System-wide comparable restaurant sales growth of 2.4% in Fiscal
Fourth Quarter
Announces Upcoming Launch of Elevated Combined Solutions
Conference Call and Webcast at 5:00 p.m. ET Today
LAKE FOREST, Calif.--(BUSINESS WIRE)--
Del Taco Restaurants, Inc. (“Del Taco” or the “Company”), (NASDAQ:TACO),
the second largest Mexican-American QSR chain by units in the United
States, operating restaurants under the name Del Taco, today reported
fiscal fourth quarter and fiscal year 2017 financial results. The
Company also provided guidance for fiscal year 2018 and announced the
upcoming launch of Elevated Combined Solutions, the next phase of Del
Taco’s successful Combined Solutions strategy.
The fiscal fourth quarter and fiscal year 2017 ended January 2, 2018
consisted of 16 and 52 weeks, respectively. The fiscal fourth quarter
and fiscal year 2016 ended January 3, 2017 consisted of 17 and 53 weeks,
respectively.
Fiscal Fourth Quarter 2017 Highlights
-
System-wide comparable restaurant sales growth of 2.4% and
company-operated comparable restaurant sales growth of 2.1%, marking
the 17th and 22nd consecutive quarter of gains, respectively;
-
Company-operated comparable restaurant sales growth was comprised
of average check growth of 2.5% offset by a transaction decrease
of 0.4%;
-
Total revenue of $146.5 million compared to $150.2 million in the
fiscal fourth quarter 2016. On a comparable 16-week basis, total
revenue increased 3.2%;
-
Company restaurant sales of $140.6 million compared to $144.4 million
in the fiscal fourth quarter 2016. On a comparable 16-week basis,
company restaurant sales increased 3.1%;
-
Net income increased to $35.2 million, representing diluted earnings
per share of $0.89, compared to $8.0 million in the fiscal fourth
quarter 2016, representing diluted earnings per share of $0.20;
-
Adjusted net income* was $6.1 million, representing diluted earnings
per share of $0.15, compared to $8.0 million in the fiscal fourth
quarter 2016, representing diluted earnings per share of $0.20;
-
Restaurant contribution* margin of 19.9% compared to 21.5% in the
fiscal fourth quarter 2016;
-
Adjusted EBITDA* of $23.3 million compared to $25.3 million in the
fiscal fourth quarter 2016. Adjusted EBITDA in the fiscal fourth
quarter 2016 included an estimated $1.1 million benefit from the
additional operating week in the quarter; and
-
The opening of 10 restaurants system wide, including nine
company-operated and one franchised restaurant.
Fiscal Year 2017 Highlights
-
System-wide comparable restaurant sales growth of 4.3% and
company-operated comparable restaurant sales growth of 4.0%, marking
the 5th consecutive year of gains;
-
Company-operated comparable restaurant sales growth comprised
average check growth of 3.8%, including over 1% of menu mix
growth, and a transaction increase of 0.2%, marking the 5th
consecutive year with transaction growth;
-
Total revenue of $471.5 million, representing 4.3% growth from fiscal
year 2016. On a comparable 52-week basis, total revenue increased 6.2%;
-
Company restaurant sales of $452.1 million, representing 4.2% growth
from fiscal year 2016. On a comparable 52-week basis, company
restaurant sales increased 6.1%;
-
Net income increased to $49.9 million, representing diluted earnings
per share of $1.25, compared to $20.9 million in fiscal year 2016,
representing diluted earnings per share of $0.53. Fiscal year 2017
results include a $29.1 million one-time benefit from the revaluation
of our deferred tax balances as per the Tax Cuts and Jobs Act (TCJA),
representing diluted earnings per share of $0.73. Fiscal year 2016
results included an estimated $0.01 benefit to diluted earnings per
share from the additional operating week;
-
Adjusted net income* was $20.8 million, representing adjusted diluted
earnings per share of $0.52, compared to $20.9 million in fiscal year
2016, representing diluted earnings per share of $0.53;
-
Restaurant contribution* margin of 19.7% compared to 20.6% in fiscal
year 2016;
-
Adjusted EBITDA* of $71.5 million compared to $71.4 million in fiscal
year 2016. Adjusted EBITDA in fiscal year 2016 included an estimated
$1.1 million benefit from the additional operating week in the year;
and
-
The opening of 20 restaurants system wide, including twelve
company-owned and eight franchised restaurants.
