of approximately $9.3 million, of which approximately $5.5 million is related to terminated employees. In addition, the salaries for all vice presidents and executives were reduced by 10% to 35% for at least one quarter. We intend to market our 1,500 properties for sale or sale leaseback, and four properties now are either in the letter of intent stage or have contracts signed for sale, although there can be no assurance that any sales or sale leasebacks transactions will be ultimately consummated.

As a result of our efforts, cash balances since the first week of April, when we drew down on the revolver, have actually increased from $76.3 million to $91.6 million as of May 6. As Rich mentioned, our sales trend is currently at breakeven profitability. Our goal is to fund capital expenditures through the increased cash flow from working capital efficiency and property sales. As a result of all of the efficiency efforts and the recent sales trends, we feel confident that we will have adequate liquidity through the end of 2020. In closely, we feel very good about our top line momentum. It continues to improve weekly. We are very focused on improving efficiency, and we will continue to stay focused on safety and welcoming of our customers and team members. We are confident that we will ultimately exit this crisis company better positioned for future sales and profit growth.

Thank you for listening, and we will now open up the call to questions. Operator?

Questions and Answers:


[Operator Instructions] We will now take our first question from Nicole Miller from Piper Sandler. Please go ahead.

Please go ahead. Your line is open. Please ensure your mute function is turned off to allow your signal to reach our equipment.

Nicole Miller -- Piper Sandler -- Analyst

Good afternoon.Can you hear me OK?

Richard Stockinger -- Chief Executive Officer and President

Yes, we can, Nicole.

Nicole Miller -- Piper Sandler -- Analyst

Great. Thank you. I wanted to ask a couple of questions just about the nature of the concepts. I'm thinking about the Taco Cabana improvement specifically. And could you talk a little bit about that being maybe more suburban in terms of locations and maybe more influenced by dinner patterns, both of which will be holding up in the marketplace?

Richard Stockinger -- Chief Executive Officer and President

Yes. I would say we've been consistent from sales improvements from what we had before. Again, that was again being driven by the new oil in the State of Texas. The only area, I would say, that is lagging a bit behind and has nothing to do with anything else, it's Houston. And as you know, Houston is not only hit by the negative impact of COVID-19, but also in the oil and gas industry. But other than that, no, we've seen consistent line starting at lunchtime, seven days a week, regarding our alcoholic beverage promotions as well as again, this is Midwest, and they're having [Indecipherable] and enjoying their foods and coming back again, like in the past might have just driven more products.

Nicole Miller -- Piper Sandler -- Analyst

Okay. Very, very helpful. Last question. I mean, I was just kind of thinking back to the beginning of this story, maybe as a public company. And it was always the unit level economics were strong, and that was the basic premise. And there's a home court advantage for each brand. So could you talk somehow and let us understand core versus noncore or by vintage or top-tier versus bottom tier? Or are literally these comp trends in the performance across both concepts across every single location? I would love to just understand some pushes and pulls there.

Richard Stockinger -- Chief Executive Officer and President

Sure. The sales trends right now per portfolio is pretty much consistent. So it's not just core of or land being down but it's pretty much across the board. And again, as you know, because the revisit the profitability margins are much higher here in core than they are outside of core portfolio. On the Taco, I would say, again, I think in [Indecipherable] and we're seeing this, that the increase in the alcoholic beverages, and the yesterday coming in now are different than in the past, we believe the margin enhancement is a great possibility, even more than we had said in the last quarter. We've taken actions regarding food cost and lowering the value of the food cost. We've now got delayed schedules down significantly. So again, for Taco, San Antonio is doing well. Houston is hurting a little bit, like I said before. And Dallas is showing the most improvement

Nicole Miller -- Piper Sandler -- Analyst

Thank you for taking my question.


[Operator Instructions] We will now take our next question from Brian Vaccaro from Raymond James. Please go ahead.

Brian Vaccaro -- Raymond James -- Analyst

Thanks and good afternoon. I wanted to start on the sales performance at Pollo, if we could. And Q1 seemed to play out about as expected, but it seemed that April worsened maybe a bit before starting to recover and it seems to be lagging the broader industry recovery we're seeing. So I'm just curious to get your perspective on what may have driven that, maybe something regional or macro specific in South Florida or something else that scores highlighting.

Richard Stockinger -- Chief Executive Officer and President

Yes. Great question. At Pollo, versus BlackBox, improvement is right there and within our market. We're not doing well as the we [Indecipherable] is doing. Keep in mind, in South Florida, before this happened, 25% of the [Indecipherable] were living at the poverty level or below. it is right now. So that's why we're pushing hard on the lower-cost, lower-priced promotions. We're doing hard on things like the Pantry, which we've just introduced. But these prices are lower than the local grocery stores. So I would say we are not doing worse than local competitors in that [Indecipherable]. We're not doing as well as the quick service. And one area also is, keep in mind, our menu is a lot different than quick service. So quick service is much more in-home, and we do not. So without the timing, we've lost a lot of those people that are coming in for the platters at Pollo. We expect as the dining restriction start to be removed or lessened, those people will come back.

