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Fiesta Restaurant Group Inc (NASDAQ:FRGI)
Q2 2020 Earnings Call
Aug 5, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the Fiesta Restaurant Group, Inc. Second Quarter 2020 Earnings Conference Call. [Operator Instructions]

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

Raphael Gross -- Managing Director

Thank you. Fiesta Restaurant Group's second quarter 2020 earnings release was issued after the market closed today. If you have not already accessed it, it could be found on the company's website, www.frgi.com, 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 a reconciliation to comparable GAAP measures is available 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 will turn the call over to Rich.

Richard Stockinger -- Chief Executive Officer and President

Thank you, Ray. I'd first like to thank all of the investors and other participants on the call today for their continued support during the COVID-19 crisis. I'll be covering three topics today. Our key priorities for the balance of the year, an update on the status of our sales driving efforts and second quarter results highlights. Dirk will then provide a financial update. Our top priority has been and will continue to be effectively managing through the COVID-19 crisis with a focus on the safety and well-being of our team members. Our decision to temporarily close our dining rooms effective July 12 was primarily driven by our concerns about the increased infection rates in our markets, and we will continue to make changes to our operations model as needed to safely operate. Our leadership and operations teams have been spending a significant amount of time, taking the right steps to ensure team member and customer safety through COVID-19 employee and guest protocols and precautions, and we are continually adapting those procedures to changing conditions. Our second priority is maximizing liquidity. In July, we secured a loan amendment that we believe allows us adequate covenant cushion and liquidity to operate in this challenging environment. We generated positive adjusted EBITDA at both brands and also generated net cash provided by operating activities of $24.5 million through the positive brand level profit at both brands and improved working capital management. Since the beginning of the COVID crisis, we have significantly reduced our outstanding revolving credit facility and net revolver debt balances. As of July 31, our net revolver debt was $48.4 million. Please see the non-GAAP disclosure in our earnings release for more details on how we calculate net revolver debt.

By the way, we are also current on all lease obligations as of July 31. In the second half of the year, we will continue to pursue additional actions to improve liquidity, including the sale of owned real estate properties. Dirk will provide additional details on our liquidity plans in his update. Our third key priority is finding new and better ways to drive sales. We made very good progress during the second quarter on developing a better business model designed to enable our customers to enjoy our brands safely wherever and however, they choose, including expanded delivery options, new curbside and pickup capabilities and a much enhanced online ordering experience. With drive-thru now being an even more critical component of our business, we're in a process of improving the drive-thru experience through investments in technology and kitchen line reengineering to improve speed of service, including upgrading our drive-thru remote pod ordering system and testing a modular kitchen line that is more flexible and reduces order processing time. We will continue to invest in ongoing product innovation that will contribute to check and traffic growth, such as our alcohol expansion at Taco Cabana and continued LTOs and menu add-ons at both brands. Now I'll highlight Q2 results and the status of our initiatives to accelerate sales in this changing environment at each brand. Starting with Pollo Tropical. Second quarter comparable restaurant sales declined 31.6% but improved significantly over the course of the quarter and into July. April comp sales were the lowest of the COVID time frame at minus 49.2%. However, each month of the second quarter, Pollo comp sales improved significantly, driven by improved traffic and check. This improvement continued into July with comp sales of minus 13.8%, which were 400 basis points better than June.

The state of Florida has been more negatively impacted by COVID-related challenges compared to other regions, which impacted our sales as compared to other national brands. Operating time frames during the quarter were significantly disrupted in our geographies by COVID and protests that resulted in temporary store closures and shortened hours. We estimate the impact of those operating constraints on sales was significant and may have impacted Pollo more significantly than our peers due to our relatively higher pre COVID mix of dine-in sales of approximately 24% of net sales. From a market share perspective, we maintained our share in the second quarter in our core markets, as measured by Black box, fast casual Florida benchmark in terms of both comp sales and transactions. Our off-premise initiatives are gaining traction, with total off-premise sales penetration of 11.5% compared to 4% in the second quarter last year. Delivery sales in the second quarter roughly tripled compared to last year, driven in part by the expansion to four delivery service providers, DSPs, from only one last year. And we launched a curbside initiative that was rolled out to all stores by the end of July and is showing promise. We were happy with check growth compared to last year in both drive-thru and delivery of over 10% and 20%, respectively. Drive-thru check averages were driven by increased transaction size, while delivery check growth also came from increases in items per order as well as setting minimum order sizes for free delivery promotions. Our new app developed by a leading digital design developer, Bottle Rocket went live for Pollo in late July and we expect to significantly grow our online sales through this much improved app. Although the app was just recently launched, loyalty club sign-up since the apps went live have increased 45% to the weekly average weekly sign-up rate prior to the new app.