Adjusted net income*, Adjusted EBITDA*, and restaurant contribution*
margin are non-GAAP measures and defined below under “Key Financial
Definitions.” Please see the reconciliation of non-GAAP measures
accompanying this release.
John D. Cappasola, Jr., President and Chief Executive Officer of Del
Taco, commented, “We continued our momentum in 2017 by leveraging our
value oriented QSR+ positioning to deliver a fourth consecutive year of
mid-single-digit SSS results with two and three year comps that are
among the best in our industry. System-wide, we also opened 20
restaurants, representing a substantial increase from 13 opened in 2016.
We are obviously very proud of these results and thank all of our team
members, franchisees and guests for making them possible.”
Cappasola continued, “We began 2018 promoting our Buck & Under menu by
reinforcing that only Del Taco has a value platform at a $1 or under,
with up to 15 items including the new $1 Salsa Chicken Taco. In February
we transitioned to our popular annual seafood promotion featuring Jumbo
Shrimp in advance of Lent. Although our first quarter will benefit from
a two week calendar shift of the Lenten season, we are very pleased with
strong comparable restaurant sales to date that include positive traffic
at company-operated restaurants.”
Cappasola concluded, “Later this year, we will refresh our Combined
Solutions Strategy. This latest iteration, Elevated Combined Solutions,
will encompass a series of brand catalysts and operational improvements
launching throughout the back half of the year. These include a
refreshed advertising campaign, new product introductions, rollout of
the new Del Taco mobile app and several enhancements to the guest
experience focused on greater hospitality in our restaurants. We believe
Elevated Combined Solutions will build upon our brand momentum and
provide a significant ongoing opportunity to drive growth in AUVs and
restaurant contribution across the system in 2018 and beyond.”
Review of Fiscal Fourth Quarter 2017 Financial Results
The Company's fiscal fourth quarter 2017 included 16 weeks compared to
17 weeks in the fiscal fourth quarter 2016. Total revenue was $146.5
million compared to $150.2 million in fiscal fourth quarter 2016. Total
revenue and company restaurant sales attributed to the additional
operating week in the fiscal fourth quarter were approximately $8.3
million and $8.0 million, respectively.
Comparable restaurant sales increased 2.4% system-wide for the fiscal
fourth quarter 2017, resulting in a 7.9% increase on a two-year basis.
The Del Taco system has now generated comparable restaurant sales growth
for 17 consecutive quarters. Company-operated comparable restaurant
sales increased 2.1%, marking the 22nd consecutive quarter of comparable
restaurant sales growth. Franchise comparable restaurant sales increased
2.8%.
Net income was $35.2 million, representing $0.89 per diluted share,
compared to $8.0 million in the fiscal fourth quarter 2016, representing
$0.20 per diluted share. Fiscal fourth quarter 2017 results include a
$29.1 million one-time income tax benefit from the revaluation of our
deferred tax balances as per the TCJA, representing diluted earnings per
share of $0.73. Fiscal fourth quarter 2016 results included an estimated
$0.01 benefit to diluted earnings per share from the additional
operating week.
Adjusted net income* was $6.1 million, representing $0.15 per diluted
share. The one-time adjustment represented an income tax benefit of
$29.1 million, or $0.73 per diluted share, from the revaluation of our
deferred tax balances as per the TCJA.
Restaurant contribution* was $28.0 million compared to $31.1 million in
the fiscal fourth quarter 2016. Fiscal fourth quarter 2016 results
included an estimated $1.4 million benefit to restaurant contribution
from the additional operating week. On a comparable 16-week basis,
restaurant contribution decreased 5.7%.
As a percentage of Company restaurant sales, restaurant contribution*
decreased approximately 160 basis points year-over-year to 19.9%. The
decrease was the result of an approximately 10 basis point increase in
food and paper costs, an approximately 90 basis point increase in labor
and related expenses, and an approximately 70 basis point increase in
occupancy and other operating expenses.