Brian Vaccaro -- Raymond James -- Analyst

Okay. That's helpful. And I guess a follow-up on that. Rich, could you give some perspective, thinking about some of those dynamics you just mentioned, could you give some perspective on quarter-to-date? How variable has it been if you compare South Florida to Orlando, Tampa, some of the other markets? Could you give any perspective across the individual regions?

Richard Stockinger -- Chief Executive Officer and President

I can give you a top line. They're pretty consistent on the sales decline, and there's not much difference if you look at Northern Florida, Central Florida and South Florida in terms of the range being down around 30%, 32%. We kind to are close there right now, and we're working on that. But no, there hasn't been a significant variance in the geographic region.

Brian Vaccaro -- Raymond James -- Analyst

Okay. All right. I wanted to also ask, the Pollo Tropical off-premise, I think you said it was 7.1%. Could you share what percent of that is delivery? And could you also just give a little bit more on the traction that you've seen thus far with Uber Eats, which I believe has a pretty dominant share in South Florida in particular?

Richard Stockinger -- Chief Executive Officer and President

Keep in mind, we just signed on Uber Eats when we ended the first quarter. They have been a partner, as they all have. Uber Eats, as you know, is the Number one DSP in South Florida. And we just recently started rolling out, we've guided in now into our core market, Grubhub, which is Number two. So we expect that number to grow in terms of the off-premise. Is it as high as our competitors? No. Is it as high as we want it to be? The answer is no. And again, I think it was more of a timing of getting [Indecipherable] Uber Eats. And now Grubhub is the Number two. And we expect those numbers to improve.

Dirk Montgomery -- Chief Financial Officer

And in terms of the mix of off-premise right now, delivery is accounting for roughly 60% to 70% of the total off-premise dollars. That's currently a little bit skewed due to the conditions. We've had very good success in catering at the end of the calendar year, very strong momentum. I think we expect that once things go back to normal, that catering contribution will dramatically improve because we had great traction at the end of the fourth quarter in that channel. We also expect, as Rich said, that our online sales should increase dramatically as we launch the Bottle Rocket, new online in app which supported by Bottle Rocket.

Brian Vaccaro -- Raymond James -- Analyst

All right. That's great. And then just last one for me. On the G&A cuts, obviously, very difficult decisions that you had to make. But in terms of the permanent cuts that you've made, just curious if you could share in what functions you pared it back? And just any other color on the permanent changes, structural changes that you've made, either from a personnel or maybe from a headquarters standpoint. Are you still going with the three headquarters? Or is there an opportunity have you made a decision to pare that back perhaps?

Dirk Montgomery -- Chief Financial Officer

Sure. So I mean, we made cuts across the board in all functions and all occasions. Obviously, our focus is around making sure that we maintain the support that we mean needed to support operations in [Indecipherable] activities. And as we mentioned in the in the press release and in my prepared comments, roughly $5.5 million of the estimated $9.1 million of annualized savings work from terminations versus furloughs. So no date when recent Polo and the preload employees will be brought back. But those are kind of the mix dimensions of the separation. So I think we of the $5.5 million certainly would be viewed as more permanent. And the remainder comprising of the furloughs is going to depend on the business friend

Richard Stockinger -- Chief Executive Officer and President

You know Brain. We take a look at every aspect of our business. You know, taking the line from Governor Cuomo, he's done a great job in the State of New York. As a leader. we are reimagining every aspect of our business. Not just the overhead, but the way we do things going forward. Because none of us on the phone call in the middle [Indecipherable] knows what the new world is going to look like. So we're undertaking this opportunity to look at every aspect [Indecipherable] and not just replacing what we did before, but trying to find a better method or better opportunity as we go into the new world. So we're not we have no specific plans, but more to come, we're looking at ways to improve our business on top line, efficiency and the bottom line.

Brian Vaccaro -- Raymond James -- Analyst

Understood, certainly unprecedented times. I hope everyone's well and stays healthy. Thank you again.

Richard Stockinger -- Chief Executive Officer and President

Thank you. You too.


That concludes today's question-and-answer session. I would now like to turn the call back to the management team for any additional or closing remarks.

Richard Stockinger -- Chief Executive Officer and President

In closing, again, I just want to thank our team members for the passion, for their loyalty, their hard work, not only the people that in the office in support who've been working from home, very difficult, but most important, the people that are in the front lines. There's another saying, "How much is a human life worth?" They're priceless. And that's why we're taking every opportunity for our safety of our frontline employees. So again, thank you to our team members, thank you to our shareholders, and looking forward to speaking to you again next quarter. Thank you, everyone.


[Operator Closing Remarks]

Duration: 47 minutes

Call participants:

Raphael Gross -- Managing Director

Richard Stockinger -- Chief Executive Officer and President

Dirk Montgomery -- Chief Financial Officer

Nicole Miller -- Piper Sandler -- Analyst

Brian Vaccaro -- Raymond James -- Analyst

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