On the margin side, our operations team has done a great job adjusting staffing and food cost management to improve efficiency. Second quarter hourly and management labor as a percentage of net sales decreased 90 basis points, excluding COVID-19 incentives and quarantine pay. Cost of sales as a percentage of net sales was up 40 basis points versus last year, largely due to packaging costs, higher promotions and discounts and commodity costs. However, we significantly reduced food waste to offset a significant portion of those cost increases. Restaurant adjusted EBITDA margins for the quarter were significantly impacted by very low April comp sales. May and June, restaurant level adjusted EBITDA margin trends were much improved and estimated to be in the range of 19% to 20% of sales. COVID costs were a significant factor in comparing year-over-year performance, with estimated total COVID costs of labor incentives, safety, supply and quarantine-related labor resulted an increasing cost for the quarter for Pollo of $1.6 million. Turning to Taco Cabana. Second quarter comparable restaurant sales declined 19.2% but also improved significantly over the course of the quarter and into July. April comp sales were the lowest of the COVID time frame at 26.2% down. May and June comp sales were both significantly better than April with May comps benefiting from the successful Cinco de Mayo margarita promotion, which drove roughly $161,000 in margarita revenue in a single day and the highest total revenue for Cinco de Mayo holiday in five years. Driven in part by another successful margarita promotion on July 24 for National Tequila Day, July comps were minus 14.4%, more than 350 basis points above June comp sales. Alcohol sales and related promotions have helped increase average drive-thru sales per week by more than 20% versus the first quarter of 2020. Alcohol and related food sales have been a primary contributor to drive-thru check average growth in the second quarter, up 20% compared to last year. We also believe the alcohol sales and promotions are bringing new customers to the brand and expect alcohol mix run rates of roughly 8% to continue, due in part to the state of Texas announcement that drive-thru sales of alcohol will be allowed for the foreseeable future.

The state of Texas has been more negatively impacted by COVID-related challenges compared to other regions, which impacted our sales compared to national brands. We estimate the impact of those operating constraints on sales was significant given our relatively high historic level of dine-in sales penetration of 25%. From a market share perspective, we maintained our share in the second quarter, as measured by the Black Box fast casual Texas benchmark in terms of comp sales and lagged by 140 basis points on a transaction basis. Taco's off-premise initiatives continue to gain traction over the quarter with total off-premise sales penetration of 8% compared to 3.7% last year. Delivery sales in the second quarter grew by over double last year's second quarter total and we launched a curbside initiative that was in all restaurants by mid-July. The new Taco Cabana app scheduled to go live in September is in the final stages of development and will include similar attractive features to the Pollo app. We expect to significantly grow our online sales through this much improved app. Second quarter restaurant level adjusted EBITDA margins for Taco improved versus last year from 12.1% to 12.6%. The restaurant margin improvement was driven by significant labor efficiencies as a percentage of net sales of 210 basis points, excluding COVID-19 incentives and quarantine pay and by cost of sales decreases of 130 basis points compared to last year. Those efficiencies were partially offset by COVID related labor and operating expense increases, including quarantine-related labor costs and special incentives as well as the negative impact of a very soft April comp sales trend on margins. Based on May and June sales and margin trends, restaurant-level adjusted EBITDA margin trends are estimated in the range of 13% to 15% of net sales. COVID costs were a significant factor in comparing year-over-year performance with estimated total COVID costs for labor incentives, safety supply and quarantine-related labor, resulting in an increase in cost for the quarter of $1.8 million.

In summary, we are happy with the progress we made over the quarter on managing the COVID crisis successfully and finding new ways to meet our customers' needs and improve sales. I personally want to thank our leadership team, our support staff, our operations team members and my executive committee for not only persevering during this tough quarter, but in seizing the opportunity to reimagine our business to find better ways to meet our customers' needs. Thanks to our team, we believe we are stronger today than when the crisis began and will even be stronger at the end of the year, ready to capitalize on opportunities that await beyond the crisis.

I'll now turn it over to Dirk to cover the financial highlights in more detail.