Adjusted EBITDA* was $23.3 million compared to $25.3 million in the
previous year’s fiscal fourth quarter. Adjusted EBITDA in the fiscal
fourth quarter 2016 included an estimated $1.1 million benefit from the
additional operating week. On a comparable 16-week basis, Adjusted
EBITDA decreased 3.8%.
Restaurant Portfolio
During the fiscal fourth quarter 2017, Del Taco opened nine
company-operated restaurants and one franchised restaurant. Three
company-operated restaurants and one franchised restaurant were closed.
The Company also purchased one franchise restaurant in Moreno Valley, CA.
For fiscal year 2017, Del Taco opened 20 system-wide restaurants and
closed seven system-wide restaurants. There were 564 system-wide
restaurants as of January 2, 2018, consisting of 312 company-operated
and 252 franchised restaurants.
Repurchase Program for Common Stock and Warrants
During the fiscal fourth quarter 2017, the Company repurchased 249,210
shares at an average price per share of $12.27 and 23,253 warrants at an
average price per warrant of $3.22 for an aggregate of $3.1 million.
For fiscal year 2017, the Company repurchased approximately 1.0 million
shares at an average price per share of $12.41 and 424 thousand warrants
at an average price per warrant of $3.72 for an aggregate of $13.8
million. As of the end of fiscal 2017 there was approximately $20.9
million remaining under the $50 million repurchase authorization.
Impact of Tax Reform
In December 2017, the TCJA was enacted and includes a number of changes
to existing U.S. tax laws that impact the Company, most notably a
reduction of the U.S. corporate income tax rate from 35 percent to 21
percent for tax years beginning after December 31, 2017. The TCJA also
provides for the acceleration of depreciation of certain assets placed
into service after September 27, 2017 as well as prospective changes
beginning in 2018, including additional limitations on executive
compensation and limitations on the deductibility of interest.
The Company measures deferred tax assets and liabilities using enacted
tax rates that will apply in the years in which the temporary
differences are expected to reverse. Accordingly, the Company’s deferred
tax assets and liabilities were remeasured to reflect the reduction in
the U.S. corporate income tax rate from 35 percent to 21 percent,
resulting in a $29.1 million decrease in income tax expense for the year
ended January 2, 2018 and a corresponding $29.1 million decrease in net
deferred tax liabilities as of January 2, 2018.
Fiscal Year 2018 Guidance
The Company is providing the following guidance for fiscal year 2018,
the 52-week period ending January 1, 2019:
-
System-wide same store sales growth of approximately 2% to 4%;
-
Total revenue between $506 million and $516 million, reflecting the
new revenue recognition rules whereby franchise advertising
contributions and other franchise revenue, which totaled $12.7 million
and $0.8 million in fiscal year 2017, respectively, will now be
reported on a gross basis. This guidance also includes an estimated
$0.5 million unfavorable impact from the timing of initial franchise
fees and renewal fees which must be deferred and recognized over the
term of the related franchise agreement;
-
Total company-operated restaurant sales between $473 million and $483
million;
-
Restaurant contribution margin between 19.3% and 19.8%;
-
General and administrative expenses between approximately 8.2% and
8.5% of total revenue, including the expense side of the other
franchise revenue that will now be reported on a gross basis;
-
Effective tax rate of approximately 26.5% to 27.5%;
-
Diluted earnings per share of approximately $0.59 to $0.63;
-
Adjusted EBITDA between $71.5 million and $74.0 million;
-
25 to 28 new system-wide restaurant openings; and
-
Net capital expenditures between $35.0 million to $38.0 million.
We have not reconciled guidance for Adjusted EBITDA to the corresponding
GAAP financial measure because we do not provide guidance for the
various reconciling items. We are unable to provide guidance for these
reconciling items because we cannot determine their probable
significance, as certain items are outside of our control and cannot be
reasonably predicted since these items could vary significantly from
period to period. Accordingly, a reconciliation to the corresponding
GAAP financial measure is not available without unreasonable effort.