Dirk Montgomery -- Chief Financial Officer

Thank you, Rich, and good afternoon, everyone. I'm going to review our second quarter results and then provide an update on our cash and liquidity. Total revenues decreased 28.9% from the prior year period to $121.9 million due primarily to the comparable restaurant sales declines at both brands due principally to the impact of COVID-19 and a decrease in sales related to closed restaurants at Taco Cabana. The total revenue decline and quarterly comp sales totals are not fully reflective of the sequential improvement in same-store comparable sales that were generated at both brands, which continued into July. July same-store comp sales improved to down 13.8% for Pollo Tropical and down 14.4% for Taco Cabana. From a channel perspective, we were pleased with our efforts to maximize off-premise and drive-thru sales. Consolidated off-premise sales as a percentage of total sales almost doubled versus last year, growing to 10% of total revenue. Drive through sales rates in terms of revenue per week and check average during the second quarter increased at both brands compared to last year. Driven by successful promotions such as Taco Cabana's margarita promotions and successful add-ons at both brands, such as the top to and cheesy yuca bites at Pollo Tropical and empanadas offered at both brands.

The consolidated net loss in the second quarter of 2020 was $8.3 million or $0.33 per diluted share and included a $0.22 per diluted share negative impact primarily from items such as $1.7 million in impairment charges and $1.4 million in closed restaurant rent charges. This compared to a net loss of $43.4 million or $1.62 per diluted share in the prior year quarter, which included $1.83 per diluted share negative impact primarily from $46.5 million in goodwill impairment charges. On an adjusted basis, the net loss was $2.9 million or $0.11 per diluted share this year. This compared to adjusted net income of $5.7 million or $0.21 per diluted share in the second quarter of 2019. Please see the non-GAAP reconciliation table in our earnings release for more details. Now turning to our individual brands. At Pollo Tropical, comparable restaurant sales decreased 31.6% for the quarter compared to a 1.3% decrease in the second quarter of last year. This year's decline consisted of a 38.2% decrease in comparable restaurant transactions, partially offset by a 6.6% increase in the net impact of pricing and product and channel mix. The increase in pricing and product and channel mix was driven primarily by increases in delivery and drive-thru check average and sales channel penetration and menu price increases of approximately 0.2%. Drive-thru sales penetration increased to 70% of net sales in the second quarter, and average check for drive-thru grew by over 10% versus the second quarter of last year. Delivery sales penetration grew to 8% of net sales, and the average check for delivery grew by over 20% versus the second quarter of last year, driven by an increase in items per order. Turning to the brand profitability for the second quarter. Restaurant level adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased Pollo Tropical by $11 million to $10.3 million or 16.3% of restaurant sales from $21.4 million or 23.1% of restaurant sales last year. As a percentage of restaurant sales, Pollo Tropical experienced higher cost of sales due to sales mix and higher commodity costs and promotions and discounts, partially offset by operating efficiencies. Higher restaurant wages and related expenses due to COVID-19-related special incentives, higher rent expenses and higher other operating expenses, which included higher third-party delivery fees and COVID-related supplies.

These increases were partially offset by lower advertising costs. As Rich mentioned, Pollo's second quarter margins were significantly impacted by low April comp sales. May and June restaurant-level adjusted EBITDA margins were much improved and estimated in the range of 19% to 20%. We incurred incremental costs relative to COVID-19 of $1.6 million during the second quarter, including special incentive pay, quarantine pay and costs related to masks and sanitizer. Onetime special incentive pay totaling $0.9 million was offered to hourly employees during the second quarter. Management hourly wage costs as a percentage of net sales improved compared to last year by 0.9%, excluding the COVID-19 incentives and quarantine pay due to labor efficiency initiatives. Adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased by $9.7 million to $5.0 million for Pollo Tropical in the second quarter of 2020. At Taco Cabana, comparable restaurant sales decreased 19.2% compared to a 3% decrease in the second quarter of last year. This year's decline consisted of a 29% decrease in comparable restaurant transactions partially offset by a 9.8% increase in the net impact of product and channel mix. The increase in product and channel mix was driven primarily by increases in drive-thru and delivery sales channel penetration and an increase in average check for drive-thru orders, driven in part by an increase in transactions with alcohol sales. Taco drive-thru revenue per unit grew roughly 25% versus last year, representing 81% of net sales, driven in part by increased check average of roughly 20% over last year, again, driven by alcohol promotions. Turning to the brand's second quarter profitability. Restaurant level adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased to Taco Cabana by $2.2 million to $7.3 million or 12.6% of restaurant sales from $9.5 million or 12.1% of restaurant sales last year. As a percentage of restaurant sales, Taco Cabana incurred higher restaurant wages and related expenses due to COVID-19-related special incentives, rent expense and other operating expenses, which included higher third-party delivery fees in addition to the negative impact of lower comparable restaurant sales.

These were partially offset by lower cost of sales due to lower commodity costs and advertising expense. Despite lower same-store comp sales, Taco Cabana did an exceptional job managing food cost and labor to improve restaurant-level adjusted EBITDA margins compared to last year. Based on May and June sales and margin trends, restaurant-level adjusted EBITDA margins are estimated at 13% to 15% of net sales. Taco Cabana incurred incremental costs related to COVID-19 of $1.8 million for the second quarter, including special incentive pay, quarantine pay and costs related to masks and sanitizer. Onetime special incentive pay, totaling $1 million was offered to hourly employees during the second quarter, driven by efficiency initiatives, management and hourly wage costs as a percentage of net sales decrease versus last year by 2.1%. Adjusted EBITDA, a non-GAAP measure as defined in our SEC filings, decreased to Taco Cabana by $1.4 million to $2.7 million in the second quarter of 2020. Let me quickly touch on our cash and liquidity. We amended our senior credit facility on July 10, the details of which are included on our Investor Relations website and the 8-K filed the same day. We believe that the amendment will allow us to adequate will allow us adequate covenant cushion and liquidity to operate the business through the end of the loan term, which expires in November of 2022. A few key points I'd like to highlight from the amendment. The covenants were revised to reflect current sales and profit trends and include only two financial covenants through the remainder of 2020, which are a minimum liquidity covenant and a maximum capital expenditure covenant. The minimum liquidity covenant generally defines liquidity as available revolver capacity plus cash balances, and we are required to maintain minimum liquidity of $40 million in the third quarter of 2020 and $30 million in the fourth quarter of 2020. As of July 31, our liquidity as defined in the loan amendment was $71.6 million, leaving a significant amount of cushion compared to the covenant target of $40 million. And at current sales trends, we believe we will continue to improve liquidity. The facility size will be reduced from $150 million to $95 million in a phased reduction, beginning with a $30 million reduction at the closing of the loan amendment on July 10, a $15 million reduction in the fourth quarter of 2020 and a $10 million reduction in the first quarter of 2021.

To the extent that our revolving credit facility balance at the time of the scheduled reductions is already below the reduced capacity, no additional loan paydown is required. The interest rate on the loan is LIBOR plus 500 basis points with an undrawn fee of 50 basis points and a LIBOR floor of one percentage point. This compares to a pre-amendment interest rate on a scale based on the adjusted leverage ratio that averaged LIBOR plus 250 basis points in the second quarter of 2020 with an undrawn fee of 30 basis points. At the second quarter end, we had $101.4 million in cash and $148.5 million in debt, of which $146.5 million outstanding was under our amended senior credit facility. In addition to the $30 million repayment on July 10, we paid an additional $62.5 million through July 31. This resulted in $54 million outstanding revolver credit borrowings as of that date. Notably, as of July 31, we were also current on all lease obligations with no rent deferrals. We are tightly managing capital expenditures. Total capital expenditures in the second quarter of 2020 were $2.6 million. Our expenditures primarily included $1.4 million for maintenance, $0.9 million for technology and corporate. Capital expenditures in the first half of 2020 totaled $8.7 million compared to $21.7 million in the first half of 2019. Our 2020 capital expenditures will not exceed $22 million. Working capital efficiency has been significantly improved as a result of our vendor payment term and pricing renegotiations, which contributed to cash flow from operations of $24.5 million during the second quarter of 2020. We believe that a significant portion of the improvement in working capital efficiency represents sustainable improvements in cash flow. We are also marketing 16 owned properties for sale or sale leaseback, which are expected to result in cash flow increases going forward. As of July 31, we had received offers for the purchase of 12 properties with the average offer per site in the range of $1.7 million to 2.0 million. The marketing process for these properties will continue through the second half of the year, and we believe we will close transactions on a number of the properties for which we have offers by the end of 2020.

However, there can be no assurance that any such sales or sale-leaseback transactions will be consummated. To conclude, our operations team is doing an exceptional job, keeping our restaurants operating safely while improving efficiency in the face of challenging conditions. As a result of their efforts and supported by recent sales trends, we feel confident that we will be able to improve liquidity based on current sales trends. We are optimistic that a number of our growth initiatives will accelerate in the second half of this year as they gain traction, including curbside capabilities, our new apps and continued growth in delivery channel sales. Our entire team is focused on evolving our business to emerge in a stronger, competitive position, poised to take advantage of future growth opportunities.