Conference Call
A conference call and webcast to discuss Del Taco’s financial results
and annual guidance is scheduled for 5:00 p.m. ET today. Hosting the
conference call and webcast will be John D. Cappasola, Jr., President
and Chief Executive Officer; and Steven L. Brake, Executive Vice
President and Chief Financial Officer.
Interested parties may listen to the conference call via telephone by
dialing 1-201-689-8471. A telephone replay will be available shortly
after the call has concluded and can be accessed by dialing
1-412-317-6671, the passcode is 13675716.
The webcast will be available at www.deltaco.com
under the investors section and will be archived on the site shortly
after the call has concluded.
Key Financial Definitions
Comparable restaurant sales growth reflects the change in
year-over-year sales for the comparable company, franchise and total
system restaurant base. Restaurants are included in the comparable store
base in the accounting period following its 18th full month of
operations and excludes restaurant closures.
Adjusted net income* represents company net income before items
that we do not consider representative of our ongoing operating
performance. Adjusted diluted net income per share represents
company diluted net income per share before items that we do not
consider representative of our ongoing operating performance.
Restaurant contribution* is defined as company restaurant sales
less restaurant operating expenses, which are food and paper costs,
labor and related expenses and occupancy and other operating expenses. Restaurant
contribution margin is defined as restaurant contribution as a
percentage of company restaurant sales. Restaurant contribution and
restaurant contribution margin are neither required by, nor
presented in accordance with, GAAP. Restaurant contribution and
restaurant contribution margin are supplemental measures of operating
performance of restaurants and the calculations thereof may not be
comparable to those reported by other companies. Restaurant contribution
and restaurant contribution margin have limitations as analytical tools,
and you should not consider them in isolation or as substitutes for
analysis of results as reported under U.S. GAAP. Management believes
that restaurant contribution and restaurant contribution margin are
important tools for investors because they are widely-used metrics
within the restaurant industry to evaluate restaurant-level
productivity, efficiency and performance. Management uses restaurant
contribution and restaurant contribution margin as key performance
indicators to evaluate the profitability of incremental sales at Del
Taco restaurants, to evaluate restaurant performance across periods and
to evaluate restaurant financial performance compared with competitors.
Adjusted EBITDA* is defined as net income/loss prior to interest
expense, income taxes, and depreciation and amortization, as adjusted to
add back certain charges, such as stock-based compensation expense and
transaction-related costs, as these expenses are not considered an
indicator of ongoing company performance. Adjusted EBITDA is a
non-GAAP financial measure and should not be considered as an
alternative to operating income or net income/loss as a measure of
operating performance or cash flows or as measures of liquidity.
Non-GAAP financial measures are not necessarily calculated the same way
by different companies and should not be considered a substitute for or
superior to GAAP results. We believe Adjusted EBITDA facilitates
operating performance comparisons from period to period by isolating the
effects of some items that vary from period to period without any
correlation to core operating performance or that vary widely among
similar companies. These potential differences may be caused by
variations in capital structures (affecting interest expense), tax
positions (such as the impact on periods or changes in effective tax
rates or net operating losses) and the age and book depreciation of
facilities and equipment (affecting relative depreciation expense). We
also present Adjusted EBITDA because (i) we believe this measure is
frequently used by securities analysts, investors and other interested
parties to evaluate companies in our industry and (ii) we use Adjusted
EBITDA internally as a benchmark to compare performance to that of
competitors.
About Del Taco Restaurants, Inc.
Del Taco (NASDAQ:TACO) offers a unique variety of both Mexican and
American favorites such as burritos and fries, prepared fresh in every
restaurant’s working kitchen with the value and convenience of a drive
thru. Del Taco’s menu items taste better because they are made with
quality ingredients like freshly grated cheddar, hand-chopped pico de
gallo, sliced avocado, slow-cooked beans made from scratch, and
fresh-grilled marinated chicken and carne asada. The brand’s UnFreshing
Believable® campaign further communicates Del Taco’s commitment to
provide guests with the best quality and value for their money. Founded
in 1964, today Del Taco serves more than three million guests each week
at its more than 560 restaurants across 14 states. For more information,
visit www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain a number
of “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
without limitation, information concerning Del Taco’s possible or
assumed future results of operations, business strategies, competitive
position, industry environment, potential growth opportunities and the
effects of regulation. These statements are based Del Taco’s
management’s current expectations and beliefs, as well as a number of
assumptions concerning future events. When used in this press release,
the words “estimates,” “projected,” “expects,” “anticipates,”
“forecasts,” “plans,” “intends,” “believes,” “seeks,” “target,” “may,”
“will,” “should,” “future,” “propose,” “preliminary,” “guidance,” “on
track” and variations of these words or similar expressions (or the
negative versions of such words or expressions) are intended to identify
forward-looking statements. Such forward-looking statements are subject
to known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside Del Taco’s management’s
control that could cause actual results to differ materially from the
results discussed in the forward-looking statements. These risks
included, without limitation, consumer demand, our inability to
successfully open company-operated or franchised restaurants or
establish new markets, competition in our markets, our inability to grow
and manage growth profitably, adverse changes in food and supply costs,
our inability to access additional capital, changes in applicable laws
or regulations, food safety and foodborne illness concerns, our
inability to manage existing and to obtain additional franchisees, our
inability to attract and retain qualified personnel, our inability to
profitably expand into new markets, changes in, or the discontinuation
of, the Company’s repurchase program, and the possibility that we may be
adversely affected by other economic, business, and/or competitive
factors. Additional risks and uncertainties are identified and discussed
in Del Taco’s reports filed with the SEC, including under Item 1A. Risk
Factors in our Annual Report on Form 10-K for the year ended January 3,
2017, and available at the SEC’s website at www.sec.gov
and the Company’s website at www.deltaco.com.
Forward-looking statements included in this release speak only as of the
date of this release. Del Taco undertakes no obligation to update its
forward-looking statements to reflect events or circumstances after the
date of this release or otherwise.
Del Taco Restaurants, Inc.
|
Consolidated Balance Sheets
|
(In thousands, except share and per share data)
|
|
|
|
January 2, 2018
|
|
January 3, 2017
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
6,559
|
|
|
$
|
8,795
|
|
Accounts and other receivables, net
|
|
|
3,828
|
|
|
|
4,141
|
|
Inventories
|
|
|
2,712
|
|
|
|
2,718
|
|
Prepaid expenses and other current assets
|
|
|
6,784
|
|
|
|
4,204
|
|
Total current assets
|
|
|
19,883
|
|
|
|
19,858
|
|
Property and equipment, net
|
|
|
156,124
|
|
|
|
138,320
|
|
Goodwill
|
|
|
320,638
|
|
|
|
320,025
|
|
Trademarks
|
|
|
220,300
|
|
|
|
220,300
|
|
Intangible assets, net
|
|
|
21,498
|
|
|
|
24,782
|
|
Other assets, net
|
|
|
3,881
|
|
|
|
3,872
|
|
Total assets
|
|
$
|
742,324
|
|
|
$
|
727,157
|
|
Liabilities and shareholders' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
18,759
|
|
|
$
|
16,427
|
|
Other accrued liabilities
|
|
|
35,257
|
|
|
|
36,653
|
|
Current portion of capital lease obligations and deemed landlord
financing liabilities
|
|
|
1,415
|
|
|
|
1,588
|
|
Total current liabilities
|
|
|
55,431
|
|
|
|
54,668
|
|
Long-term debt, capital lease obligations and deemed landlord
financing liabilities, excluding current portion, net
|
|
|
170,639
|
|
|
|
173,743
|
|
Deferred income taxes
|
|
|
68,574
|
|
|
|
91,273
|
|
Other non-current liabilities
|
|
|
31,431
|
|
|
|
30,140
|
|
Total liabilities
|
|
|
326,075
|
|
|
|
349,824
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no
shares issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.0001 par value; 400,000,000 shares authorized;
38,434,274 shares issued and outstanding at January 2, 2018;
39,153,503 shares issued and outstanding at January 3, 2017
|
|
|
4
|
|
|
|
4
|
|
Additional paid-in capital
|
|
|
349,334
|
|
|
|
360,131
|
|
Accumulated other comprehensive loss
|
|
|
14
|
|
|
|
172
|
|
Retained earnings
|
|
|
66,897
|
|
|
|
17,026
|
|
Total shareholders' equity
|
|
|
416,249
|
|
|
|
377,333
|
|
Total liabilities and shareholders' equity
|
|
$
|
742,324
|
|
|
$
|
727,157
|
|
|
Del Taco Restaurants, Inc.