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

Questions and Answers:

Operator

[Operator Instructions] The first question comes from Nicole Miller Regan from Piper Sandler. Please go ahead.

Nicole Miller Regan -- Piper Sandler -- Analyst

Thank you and good afternoon. We appreciate the update. I know this is a previous question, so I'll apologize. But when you think about the first 12 days of July until now, because you helped us with July comps, which is incredibly helpful, what would you say about those dining room closures and impact on trends?

Richard Stockinger -- Chief Executive Officer and President

Well, first of all, when we made July 12 decision on closing the dining rooms, we were a day or two before the mayor of Miami-Dade county, who then said that all dining rooms had to close. So we were ahead of the curve on that. The impact, we were not getting much in terms of sales through the dining room anyway. In fact, that's why we made the decision throughout the entire company. The dining room sales were very small.

Nicole Miller Regan -- Piper Sandler -- Analyst

Okay. We're probably not surprised by that being 2, 2.5 weeks into earnings season. So if we take the July numbers and use those somewhat as a run rate, and I use that term very loosely because of the fluid situation, then I think we've concluded there's nothing dramatically happening dramatically different than when people can't get in. So that goes back to what you said, this is drive-thru and off premise. That's pretty much the message, right?

Richard Stockinger -- Chief Executive Officer and President

That's correct as well as the drive-thru is one. The curb side is another, the online ordering and pickup and then delivery. And that's what's driving our business for improvements throughout this COVID crisis.

Nicole Miller Regan -- Piper Sandler -- Analyst

I also wanted to let you know, we really appreciate the store level margin commentary because that's been something we've been taking and tying on a monthly basis as best as we can from commentary. So being proactive is fantastic. If you take that and apply the comp in those store level margin commentary, I want to talk cash burn. I will just tell you, I haven't had time to really run the numbers the way I would have liked, but I'm not even sure that you're in cash burn territory. So can you walk through previous commentary on cash burn and then how you're thinking about it right now, please?

Dirk Montgomery -- Chief Financial Officer

Sure. So I mean, we are not experiencing a cash burn right now on a run rate basis. We had indicated at the end of the first quarter that at the comp trend even in the first at the kind of at the tail end of the first, beginning of the second that we were out of that cash burn situation. So as we said, at the current sales rate, we expect to continue to improve liquidity. And that's kind of where we're at.

Richard Stockinger -- Chief Executive Officer and President

And Nicole, that includes we are now current on all our leases and our rent. There's no deferrals. So we don't have a cash burn.

Dirk Montgomery -- Chief Financial Officer

And one of the things that certainly benefited us, as we said in the second quarter was just maximizing working capital efficiency.

Nicole Miller Regan -- Piper Sandler -- Analyst

Okay. Yes, I made note of that and modeled that. Okay. And then the last one on margins. I've always gone back and forth on this, and I feel like I really hear both sides of it. But when you think about those alcohol sales, and it's a great run rate, is there any margin benefit embedded in that? Or is that going to be fairly similar with pretty much a mix shift benefit that you could get in these other channels? Are they going to be more similar to food than not?

Richard Stockinger -- Chief Executive Officer and President

Nicole, I would tell you, when you're doing $2 margaritas, it's not a great margin. So that's not helping the margin, but it sure is bringing in traffic.

Dirk Montgomery -- Chief Financial Officer

And with the increase in check size, we believe that the dollar ring, the net dollar profit ring is accretive, which is one of the things that's driving up our check average and drive-thru. Okay.

Nicole Miller Regan -- Piper Sandler -- Analyst

So really make sure we look at it as all collectively together, the power of that side of the business and what it does for the check and that's supporting margins. Is that the better way to think about it than to try to isolate it out?

Richard Stockinger -- Chief Executive Officer and President

Yes, correct. You're leveraging the labor.

Nicole Miller Regan -- Piper Sandler -- Analyst

Okay, thank you again. Appreciate the time.

Richard Stockinger -- Chief Executive Officer and President

Thanks, Nicole.

Operator

Thank you. [Operator Instructions] Our next question comes from Brian Vaccaro from Raymond James Financial. Please go ahead.