|
Consolidated Statements of Comprehensive Income
|
(In thousands, except share and per share data)
|
|
|
|
16 Weeks Ended
|
|
17 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
January 2, 2018
|
|
January 3, 2017
|
Revenue:
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Company restaurant sales
|
|
$
|
140,606
|
|
|
$
|
144,424
|
|
|
$
|
452,148
|
|
|
$
|
434,064
|
|
Franchise revenue
|
|
|
4,970
|
|
|
|
5,085
|
|
|
|
16,464
|
|
|
|
15,676
|
|
Franchise sublease income
|
|
|
966
|
|
|
|
726
|
|
|
|
2,844
|
|
|
|
2,343
|
|
Total revenue
|
|
|
146,542
|
|
|
|
150,235
|
|
|
|
471,456
|
|
|
|
452,083
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Restaurant operating expenses:
|
|
|
|
|
|
|
|
|
Food and paper costs
|
|
|
39,055
|
|
|
|
40,055
|
|
|
|
125,391
|
|
|
|
120,116
|
|
Labor and related expenses
|
|
|
44,971
|
|
|
|
44,944
|
|
|
|
145,012
|
|
|
|
135,725
|
|
Occupancy and other operating expenses
|
|
|
28,582
|
|
|
|
28,348
|
|
|
|
92,825
|
|
|
|
88,908
|
|
General and administrative
|
|
|
10,977
|
|
|
|
12,148
|
|
|
|
38,154
|
|
|
|
37,220
|
|
Depreciation and amortization
|
|
|
7,459
|
|
|
|
6,954
|
|
|
|
23,362
|
|
|
|
23,129
|
|
Occupancy and other - franchise subleases
|
|
|
870
|
|
|
|
673
|
|
|
|
2,608
|
|
|
|
2,207
|
|
Pre-opening costs
|
|
|
1,060
|
|
|
|
509
|
|
|
|
1,591
|
|
|
|
731
|
|
Restaurant closure charges, net
|
|
|
192
|
|
|
|
556
|
|
|
|
191
|
|
|
|
435
|
|
Loss on disposal of assets, net
|
|
|
551
|
|
|
|
121
|
|
|
|
1,075
|
|
|
|
312
|
|
Total operating expenses
|
|
|
133,717
|
|
|
|
134,308
|
|
|
|
430,209
|
|
|
|
408,783
|
|
Income from operations
|
|
|
12,825
|
|
|
|
15,927
|
|
|
|
41,247
|
|
|
|
43,300
|
|
Other expenses, net:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,402
|
|
|
|
2,038
|
|
|
|
7,200
|
|
|
|
6,327
|
|
Transaction-related costs
|
|
|
—
|
|
|
|
50
|
|
|
|
—
|
|
|
|
731
|
|
Total other expenses, net
|
|
|
2,402
|
|
|
|
2,088
|
|
|
|
7,200
|
|
|
|
7,058
|
|
Income from operations before (benefit) provision for income taxes
|
|
|
10,423
|
|
|
|
13,839
|
|
|
|
34,047
|
|
|
|
36,242
|
|
(Benefit) provision for income taxes
|
|
|
(24,779
|
)
|
|
|
5,800
|
|
|
|
(15,824
|
)
|
|
|
15,329
|
|
Net income
|
|
|
35,202
|
|
|
|
8,039
|
|
|
|
49,871
|
|
|
|
20,913
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Change in fair value of interest rate cap, net of tax
|
|
|
109
|
|
|
|
294
|
|
|
|
(162
|
)
|
|
|
172
|
|
Reclassification of interest rate cap amortization included in net
income
|
|
|
4
|
|
|
|
—
|
|
|
|
4
|
|
|
|
—
|
|
Total other comprehensive (loss) income, net
|
|
|
113
|
|
|
|
294
|
|
|
|
(158
|
)
|
|
|
172
|
|
Comprehensive income
|
|
$
|
35,315
|
|
|
$
|
8,333
|
|
|
$
|
49,713
|
|
|
$
|
21,085
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.91
|
|
|
$
|
0.21
|
|
|
$
|
1.29
|
|
|
$
|
0.54
|
|
Diluted
|
|
$
|
0.89
|
|
|
$
|
0.20
|
|
|
$
|
1.25
|
|
|
$
|
0.53
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
|
38,564,736
|
|
|
|
39,164,127
|
|
|
|
38,689,508
|
|
|
|
38,725,541
|
|
Diluted
|
|
|
39,672,204
|
|
|
|
40,357,955
|
|
|
|
39,949,907
|
|
|
|
39,274,649
|
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
|
(Unaudited)
|
(In thousands)
|
|
|
|
16 Weeks Ended
|
|
17 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
January 2, 2018
|
|
January 3, 2017
|
Net income
|
|
$
|
35,202
|
|
|
$
|
8,039
|
|
|
$
|
49,871
|
|
|
$
|
20,913
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
(Benefit) provision for income taxes
|
|
|
(24,779
|
)
|
|
|
5,800
|
|
|
|
(15,824
|
)
|
|
|
15,329
|
|
Interest expense
|
|
|
2,402
|
|
|
|
2,038
|
|
|
|
7,200
|
|
|
|
6,327
|
|
Depreciation and amortization
|
|
|
7,459
|
|
|
|
6,954
|
|
|
|
23,362
|
|
|
|
23,129
|
|
EBITDA
|
|
|
20,284
|
|
|
|
22,831
|
|
|
|
64,609
|
|
|
|
65,698
|
|
Stock-based compensation expense (a)
|
|
|
1,536
|
|
|
|
1,466
|
|
|
|
4,876
|
|
|
|
4,096
|
|
Loss on disposal of assets, net (b)
|
|
|
551
|
|
|
|
121
|
|
|
|
1,075
|
|
|
|
312
|
|
Restaurant closure charges, net (c)
|
|
|
192
|
|
|
|
556
|
|
|
|
191
|
|
|
|
435
|
|
Amortization of favorable and unfavorable lease assets and
liabilities, net (d)
|
|
|
(288
|
)
|
|
|
(187
|
)
|
|
|
(809
|
)
|
|
|
(607
|
)
|
Transaction-related costs (e)
|
|
|
—
|
|
|
|
50
|
|
|
|
—
|
|
|
|
731
|
|
Pre-opening costs (f)
|
|
|
1,060
|
|
|
|
509
|
|
|
|
1,591
|
|
|
|
731
|
|
Adjusted EBITDA
|
|
$
|
23,335
|
|
|
$
|
25,346
|
|
|
$
|
71,533
|
|
|
$
|
71,396
|
|
(a) Includes non-cash, stock-based compensation.
|
(b) Loss on disposal of assets, net includes the loss or gain on
disposal of assets related to sales-leaseback transactions, sales,
retirements and replacement or write-off of leasehold improvements,
furniture, fixtures or equipment in the ordinary course of business,
net of amortization of deferred gains on assets sales associated
with sale-leaseback transactions and gains or losses recorded
associated with the sale of company-operated restaurants to
franchisees.
|
(c) Includes costs related to future obligations associated with the
closure or net sublease shortfall of a restaurant, partially offset
by sublease income from leases which are treated as deemed landlord
financing.
|
(d) Includes amortization of favorable lease assets and unfavorable
lease liabilities.
|
(e) Includes costs related to the offer to exchange the Company's
common stock for each outstanding Company warrant in August 2016 and
the strategic sale process which commenced during 2014 and resulted
in the March 2015 stock purchase agreement and the June 2015
Business Combination consummated pursuant to the Merger Agreement.
|
(f) Pre-opening costs consist of costs directly associated with the
opening of new restaurants and incurred prior to opening, including
restaurant labor, supplies, cash and non-cash rent expense and other
related pre-opening costs. These are generally incurred over the
three to five months prior to opening.