Brian Vaccaro -- Raymond James Financial -- Analyst

Thanks, and good evening. I wanted to start out with comps at Pollo Tropical. And could you share a bit more on what you're seeing across regions, I guess, more recently? But how is South Florida holding up relative to other markets for Pollo specifically?

Dirk Montgomery -- Chief Financial Officer

Sure. So I mean, we tend we focus a lot on Black Box, our trends versus Black box. And the South Florida core market trend is in line with the Black Box market trends, as we said, in the noncore markets, which only represent about 25% of our sales, we've relative to black box, we've trailed slightly, particularly in Orlando. We think the hospitality tourism effect has impacted us more negatively than some of the other concepts that we're being compared to in that set.

Brian Vaccaro -- Raymond James Financial -- Analyst

All right. That's helpful. And Dirk, I appreciate the stats that you gave on sales channels, and I wanted to just make sure I got it right for each concept. Could you share again what was drive-thru sales mix and delivery sales mix for each brand in Q2? And could you share where those mixed in, say, June and July sort of after you had launched some of the expanded off-premise initiatives? Is it up further from those Q2 numbers?

Dirk Montgomery -- Chief Financial Officer

Yes. So it's I'll give you the quarterly numbers and then we can talk about kind of overall trends by channel. So the for Pollo, the drive-thru mix in the second quarter was 71% of sales. The delivery mix was 8% of sales. Those are both up significantly from both the prior year and what we consider to be kind of the first three or four weeks of post COVID activity, which was actually in the first quarter. And then for Taco Cabana, second quarter drive-thru penetration was 81% and delivery penetration was 5%. And I think, just in general, we've seen sequential improvement in drive-thru sales at Taco, where I think we feel like we're kind of really in probably the beginning stages of perfecting the alcohol promotion cycle.

But as we've said, the July promote we've had a couple of pretty major promotions now that have driven a pretty significant amount of traffic. And I think we're going to continue to connect those purchase occasions as we move forward. So I think we expect to continue to maintain or improve those drive-thru rates. From a capacity perspective, as Rich said, we're working to try to increase the capacity and the speed of service on drive thru for both concepts. And it's not I mean it's little increments make a big difference. We invested in we have been in investing in better technology to improve speed of service in the drive-thru and kind of really simple things like pods that they can work further out from the restaurant. Little things like that make a huge difference.

Brian Vaccaro -- Raymond James Financial -- Analyst

And can you remind me, while we're talking drive thru speeds, what are the drive-thru speeds recently or in the last quarter or so at each brand? Have you guys done have any thoughts on that?

Dirk Montgomery -- Chief Financial Officer

Yes. I mean they're both down below five minutes, yes.

Brian Vaccaro -- Raymond James Financial -- Analyst

Below five minutes. Okay. Great. Great. I also wanted to ask a couple on the amended credit facility and some of the milestones specifically. And the asset sales, I appreciate the detail there. I think you said it's 16 units. How many of those are Pollo Tropicals versus Tacos? And how many of them are in South Florida, the South Florida market?

Richard Stockinger -- Chief Executive Officer and President

Yes. Just a sec. We can give you that. Let's see, one, two, three, four, five, six. So eight well, it's half, eight units of Pollo Tropical and eight units of Taco Cabana. In terms of the units in South Florida, let's see. One it looks like most of them are not in.

Dirk Montgomery -- Chief Financial Officer

Yes. There are a couple of units in South Florida, but most of them are not in South Florida on the Pollo side.

Brian Vaccaro -- Raymond James Financial -- Analyst

Okay. Okay. Great. Great. And there was also a milestone in there related to hiring an outside consulting firm, I think it was continue to serve. Could you just expand on what areas they'll be focused on? Are we talking store level or more focused on G&A? And is there a way to ballpark potential savings at this point or efficiency gains?

Richard Stockinger -- Chief Executive Officer and President

Yes. So to answer the second question, no, their work is still in process. Their focus is really around back office and G&A. So they're working with us, too, and they're a firm that's spent a lot of time process reengineering and process improvement with a lot of other companies like ours that have multiple locations. And so that work is under way, and we expect to be wrapping it up here in the next couple of months.

Brian Vaccaro -- Raymond James Financial -- Analyst

All right, thank you.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

Raphael Gross -- Managing Director

Richard Stockinger -- Chief Executive Officer and President

Dirk Montgomery -- Chief Financial Officer

Nicole Miller Regan -- Piper Sandler -- Analyst

Brian Vaccaro -- Raymond James Financial -- Analyst

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