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Company Restaurant Sales to Restaurant
Contribution
|
(Unaudited)
|
(In thousands)
|
|
|
|
16 Weeks Ended
|
|
17 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
January 2, 2018
|
|
January 3, 2017
|
Company restaurant sales
|
|
$
|
140,606
|
|
|
$
|
144,424
|
|
|
$
|
452,148
|
|
|
$
|
434,064
|
|
Restaurant operating expenses
|
|
|
112,608
|
|
|
|
113,347
|
|
|
|
363,228
|
|
|
|
344,749
|
|
Restaurant contribution
|
|
$
|
27,998
|
|
|
$
|
31,077
|
|
|
$
|
88,920
|
|
|
$
|
89,315
|
|
Restaurant contribution margin
|
|
|
19.9
|
%
|
|
|
21.5
|
%
|
|
|
19.7
|
%
|
|
|
20.6
|
%
|
|
Del Taco Restaurants, Inc.
|
Reconciliation of Net Income and Earnings Per Share to Adjusted
Net Income and Earnings Per Share
|
(Unaudited)
|
(In thousands, expect per share data)
|
|
|
|
16 Weeks Ended
|
|
17 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
|
$
|
|
Per Share
|
|
$
|
|
Per Share
|
Net income & diluted net income per share, as reported
|
|
$
|
35,202
|
|
|
$
|
0.89
|
|
|
$
|
8,039
|
|
|
$
|
0.20
|
|
Re-measurement of net deferred tax liability to new corporate tax
rate
|
|
|
(29,111
|
)
|
|
|
(0.73
|
)
|
|
|
—
|
|
|
|
—
|
|
Non-GAAP adjusted net income and diluted net income per share
|
|
$
|
6,091
|
|
|
$
|
0.15
|
|
|
$
|
8,039
|
|
|
$
|
0.20
|
|
|
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
|
$
|
|
Per Share
|
|
$
|
|
Per Share
|
Net income & diluted net income per share, as reported
|
|
$
|
49,871
|
|
|
$
|
1.25
|
|
|
|
20,913
|
|
|
$
|
0.53
|
|
Re-measurement of net deferred tax liability to new corporate tax
rate
|
|
|
(29,111
|
)
|
|
|
(0.73
|
)
|
|
|
—
|
|
|
|
—
|
|
Non-GAAP adjusted net income and diluted net income per share
|
|
$
|
20,760
|
|
|
$
|
0.52
|
|
|
$
|
20,913
|
|
|
$
|
0.53
|
|
|
Del Taco Restaurants, Inc.
|
Restaurant Development
|
|
|
|
16 Weeks Ended
|
|
17 Weeks Ended
|
|
52 Weeks Ended
|
|
53 Weeks Ended
|
|
|
January 2, 2018
|
|
January 3, 2017
|
|
January 2, 2018
|
|
January 3, 2017
|
Company-operated restaurant activity:
|
|
|
|
|
|
|
|
Beginning of period
|
|
305
|
|
|
300
|
|
|
310
|
|
|
297
|
|
Openings
|
|
9
|
|
|
5
|
|
|
12
|
|
|
8
|
|
Closures
|
|
(3
|
)
|
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
Purchased from franchisee
|
|
1
|
|
|
5
|
|
|
1
|
|
|
6
|
|
Sold to franchisee
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
Restaurants at end of period
|
|
312
|
|
|
310
|
|
|
312
|
|
|
310
|
|
Franchised restaurant activity:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
253
|
|
|
246
|
|
|
241
|
|
|
247
|
|
Openings
|
|
1
|
|
|
2
|
|
|
8
|
|
|
5
|
|
Closures
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
Sold to Company
|
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(6
|
)
|
Purchased from Company
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Restaurants at end of period
|
|
252
|
|
|
241
|
|
|
252
|
|
|
241
|
|
Total restaurant activity:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
558
|
|
|
546
|
|
|
551
|
|
|
544
|
|
Openings
|
|
10
|
|
|
7
|
|
|
20
|
|
|
13
|
|
Closures
|
|
(4
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|
(6
|
)
|
Restaurants at end of period
|
|
564
|
|
|
551
|
|
|
564
|
|
|
551
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20180314005945/en/
Source: Del Taco Restaurants, Inc.